VZCZCXYZ0000
PP RUEHWEB

DE RUEHBU #0586/01 1262015
ZNR UUUUU ZZH
P 052015Z MAY 08
FM AMEMBASSY BUENOS AIRES
TO RUEHC/SECSTATE WASHDC PRIORITY 0939
INFO RUCNMER/MERCOSUR COLLECTIVE

UNCLAS BUENOS AIRES 000586 
 
SENSITIVE 
SIPDIS 
 
TREASURY FOR LTRAN, MMALLOY, AND USED OFFICE AT IDB 
 
E.O. 12958: N/A 
TAGS: PGOV PREL EAID EFIN KDEM AR
SUBJECT: AMBASSADOR MEETS WITH TIERRA DEL FUEGO GOVERNOR 
 
REF: A) BUENOS AIRES 568 
 
 ¶1.  (SBU) Summary: The Ambassador met April 29 with Tierra 
del Fuego Governor Fabiana Rios, Argentina's first elected 
female governor.  Governor Rios was straightforward and 
cordial throughout the meeting, during which she explained 
her province's abysmal financial state.  Rios solicited the 
Ambassador's advice on how to best approach the 
Inter-American Development Bank (IDB) to fund a study that 
would help Tierra del Fuego improve its provincial 
administration.  The Ambassador informed Rios that the USS 
Farragut was headed to Ushuaia in mid-May (14-18) and would 
be donating supplies to the local hospital.  End Summary. 
 
A Province in Disarray 
---------------------- 
 
¶2.  (SBU) Ambassador Wayne met with Governor Fabiana Rios and 
her economic advisor Ricardo Iglesias on April 29 in his 
office.  Rios is the first elected female governor in 
Argentine history and the first from the opposition party 
ARI, member of the Civic Coalition (CC) (led at the national 
level by CC President Elisa Carrio, who finished second in 
the October 2007 presidential election).  Rios detailed her 
province's dire financial straits, exacerbated (she claimed) 
by the mismanagement of the prior governor, Hugo Omar 
Coccaro.  She said that her biggest challenge is rebuilding 
institutions, which she said deteriorated significantly under 
Coccaro. 
 
¶3.  (SBU) Rios said she has sought a constructive working 
relationship with the national government because of her 
province's financial dependence on the national government. 
Rios described the financial state of the province as "more 
than bad, it's terrible."  Although the constitution obliges 
the national government to share revenues (or 
"co-participation" funds) with the provinces, the national 
government doles the funds out at its discretion.  Rios said 
these funds account for 70% of her government's budget. 
 
Fixing a Broken System 
---------------------- 
 
¶4.  (SBU) Rios said that 110% of Tierra del Fuego's current 
budget goes to payroll.  The provincial government lacks an 
inventory of human resources.  Rios said they don't know who 
the employees are, where they work, what they do, or to whom 
they report.  For example, Rios said that in a press section 
with 80 people only 4 are professionals -- the rest are 
"cleaning staff."  She also said that the hospitals have 5 
cleaning or administrative workers for every doctor.  There 
were four school teachers for each available class room. 
Rios lamented that there was no "normal" solution to the 
province's financial troubles. 
 
¶5.  (SBU) Rios said she wanted to approach the Inter-American 
Development Bank (IDB) to finance a census of the provincial 
government's financial and human resources, to be followed by 
a rationalization and downsizing of the provincial payroll. 
In anticipation of the downsizing, she hoped the IDB could 
develop a training program geared towards easing the pain of 
the inevitable layoffs by making these people more marketable 
for the private sector. 
 
¶6.  (SBU) Rios solicited the Ambassador's opinion on the best 
way to present the government's plan to the IDB.  The 
Ambassador explained that the IDB has an overall program 
budget for Argentina and they look for good projects to 
invest in and that one of the areas they focus on is public 
administration.  The Ambassador highlighted the IDB's program 
in Argentina as the biggest they have at present.  He said 
the challenge was to present worthy, feasible proposals with 
a solid, sustainable plan.  Rios said she had little 
experience with international organizations, but had started 
technical discussions with the IDB.  Ambassador Wayne 
suggested inviting experts from the IDB to travel to Tierra 
del Fuego and observe the situation.  Rios also asked for USG 
support of their contact with and application to the IDB. 
The Ambassador said the Embassy economic section could help 
establish contact with the local IDB office. 
 
Not Affected by Ag Strikes 
-------------------------- 
 
¶7.  (U) Rios noted that Tierra del Fuego has not felt the 
effects of the agricultural strike in availability of food. 
She said that the province's economic system -- based on 
sheep, fish, and gas -- was different and too far away to 
feel the effect.  Rios mentioned that 80% of the province's 
land was in the hands of only 100 people. 
 
Gas Restrictions 
---------------- 
 
¶8.  (SBU) The Ambassador asked if the new gas law would give 
Tierra del Fuego more control over natural resources.  Rios 
said that the law gives jurisdiction to the provinces but 
noted that strategic decisions are made at the national 
level, so the provinces don't have as much control.  Her 
government is, however, preparing to have a bidding process 
for new areas for September.  The Ambassador observed that it 
also has been difficult for companies operating in the 
region, such as Apache Oil, because of the Argentine 
government's limits on gas exports to Chile.  The Ambassador 
told Rios that he had recently met with Planning Minister De 
Vido (reftel) to raise Apache's concerns about GOA 
interference shutting down its gas exports and about the 
limited ability to export north to Argentines.  De Vido told 
the Ambassador that the bidding process for the second gas 
pipeline would begin in the next few months.  The Ambassador 
mentioned that negotiations with Chile and Methanex were 
complicated, but the high price of gas agreed to recently 
apparently prevents the company from operating.  Rios said 
she had heard a similar message from the Canadian Ambassador 
(Methanex is a Canadian company).  Rios mentioned that she 
planned to meet with De Vido during her trip to Buenos Aires. 
 
 
¶9.  (U) Rios mentioned that she spent 15 days traveling to 
offshore platforms because she wasn't familiar with them. 
Ambassador noted that the subject of gas exports was 
constantly on Argentina's bilateral agenda with Chile.  Rios 
said that if Methanex can't produce, there are upstream 
implications for Tierra del Fuego, and "we all lose." 
 
Preserving Nature 
----------------- 
 
¶10.  (U) The Ambassador brought up the issue of nature 
preservation, mentioning that two or three years ago Goldman 
Sachs had donated land to the Chilean government to build a 
nature preserve.  He mentioned the company had hoped to do 
the same in Argentina, but the effort was blocked by private 
interests.  Rios said Tierra del Fuego was beautiful, but had 
a vulnerable ecosystem.  She cited sustainable development 
efforts that would preserve the natural lakes and thermal 
springs in the area.  The Ambassador agreed that there were 
ways to have tourism and preserve nature. 
 
Small Steps Forward 
------------------- 
 
¶11.  (U) Rios emphasized the importance of getting out the 
provincial government's message of honesty, transparency, and 
production.  She said it was important to give clear signals 
that there was no corruption in the government, which had 
been a problem in her predecessor's administration.  Rios 
cited specific measures her government had taken to improve 
things in the province.  She mentioned increasing 
transparency as one of her primary goals.  To that end, she 
has made public spending numbers available on her website. 
Rios acknowledged that these were small changes; but that 
they were important cultural changes nevertheless. 
 
Activity in Ushuaia 
------------------- 
 
¶12.  (U) Ambassador Wayne told Rios that the USS Farragut 
will be in Tierra del Fuego's capital, Ushuaia, from May 
14-18 for a ship visit and strengthening of ties between our 
armed forces.  He informed Rios that the crew plans to donate 
medical supplies and hygiene supplies to the local hospital. 
The Ambassador also mentioned that the crew had offered to 
conduct a blood drive for the Regional Hospital in Ushuaia. 
Rios looked forward to the visit and said her health minister 
would be very pleased to hear about the ship's plans.  The 
Ambassador said he had visited the Binational Center in 
Ushuaia for English language instructors and that the 
consular section has a good working relationship with local 
authorities.  Rios said the mayor of Ushuaia, Federico 
Sciurano, was not of her party but described him nonetheless 
as young, hard-working, and reasonable. 
 
Help with Housing 
----------------- 
 
¶13.  (U) Iglesias concluded the meeting by bringing up Tierra 
del Fuego's housing crisis and said that they were looking to 
develop a housing plan to attract investment.  He was 
specifically interested in pre-fabricated housing providers 
in the U.S. who would be interested in supplying Tierra del 
Fuego.  Iglesias also mentioned that constructing houses was 
particularly difficult in the winter in Tierra del Fuego. 
The Ambassador offered Embassy commercial section assistance 
in identifying U.S. purveyors of pre-fabricated housing as 
well as contacts at the World Bank in charge of housing 
assistance. 
 
Comment 
------- 
 
¶14.  (SBU) Although Tierra del Fuego is remote and sparsely 
populated, Governor Rios gained a great deal of attention 
with her 2007 defeat of an entrenched incumbent backed by the 
Kirchners.  She is the nation's first female provincial 
governor, and the only governor elected by opposition party 
ARI.  With the Ambassador, she conveyed a sense of urgency in 
overcoming the challenge presented by the province's 
financial situation.  Rios is inheriting a bloated state 
apparatus without inventories, adequate databases or other 
basic management tools.  Her steps to increase transparency 
and her obvious energy to confront these problems, however, 
are a welcome step towards better provincial management in 
Tierra del Fuego.  End comment. 
 
Bio Note 
-------- 
 
¶15.  (U) Rios was born in Rosario, Santa Fe Province, on 
March 31, 1964.  She is married to Gustavo Longhi, a 
provincial councillor in Rio Grande who won re-election in 
¶2007.  The couple has two daughters; Maria Betania (17) and 
Victoria (14).  Rios was previously a national deputy in 
2003, and a provincial legislator from 199-2003.  She also 
served as the Pharmaceutical coordinator in the Provincial 
Institute for Social Services in Tierra del Fuego 
(1997-1999); Coordinator of Pharmaceutical Allowances under 
the same institute (1996) and some other public health 
positions in the municipality of Rio Grande in Tierra del 
Fuego.  Rios received her degree in pharmacy from the 
National University of Rosario and won a national award for 
her professional record in 2001. 
WAYNE