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Viewing cable 08ASUNCION722, TENSIONS WITH BRAZIL INCREASE OVER LAND AND

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Reference ID Created Released Classification Origin
08ASUNCION722 2008-10-24 18:41 2011-07-11 00:00 CONFIDENTIAL Embassy Asuncion
VZCZCXYZ0000
OO RUEHWEB

DE RUEHAC #0722/01 2981841
ZNY CCCCC ZZH
O 241841Z OCT 08
FM AMEMBASSY ASUNCION
TO RUEHC/SECSTATE WASHDC IMMEDIATE 7337
INFO RUCNMER/MERCOSUR COLLECTIVE PRIORITY
RUEHSN/AMEMBASSY SAN SALVADOR PRIORITY 0061
RHMFISS/USSOCOM MACDILL AFB FL PRIORITY
RHMFISS/HQ USSOUTHCOM MIAMI FL PRIORITY
C O N F I D E N T I A L ASUNCION 000722 
 
SIPDIS 
 
STATE FOR DS/DSS/ITA, DS/IP/WHA, AND WHA/BSC MDASCHBACH 
 
E.O. 12958: DECL: 10/25/2028 
TAGS: PTER ASEC PINS PGOV PREL PA BR AR ES
SUBJECT: TENSIONS WITH BRAZIL INCREASE OVER LAND AND 
MILITARY ISSUES 
 
REF: A. ASUN 709 
     B. ASUN 181 
     C. ASUN 590 
 
Classified By: Ambassador Liliana Ayalde for reasons 1.4 (b) and (d). 
 
------- 
SUMMARY 
------- 
 
1. (C) Paraguay's bilateral relations with Brazil soured in 
October over Brazilian military exercises on the Paraguayan 
border and an increase in invasions of land owned by 
Brazilian-Paraguayans.  Although Brazil informed Paraguay of 
its plans to conduct military exercises, Paraguayan officials 
claimed Brazil did not give Paraguay enough notice and 
objected to Brazil's show of force, taking the exercise as an 
affront to Paraguay's sovereignty.  The Brazilian military 
initially assuaged Paraguay's concerns by claiming that the 
exercises were routine; however, rhetoric from the Brazilian 
military later fanned the fire.  The Paraguayan government 
responded to the crisis by banning foreigners from owning 
property for agricultural purposes, and sent in security 
forces to quell the campesino movements.  Although Brazil 
regularly conducts military exercises, this one came at a 
particularly sensitive time.  While the Brazilian maneuvers 
(and Paraguayan reaction) have gone largely unnoticed in 
Brazil, Paraguayans (including President Lugo himself) will 
be nursing their bruised egos for some time.  END SUMMARY. 
 
------------------------------------ 
MILITARY EXERCISES LEAD TO TENSIONS 
------------------------------------ 
 
2.  (C) Paraguay's bilateral relations with Brazil soured in 
October over large-scale Brazilian military exercises on the 
Paraguayan border.  The exercise -- dubbed "Operation 
Southern Frontier II" -- began October 13 and concluded 
October 24.  It included land, air, and amphibious operations 
involving up to 3,000 soldiers, 250 patrol vehicles, seven 
helicopters, and live ammunition.  The Brazilian military 
destroyed several ports used for smuggling on the Paraguay 
River, and set up check points near the Brazilian border 
crossing near Ciudad del Este, where it inspected over 6,000 
vehicles.  The press reported that the military exercises 
notably dampened the flow of commerce between Paraguay and 
Brazil. When Ambassador traveled with President Fernando Lugo 
to the border town of Capitan Bado in Amambay Department 
October 20, local officials reported that the Brazilians had 
removed six tanks and a large number of troops only hours 
before their arrival.  Paraguayan Minister of Agriculture 
Vera Beranjano privately told the Ambassador during the trip 
that he considered her presence a show of U.S. support for 
Paraguay to Brazil. 
 
3.  (U) Although Brazil officially informed Paraguay of its 
plans to conduct military exercises, Paraguayan officials 
claimed Brazil did not give Paraguay enough notice and 
objected to Brazil's show of force, taking the exercise as an 
affront to Paraguay's sovereignty. (NOTE: In addition to 
diplomatic channels, the Brazilian DATT informed his 
Paraguayan counterpart about the exercise in May 2008. END 
NOTE). Lugo stated October 16, "Brazil can do what it wants 
inside its territory" but that "we will not accept any 
interference." The Paraguayan Defense, Foreign and Interior 
ministries warned Brazil not to violate Paraguay's 
territorial integrity.  (NOTE: Brazil has repeatedly 
encroached on Paraguayan territory during military and police 
operations, and the press reported that Brazilian troops 
entered Paraguay during the military exercise.  The Ultima 
Hora newspaper claimed October 17 that the Brazilian military 
illegally entered Amambay Department during the exercise by 
traveling on routes that pass through Paraguay.  END NOTE.) 
The Paraguayan Defense Ministry issued a statement October 16 
denouncing the military exercise and stating that Paraguayan 
Military Forces were on alert for its duration. 
 
4.  (SBU) The Brazilian military initially assuaged 
Paraguay's concerns by claiming that the exercises were 
routine; however, rhetoric from the Brazilian military later 
fanned the fire.  Brazil's 5th Army Division Communications 
Chief Ariel Okopny told the Ultima Hora newspaper October 16 
that "It's not a show of force against Paraguay but against 
lawlessness on the border.  This is an internal action, which 
is held regularly, where the Brazilian Armed Forces interact 
with federal and interstate bodies." (NOTE: Paraguayan 
Ambassador to Brazil Luis Gonzalez Arias said that the 
 
military exercises along the Paraguayan border "should not 
scare us, because they are military exercises which Brazil 
has been carrying out for more than ten years." END NOTE.) 
However, two days later, Brazilian Southern Command Chief 
General Jose Elito Carvalho said "through this demonstration 
of force, the Armed Forces are sending another message to 
neighboring countries."  Carvalho also told the press during 
an interview October 18 that "the phase when we had to hide 
things has passed.  We now have to demonstrate that we are a 
power, and it is important that our neighbors know about it." 
The Paraguayan press reported as current statements Carvalho 
made in June that the Brazilian military would intervene if 
Itaipu Dam were taken over by "social movements" if so 
ordered by Brazilian President Luiz Inacio Lula da Silva. 
 
5.  (SBU) Lugo dismissed Carvalho's statements October 19, 
saying, "If you believe that military exercises at the border 
or press statements are going to scare us, they will not." 
Interior Ministry Rafael Filizzola, who oversees the National 
Police, condemned Carvalho's remarks as an "outrage to our 
sovereignty."  Lugo stated that he would ask Lula for an 
explanation of the military exercises when they meet at the 
Ibero-American Summit in El Salvador on October 29. 
 
-------------- 
LAND INVASIONS 
-------------- 
 
6.  (SBU) Tensions between Paraguay and Brazil further 
increased after several landless farmer groups illegally 
occupied properties owned by Paraguayans of Brazilian origin 
("BrasiguayosbKZGQV]H5pg&*rTe lands. 
Campesino groups have targeted large Brazilian landowners, 
who are widely believed to illegally own Paraguayan land, to 
refuse to hire Paraguayan farm workers, and to contaminate 
the environment with agrotoxins.  (NOTE: Between 
300,000-500,000 Brasiguayos live in Paraguay.  END NOTE.) 
Leading daily newspaper ABC Color reported October 17 that 
campesino groups illegally occupied 33 properties in seven 
Paraguayan departments, including 20 properties in Alto 
Parana.  It also reported that these groups threatened to 
invade another 110 properties, including 74 in San Pedro. 
San Pedro campesino leaders Elvio Benitez and Antonio Cabrera 
of the National Patriotic Front (FPN) told Ultima Hora 
October 19 that they had ended their truce with the 
Paraguayan government and will occupy 23 large private 
landholdings in San Pedro covering 3,000 hectares of land 
claims was illegally sold to Brazilian farmers. In Alto 
Parana, the Alto Parana Association of Agriculturists 
(ASAGRAPA), Campesino Alliance, and Paraguayan Agrarian 
Movement Revolutionaries -- groups affiliated with the 
Without Land (Sin Tierras) campesino movement -- illegally 
occupied over 20 properties, including several industrial 
farms. 
 
7.  (SBU) The Paraguayan government responded to the crisis 
by banning foreigners -- including "Brasiguayos" -- from 
owning land for agricultural purposes October 6.  Paraguay's 
Rural Development and Land Institute (INDERT) issued the 
decree, which purports to modify a 2005 law that allows 
foreigners to own land for any purpose as long as it is not 
located within 50 miles of Paraguay's borders. Lugo assured 
"Brasiguayos" that the government would not actively expel 
them from Paraguay.  However, at the urging of the Brazilian 
consulate in Ciudad del Este, Brasiguayos in Alto Parana and 
Itapua departments met October 15 and decided to create a 
council to ask Brazil's Foreign Minister, Celso Amorim, to 
deal with this issue at the Brazilian and Paraguayan high 
government levels. 
 
8.  (SBU) The Paraguayan government ordered hundreds of 
unarmed police officers to San Pedro and Alto Parana 
departments to quell the campesino movements.  Ultima Hora 
reported October 21 that the National Police had 510 agents 
in 19 districts in San Pedro, and deployed over 100 officers 
in the past month to key locations in San Pedro and 
Concepcion departments to help manage unrest caused by 
campesino land occupations, narcotrafficking, and kidnappings 
(ref A).  The Interior Ministry warned October 17 that armed 
groups camouflaged as peasants existed in several illegal 
campesino settlements in Alto Parana Department.  Ultima Hora 
reported that police consider it possible but could not 
confirm that members of the so-called Paraguayan People's 
Army (EPP) are involved in fomenting unrest in San Pedro (ref 
B).  Political analyst Roque Gonzalez Vera stated October 19 
that campesino leaders are using the recent death of 
Bienvenido Melgarejo in a clash with Paraguayan police as a 
 
"martyr" to carry out their "patriotic struggle" through 
armed resistance.  Campesino leader Tomas Zayas vowed that 
campesinos will retaliate for Melgarejo's death. 
 
9. (C)  Interior Minister Rafael Filizzola has made strong 
public statements that the government will not tolerate the 
invasion of private property.  Privately however, Filizzola 
told RSO October 20 that he is worried about the continuing 
threats of land invasion and said the GOP is struggling with 
how to respond.  President Lugo broke his silence on the 
issue October 18 to say he would not tolerate violent action 
of any kind, and that legal means must be used to resolve 
conflict.  Lugo met for three hours October 23 with the 
congressional members of his Patriotic Alliance for Change. 
One participant in that meeting told the Ambassador late on 
October 23 that she and others were pushing the president for 
an even stronger position on the importance of respecting 
private property and the rule of law. 
 
------------------------------ 
BRAZILIAN-PARAGUAYAN RELATIONS 
------------------------------ 
 
10.  (C)  Although Brazil regularly conducts military 
exercises, this one came at a particularly sensitive time. 
One of Lugo's central campaign promises was to renegotiate 
the Itaipu dam treaty with Brazil.  However, preliminary 
talks between the two countries have not resulted in any 
signals that Brazil is open to renegotiation, leading many 
Paraguayans to believe that Brazil's military exercise is a 
reminder of Brazil's military and economic strength (and 
Paraguay's relative weakness). 
 
11.  (C) Press reports also speculated that the Brazilian 
military may have been sending a message to Venezuela, which 
continues to dabble in Mercosur affairs.  Political analyst 
Gonzalez Vera said the purpose of the Brazilian military 
exercises was to warn Venezuelan President Hugo Chavez that 
Paraguay is linked to Brazil's security plan and to not 
meddle in Paraguay's internal affairs by financing 
pro-Venezuelan political campesino groups.  (NOTE:  During 
his visit to San Pedro August 16, Chavez singled out the 
department -- the epicenter of campesino activity -- for 
local development assistance (ref C).  END NOTE.) 
 
------- 
COMMENT 
------- 
 
12.  (C)  While the Brazilian maneuvers (and Paraguayan 
reaction) may not have made headlines in Brazil, Paraguayans 
(including President Lugo and many members of his cabinet) 
will be nursing their bruised egos for some time.  Brazil may 
have legitimate reasons for choosing to flex its military 
muscle, and the exercises may be routine, but these are the 
first Brazilian exercises during the Lugo administration. 
The Paraguayan government is of the mind that they could have 
been handled with increased care.  The perception here is 
that Brazil is reminding Paraguay of the neighborhood pecking 
order, of its weak negotiating position on Itaipu, and that 
Brazil is watching out for its own in Paraguay. END COMMENT. 
 
Please visit us at     http://www.state.sgov.gov/p/wha/asuncion 
 
AYALDE