VZCZCXYZ0000
RR RUEHWEB

DE RUEHLP #0604 1131322
ZNR UUUUU ZZH
R 231322Z APR 09
FM AMEMBASSY LA PAZ
TO SECSTATE WASHDC 0607

UNCLAS LA PAZ 000604 
 
SENSITIVE 
SIPDIS 
 
STATE/USAID PASS TO DEBORAH KENNEDY-IRAHETA 
 
E.O. 12958: N/A 
TAGS: EAID ECON PREL PGOV BL
SUBJECT: Bolivia 2009 Fiscal Transparency Report 
 
REF: 09 State 28885, 08 La Paz 1720, 08 La Paz 174 
 
¶1.  (U) The Government of Bolivia has maintained its commitment to 
fiscal transparency and accountability as reported in Post's 
submissions for the Department's preparation of the report submitted 
under a similar provision in the FY 2008 State, Foreign Operations, 
and Related Programs Appropriations Act (Section 668).  The Summary 
Sheet for April 2008 Report on Fiscal Transparency and 
Accountability, which accompanied the Report on Fiscal Transparency 
and Accountability In Countries Whose Central Governments Receive 
U.S. Foreign Assistance, released in April 2008 by the Bureau of 
Economic, Energy and Business Affairs, U.S. Department of State, 
assigned Bolivia a rating of 'Green,' meaning that "the Country is 
likely eligible for assistance based off of report data."  Post sees 
no reason to recommend a change in that rating. 
 
¶2.  (SBU) Responses to Action Request, Paragraphs 3 and 4, SECSTATE 
¶28885. 
--Is the central government expected to receive or is it already 
receiving U.S. foreign assistance funded using FY 09 funds? 
(SBU) Post responds that, regarding U.S. foreign assistance funds 
appropriated to USAID, the Government of Bolivia declined to sign 
bilateral grant agreements with USAID for the obligation of FY 08 
funds, and FY 08 funds were obligated unilaterally to non-GOB 
recipients.  While USAID will explore the possibility of obligating 
at least some FY 09 funds bilaterally with the GOB, due to continued 
erosion of the bilateral relationship and the high possibility that 
the GOB will again decline to sign bilateral grant agreements for FY 
09 funds, USAID will prepare to obligate FY 09 funds unilaterally as 
well, to non-GOB recipients. 
 
Even if FY 09 funds are obligated bilaterally with the GOB, the 
funds are then subobligated by USAID to non-GOB recipients, for the 
purposes of implementing the USAID program in Bolivia, so there will 
not be any direct benefit, in terms of providing either funds or 
commodity assistance, to the GOB. 
 
--Is the host country's budget publicly available? 
 
(U) The government of Bolivia presents a proposed national budget to 
the congress toward the end of the year (November or December).  At 
that time, the government makes public its budget assumptions and 
its presentation to congress.  Congress considers the budget 
proposals and is then expected to approve a final version by the end 
of the year.  Once approved, the budget is available in print and on 
the Finance Ministry's website.  All revenue and expenditure figures 
are included in the publicly available budget.  On the whole, the 
information is both meaningful and accurate. 
 
--Post's assessment of the extent to which the publicly available 
budget accurately reflects actual government incomes and 
expenditures. 
 
(U) Some of the methodology used for data collection may be 
problematic, principally because of a lack of institutional capacity 
in small municipalities.  An additional area of concern is the 
growing size and lack of institutional capacity within state-run 
enterprises.  The political disposition for transparent fiscal 
administration appears to continue to exist, but institutional 
capacity to manage a growing budget both within state-owned 
companies and within the smaller, municipal (and even departmental) 
governments may cause the accuracy of budget reporting to be called 
into question. 
 
¶3. (U) Post notes that Venezuelan development assistance was 
administered off budget from 2006 to 2008.  The Venezuelan 
government contends it provided about $95 million in Bolivian 
development assistance in 2006 and 2007 and media reports often 
estimate more than $170 million from 2006 to 2008.  This funds are 
provided directly to Bolivian President Evo Morales to distribute as 
he sees fit through the "Bolivia Changes, Evo Delivers" program. 
This off-budget distribution is often criticized by the opposition 
as a means to provide patronage to the Bolivian government's 
political allies, encourage loyalty among the local government 
officials, and influence voting during elections (reftels b and c). 
URS