C O N F I D E N T I A L SECTION 01 OF 02 BUENOS AIRES 002291

08/10/2004

SIPDIS

FOR U/S LARSON, WHA FOR A/S NORIEGA, WHA FOR PDAS DERHAM, WHA/BSC, WHA/EPSC, AND EB FOR A/S WAYNE, EB/IFD/OMA PASS NSC FOR TOM SHANNON, MIKE DEMPSEY, NILMINI GUNARATNE, AND DEL RENIGAR PASS USTR FOR PETER ALLGEIER, SUE CRONIN USCINCSO FOR POLAD

E.O. 12958:
DECL: 08/10/2014

TAGS: ETRD, PGOV, PREL, AR, MERCOSUR, FTAA.

SUBJECT: FORMER PRESIDENT DUHALDE ON KIRCHNER, FTAA AND VENEZUELA.

Classified By: Ambassador Lino Gutierrez for Reasons 1.4 (b) and (d).

1. Summary: Former President Eduardo Duhalde claims that a MERCOSUR-led “South American Union” will be announced before year’s end. He claimed to support free trade and FTAA, especially after the recent compromise reached at the WTO meeting in Geneva. Duhalde said President Kirchner is more pragmatic than ideological, and said that he wanted to help him. Duhalde discounted any challenge by President Kirchner or First Lady Cristina Kirchner to his control of Buenos Aires Province. On Venezuela, he said that a democratic solution was the only way out of the current conflict, though he expressed the opinion that a Chavez victory would be better on the whole for Argentina. End Summary.

2. (SBU) Former President of Argentina and President of the MERCOSUR Commission Eduardo Duhalde (protect) came over for coffee at the Residence August 9. Duhalde arrived ten minutes early, and said, “Unlike others (read President Kirchner) I am always punctual.”

Still Bitter

3. It was clear that Duhalde still feels he was slighted by the USG during his term as president. He said the United States “disrespected us” and that President Bush would not even call him on the phone. When President Bush finally called Duhalde in Davos, by then Duhalde said he recommended that the President get in touch with his successor. Duhalde claimed that the U.S. had not paid attention to Latin America under the Bush Administration. I disagreed with Duhalde’s assessment, reminding him of the situation the U.S. faced after September 11. Despite Duhalde’s hurt feelings, he opined that President Bush’s reelection would be “better for Argentina,” since he has concluded that prospects for FTAA and free trade would be better under a Bush Administration.

Toward a South American Union

4. (SBU) Duhalde said South America is moving inexorably toward a “South American Union” which will be announced by the end of the year. The goal will be to create a bloc like the European Union in South America, though Duhalde acknowledged that an EU-like entity is still “decades away.” MERCOSUR will take the lead in forming this alliance. Duhalde sees no contradiction between a South American Union and FTAA. Duhalde is also working with Argentina, Brazil and Paraguay to create a special fund to help Paraguay and Bolivia.

FTAA

5. (SBU) “We want free trade, but on fair terms,” Duhalde proclaimed. The WTO agreement in Geneva provides an opportunity for the elimination of subsidies, though Duhalde does not believe it will be easy. But in Duhalde’s view, FTAA is a must if Latin America is ever going to sustain economic growth and no longer be the region with the most inequality on the planet.

Relationship with Kirchner

6. Regarding his reportedly rocky relationship with President Kirchner, “I want to help him,” Duhalde assured. I repeated President Bush’s statement that the United States wanted Argentina and President Kirchner to succeed. Duhalde agreed that Kirchner had to finish his term for the good of Argentina and its democracy. As to Kirchner’s supposed leftist ideology, do not be fooled by Kirchner’s rhetoric, cautioned Duhalde. He is essentially a pragmatist. “Look at his cabinet,” he said. “They are all centrist or center-right,” and he specifically mentioned Minister of Defense Jose Pampuro, Minister of the Presidency Alberto Fernandez, Minister of the Interior Anibal Fernandez, Minister of Health Gines Garcia and Minister of the Economy Roberto Lavagna. What about Minister of Planning Julio De Vido? “I don’t know him well, but he’s a classic Peronist.”

7. In Duhalde’s view, Kirchner has made a tactical mistake by placing himself on the center-left side of the political spectrum. “He’s not going to get many more votes on the Left,” while he could lose considerably on the Right. Duhalde criticized Kirchner’s disorganization and lack of punctuality. He hopes Kirchner will learn the longer he is in office. Until then, Duhalde sees no other choice but to help Kirchner. Will Kirchner challenge Duhalde’s control of BA province by running First Lady Cristina Fernandez de Kirchner (who runs well in the polls) for a Senate seat, as the press has speculated? Not in your life, according to Duhalde. Kirchner simply cannot afford the embarrassment of his wife losing a provincial election, so this will not happen. Duhalde expects an agreement with Kirchner on the selection of provincial candidates for next year’s election.

Venezuela

8. Duhalde confirmed he will leave on Thursday for Venezuela, where he will be an electoral observer at the August 15 referendum. He is convinced that “the only solution in Venezuela is a democratic one.” I agreed, and said that it was important that the referendum process be democratic and transparent. Duhalde agreed. That said, he believes from Argentina’s perspective it would be better if Chavez won the referendum. “Otherwise, there will be anarchy.” “Better to have stability in Venezuela than to have both Colombia and Venezuela in turmoil,” he claimed.

Other Countries

9. President Alvaro Uribe in Colombia is Duhalde’s favorite president. “Colombia’s problem is our problem. When I was Menem’s vice-president, I visited then-President Barco and delivered two (anti-guerrilla) aircraft to him,” he recounted. Elsewhere the region is in turmoil, including Peru and Bolivia. Duhalde is impressed by Bolivian President Mesa but not by President Toledo of Peru.

Comment

10. Duhalde was tanned (unusual in the Southern Hemisphere winter) and in good spirits. He still feels Argentina and the Hemisphere owe him for keeping Argentina stable after the 2001-2 crisis. Although he has said publicly he wants to retire from politics, it is clear he remains heavily engaged in day-to-day political events here. Despite his bitterness about perceived slights and his occasional anti-FTAA public pronouncements, I found him eager to maintain contact to compare notes on occasion.

11. As the strong man of Buenos Aires province, which contains one third of the Argentine population, Duhalde remains the second-most powerful political figure here after the President. His public standing in the polls is still highly negative, as he is blamed by many for causing President De la Rua’s downfall (something he vehemently denies), for the corruption of the Buenos Aires Province government and police, and by some in the Left for the death of two piqueteros during a demonstration while he was president. Yet President Kirchner may have concluded that it is easier to govern by striking a deal with Duhalde. There have been indications of late that Duhalde and Kirchner may agree on a common list of candidates for the important 2005 national and local elections. Under any scenario, Eduardo Duhalde will remain a force to be reckoned with in Argentina for some time to come.

GUTIERREZ

C O N F I D E N T I A L BUENOS AIRES 000174

02/20/2009

SIPDIS

E.O. 12958:

DECL: 02/18/2039

TAGS: PREL, PGOV, PINR, ECON, SNAR, AR

SUBJECT: EX-PRESIDENT DUHALDE HANDICAPS THE NEW GENERATION OF ARGENTINE POLITICAL LEADERS

REF: BUENOS AIRES 144

Classified By: Charge d’Affaires Thomas P. Kelly for reasons 1.4 (b) and (d).

1. Summary: Former Argentine president Eduardo Duhalde predicted during a meeting with the CDA that President Cristina Fernandez de Kirchner (CFK) will complete her term, but that the Kirchners were fast being eclipsed by new faces and new ideas in Argentine politics. After venting his spleen about the Kirchners, Duhalde handicapped the current crop of presidential aspirants. He indicated that Senator Carlos Reutemann, at 67, is “too old” to run a successful campaign, calling him “our McCain.” Duhalde spoke highly of Buenos Aires City mayor Mauricio Macri and former Buenos Aires governor Felipe Sola. Although Macri, Sola, and Deputy Francisco De Narvaez have forged an alliance for the mid-term elections, he acknowledged that it will be difficult for the three ambitious politicians to agree on who will lead the ticket in 2011. Duhalde said that he hoped Argentines would have two viable parties to choose from by 2011. To that end, despite his reputation as an arch-Peronist, he claimed that he was communicating with the Radical Party to help it recover its standing. He praised Vice President Julio Cobos, characterizing him as a principled man who is the first Radical politician with truly national appeal since Raul Alfonsin. Duhalde dismissed Civic Coalition leader and 2007 presidential runner-up Elisa Carrio as “too combative” and Kirchner-like to build an effective political alliance. End Summary.

2. Former President Eduardo Duhalde on February 19 stopped by the Embassy’s front office while visiting the Embassy to renew his U.S. visa prior to traveling to Europe and Colombia (at, he said, President Uribe’s invitation). Duhalde began by expressing deep concern about Argentina’s ability to weather the global financial crisis. He noted that talk of the U.S. demise in some circles is wrong, adding that the U.S. has demonstrated time and again its ability to overcome crises. However, developing countries such as Argentina are limited in the actions they can take to mitigate the economic downturn. He described as foolhardy those who claim that the “U.S. tsunami will reach Brazilian beaches as gentle waves.” He added that “if we sit on the sidelines, we will only be waiting for the next crisis—which could be worse.”

Duhalde Slams the Kirchners

3. Noting that he’d had his own differences with the IMF, Duhalde said that the Kirchners had overdone the Fund-bashing. He characterized as “ridiculous” Nestor Kirchner’s decision to pay off the GOA’s entire IMF debt in one fell swoop and rely instead on more expensive financing from Hugo Chavez’s regime. Now that there is talk about IMF reform, he expressed the hope that the GOA would reach a rapprochement with the IMF that would allow it to regain access to IMF credit lines.

4. Duhalde bluntly called the Kirchners “incompetent”, and acknowledged that he was partly to blame as he had a hand in bringing former President Nestor Kirchner to power. Instead of taking advantage of the economic boom after Argentina’s 2001-02 crisis to develop a plan in conjunction with the country’s productive sectors, like Brazil and Chile had done, the Kirchners opted to fight them. The CDA observed that the GOA’s protracted dispute with the farm sector seemed to be an inflection point for the Kirchners’ political strength. Duhalde agreed, saying “Nestor and Cristina are the same thing. Both are aggressive with everyone. Instead of looking to build Argentina’s future, they focus on rectifying the abuses of the past to defend the human rights of the dead. What they should be doing is defending the rights of those who live today.”

5. Duhalde attributed the Kirchners’ failings to lack of experience. Despite Nestor Kirchner’s success in running Santa Cruz province, it is a small province with lots of resources and only 180 thousand people. Its problems are nothing in comparison to problems at the national level, he said. What is even more dangerous, he maintained, is that the Kirchners do not have a defined political agenda. For this reason, he said, Argentina not only needs new faces, but also new ideas in politics.

6. Duhalde pointed out that the 2001-02 crisis destroyed public confidence in Argentina’s democratic institutions, culminating in the popular cry to “get rid of them all.” By 2003, with order reestablished, Argentines began to believe again. He noted that 82 percent of the population voted in the 2003 elections. The Kirchners have abused the public’s trust, and each day the public loses their faith and confidence in their ability to govern, he asserted. When the CDA asked if the Kirchners are more comfortable governing in times of crisis, Duhalde said no, noting that only three days before, CFK reiterated publicly that Argentina is not in crisis and does not need a plan B. This kind of intemperate remark, Duhalde added (intemperately), was the kind of think you would expect to hear from a politician in Venezuela, Ecuador, or Colombia, “but in the South, we’re supposed to be different.” The CDA pointed out that at least NK seems to have acknowledged otherwise, noting that he was quoted in today’s papers as saying that the country was about to face the worst crisis in 100 years. Duhalde laughed, saying it must be difficult for mature countries to take Argentina seriously. In terms of political rhetoric, the Kirchners seem to be taking their cue from Venezuelan President Hugo Chavez, he said, adding that they are wont to proclaim their administration as “the best the country has seen in 100 years.” He lamented that many people believe what the Kirchners tell them on television, “but it’s all a lie.”

CFK will Finish Term, But has Lost Public Confidence

7. Nevertheless, Duhalde indicated that he expected CFK to finish her term. He asserted that the rumors that CFK was ready to resign at the height of the agricultural conflict over export taxes were true, as she and her husband were in a state of shock over the degree of support that coalesced around the anti-Kirchner farmers, culminating with the government’s startling loss of the Congressional vote on the tax increases. They will not react in the same way in the event of an adverse result in the upcoming mid-term elections, he surmised, adding that “the Kirchners know they will lose the mid-term elections, and they are trying to determine what they will do in such an event.” Duhalde added that, for the sake of Argentine democracy, he wanted CFK to reach the end of her term.

8. He predicted that neither Kirchner will be a factor in the 2011 presidential elections, either as a candidate or kingmaker. He explained that “the Kirchners have done nothing to connect with the people. They are feared, not loved. The private sector is scared to talk over the phone. Pro-Kirchner Radical governors are fed up, because if they do not support the first couple, the government withholds federal funds designated for the province. The Congress is a joke. The Kirchners appointed a strong Supreme Court, but the lower courts are not as strong. They have created an ‘anything goes’ political culture and weakened Argentina’s federal system and its democracy.” He regretted that the Argentine public has grown so accustomed to public scandals that no one objects when the President’s son announces that he is beginning a consulting firm to facilitate foreign investment in Argentina.

Duhalde’s “Helping Hand” in Mid-Term Elections

9. Turning to a discussion of mid-term elections, Duhalde indicated that there are a number of governors who are running their provinces very well and have very high public approval ratings. He reiterated, however, that jumping from the provincial to the national level is difficult. In Senator Carlos Reutemann’s case, it is easier, he said, since Reutemann has a national presence. Nevertheless, he considered Reutemann (at 67, the same age as Duhalde) as “too old” to run a successful presidential campaign, calling him “our McCain.” (Duhalde added to another emboff en route to this meeting that he himself was also too old to be a presidential aspirant.)

10. As a result, Duhalde is now focusing his energy on helping the next generation of political leaders. He expressed high hopes for Buenos Aires City mayor Mauricio Macri, noting that he is relatively young (48) and has strong ties to Argentina’s business class. He opined that a healthy government-business alliance was key to governability.

Duhalde indicated that former Buenos Aires province governor Felipe Sola (reftel), a Peronist who broke from the Kirchners in late 2008, has a solid chance. Duhalde noted that Sola’s honesty and track record of performance as governor of the country’s biggest province bolstered his appeal as a candidate. Despite his professed zeal for young leadership, Duhalde claimed that the caliber of today’s political leaders has declined, with the majority looking for personal enrichment rather than enhancing the country’s well-being.

11. Noting the political alliance forged by Macri, Sola, and Deputy Francisco De Narvaez for the mid-term elections, the CDA asked whether the three presidential hopefuls would be able to agree among themselves on whom would head the 2011 presidential ticket. Duhalde acknowledged that this would be difficult. Commenting on press reports that Macri et al. were courting Reutemann as well, Duhalde opined that Reutemann was unlikely to join, suggesting that he was something of a loner. (Note: Duhalde is seen by many as the architect of the Macri-Sola-De Narvaez alliance; former President Kirchner recently called on him to step forward as the architect of this grouping. End Note.)

A Closet Radical?

12. Despite his reputation as a Peronist diehard, Duhalde claimed to be helping leaders in the non-Peronist opposition as well, saying that Argentine democracy would benefit from a return to a two-party system and that he hoped there would be two viable parties in 2011. He maintained that the Radical party is still well-regarded by the middle and lower middle classes, as evinced by the number of Radical mayors throughout the country. The problem with the Radical party, he opined, is that no one emerged to fill the vacuum left by former president Raul Alfonsin.

13. Duhalde suggested that Vice President and Radical party member Julio Cobos could be that leader, although he is currently excommunicated from the party as well as estranged from his running mate, CFK. Cobos, Duhalde argued, is the first Radical politician with truly national appeal since Alfonsin. His courage and conviction in standing up to the Kirchners by casting the decisive vote to defeat the farm export tax increase is widely admired and sustains his national popularity. Duhalde discounted reports that Cobos had given up in trying to rejoin the Radical party. Duhalde said that he talked to Alfonsin’s son Ricardo on February 18 and was told that the negotiations between the party and Cobos continue. (He added that his fellow ex-president Raul Alfonsin, who suffers from a number of ailments, has taken a turn for the worse and “is very ill.”)

14. Duhalde was dismissive about Elisa Carrio, the Civic Coalition leader, 2007 presidential runner-up, and presumptive linchpin of another emerging opposition alliance incorporating the Radicals and Socialists. He remarked that her combative leadership style is similar to the Kirchners, making it very difficult for her to build bridges with other political groups or to connect with the electorate.

Duhalde on Drug Policy

15. Prior to the meeting, Duhalde told ICE Attache that twenty years ago he argued that Argentina was not just a drug transshipment point, but also a user country. He maintains that his prediction is being borne out today. (Note:

According to a recent UN study, Argentina leads Latin America in cocaine consumption. Press articles have also estimated that over half of Buenos Aires youth have experimented with drugs.) Duhalde criticized Minister of Justice Anibal Fernandez’s assertions that drug consumption is not a major problem in Argentina. He stated that Fernandez is too focused on the supply side and has not stepped up drug prevention efforts.

Comment

16. This was a golden opportunity to compare notes behind closed doors with the controversial Duhalde, who remains very much in the middle of the Argentine political game. The fact that Nestor Kirchner, who was hand-picked by Duhalde to succeed him, publicly attacked his former mentor on February 17 is a backhanded compliment—though it’s also intended to diminish “new generation” politicians like Macri by casting them as mere puppets. Given the currency of the view that this ex-president is the brains behind a resurgent anti-Kirchner alliance, we asked for and received assurances from Duhalde that he not publicize the conversation in any way.

KELLY