VZCZCXRO9657
RR RUEHLN RUEHPOD RUEHSK RUEHVK RUEHYG
DE RUEHMO #3526/01 3401423
ZNR UUUUU ZZH
R 051423Z DEC 08
FM AMEMBASSY MOSCOW
TO RUEHC/SECSTATE WASHDC 1007
INFO RHEHNSC/NSC WASHDC
RUEKJCS/SECDEF WASHDC
RUEHWH/WESTERN HEMISPHERIC AFFAIRS DIPL POSTS
RUCNCIS/CIS COLLECTIVE
RUEHXD/MOSCOW POLITICAL COLLECTIVE

UNCLAS SECTION 01 OF 03 MOSCOW 003526 
 
SENSITIVE 
SIPDIS 
 
E.O. 12958:  N/A 
TAGS: PREL PGOV MASS EAID ETRD EPET EINV ENRG RS XM
SUBJECT: MEDVEDEV BOLSTERS RUSSIA?S LATIN AMERICAN OUTREACH 
 
MOSCOW 00003526  001.2 OF 003 
 
 
¶1. (SBU) Summary: The MFA and experts saw President Medvedev?s 
November 22-28 trip to Latin America as pragmatic, and focused 
on trade and economic issues, not driven by ideology or 
efforts to compete with the U.S. or China.  In a meeting with 
the Ambassador December 2, Deputy Foreign Minister Sergey 
Ryabkov characterized the trip as a "success on a number of 
fronts," and said it was not "overloaded (except by Venezuelan 
President Chavez) with a political message to the U.S." 
Ryabkov downplayed the military cooperation elements of the 
visit, noting that the Russian military needed to train, which 
included exercising its reach.  Medvedev's trip capped a 
series of high-level GOR visits over the last few months, 
producing some new accords, including a USD 350 million loan 
to Cuba, the creation of a Russian-Venezuelan development 
bank, Russian-Venezuelan visa-free travel, a 25-year energy 
cooperation agreement with Venezuela, a military-technical 
cooperation agreement with Peru, and the possibility for 
nuclear energy cooperation with Venezuela, Brazil, and 
Ecuador.  Russian ambitions to expand its influence in the 
region have been overtaken by a domestic preoccupation with 
the economic fallout from the global financial crisis.  End 
summary. 
 
"Pragmatic Cooperation" 
----------------------- 
 
¶2. (SBU) Continuing senior Russian leaders' efforts to expand 
Russia's relations with Latin American countries, President 
Medvedev visited Peru, Brazil, Venezuela, and Cuba November 
22-28, participating in the APEC Summit in Lima and a 
Bolivarian Alternative for the Americas (ALBA) summit in 
Caracas.  The focus was principally on the trade, economic and 
energy fields, and several agreements were reached in areas 
previously lacking in the relationship, according to Ryabkov. 
While Lavrov had said that trade between Latin America and 
Russia had shown an annual growth of 25-30 percent, and was 
expected to reach a record of USD 15 billion in 2008, MFA Head 
of the Latin America Regional Problems Department Igor 
Romanschenko told us the global financial crisis would 
probably cause growth to slow substantially in the foreseeable 
future. 
 
¶3. (SBU) Despite extensive media portrayal of Medvedev's trip 
to the region, particularly Venezuela and Cuba, as challenging 
the U.S. and showing that Russia can play in America's 
backyard too, Ryabkov told the Ambassador that Russia was not 
trying to play "childish games," but simply needed to have 
better relations with Latin American countries over the long 
term.  Lavrov told the press that Russia's Latin American 
links were not aimed at third parties, emphasizing that 
Russian arms deals were only for defensive measures.  Military 
exercises, such as the ones between the Russian and Venezuelan 
Navies, were merely good training opportunities.  Romanschenko 
insisted that upgrading Latin American relations was not 
intended to be a response to U.S. support of Georgia during 
the war in August, and emphasized that Russia's main interest 
in the region was to strengthen its economic ties.  He 
acknowledged, however, that developing stronger relations with 
Latin America would help promote Mevedev's view of a "multi- 
polar world system." 
 
¶4. (SBU) While experts discounted any overarching ideological 
motivation behind the trip, they acknowledged that it was part 
of Russia's effort to expand its influence.  Director of the 
Latin American Institute Vladimir Davidov noted that Russia's 
commitment to expanding political and economic ties with all 
Latin American countries was critical to Russia's foreign 
policy goals.  Pyotr Romanov, Latin America Commentator for 
Ria Novosti, said that in the past, Russia's priority in the 
region had been ideological and anti-U.S.  Now, although 
Chavez wanted to talk about a "strategic relationship" with 
Russia, Moscow was not interested.  "It's all business," 
Romanov claimed. 
 
----------------- 
Russia vs. China? 
----------------- 
 
¶5. (SBU) Both Medvedev and the MFA dismissed media speculation 
that Russia was seeking to compete with China in the region, 
with Medvedev characterizing Chinese ties to Latin America as 
"normal competition" for Russia.  Romanschenko said there was 
limited economic competition between Russia and China in the 
region, given that the two countries were interested in 
different resources.  He added that with China's trade volume 
with Latin American countries reaching USD 100 billion, while 
Russia's was only USD 15 billion, there was little scope for 
significant competition.  Vasiliy Mikheyev, Director of the 
 
MOSCOW 00003526  002.2 OF 003 
 
 
China and Japan Center at the Institute for World Economy and 
International Relations, agreed that Russia and China were 
unlikely to compete in the region, because of their divergent 
goals.  Russia was interested in offering technological 
expertise in exchange for access to Latin American resources, 
while China was more interested in providing capital 
investment in exchange for raw materials.  Mikheyev also noted 
that while China had started developing Latin American 
relations some years ago, Russian interest in the region was 
still in the early stages of development and had not yet 
yielded many substantive cooperative arrangementsbm+h$\[QQ6DQ-- 
Medvedev in VenezujAD=QKmQQqd aluminum 
mining, with USD 4 billion earmarked for the bank?s initial 
capital.  He stated that the two sides also focused on the 
"possibility" of using the Ruble and the Bolivar as the main 
currency for mutual settlements through the bank.  An accord 
between Gazprom and Petroleos de Venezuela SA (PDVSA), and a 
MOU between the Russian United Shipbuilding Corporation and 
PDVSA were also reached for joint exploration of t~{2"y agreement, 
which could also be extended for an additional 5 years, was 
signed, and included dialogu2$y-QQ- (SBU) Although no time tables were given for any of these 
agreements, Rosatom CEO Sergei Kiriyenko told the press that 
Venezuela and Russia planned to develop a nuclear cooperation 
program by the end of 2009.  Chavez told supporters that the 
GOR had offered to help Venezuela build a nuclear reactor in 
the Zula region.  However, Romanschenko told us that he had no 
details concerning possible nuclear cooperation with 
Venezuela, but noted that the GOR was always ready to push 
forward on economically beneficial projects. 
 
--------------------------------- 
Medvedev in Peru, Brazil and Cuba 
--------------------------------- 
 
¶8. (SBU) In Peru, Medvedev had been expected to sign a number 
of accords, but only one agreement on military cooperation to 
build a plant to repair and service Russian-built helicopters 
was reached.  Other negotiations were reportedly held back 
over issues including double-taxation of Gazprom.  Medvedev 
also invited President Alan Garcia to visit Moscow in the near 
future. 
 
¶9. (SBU) Ryabkov highlighted Medvedev's visit to Brazil, 
noting the importance of bolstering economic ties.  Medvedev 
and Lula discussed the future of and participation in global 
institutions, including the UN Security Council and G20, and 
called for a new BRIC summit to be held in Russia next year. 
Agreements on aerospace cooperation, defense industries 
cooperation, and development of nuclear energy cooperation 
were signed. 
 
¶10. (SBU) Despite the media frenzy about increased Russia-Cuba 
ties, no new deals were signed, although possibilities for 
"economic cooperation" were discussed.  Seeing little 
likelihood of any significant arms deals or military 
cooperation, Romanov told us the main stumbling block was 
Cuba's inability to pay.  The only concrete deal actually 
under discussion was for Kamaz, a Russian automobile company, 
to open an assembly factory in Cuba to build buses. 
 
------------------------ 
Medvedev Meets With ALBA 
------------------------ 
 
¶11. (U) Medvedev met with leaders from Nicaragua, Dominica, 
Bolivia, Ecuador, Honduras, and Cuba in an ALBA meeting on 
November 27 in Caracas.  According to Russian press reports, 
during this meeting Medvedev expressed interest in developing 
relations with these countries, and possible Russian 
participation in the organization in the future as an 
 
MOSCOW 00003526  003.2 OF 003 
 
 
"associated member." 
 
---------------- 
Lavrov in Ecuador 
----------------- 
 
¶12. (U) During a side-trip to Ecuador separate from Medvedev?s 
itinerary, FM Lavrov told the press on November 27 that Russia 
was interested in nuclear energy cooperation for peaceful 
purposes with Ecuador, and in increasing military-technical 
cooperation. 
 
------- 
COMMENT 
------- 
 
¶13. (SBU) Although GOR officials adhere to the line that 
Russia?s interest in Latin America is simply a normal 
expansion of ties, and not intended as a challenge to the 
U.S., Moscow is clearly intent on extending its influence, if 
not ideologically, at least politically and economically, in 
the region.  Despite Russia's aspirations, the global 
financial crisis is likely to slow the process, both in 
Russian investment and in the region's buying power. 
Grandiose schemes, such as Russia's proposed construction of 
an "alternate Panama canal" (floated by DFM Sechin), appear 
quaint in light of the scale of Russia?s economic downturn and 
domestic economic preoccupations.