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DE RUEHLP #0271/01 0501456
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R 191456Z FEB 09
FM AMEMBASSY LA PAZ
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UNCLAS LA PAZ 000271 
 
SENSITIVE 
SIPDIS 
 
PASS TO USAID 
 
E.O. 12958: N/A 
TAGS: PGOV ECON KPAO EAID SNAR BL
SUBJECT: A/DCM VISIT TO SANTA CRUZ 
 
¶1. (U) During a February 12-13 visit to Santa Cruz, Acting DCM: 
--escorted two youth from the Yungas region of La Paz, who won 
scholarships from the Narcotics Affairs Section (NAS), to the 
Tahuichi soccer academy; 
--announced English scholarships for 50 disadvantaged high school 
students to study at the Santa Cruz Binational Center; 
--hosted dinner for four leaders of the Santa Cruz Chamber of 
Commerce, Industry, Services and Tourism; 
--met with leaders of the hydrocarbons sector; 
--visited the NAS-supported Special Unit for Victims of sexual 
crimes and trafficking in persons; 
--toured the International Tourism Fair and participated in the 
working lunch hosted by the Embassy's Commercial Section and the 
Visit USA Committee, which included a speaker from International 
Tourism Marketing, Inc. based in Colorado, and featured a film about 
the USAID "Cup of Excellence" coffee project; 
--donated furniture to a home for children undergoing cancer 
treatment, a USAID Special Development Activity Fund (SDAF) project; 
and 
--presented awards to NAS employees at their regional office. 
 
¶2. (SBU) The public events received extensive coverage in the print 
media, and served as an important reminder to residents in Santa 
Cruz that the U.S. continues to be present in the region delivering 
aid, combating narcotrafficking, supporting education and culture, 
and working to improve economic conditions and trade opportunities. 
Since the highly-publicized September 2008 expulsion of the U.S. 
Ambassador, there is a perception among some that the U.S. embassy 
is no longer actively engaged in Bolivia.  Our high-profile outreach 
trips help counter that misperception. 
 
Economic News 
------------- 
¶3. (SBU) Although most Crucenos are presently thinking more about 
the upcoming Carnival holiday than the serious political and 
economic issues facing Bolivia, business leaders were both 
optimistic and pessimistic in their assessments.  Hydrocarbons 
industry experts addressed the corruption scandal in the Bolivian 
hydrocarbons distribution company (YPFB), saying that despite a lot 
of changes at the top levels of YPFB since the Morales government 
took office, the working levels of the company are maintaining some 
consistency with the nationalization agenda.  Nonetheless, YPFB's 
lack of ability to plan, a slowness to respond to industry requests 
and permits, a lack of fuel storage capacity in Bolivia, and the 
government's lack of will to enforce laws against contraband, 
results in continuous seasonal fuel shortages.  Politicians have 
only the most basic understanding of the sector.  The executives 
expressed satisfaction with YPFB's higher budget for investments in 
oil and gas fields for the coming year, but lamented that there had 
not been enough investment in pipelines and other transportation 
infrastructure.  They said Russian hydrocarbons representatives 
visit Bolivia every few years, but have never made any significant 
investment, and they did not expect the recent Gazprom visit to 
Bolivia or Morales's visit to Russia to amount to much (septel). 
 
¶4. (SBU) A real concern in Santa Cruz is the Morales government's 
threat to nationalize cooperatives that provide basic services such 
as water, sewage, and electricity to neighborhoods and communities. 
The Crucenos are proud of their cooperatives and see them as an 
important part of regional identity.  They often say, "Everything we 
have, we built ourselves, because the central government has always 
ignored our needs."  The telecommunications cooperative, COTAS, is 
very worried about nationalization.  COTAS has 150,000 shareholders 
and is valued at USD 200 million.  Directors say they frequently get 
calls from low-level officials in the communications superintendancy 
asking for bribes to prevent nationalization, but they have refused 
to pay as they know that there is little that can be done if 
President Morales decides to nationalize the company. 
 
¶5. (SBU) Other business leaders criticized the current government's 
economic policies and short-sightedness, for example Morales vetoing 
of a private deal with a Brazilian company to develop biofuels. 
They are concerned about many aspects of the new constitution, but 
are especially interested in fielding a candidate that can stand up 
to President Morales in upcoming presidential elections scheduled 
for December 2009.  Several leaders were impressed by a recent visit 
to Santa Cruz by Victor Hugo Cardenas, and liked his message, but 
admit it will be hard to unify the opposition to Morales. 
 
URS