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FM AMEMBASSY TEGUCIGALPA
TO RUEHC/SECSTATE WASHDC IMMEDIATE 1726
INFO RHMFISS/CDR JTF-BRAVO  PRIORITY
RUEAIIA/CIA WASHDC PRIORITY
RUEHC/DEPT OF LABOR WASHDC PRIORITY
RHEFDIA/DIA WASHINGTON DC PRIORITY
RUEIDN/DNI WASHINGTON DC PRIORITY
RHEHAAA/NATIONAL SECURITY COUNCIL WASHINGTON DC PRIORITY
RUEHTG/USDAO TEGUCIGALPA HO PRIORITY
RUEHTG/USMILGP TEGUCIGALPA HO PRIORITY
RUMIAAA/USSOUTHCOM MIAMI FL PRIORITY
RUCPDOC/DEPT OF COMMERCE WASHDC PRIORITY
RHEBAAA/DEPT OF ENERGY WASHDC PRIORITY
RUEATRS/DEPT OF TREASURY WASHDC PRIORITY
RUEHLMC/MILLENNIUM CHALLENGE CORP WASHINGTON DC PRIORITY 1313
RUEHZA/WHA CENTRAL AMERICAN COLLECTIVE

UNCLAS SECTION 01 OF 02 TEGUCIGALPA 000165 
 
SENSITIVE 
SIPDIS 
 
E.O. 12958: N/A 
TAGS: EAID ECON EFIN EINV ENRG ETRD PGOV HO
SUBJECT: AMBASSADOR'S MEETING WITH MINISTER OF THE 
PRESIDENCY 
 
REF: TEGUCIGALPA 142 
 
¶1.  (SBU) Summary: In an introductory meeting with the new 
Minister of the Presidency, Maria Antonieta Bogran, the 
Ambassador said that the U.S. was committed to renewing 
assistance to Honduras, but in a way that takes a new look at 
development and investment, rather than return to business as 
usual.  Bogran noted that the GOH is appointing a commission 
to discuss the issue of fuel pricing, which has been an 
important topic for fuel importing companies.  The Ambassador 
said that the MCC compact is at a critical juncture, and that 
it would require leadership and a commitment to achieve and 
sustain the compact goals.  Bogran said that the 
administration of President Lobo is committed to increasing 
trade and investment, and is also instituting a Ministry of 
Energy to coordinate policy in that area.  End summary. 
 
¶2.  (SBU) The Ambassador met with the Minister of the 
Presidency and First Presidential Designate, Maria Antonieta 
Bogran, on February 16.  Bogran was accompanied by Vice 
Minister of the Presidency Marlon Tabora.  Also in attendance 
were the DCM, USAID director, and MCC Director. 
 
¶3.  (SBU) The Ambassador emphasized that, while the USG is in 
the process of normalizing relations and renewing assistance 
to Honduras, we would not be returning to "business as 
usual."  Rather, we would be asking how we can do things 
differently and better than before.  He highlighted economic 
and development priorities including investment and trade, 
Pathways to Prosperity, the MCC compact, and the Merida Task 
Force.  He pointed out that once the assistance spigot is 
turned on, USAID could provide over $50 million to Honduras 
in FY 2010.  This includes $10 million in funds dedicated to 
the food security initiative.  The Ambassador assured Bogran 
that the USG would be an ally in Honduras's efforts to 
attract investment, and proposed a trade mission to Honduras 
by U.S. companies in July.  He said that renewable energy 
will be a special emphasis as the USG seeks new investment 
opportunities for U.S. companies in Honduras. 
 
¶4.  (SBU) Minister Bogran expressed her appreciation for the 
good relationship between Honduras and the U.S. and noted 
that it is a priority for President Lobo to renew that 
relationship in political, diplomatic, and commercial areas. 
She noted that the Ministry of the Presidency works as a 
facilitator to find ways to accomplish GOH goals and resolve 
the issues most important to the Honduran people.  She 
pointed out that she would be working to implement the Nation 
Plan, which acts as a vision and guide for coordination and 
prioritization.  As part of this plan, the GOH would focus 
its efforts across six regions of the country to be able to 
better track development projects, trade, foreign investment, 
tourism, infrastructure, education, and the activities of 
other philanthropic organizations in each region.  Especially 
in depressed regions, such as La Mosquitia, she emphasized 
the importance of long-term planning and intervention to 
increase sustainability and avoid projects that have quick 
but short-lived benefit. 
 
¶5.  (SBU) Bogran also raised the subject of the fuel price 
formula (reftel A), saying that the GOH is discussing the 
issue and is appointing a commission to find the right 
break-even point in the pricing.  (Note: Fuel importers 
complained that they were operating at a loss in Honduras due 
to the Zelaya government's pricing policies.  The de facto 
regime partially addressed their concerns by allowing a 
higher price for premium than for regular gasoline.  The new 
government is conducting a review of the issue.  End note.) 
Bogran said she had heard from the fuel importers that the 
recent change to the pricing for premium fuel had solved only 
a small part of the problem, and that the importers had 
emphasized they are not donors, but profit-driven.  She noted 
that, since this is a sensitive issue to consumers, the 
government is working quietly but steadily to resolve the 
issue.  The Ambassador stressed that Honduras had imposed an 
unfair price formula U.S. oil companies that had imposed 
 
TEGUCIGALP 00000165  002 OF 002 
 
 
major operating losses.  The Ambassador urged Bogran to make 
this a priority investment issue and send a clear signal that 
these "Fortune 100" investors were treated fairly.  Fixing 
the price formula issue would be an important measure to help 
restore a positive investment climate in Honduras.  Bogran 
indicated understanding of the urgency of the situation, 
noting that arrangements with Petrocaribe are no longer in 
force. 
 
¶6.  (SBU) Regarding the MCC compact, the Ambassador and MCC 
Director said that it is at a critical juncture, and would 
require the Minister's leadership in chairing the 
MCA-Honduras Board of Directors to sustain the investments 
already made.  The MCC Director also pointed out that 
Honduras's performance in key indicators is vital for the 
possibility of a further MCC program.  Bogran said that 
President Lobo was keeping the existing technical team in 
place to maintain continuity, and that she would be holding a 
Board of Directors meeting the following week.  She noted the 
strong commitment of the administration to improve 
transparency and fight corruption.  She said that democracy 
is more than just an election, and must be followed up with 
the kind of development projects people are looking for. 
When asked about assistance in the areas of transparency and 
democracy, the Ambassador replied that there are teams in the 
embassy and USAID that can share ideas and experiences.  He 
noted that if President Lobo keeps his promise for 
transparency, the people will follow, but if he fails, there 
will be serious consequences.  The Ambassador and Bogran 
agreed that human rights must also be a part of this 
discussion, and Bogran noted that this would be a part of the 
work of the Truth Commission. 
 
¶7.  (SBU) Bogran told the Ambassador that the government 
plans to improve tax collection and to look closely at the 
issue of education, especially the burden of teacher salaries 
on the overall budget.  She said that President Lobo has a 
new project to focus on foreign investment and trade zones, 
and that he will create an energy ministry to oversee an 
integrated policy. 
 
¶8.  (SBU) The Ambassador and Bogran agreed to bring their 
teams together for more discussions on economic issues, the 
Merida Task Force, Pathways to Prosperity, renewable energy, 
transparency and governance. Bogran said President Lobo would 
want to participate in these meetings.  (Note:  The Embassy 
Economic Team will meet with Lobo and his Economic Cabinet on 
Wednesday, February 24.  End Note) 
 
¶9.  (SBU) Comment: The Minister of the Presidency and First 
Presidential Designate is the key point person and adviser in 
the Lobo administration, the person the President will turn 
to first to help solve problems and implement policy. 
Because of her position, focus, intellect, and desire to 
develop a working agenda with the U.S., Embassy Tegucigalpa 
expects to work closely with Minister Bogran. 
LLORENS