Cable Viewer

Currently released so far... 12532 / 251,287

### Browse latest releases

2010/11 2010/12 2011/01 2011/02 2011/03 2011/04 2011/05
2010/11/28 2010/11/29 2010/11/30
2010/12/01 2010/12/02 2010/12/03 2010/12/04 2010/12/05 2010/12/06 2010/12/07 2010/12/08 2010/12/09 2010/12/10 2010/12/11 2010/12/12 2010/12/13 2010/12/14 2010/12/15 2010/12/16 2010/12/17 2010/12/18 2010/12/19 2010/12/20 2010/12/21 2010/12/22 2010/12/23 2010/12/24 2010/12/25 2010/12/26 2010/12/27 2010/12/28 2010/12/29 2010/12/30
2011/01/01 2011/01/02 2011/01/04 2011/01/05 2011/01/07 2011/01/09 2011/01/10 2011/01/11 2011/01/12 2011/01/13 2011/01/14 2011/01/15 2011/01/16 2011/01/17 2011/01/18 2011/01/19 2011/01/20 2011/01/21 2011/01/22 2011/01/23 2011/01/24 2011/01/25 2011/01/26 2011/01/27 2011/01/28 2011/01/29 2011/01/30 2011/01/31
2011/02/01 2011/02/02 2011/02/03 2011/02/04 2011/02/05 2011/02/06 2011/02/07 2011/02/08 2011/02/09 2011/02/10 2011/02/11 2011/02/12 2011/02/13 2011/02/14 2011/02/15 2011/02/16 2011/02/17 2011/02/18 2011/02/19 2011/02/20 2011/02/21 2011/02/22 2011/02/23 2011/02/24 2011/02/25 2011/02/26 2011/02/27 2011/02/28
2011/03/01 2011/03/02 2011/03/03 2011/03/04 2011/03/05 2011/03/06 2011/03/07 2011/03/08 2011/03/09 2011/03/10 2011/03/11 2011/03/13 2011/03/14 2011/03/15 2011/03/16 2011/03/17 2011/03/18 2011/03/19 2011/03/20 2011/03/21 2011/03/22 2011/03/23 2011/03/24 2011/03/25 2011/03/26 2011/03/27 2011/03/28 2011/03/29 2011/03/30 2011/03/31
2011/04/01 2011/04/02 2011/04/03 2011/04/04 2011/04/05 2011/04/06 2011/04/07 2011/04/08 2011/04/09 2011/04/10 2011/04/11 2011/04/12 2011/04/13 2011/04/14 2011/04/15 2011/04/16 2011/04/17 2011/04/18 2011/04/19 2011/04/20 2011/04/21 2011/04/22 2011/04/23 2011/04/24 2011/04/25 2011/04/26 2011/04/27 2011/04/28 2011/04/29 2011/04/30
2011/05/01 2011/05/02 2011/05/03 2011/05/04 2011/05/05 2011/05/06 2011/05/07 2011/05/08 2011/05/09 2011/05/10 2011/05/11

### Browse by creation date

66 72 73 75 79 85 86 87 88 89 90 91 92 93 96 97 00 01 02 03 04 05 06 07 08 09 10
1966/12
1972/02 1972/08
1973/04
1975/03
1979/08
1985/03 1985/06
1986/05
1987/06
1988/01
1989/12
1990/01 1990/07 1990/08 1990/10
1991/05
1992/01 1992/06 1992/12
1993/10
1996/11
1997/12
2000/05 2000/06 2000/09 2000/11
2001/02 2001/03 2001/06 2001/07 2001/09 2001/10 2001/11
2002/01 2002/02 2002/03 2002/04 2002/07 2002/08 2002/09 2002/11
2003/01 2003/02 2003/03 2003/04 2003/05 2003/06 2003/07 2003/08 2003/09 2003/10 2003/11 2003/12
2004/01 2004/02 2004/03 2004/04 2004/05 2004/06 2004/07 2004/08 2004/09 2004/10 2004/11 2004/12
2005/01 2005/02 2005/03 2005/04 2005/05 2005/06 2005/07 2005/08 2005/09 2005/10 2005/11 2005/12
2006/01 2006/02 2006/03 2006/04 2006/05 2006/06 2006/07 2006/08 2006/09 2006/10 2006/11 2006/12
2007/01 2007/02 2007/03 2007/04 2007/05 2007/06 2007/07 2007/08 2007/09 2007/10 2007/11 2007/12
2008/01 2008/02 2008/03 2008/04 2008/05 2008/06 2008/07 2008/08 2008/09 2008/10 2008/11 2008/12
2009/01 2009/02 2009/03 2009/04 2009/05 2009/06 2009/07 2009/08 2009/09 2009/10 2009/11 2009/12
2010/01 2010/02

### Browse by origin

A B C D F G H I J K L M N O P Q R S T U V W Y Z
Embassy Athens Embassy Asuncion Embassy Astana Embassy Asmara Embassy Ashgabat Embassy Apia Embassy Ankara Embassy Amman Embassy Algiers Embassy Addis Ababa Embassy Accra Embassy Abuja Embassy Abu Dhabi Embassy Abidjan Consulate Auckland Consulate Amsterdam Consulate Adana American Institute Taiwan, Taipei
Embassy Bujumbura Embassy Buenos Aires Embassy Budapest Embassy Bucharest Embassy Brussels Embassy Bridgetown Embassy Bratislava Embassy Brasilia Embassy Bogota Embassy Bishkek Embassy Bern Embassy Berlin Embassy Belmopan Embassy Belgrade Embassy Beirut Embassy Beijing Embassy Banjul Embassy Bangkok Embassy Bandar Seri Begawan Embassy Bamako Embassy Baku Embassy Baghdad Consulate Barcelona
Embassy Copenhagen Embassy Conakry Embassy Colombo Embassy Chisinau Embassy Caracas Embassy Canberra Embassy Cairo Consulate Curacao Consulate Ciudad Juarez Consulate Chennai Consulate Casablanca Consulate Cape Town Consulate Calgary
Embassy Dushanbe Embassy Dublin Embassy Doha Embassy Djibouti Embassy Dili Embassy Dhaka Embassy Dar Es Salaam Embassy Damascus Embassy Dakar Consulate Dubai
Embassy Freetown Consulate Fukuoka
Embassy Guatemala Embassy Gaborone Consulate Guayaquil Consulate Guadalajara
Embassy Helsinki Embassy Harare Embassy Hanoi Consulate Ho Chi Minh City Consulate Hermosillo Consulate Hamilton Consulate Hamburg Consulate Halifax
Iran RPO Dubai Embassy Islamabad Consulate Istanbul
Embassy Jakarta Consulate Jerusalem Consulate Jeddah
Embassy Kyiv Embassy Kuwait Embassy Kuala Lumpur Embassy Kinshasa Embassy Kingston Embassy Kigali Embassy Khartoum Embassy Kathmandu Embassy Kampala Embassy Kabul Consulate Kolkata
Embassy Luxembourg Embassy Luanda Embassy London Embassy Ljubljana Embassy Lisbon Embassy Lima Embassy Lilongwe Embassy La Paz Consulate Lahore Consulate Lagos
Mission USOSCE Mission USNATO Mission UNESCO Embassy Muscat Embassy Moscow Embassy Montevideo Embassy Monrovia Embassy Minsk Embassy Mexico Embassy Mbabane Embassy Maputo Embassy Manila Embassy Manama Embassy Managua Embassy Malabo Embassy Madrid Consulate Munich Consulate Mumbai Consulate Montreal Consulate Monterrey Consulate Milan Consulate Melbourne
Embassy Nicosia Embassy Niamey Embassy New Delhi Embassy Ndjamena Embassy Nassau Embassy Nairobi Consulate Naples Consulate Naha
Embassy Ouagadougou Embassy Ottawa Embassy Oslo
Embassy Pristina Embassy Pretoria Embassy Prague Embassy Port Of Spain Embassy Port Louis Embassy Port Au Prince Embassy Phnom Penh Embassy Paris Embassy Paramaribo Embassy Panama Consulate Peshawar
Embassy Quito Consulate Quebec
REO Basrah Embassy Rome Embassy Riyadh Embassy Riga Embassy Reykjavik Embassy Rangoon Embassy Rabat Consulate Rio De Janeiro Consulate Recife
Secretary of State Embassy Suva Embassy Stockholm Embassy Sofia Embassy Skopje Embassy Singapore Embassy Seoul Embassy Sarajevo Embassy Santo Domingo Embassy Santiago Embassy Sanaa Embassy San Salvador Embassy San Jose Consulate Strasbourg Consulate St Petersburg Consulate Shenyang Consulate Shanghai Consulate Sapporo Consulate Sao Paulo
Embassy Tunis Embassy Tripoli Embassy Tokyo Embassy The Hague Embassy Tel Aviv Embassy Tehran Embassy Tegucigalpa Embassy Tbilisi Embassy Tashkent Embassy Tallinn Consulate Toronto Consulate Tijuana
USUN New York USEU Brussels US Office Almaty US Mission Geneva US Interests Section Havana US Delegation, Secretary UNVIE Embassy Ulaanbaatar
Embassy Vilnius Embassy Vienna Embassy Vatican Embassy Valletta Consulate Vladivostok Consulate Vancouver
Embassy Windhoek Embassy Wellington Embassy Warsaw
Embassy Yerevan Embassy Yaounde
Embassy Zagreb

### Browse by tag

A B C D E F G H I J K L M N O P Q R S T U V W X Y Z
ASEC AF AR ARF AG AORC APER AS AU AJ AM ABLD APCS AID APECO AMGT AFFAIRS AMED AFIN ADANA AEMR AE ADCO AA AECL AADP ACAO ANET AY APEC AORG ASEAN ABUD AINF AFSI AFSN AGR AROC AO AODE AL ACABQ AGMT AORL AX AMEX ATRN ADM AFGHANISTAN AZ ASUP AND ARM AQ ATFN AMBASSADOR ACBAQ ADPM AC ASIG ASCH AGAO ACOA AUC ASEX AIT AMCHAMS AER AVERY AGRICULTURE AMG AFU AN ALOW ASECKFRDCVISKIRFPHUMSMIGEG ACS
BA BR BU BK BEXP BO BL BM BC BT BRUSSELS BX BIDEN BTIO BG BE BD BY BBSR BB BP BN BILAT BF BH BTIU BWC BMGT
CO CH CA CS CE CASC CU CI CDG CVIS CG CWC CIDA CM CICTE CMGT COUNTER CPAS COUNTRY CJAN CBW CBSA CEUDA CD CAC CODEL CW CBE CHR CT CDC CFED COM CIS CR CKGR CVR CIA CLINTON CY COUNTERTERRORISM CITEL CLEARANCE COE CN CARICOM CB CONDOLEEZZA CACS CSW CIC CITT CONS COPUOS CL CARSON CACM CDB CROS CLMT CTR CJUS CF CTM CAN CAPC CV CBC CNARC
DR DA DK DJ DHS DPRK DEPT DEA DISENGAGEMENT DE DOMESTIC DOD DOE DS DTRA DEFENSE DO DAO DCM DEAX
ETTC EFIN ECON EAIR EG EINV ETRD ENRG EC EFIS EAGR EUN EAID ELAB ER EPET EMIN EU ECPS EN EWWT ELN EIND ELTN EINT ECA EPA ENGR ETRC EXTERNAL ELECTIONS EZ ECIN EI ENVI ETRO ETRDEINVECINPGOVCS ETRN ET EK ES EINVEFIN ERD EUR ETC ENVR EAP ENIV ECONOMY EINN EFTA ECONOMIC EXBS ECUN ENGY ECONOMICS EIAR EINDETRD EREL EUC ESENV ECONEFIN EURN EDU ETRDEINVTINTCS ECIP ENERG EFIM EAIDS EAIG ECONCS EEPET ESA EXIM ENNP ECINECONCS EFINECONCS EUREM ETRDECONWTOCS EUNCH EINVETC EINVECONSENVCSJA EUMEM ETRA ERNG
FI FR FTA FARC FJ FTAA FAC FOREIGN FBI FAO FAS FM FINR FREEDOM FOR FINANCE FOI FMLN FDA FO FISO
GV GG GM GH GOV GOI GL GT GY GAERC GA GF GR GE GZ GAZA GANGS GCC GTIP GERARD GLOBAL GTMO
HR HA HO HU HUMAN HK HILLARY HI HURI HSTC HYMPSK HUMOR HEBRON
IR IC IN IAEA IT IBRD IS ITU ILO IZ ID ICRC IPR ISRAELI IIP ICAO IMO INMARSAT IWC INTERNAL IV INDO ITPHUM ITPGOV ITALIAN IO IBET INR ICJ ICTY IRS IA INTERPOL IRAQI IEA INRB IL IMF ITRA ISLAMISTS ITALY IQ IAHRC IZPREL IRAJ IDP ILC IRC IACI IDA ITF IF ISRAEL ICTR IGAD INRA INRO IEFIN INTELSAT
JA JUS JO JM JP JOSEPH JAMES JOHNNIE JOHN
KCRM KJUS KWMN KISL KIRF KDEM KTFN KTIP KFRD KPRV KCOR KNNP KAWC KUNR KGHG KV KIPR KFLU KSTH KFRDCVISCMGTCASCKOCIASECPHUMSMIGEG KSUM KTIA KTDB KPAO KMPI KZ KMIG KBCT KSCA KN KPKO KPAL KIDE KOMC KS KOLY KU KWBG KPAONZ KNUC KHLS KMDR KE KNNPMNUC KSTC KWAC KERG KACT KSCI KHDP KDRG KVPR KICC KPRP KBIO KFLO KCFE KCIP KTLA KTEX KSEP KHIV KCSY KTRD KID KGIC KRVC KNAR KSPR KMRS KNPP KJUST KMCA KPWR KG KTER KRCM KIRC KR KSEO KNEI KTBT KCFC KSAF KSAC KCHG KAWK KGCC KPLS KREL KMFO KFRDKIRFCVISCMGTKOCIASECPHUMSMIGEG KFTFN KVRP KBTR KCOM KO KLIG KDEMAF KRAD KOCI KAID KNSD KGIT KFSC KWMM KPAI KICA KHUM KREC KRIM KSEC KCMR KPIN KESS KDEV KCGC KOM KRGY KPOA KBTS KHSA KMOC KCRS KVIR KX KWWMN KPAK KWNM KWMNCS KRFD KDDG KIFR KFIN KOMS KCRCM KNUP
LE LY LI LG LH LTTE LU LO LAB LOG LA LT LABOR
MARR MU MOPS MNUC MO MASS MCAP MX MY MZ MUCN MTCRE MIL ML MEDIA MPOS MA MP MERCOSUR MG MR MI MD MK MOPPS MASC MTS MLS MILI MAR MEPN MAPP MTCR MEPI MEETINGS MW MAS MRCRE MT MCC MIK MAPS MARAD MDC MQADHAFI MTRE MV MEPP MILITARY MASSMNUC MC
NZ NL NATO NO NI NU NS NASA NAFTA NP NDP NIPP NPT NG NEW NE NSF NZUS NR NH NA NSG NC NRR NATIONAL NT NGO NSC NPA NV NK NAR NORAD NSSP NATOPREL NW NPG NSFO
OVIP OPDC OTRA OREP OAS OPRC OPIC OECD OPCW OFDP OIIP OEXC ODIP OSCE OBSP OSCI OIE OTR OMIG OSAC OFFICIALS ON OFDA OES OVP OCII OHUM OPAD OIC OCS
PREL PGOV PHUM PINR PTER PARM PREF PK PINS PMIL PA PE PHSA PM PROP PALESTINIAN PBTS PARMS POL PO PROG PL PAK POLITICS PBIO PTBS POLICY PGOVSMIGKCRMKWMNPHUMCVISKFRDCA PBT PTERE PRGOV PORG PP PS PGOF PKFK PSOE PEPR PPA PINT PMAR PRELP PREFA PINF PNG PFOR PUNE PDOV PGOVLO PAO PHUMBA PSEPC PCUL PNAT PREO PLN PNR POLINT PRL PGOC POGOV PU PF PY PGOVE PG PCI PINL POV PAHO PGGV PHALANAGE PARTY PHUS PDEM PECON PROV PAS PHUMPREL PGIV PRAM PHUH PSA PHUMPGOV PEL PSI PAIGH POLITICAL PARTIES POSTS
QA
RU RS RP REACTION REPORT RIGHTS RO RCMP RW RM REGION RSP RF RICE RFE RUPREL ROOD RIGHTSPOLMIL ROBERT RELATIONS RSO
SNAR SOCI SZ SENV SU SA SCUL SP SMIG SW SO SY SL SENVKGHG SR SF SYRIA SI SWE SARS SC SAN SN STEINBERG SG ST SPCE SIPDIS SYR SNARIZ SNARN SSA SHI SK SPCVIS SOFA SEVN SIPRS SNARCS SAARC SHUM SANC SEN SH SCRS
TRGY TBIO TU TS TSPA TSPL TT TPHY TK TI TERRORISM TH TIP TC TZ TNGD TW THPY TL TV TX TO TRSY TINT TN TURKEY TBID TD TF TFIN TP TAGS TR
UV UK UNGA US UY USTR UNSC UN UNHRC UP UG USUN UNEP UNESCO USPS UZ USEU UNCHR USAID UNMIK UNHCR UE UNVIE UAE UNO USOAS UNODC UNCHS UNFICYP UNIDROIT UNDESCO UNCHC UNDP UNAUS UNPUOS UNC UNCND UNICEF UNCSD UNDC USNC
VT VE VZ VTPREL VI VM VN VTIZ VAT VC VTEG
WTO WTRO WS WTRQ WI WZ WHO WWARD WBG WB WHA WITH WMD WIPO WMO WFP WHTI WEU WA
XG XT XZ XM XR XA XY XX XF XL XW XV XB XU XS XH XK XD XI XC XE XQ XTAG
YM YI YE YMCS
ZR ZB ZI ZU ZJ ZEALAND ZK ZF ZP ZN ZL ZA ZANU ZO ZOELLICK

### Browse by classification

CONFIDENTIAL CONFIDENTIAL//NOFORN SECRET SECRET//NOFORN UNCLASSIFIED UNCLASSIFIED//FOR OFFICIAL USE ONLY

### Community resources

Follow us on Twitter Check our Reddit Twitter this Digg this page Contact us on IRC

courage is contagious

### Viewing cable 08SAOPAULO19, FORMER FINANCE MINISTER ON BRAZILIAN POLITICS AND RELATIONS WITH VENEZUELA SENSITIVE BUT UNCLASSIFIED; PLEASE PROTECT ACCORDINGLY

If you are new to these pages, please read an introduction on the structure of a cable as well as how to discuss them with others. See also the FAQs
Understanding cables
Every cable message consists of three parts:

- The top box shows each cables unique reference number, when and by whom it originally was sent, and what its initial classification was.
- The middle box contains the header information that is associated with the cable. It includes information about the receiver(s) as well as a general subject.
- The bottom box presents the body of the cable. The opening can contain a more specific subject, references to other cables (browse by origin to find them) or additional comment. This is followed by the main contents of the cable: a summary, a collection of specific topics and a comment section.

To understand the justification used for the classification of each cable, please use this WikiSource article as reference.
Discussing cables
If you find meaningful or important information in a cable, please link directly to its unique reference number. Linking to a specific paragraph in the body of a cable is also possible by copying the appropriate link (to be found at theparagraph symbol). Please mark messages for social networking services like Twitter with the hash tags #cablegate and a hash containing the reference ID e.g. #08SAOPAULO19.

Reference ID | Created | Released | Classification | Origin
--- | --- | --- | --- | ---
08SAOPAULO19 | 2008-01-15 16:07 | 2011-01-20 00:00 | UNCLASSIFIED//FOR OFFICIAL USE ONLY | Consulate Sao Paulo

`

    VZCZCXRO2651
    RR RUEHRG
    DE RUEHSO #0019/01 0151607
    ZNR UUUUU ZZH
    R 151607Z JAN 08
    FM AMCONSUL SAO PAULO
    TO RUEHC/SECSTATE WASHDC 7821
    INFO RUEHBR/AMEMBASSY BRASILIA 8968
    RHEHNSC/NSC WASHDC
    RUCPDOC/USDOC WASHDC 3003
    RUEHMN/AMEMBASSY MONTEVIDEO 2579
    RUEHBU/AMEMBASSY BUENOS AIRES 3022
    RUEHSG/AMEMBASSY SANTIAGO 2276
    RUEHLP/AMEMBASSY LA PAZ 3673
    RUEHPE/AMEMBASSY LIMA 1212
    RUEHCV/AMEMBASSY CARACAS 0644
    RUEHBO/AMEMBASSY BOGOTA 1642
    RUEHGE/AMEMBASSY GEORGETOWN 0109
    RUEHMD/AMEMBASSY MADRID 0885
    RUEHAC/AMEMBASSY ASUNCION 3273
    RUEHRG/AMCONSUL RECIFE 3957
    RUEHRI/AMCONSUL RIO DE JANEIRO 8533
    RUEATRS/DEPT OF TREASURY WASHDC
    RUEAIIA/CIA WASHDC

` `

    UNCLAS SECTION 01 OF 04 SAO PAULO 000019

    SIPDIS

    SENSITIVE
    SIPDIS

    DEPT FOR WHA/BSC, WHA/EPSC, AND EB/IFD/OMA
    STATE PASS TO USTR FOR KDUCKWORTH
    STATE PASS EXIMBANK
    STATE PASS OPIC FOR MORONESE, RIVERA, MERVENNE
    NSC FOR TOMASULO
    USDOC FOR 4332/ITA/MAC/OLAC
    USDOC FOR 3134/USFCS/OIO TREASURY FOR JHOEK AID/W FOR LAC/AA

    REF A) 07 Sao Paulo 780;
    B) 07 Sao Paulo 1005;
    C) Sao Paulo 12;
    D) 07 Brasilia 2151;
    E) Brasilia 0006

    E.O. 12958: N/A TAGS: PGOV PREL ECON EINV ETRD BR VE

    SUBJECT: FORMER FINANCE MINISTER ON BRAZILIAN POLITICS AND RELATIONS WITH VENEZUELA SENSITIVE BUT UNCLASSIFIED; PLEASE PROTECT ACCORDINGLY

    Summary -------

    ¶1. (SBU) During a January 7 meeting with the Ambassador, former Minister of Finance Antonio Delfim Netto (strictly protect), who is currently working as a political and business consultant, discussed the opposition's victory over the government in a major tax battle and its implications for domestic politics and the 2010 presidential elections. Delfim also emphasized Brazil's focus on infrastructure development and said that the country will continue to pursue large-scale privatization efforts. On the subject of Brazil's relations with Venezuela, Delfim stated that Lula is concerned about Chavez's foreign policy agenda, especially his desire to annex one third of Guyana's territory. End Summary.

    CPMF Tax Defeat ---------------

    ¶2. (SBU) Delfim labeled the Brazilian Senate's December rejection of the renewal of the Provisional Financial Transactions Tax (CPMF - see ref B), as a significant defeat for the government alliance. In his view, the opposition worked to eliminate the tax, which was projected to generate 40 billion Reals (about USD 23 billion) in revenue in 2008, in order to "starve the beast," or attempt to control what government opponents see as unjustified public spending. In addition to the lost source of income that expiration of the CPMF will create, rejection represented a political setback for the Lula Administration as the President expended significant political capital in supporting the continuation of this tax. The opposition is now mounting a legal challenge to the Ministry of Finance's efforts to compensate for anticipated revenue losses by raising the Financial Operations Tax (IOF) and Corporate Profits Tax (CSLL) contributions - which Delfim mentioned are in effect very small increases - in the Supreme Federal Tribunal (ref C). Delfim predicted that the court will rule against the government and find the IOF and CSLL adjustments unconstitutional.

    Internal Politics and 2010 Presidential Elections

    --------------------------------------------- ----

    ¶3. (SBU) Delfim rebutted rumors that the CPMF defeat would lead to internal political fallout and stated that Lula is unlikely to replace Guido Mantega as Finance Minister because, even though Mantega is not a strong or independent minister, Lula and his main advisor, Civil Household Minister (Chief of Staff equivalent) Dilma Rousseff, would prefer to keep him on board. According to Delfim, Lula personally likes Mantega; both he and Rousseff believe Mantega can be easily controlled and is a convenient scapegoat for Lula on politically unpopular issues, someone that Lula can use "like a pen" because Mantega, unlike some other ministers, does not question the president's decisions. Delfim dispelled rumors that Belo Horizonte Mayor Fernando Pimentel would replace Mantega (ref B) and further stated that Lula is not grooming Pimentel to become the presidential candidate of his Workers' Party (PT) in 2010 as some analysts have suggested. (Note: During a January 7 meeting with FIESP, the Federation of Industries of Sao Paulo President Paulo Skaf [ref C], Skaf stated that he believed Pimentel would replace Minister Mantega this year as a stepping stone to becoming Governor of Minas Gerais.

    SAO PAULO 00000019 002 OF 004

    End Note.) Delfim said Lula's preferred successor would be Minister Rousseff or Social Development and Hunger Combat Minister Patrus Ananias, but noted that neither is actually apt to win the election. Delfim stated instead that Sao Paulo Governor Jose Serra of the opposition Social Democracy party (PSDB) is most likely to become Brazil's next president.

    Infrastructure Development and Privatization --------------------------------------------

    ¶4. (SBU) Delfim acknowledged that the 2010 elections might also have an impact on infrastructure investment, which will continue to increase by at least 1.5 percent of GDP in 2008. Governor Serra is expected to push privatization in Sao Paulo State, especially in the road and energy sectors, as a means of both boosting economic growth and enhancing his credentials as a market reformer in the run-up to the 2010 elections. Besides calling for a large road construction expansion program, Serra is also working actively with the Inter-American Development Bank (IDB) to promote private-sector infrastructure investment. Serra's probable primary opponent in the national elections of 2010, Minas Gerais Governor Aecio Neves, is looking to carry out similar policies in his own state to viably compete with Serra on the economic development front, Delfim said.

    ¶5. (SBU) Minister Rousseff is a key player in further driving infrastructure development, Delfim said. Rousseff has become a stronger supporter of private sector investment in the aftermath of Brazil's successful road concessions in October 2007. Her present position is a significant change because Rousseff, an erstwhile leftist militant described by Delfim as the "most important person in Brazil's government" after the president, has an overwhelming amount of influence on Brazil's national agenda. Although Rousseff continues to harbor suspicions about the private sector - Delfim stated that Rousseff believes Brazilian business is run like a "cartel and always has tricks up its sleeve" - she now sees the benefits of non-government investment. Spanish firms, with active support from Spain's government which, according to Delfim, practices an "aggressive industrial policy," are likely to be the largest foreign investors in Brazilian infrastructure. With respect to Brazil's ongoing civil aviation crisis, Delfim predicted that Rousseff will support privatizing some of the country's airports, a move which could be the beginning of a larger privatization process encompassing such areas as railroads and ports.

    Further Economic Views ----------------------

    ¶6. (SBU) Delfim stated that Minister Mantega's proposal to establish a Brazilian sovereign wealth fund is a "terrible idea" and is unlikely to materialize because Brazilian foreign reserves are inadequate and will not grow by a sufficient amount over the next year due to a decline in Brazil's terms-of-trade. Delfim added that Brazil's exchange rate (approximately 1.75 Reals per U.S. Dollar) is currently overvalued which has a significant impact on the current account balance. Turning to WTO Doha Round negotiations, Delfim remarked that the talks will not succeed because all countries negotiating trade agreements want self-sufficiency in food production and he does not expect the United States to make adequate concessions in the agricultural sector to conclude a Doha agreement.

    SAO PAULO 00000019 003 OF 004 Venezuela's Relations with its Neighbors ----------------------------------------

    ¶7. (SBU) Brazil's relations with Venezuela are tense and deteriorating, but Lula is seeking to avoid an open confrontation that could cause a serious rupture in bilateral relations and have an impact on the continent as a whole, Delfim said. He stated that Lula's presidency represents an "important inflection point" for Brazil because Lula is the first Brazilian president "to put poverty on Brazil's economic agenda in a serious way." Having come from a poor background himself, Lula understands the implications of growing up among a vastly neglected part of society. Delfim characterized Lula as someone who "believes deeply in South American unity" and thinks Latin American poverty brings the region's people together, enabling them to resolve conflicts through negotiation. Delfim, who stated his opposition to Venezuela's entry in Mercosul, said that Hugo Chavez is a "psychopath" (while Evo Morales is just a "poor man") but that Lula does not want to alienate the Venezuelan leader. Lula is worried about Venezuela's "serious" border problems with its neighbors, particularly Colombia and Guyana. Chavez has his sights on "one third" of Guyana's territory, and if Venezuela were to invade Guyana, Caracas would likely militarize all of Venezuela's south, antagonizing the indigenous populations there. (Comment: Former President and sitting Senator Jose Sarney has expressed similar concerns with regard to Chavez's designs on Guyana, per reftels D and E. End comment.) Delfim said this will have an impact on Brazil because the territories of at least one tribe, the Yanomami Indians spills over the Venezuela-Brazil border. Delfim believes that, should Venezuela invade Guyana, the Yanomamis will declare independence, forcing Brazil to get involved in a Venezuela-Guyana war.

    Comment -------

    ¶8. (SBU) Considered by analysts to be one of Brazil's most influential economic commentators, Delfim supported Lula's re-election bid and is said to meet with him regularly to provide informal economic advice. At the beginning of Lula's second term, he was expected to be appointed to a Cabinet position or as head of the Brazilian Development Bank (BNDES). While some of his views come across as exaggerated, unorthodox, or idiosyncratic, his long experience and knowledge of the players afford him unique insight into machinations and conflicts involving the government and opposition. End Comment.

    Biographical Information ------------------------

    ¶9. (U) Born on May 1, 1928, Delfim is a University of Sao Paulo (USP) professor emeritus of macroeconomics and a Brazilian politician. In 1966-1967, Delfim was Sao Paulo State Finance Secretary and subsequently national Minister of Finance, a post he SIPDIS held until 1974. During his tenure under the military dictatorship, Brazil underwent what many analysts call an "economic miracle" with seven successive years of over 10 percent growth. He was Ambassador to France (1975-1978) and served as Minister of Agriculture (1979) and Planning (1979-1985). Delfim was elected Federal Deputy in 1986 and was re-elected five times before being defeated in 2006. He was

    SAO PAULO 00000019 004 OF 004

    instrumental in creating financial regulations that increased the role of the federal government and centralized more power in Brasilia at the expense of states and municipalities. Delfim is a regular columnist on economic issues for Carta Capital Magazine mass-circulation daily Folha de Sao Paulo, as well as a political and business consultant.

    ¶10. (U) This message was cleared through the U.S. Treasury Attache in Sao Paulo and Embassy Brasilia.

    ¶11. (U) Minimize considered.

    WHITE

`