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Viewing cable 06LAPAZ3302, GOB TOUTS SUCCESS OF PEOPLES' TRADE AGREEMENT

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Reference ID Created Released Classification Origin
06LAPAZ3302 2006-12-07 13:29 2011-08-25 00:00 UNCLASSIFIED//FOR OFFICIAL USE ONLY Embassy La Paz
VZCZCXYZ0016
RR RUEHWEB

DE RUEHLP #3302/01 3411329
ZNR UUUUU ZZH
R 071329Z DEC 06
FM AMEMBASSY LA PAZ
TO RUEHC/SECSTATE WASHDC 1575
INFO RUEHAC/AMEMBASSY ASUNCION 6361
RUEHBO/AMEMBASSY BOGOTA 3685
RUEHBR/AMEMBASSY BRASILIA 7551
RUEHBU/AMEMBASSY BUENOS AIRES 4805
RUEHCV/AMEMBASSY CARACAS 2057
RUEHPE/AMEMBASSY LIMA 2130
RUEHME/AMEMBASSY MEXICO 1953
RUEHMN/AMEMBASSY MONTEVIDEO 4255
RUEHQT/AMEMBASSY QUITO 4694
RUEHSG/AMEMBASSY SANTIAGO 9279
RUCPDOC/DEPT OF COMMERCE WASHINGTON DC
RUEATRS/DEPT OF TREASURY WASHINGTON DC
RHEHNSC/NSC WASHINGTON DC
UNCLAS LA PAZ 003302 
 
SIPDIS 
 
SENSITIVE 
SIPDIS 
 
STATE FOR WHA/AND LPETRONI 
STATE PASS TO USTR FOR BHARMAN 
COMMERCE FOR JANGLIN 
TREASURY FOR SGOOCH 
 
E.O. 12958: N/A 
TAGS: ETRD EINV ECON PREL PGOV BL
SUBJECT: GOB TOUTS SUCCESS OF PEOPLES' TRADE AGREEMENT 
 
REF: LA PAZ 1172 
 
------- 
SUMMARY 
------- 
 
1. (SBU) In a December 2 newspaper insert, the GOB touted the 
early success of its April 29 Peoples' Trade Agreement with 
Venezuela and Cuba (reftel), highlighting the disbursement of 
approximately $4 million of a $100 million Venezuela-financed 
development fund.  The money has been distributed (often via 
small loans) to businesses in five departments, with 
additional disbursements expected in the near future. 
Despite the GOB's enthusiasm, it is hard to believe the 
agreement will have a significant impact on the lives of poor 
Bolivians, particularly with just four percent of funds 
allocated and few concrete plans for generating employment or 
boosting economic growth.  End summary. 
 
----------------------- 
GOB TOUTS EARLY SUCCESS 
----------------------- 
 
2. (U) In an eight-page December 2 newspaper insert, the GOB 
touted the early success of its April 29 Peoples' Trade 
Agreement with Venezuela and Cuba (reftel), highlighting the 
disbursement of approximately $4 million of a $100 million 
Venezuela-financed development fund.  The account and its 
associated Productive Development Program are designed to 
help small and medium enterprises generate employment while 
furthering the "revolutionary" process of abolishing the 
"neoliberal" economic policies of the past in favor of new, 
state-supported development methods. 
 
------------------------------ 
SMALL PROJECTS RECEIVE SUPPORT 
------------------------------ 
 
3. (U) Funds have been distributed (often via small loans) to 
small and medium businesses in five departments, with 
additional disbursements expected in the near future. 
Recipients have used an estimated 80 percent of funds to 
purchase capital equipment, machinery, and other inputs for 
textile and apparel firms, furniture factories, leather goods 
companies, and other enterprises in La Paz, El Alto, Santa 
Cruz, and Tarija.  Other projects include the construction of 
a milk production plant in Pucarani, a village in the 
department of La Paz; the development of a new central market 
in Trinidad, capital of Beni department; and the opening of a 
Brazil nut processing facility in Riberalta, an isolated town 
in the same department. 
 
4. (U) According to GOB figures, more than 100 businesses 
will receive assistance, many of them microenterprises with 
no more than a handful of employees.  The GOB claims the 
investment projects and microcredits will directly benefit an 
estimated 10,000 Bolivians and indirectly assist 50,000 more, 
primarily through the provision of new jobs and the creation 
of expanded opportunities along the supply chain. 
 
------- 
COMMENT 
------- 
 
5. (SBU) Despite the GOB's enthusiasm, it is hard to believe 
the Peoples' Trade Agreement will have a significant impact 
on the lives of poor Bolivians, particularly with just four 
percent of development funds allocated and few concrete plans 
for generating employment or boosting economic growth.  GOB 
statistics themselves suggest the trilateral pact will have 
little economic effect: according to the Bolivian Institute 
of Foreign Trade, Bolivian exports to Venezuela in the first 
six months of the year totaled only $90 million, slightly 
lower than the same period last year, and exports to Cuba 
reached a grand total of only $200.  Despite its supposed 
success, the Peoples' Trade Agreement seems little more than 
an empty political gesture designed to drum up support for 
the Morales administration. 
URS