VZCZCXYZ0001
PP RUEHWEB

DE RUEHAC #0199/01 0921154
ZNY CCCCC ZZH
P 011154Z APR 08
FM AMEMBASSY ASUNCION
TO RUEHC/SECSTATE WASHDC PRIORITY 6750
INFO RUCNMER/MERCOSUR COLLECTIVE
RUEAWJA/DEPT OF HHS WASHDC
RUEAWJA/DEPT OF JUSTICE WASHDC
RUEATRS/DEPT OF TREASURY WASHDC
RHMFISS/HQ USSOUTHCOM MIAMI FL
RUEKJCS/SECDEF WASHDC

C O N F I D E N T I A L ASUNCION 000199 
 
SIPDIS 
 
SIPDIS 
 
TO WHA/BSC KREAD 
 
E.O. 12958: DECL: 04/02/2028 
TAGS: PGOV PREL PA
SUBJECT: FADUL IMPRESSES AMCHAM 
 
REF: A. ASUNCION 163 
     ¶B. ASUNCION 196 
 
Classified By: Michael J. Fitzpatrick; reasons 1.4 (b) and (d). 
 
¶1. (C) SUMMARY: Pedro Fadul, presidential candidate for the 
Beloved Fatherland (PQ) Party, told the Paraguayan-American 
Chamber of Commerce March 18 that although business and 
government should work together to promote economic and 
social development, the private sector should be the 
economy,s driving force.  Fadul asserted that the government 
should guarantee capital investments, build infrastructure, 
provide security and education, and facilitate investment. 
Fadul explained that Paraguay had enormous development 
potential in the energy, agro-business, industry, 
infrastructure and tourism sectors.  He emphasized cultural 
concepts involving responsible government and long-term 
planning, which he said must be changed so that the country 
can advance.  On education, Fadul underscored the importance 
of building education, not schools.  He described the 
Paraguayan government as &obsolete8 and called for 
institutional reform.  Fadul wryly noted that since Paraguay 
can,t relocate, it must prioritize relations with its 
neighbors to coordinate cooperation and strengthen MERCOSUR; 
it should also negotiate trade agreements with the United 
States and the European Union and renegotiate the Itaipu and 
Yacyreta Dam treaties.  Fadul said there is an overwhelming 
consensus that he and his party's slate for senators and 
deputies are the best in the field, but that the same people 
who sing their praises say &too bad they won,t win.8 
Indeed. END SUMMARY. 
 
¶2. (U) Beloved Fatherland presidential candidate Pedro Fadul 
spoke to the Paraguayan-American Chamber of Commerce March 
18, the third in a series of speeches by the major 
presidential candidates (reftels).  The final AmCham speaker 
was Lino Oviedo on March 27 (septel).  DCM and Pol/Econ Chief 
attended all four presentations. 
 
------------------------- 
BUSINESS AND GOVERNMENT 
------------------------- 
 
¶3. (U) Fadul told his audience that business and government 
must work together to promote economic and social 
development, but that the private sector should be the 
economy,s driving force.  Fadul said that the business 
sector should educate, involve and support the poor.  He 
pointed out that in Paraguay there are "empresarios" 
(business persons) and "empresaurios" (a play on "dinosaur" 
in Spanish).  These "empresaurios" resist change because they 
receive great economic benefits from the system without 
promoting social or economic development.  For that reason, 
in Paraguay today, the business sector has two options: 1) 
build higher fences, hire more guards and install more 
gadgets for security and protection; or 2) leave the country. 
 Fadul urged the business sector to take the lead to promote 
change. 
 
¶4. (U) Fadul asserted that the government should guarantee 
capital investments, build infrastructure, provide security 
and education, and facilitate investment.  He emphasized that 
huge public enterprises must be privatized.  Fadul cited the 
mobile telephone sector as a successful case study, arguing 
that in the 15 years since it was privatized, billions of 
dollars were invested in the sector, creating thousands of 
jobs and training hundreds of people.  Fadul argued that 
other government-owned sectors, including internet service, 
should be privatized next. 
 
¶5. (U) Fadul highlighted Paraguay's enormous development 
potential in the energy, agro-business, industry, 
infrastructure (roads and airports) and tourism sectors. 
Given Paraguay's surplus of electrical energy, he said the 
government should facilitate investment in energy, 
specifically in production and transmission lines.  Fadul 
suggested (as the Ambassador has previously suggested) that 
Paraguay offer companies interested in building production 
facilities in Paraguay incentives such as preferential 
electrical prices.  Fadul also said Paraguay should 
renegotiate its treaties with Argentina and Brazil for 
additional energy from Yacyreta and Itaipu.  Paraguay could 
earn 8 to 10 billion dollars in 10 years by exploiting its 
energy resources, according to Fadul. 
------------------------------- 
SOCIAL CHANGE AND EDUCATION 
------------------------------- 
 
¶6. (U) Fadul dedicated a large portion of his discourse to 
cultural concepts involving responsible government and 
long-term planning, which he said must be changed so that the 
country can advance.  The ¬ion that poverty is the 
product of lack of resources is wrong,8 he said, &the 
manner in which resources are allocated is what creates 
poverty.8  Fadul stated that his father used to say "wealthy 
is not having more; wealthy is knowing how to manage what one 
has. It doesn,t matter how much you make. If you don,t know 
how to manage your money, you'll always spend more.8  Fadul 
made clear that in Paraguay there is no lack of resources, 
projects or ideas.  The country has the "hardware," he said. 
The problem is in the &software,8 or the social behavior 
and personal characteristics. 
 
¶7. (U) Fadul lamented that there is no long-term vision in 
Paraguayan culture.  Society is based on the Guarani concept 
of &if there is a tomorrow,8 or &koeramo.8  He also noted 
a long-standing culture of dependence on government 
assistance, which he says Duarte's government promotes to 
stay in power.  Fadul emphasized the need for change. 
Changing the "software" was possible: 99.9 percent of 
Paraguayans believe that things should change, that everyone 
must help, and that everyone should progress together. 
 
¶8. (U) Fadul underscored the importance of building 
education, not schools.  Fadul said, "we must ask the people 
what they want to be, and teach them how to be what they want 
to be, not what we want them to be."  He cited Atyra, known 
throughout Paraguay as a model city, as an example.  Atyra's 
mayor worked on cleaning up the city.  Soon, word got out 
that the city was clean and tourists started to arrive. 
Consequently, the artisans who used to travel great distances 
to sell their product could set up shop at home. That in turn 
provided social benefits -- they made money, fed their 
families and kept their families together.  In the end, a 
simple goal of keeping the city clean produced economic 
success and great social benefits. 
 
---------------------- 
INSTITUTIONAL REFORM 
---------------------- 
 
¶9. (U) Fadul criticized the Paraguayan government as 
"obsolete" and called for institutional reform.  He explained 
that instead of the institutions being used for the common 
good, they are used to win elections.  As an example, Fadul 
noted that during Stroessner's 1954-89 dictatorship, the 
military was Paraguay,s most powerful and wealthy 
institution.  Today, in contrast, he pointed out that the 
Ministry of Education,s budget has grown 10 times over the 
last 15 years.  Instead of improving education, the Ministry 
of Education,s large budget has been used as the center for 
electoral power.  If in doubt, Fadul said, just look where 
the last two Colorado presidential candidates have come from 
(both Duarte and Ovelar served as Ministers of Education). 
 
------------------------- 
FADUL ON FOREIGN POLICY 
------------------------- 
 
¶10. (U) Fadul wryly noted that since Paraguay can,t relocate 
(or invade Argentina or Brazil), it must prioritize relations 
with its neighbors to coordinate cooperation and strengthen 
MERCOSUR; it should also negotiate trade agreements with the 
United States and the European Union and renegotiate the 
Itaipu and Yacyreta Dam treaties.  He asserted that Paraguay 
must change its style of conducting foreign policy.  It must 
send the best and brightest negotiators to the negotiating 
table.  It should end its culture of begging.  To illustrate, 
Fadul stated that it made no sense that Paraguay chose to 
deal with Taiwan at the expense of China, &just because 
Taiwan gives a few millions here and there and builds some 
schools.8  It is no surprise, he said, that Paraguay is the 
only country in South America that still has diplomatic 
relations with Taiwan.  On Itaipu and Yacyreta, he clarified 
that negotiations &will be difficult,8 since one must 
negotiate within Paraguay first and then with Brazil and 
Argentina.  Fadul said "the first step should be to explain 
to the people what the problem is. You can't ask the people 
to walk with you through a dark tunnel if you do not tell 
them what is on the other side." 
 
-------------- 
FADUL ON FADUL 
--------------- 
 
¶11. (U) Fadul said he hears an overwhelming consensus on the 
campaign trail that he and his party's candidates for 
senators and deputies are the best in the field, the most 
ethical, and the hardest working representatives in Congress. 
 The same people who sing their praises, he said, also say 
&it's too bad they won't win.8  Fadul discounted his 
distant fourth place finish in the polls, implying that the 
polls are biased.  He acknowledged that the polls give him 3 
to 5 percent, noting with a grin that everywhere he goes, he 
is immediately greeted by his "3 percent." 
 
--------- 
COMMENT 
--------- 
 
¶12. (C) Fadul delivered an eloquent and humorous speech to a 
friendly audience.  He conveys confidence, conviction and 
intelligence, and certainly could capably lead Paraguay 
through the end of its democratic transition and improve the 
country's economic development.  Impeccably dressed, Fadul 
spoke for 20 minutes and answered audience questions for 
another 30 minutes, all without notes.  Unlike his opponents, 
he understood the concerns of the private sector and 
addressed them head-on -- assuring them that the private 
sector would be the economy's motor if he were elected.  It 
really is too bad he won't win.  END COMMENT. 
 
Please visit us at     http://www.state.sgov.gov/p/wha/asuncion 
 
CASON