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### Viewing cable 08BRASILIA1226, WHAT TO DO ABOUT BOLIVIA? BRAZIL'S PRESIDENCY,

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Reference ID | Created | Released | Classification | Origin
--- | --- | --- | --- | ---
08BRASILIA1226 | 2008-09-12 23:40 | 2011-07-11 00:00 | CONFIDENTIAL | Embassy Brasilia

`

    VZCZCXRO2103
    OO RUEHRG
    DE RUEHBR #1226/01 2562340
    ZNY CCCCC ZZH
    O 122340Z SEP 08 ZDK
    FM AMEMBASSY BRASILIA
    TO RUEHC/SECSTATE WASHDC IMMEDIATE 2443
    INFO RUEHBO/AMEMBASSY BOGOTA IMMEDIATE 4731
    RUEHBU/AMEMBASSY BUENOS AIRES IMMEDIATE 5789
    RUEHCV/AMEMBASSY CARACAS IMMEDIATE 4237
    RUEHGE/AMEMBASSY GEORGETOWN IMMEDIATE 1574
    RUEHLP/AMEMBASSY LA PAZ IMMEDIATE 6569
    RUEHPE/AMEMBASSY LIMA IMMEDIATE 3943
    RUEHMN/AMEMBASSY MONTEVIDEO IMMEDIATE 7510
    RUEHPO/AMEMBASSY PARAMARIBO IMMEDIATE 1642
    RUEHQT/AMEMBASSY QUITO IMMEDIATE 2588
    RUEHSG/AMEMBASSY SANTIAGO IMMEDIATE 0568
    RUEHRG/AMCONSUL RECIFE IMMEDIATE 8450
    RUEHRI/AMCONSUL RIO DE JANEIRO IMMEDIATE 6600
    RUEHSO/AMCONSUL SAO PAULO IMMEDIATE 2733
    RUMIAAA/USCINCSO MIAMI FL IMMEDIATE
    RUEKJCS/SECDEF WASHDC IMMEDIATE
    RUEKJCS/JOINT STAFF WASHDC IMMEDIATE
    RHEBAAA/DEPT OF ENERGY WASHDC IMMEDIATE
    RUEAIIA/CIA WASHDC IMMEDIATE

` `

    C O N F I D E N T I A L SECTION 01 OF 03 BRASILIA 001226

    SIPDIS

    E.O. 12958: DECL: 09/12/2018
    TAGS: PREL PGOV ECON ENGR EPET EINV BR BL
    SUBJECT: WHAT TO DO ABOUT BOLIVIA?  BRAZIL'S PRESIDENCY,
    FOREIGN MINISTRY WONDER

    REF: A. KUBISKE-MCMULLEN 9/11 TELCON
         ¶B. BRASILIA 01224
         ¶C. STATE 97316

    Classified By: Deputy Chief of Mission Lisa Kubiske.  Reasons: 1.4 (b)
    and (d).

    SUMMARY:  Ambassador Marcel Biato, Chief of Staff to
    Brazilian presidential foreign policy advisor Marco Aurelio
    Garcia, told the DCM September 11 that Brazil is engaged in
    seeking a solution to the latest crisis in Bolivia.
    President Lula had offered to foster dialogue to help
    stabilize the situation but had been rebuffed by Morales, as
    had GOB overtures to the opposition.  Biato said Brazil is
    sympathetic to the Bolivian Government's legitimate attempts
    to regain control over its territory and believes that it
    wants to avoid bloodshed.  The GOB hopes that the USG and
    others will steer clear of actions and statements that harden
    the postures of the players and their supporters in the
    hemisphere.  Ministry of External Relations (MRE) South
    America Division head Joao Pereira Pinto reiterated September
    12 the GOB's desire to facilitate dialogue, but indicated it
    has not yet decided on the best mechanism for doing so.
    Pereira noted Brazil's intent to send a high-level delegation
    to Bolivia at the appropriate time, and said the GOB was
    coordinating its response with Argentina and Colombia.
    Pereira agreed that Venezuelan President Hugo Chavez, like
    Bolivian President Evo Morales, was using the expulsion of
    U.S. ambassadors and accusations of conspiracies as a
    "tactic" to distract from domestic woes.  He suggested that
    the energy problems created by the temporary cut-off of some
    gas to Brazil were not serious and would be resolved within
    days.  The GOB sees the situation as a domestic political
    problem in which neither side is willing to negotiate, and
    sees eventual dialogue as the key to a solution, but it has
    yet to find a way forward toward achieving that goal.
    Although worried by the situation, the GOB is for the time
    being coordinating behind the scenes with other regional
    actors.   END SUMMARY.

    --------------------------------
    FROM THE OFFICE OF THE PRESIDENT
    --------------------------------

    ¶2. (C) The DCM met with Amb. Biato on September 11 to discuss
    the situation in Bolivia. Biato said that Brazil is concerned
    about the situation and has engaged.  Lula had called Evo
    Morales that afternoon, offering to help foster dialogue to
    help stabilize the situation.  They did not discuss natural
    gas during the conversation, Brazil,s main economic
    interest, however.  He said Lula had offered the help of the
    Friends of Bolivia group (Brazil, Argentina, and Colombia),
    but Morales did not accept.  (NOTE: According to press
    reports, Marco Aurelio Garcia and MRE Secretary General (Vice
    Minister) are on standby and prepared to depart for Bolivia
    as soon as Morales gives permission.  END NOTE.)  According
    to Biato, the GOB has also tried to speak with the prefects
    of the opposition departments, but to date they have
    declined.  The GOB has not offered any other kind of
    assistance.

    ¶3. (C) Biato told the DCM that Brazil sees the problem as a
    domestic political issue, in which neither side is willing to
    negotiate with the other right now.  The solution needs to be
    political dialogue and restoration of the rule of law, not
    use of force.  The Brazilian government is sympathetic to the
    Bolivian government's legitimate attempts to regain control
    over its territory, he said.  The GOB also believes that the
    Bolivian government wants to avoid serious bloodshed; it did
    not want a repeat of the Sanchez Lozada episode in which many
    people were killed and the government was toppled. The GOB
    does not presently predict a catastrophic scenario ahead, he

    BRASILIA 00001226  002 OF 003

    added, but it worries that the Bolivian government may be
    weakening and wonders if the military and police (especially
    the police) will be up to the task of protecting public
    institutions and energy facilities.

    ¶4. (C) The DCM laid out the USG's position, stating that we
    saw serious implications for our bilateral relationship with
    Bolivia, for the regional fight against narcotrafficking, and
    for regional security.  She noted also that Morales'
    unwarranted action of declaring Ambassador Goldberg persona
    non grata was a case of extremely poor timing, as it occurred
    just ahead of our drug certification decision -- a decision
    that had been controversial and difficult in recent years.
    The outlook for ATPDEA could also be complicated by Morales'
    action, she added.  Biato appeared to take careful note of
    this, asking when the certification decision would be made,
    for example.

    ¶5. (C) The GOB hopes that USG and others will steer clear of
    actions and statements that harden the postures of any of the
    players or their supporters in the hemisphere, Biato stated.
    He also noted that in its own public statements, the GOB has
    avoided making accusations of "terrorist acts," instead
    describing them as "acts of vandalism."  (NOTE: The GOB's
    public statement on the situation in Bolivia calls for
    respect for constitutional government, condemnation of
    actions of violence, and a call for dialogue towards a
    negotiated and sustainable solution. Full text is available
    at mre.gov.br.  END NOTE.)  The GOB  urged us to continue
    "strategic patience" while acknowledging that the Bolivian
    government accusations against Ambassador Goldberg are
    without foundation, Biato said.  "False dichotomies" (South
    American political alignments) could result from politicizing
    the rhetoric, he warned.

    ¶6. (C) Addressing industry concerns about the disruption in
    gas supplies caused by damage to the pipeline in Bolivia,
    Biato characterized the current situation as "worrisome but
    not grave for Brazil."  Subsequent discussions with energy
    sector contacts indicate that Brazil can continue for some
    time (many weeks) with the 10 percent shortfall in Bolivian
    supply of natural gas to Brazil through a variety of
    contingency plans (Ref B), including use of alternative types
    of energy.  A shortfall of 50 percent in Bolivian supply of
    natural gas to Brazil would be serious; at this level of
    shortfall, the main cost for Brazil would be economic higher
    energy costs raising prices more broadly in the economy.

    -----------------------
    THE VIEW FROM ITAMARATY
    -----------------------

    ¶7. (C) The Political Counselor and Deputy Political Counselor
    met September 12 with MRE (AKA "Itamaraty") Director of South
    American Department I, Minister Joao Pereira Pinto.  Pereira,
    whose section is responsible for bilateral relations with the
    MERCOSUL countries and Bolivia, said that Brazil was trying
    to promote dialogue between the government and the opposition
    prefects, but lamented that at the moment both sides "lack
    the ability and the willingness to engage in dialogue."  He
    said that although the GOB had tried to talk to the
    opposition, the Morales government wanted Brazil to talk to
    it only.  Both sides had come out of the August 10 referendum
    with indications of popular support for their respective
    positions and considered themselves "winners."  This only
    hardened their positions and made them less willing to talk,
    he added.  He also mentioned that dialogue was made more
    difficult by the underlying racial divisions between the two
    parties and possible linguistic difficulties which could
    contribute to misunderstandings.

    ¶8. (C) Pereira said the GOB saw the need to lower the level
    of confrontation between the two sides, and speculated that

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    to do so it needed to "speak frankly" with the politicians on
    both sides.  He said the GOB was coordinating with Argentina
    and Colombia but, in response to the PolCounselor's statement
    that the USG was considering the possibility of addressing
    the situation at an OAS meeting and would be looking to
    Brazil for possible assistance should that occur, Pereira
    said that Brazil did not "know about the OAS yet."  He added
    that, "It's always a possibility as a way to facilitate
    dialogue," but noted that former Argentine Foreign Minister
    Dante Caputo wanted to go to Bolivia with a group but had
    been told by the Morales government not to come.  (NOTE:
    According to press reports, President Lula has spoken with
    Cristina Kirchner and Hugo Chavez about the situation, and
    the GOB is coordinating with its Friends of Bolivia partners,
    Colombia and Argentina.  END NOTE.)

    ¶9. (C) PolCounselor noted that Venezuelan President Chavez
    had announced the expulsion of the U.S. Ambassador.  Pereira
    indicated he gave no credence to either Chavez's or Morales'
    accusations, but saw them as tactics aimed at distracting
    from internal problems.  Pereira likened Chavez to an unruly
    schoolboy who is popular only because his antics create
    problems for the teacher.  Commenting on Venezuela's
    involvement in Bolivia, Pereira said that "Morales has to
    deal with Chavez carefully," as there is a great deal of
    anti-Chavez sentiment in Bolivia.  The PolCounselor took the
    opportunity to inform Pereira that the USG would be publicly
    announcing the addition of three high ranking Venezuelan
    officials to its list of drug kingpins (ref C).  Pereira said
    that would definitely complicate matters and wondered if
    there were not some way to adjust or postpone the
    announcement.  The PolCounselor told him there was not, but
    assured him that the timing of the announcement was purely
    coincidental as it had been in the works well before the
    current situation flared up.  Pereira said he would pass the
    information on to his colleague responsible for relations
    with Venezuela.

    ¶10. (C) Discussing the events of the last few days in
    Bolivia, Pereira downplayed the significance of the gas
    pipeline cut-off.  He echoed official GOB statements that the
    first incident involving damage to the pipeline had been an
    act of vandalism.  He said the second incident was still
    being investigated, and speculated that it may have been
    caused by Petrobras increasing the level of pressure in the
    pipeline to push a greater volume of gas through to make up
    for the previous interruption in supply.  Whatever the cause
    of the problem, he noted the second problem had been fixed by
    3 PM on September 11 and that the first should be repaired
    within the next few days.

    ¶11. (C) COMMENT:  The GOB recognizes the potential for the
    situation in Bolivia to deteriorate into a grave political
    crisis, which could have extremely negative consequences for
    Brazil (including emigration to Brazil, lost investments, and
    ruptured political relations).  However, the GOB sees the
    current situation in Bolivia as a domestic political problem
    resulting from the fact that neither side is willing to
    negotiate, and appears to be at a loss for the moment on how
    best to proceed.  The GOB firmly believes that the best way
    to deal with the crisis is through dialogue between the
    Morales Government and the opposition prefects.  The GOB is
    willing to help facilitate such dialogue, but its offers have
    been rebuffed.  At present, the GOB does not believe the
    situation will degenerate into a grave political crisis.  So,
    although worried by the situation and eager to facilitate a
    solution, the GOB is for the time being coordinating behind
    the scenes with other regional actors.  END COMMENT.
    SOBEL

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