VZCZCXYZ0007
PP RUEHWEB
DE RUEHSN #0708/01 2092039
ZNY SSSSS ZZH
P 282039Z JUL 09
FM AMEMBASSY SAN SALVADOR
TO RUEHC/SECSTATE WASHDC PRIORITY 1438
INFO RUEHZA/WHA CENTRAL AMERICAN COLLECTIVE PRIORITY
RUMIAAA/USCINCSO MIAMI FL PRIORITY
RUEKJCS/JOINT STAFF WASHINGTON DC PRIORITY
RUEKJCS/SECDEF WASHDC PRIORITY
RHEHNSC/NSC WASHINGTON DC PRIORITY
S E C R E T SAN SALVADOR 000708
NOFORN
SIPDIS
E.O. 12958: DECL: 07/21/2019
TAGS: PGOV PREL ES
SUBJECT: EARLY IMPRESSIONS OF FUNES GOVERNMENT
REF: SAN SALVADOR 653
Classified By: Charge d'Affaires, for reasons 1.4 (b) and (d)
¶1. (C) Summary: Some eight weeks into the Funes
Administration, we are beginning to see more clearly the
trends and factions inside the GOES. President Mauricio
Funes' non-FMLN campaign support group, the Friends of
Mauricio, is largely in control of the economic apparatus of
El Salvador. Similarly, Defense is in the hands of a
formerly-retired, recently-promoted military officer and
Friend of Mauricio, Brigadier General David Munguia Payes.
FMLN hard-liners are at the helm of the security and
intelligence apparatus. Foreign policy is in the hands of a
loyal FMLN member, but has thus far been characterized by
pragmatism and outreach to the U.S. Assistance programs
broadly mirror the rest of the relationship, with most
programs moving forward successfully but some police and
security programs under review. The Funes GOES has made
poverty eradication its highest priority. End Summary.
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The Good
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¶2. (C) The Funes Administration inherited two serious
economic problems. First, the Salvadoran economy likely
entered recession in late 2008, driven by falling remittances
and declining exports because of the U.S. recession. Second,
the government was effectively broke ) and in many cases
behind on its bills ) because of declining tax revenues and
the Saca Administration’s lavish, election-year subsidies.
So far, the government has chosen to seek new funding from
the World Bank, Inter-American Development Bank, and
International Monetary Fund, rather than from sources like
Venezuela. The government's "Anti-Crisis Plan" likewise
appears to consist primarily of increased funding for
existing social programs. These programs, however, will
likely do little to boost the economy, where recovery
ultimately depends on the recovery in the U.S.
¶3. (C) Since June 1, Salvadoran foreign policy has also been
characterized by pragmatism. Foreign Minister Hugo Martinez
stepped into the chair at the OAS General Assembly in San
Pedro Sula just hours after assuming his new role; he
impressed both the U.S. delegation and Salvadoran observers
with his performance. Since then, the main foreign policy
issue faced by the GOES has been Honduras. In the hours
after President Zelaya's expulsion to Costa Rica, both
Martinez and Funes reached out to the Embassy and to
Washington to coordinate what has been a reasonable,
responsible approach to the crisis on their northern border.
On Funes' first day in office he recognized Cuba, but
balanced this by meeting Secretary Clinton and the USDEL to
his inauguration. FMLN hardliners, particularly Vice
President Sanchez Ceren, would prefer an ALBA-esque foreign
policy and carry out a parallel FMLN agenda, but they are not
permitted to wreck relations with traditional partners.
Ambassadorial appointments are being made in a deliberate,
unhurried fashion, and have not raised concerns; indeed,
keeping former FM Francisco Lainez in place at the OAS sent
an early signal of continuity.
¶4. (C) On foreign assistance, USAID reports good cooperation
across the board, save for some difficulties in public
security. (More on that below.) The GOES has voiced strong
support for continuing USAID programs and has indicated it is
in agreement with USAID's strategic goals for El Salvador.
The Funes Administration has elevated to Vice Minister the
MFA position responsible for coordinating foreign assistance
programs and has called for the formulation of a global
cooperation strategy. The GOES is actively leveraging
international donors to address its near-term anti-crisis
plan. In charge of both economic policy and donor
coordination is Alex Segovia, the President's Chief of
Cabinet. Segovia, a kind of super-minister, is the most
pragmatic and least ideological figure in the GOES.
¶5. (C) The GOES just reaffirmed its continued interest in
USAID's programs for improved tax collection, health sector
reform and a diagnostic of the education system. MCC's rate
of implementation continues to gain speed, in large degree
because of the efforts of local partner FOMILENIO's Director,
Jose Angel Quiroz. We successfully pushed back against a
move by Funes to replace Quiroz in the early days of his
government, arguing that another disruption in FOMILENIO
management would set back MCC's program by months, if not
more. It was Segovia, in his role as FOMILENIO Board
Chairman, who convinced Funes to leave Quiros in place. The
new GOES has shown great interest in the MCC indicators;
Segovia just wrote a warm letter to MCC CEO Rodney Bent
recommitting the GOES to the indicators and all other MCC
criteria.
¶6. (C) Military-to-military cooperation continues at a tempo
similar to that before Funes took office. The USNS Comfort
recently spent 11 days anchored offshore and saw more than
19,000 Salvadoran patients. We have three other Medical
Readiness Training Exercises scheduled for 2009 and a full
slate of DOD/SA-funded training for members of the Salvadoran
Armed Forces (ESAF). Additionally, the MOD has requested USG
support to conduct a National Security Strategy (NSS)
workshop with the intent to get Cabinet level and Assembly
personnel involved in the GOES process to develop their own
NSS. Appointment of retired Colonel Munguia Payes as
Minister of Defense, as well as mid-ranked active duty
colonels to most key command positions, has created
discomfort in ESAF ranks. However, the Minister of Defense
is an institutionalist and is focused on maintaining the
ESAF's apolitical professionalism. The Minister and the ESAF
are loyal supporters of the president, and eager to continue
longstanding mil-to-mil relationships with the U.S.
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The Bad
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¶7. (S) Salvadorans across the spectrum link Manuel Melgar,
now Minister of Public Security and Justice, to the 1985 Zona
Rosa attack which killed four off-duty U.S. Embassy Marine
Security Guards and other Americans and Salvadorans.
Melgar's nomination appears to have been based less on his
public security credentials than on the hard-line FMLN's
insistence that they control public security. This was their
"pound of flesh" in exchange for "Friends of Mauricio"
controlling the economy. Melgar's presence as Minister has
resulted in a distancing from the USG, a far cry from the
close relationship we enjoyed with his predecessor. Law
enforcement cooperation has not been frozen, but full
implementation of the Merida Initiative is now contingent
upon guidance from Washington regarding how best to work
around Melgar. Just as disappointing is the cynical message
it sends to a high-crime society like El Salvador when the
President names as Minister of Public Security an individual
with blood on his hands.
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And the Ugly
------------
¶8. (C) Traditional feuds between the Salvadoran right and
left and modern feuds between Funes and the FMLN are playing
out in other contexts. Over two weeks after the legal
deadline (June 30) to appoint five new magistrates to the
Supreme Court, the Salvadoran Legislative Assembly remained
deadlocked as the governing FMLN and ARENA-led opposition
coalition could not reach agreement on a list of names.
(Note: Supreme Court appointments require a 2/3
supermajority, thus demanding ARENA and the FMLN support any
nominee. End note.) Naming a new Attorney General (which
also requires a 2/3 Assembly vote) became linked to the
Supreme Court selections and the entire process ground to a
halt. The Supreme Court was made whole July 16 when a deal
was struck between Funes, the FMLN, and opposition on a slate
of nominees. Public and private negotiations continue over
the new Attorney General.
¶9. (S/NF) El Salvador's intelligence service (OIE) in the
hands of orthodox FMLN member Eduardo Linares could become
ugly, depending upon how much leeway Funes allows him to
accept advice, training, money, and personnel from Cuba or
Venezuela. To date Linares has behaved cautiously, first
seeking to get his arms around his own organization, which,
to be fair, had previously considered the FMLN as its primary
target.
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Pursuing U.S. Interests Going Forward
-------------------------------------
¶10. (C) Eight weeks on, we are roughly where we expected to
be. We have enjoyed excellent cooperation in most areas with
the GOES, but lost some ground in other areas, especially law
enforcement. Given the inconsistent performance of
Salvadoran law enforcement in good times, it has been hard to
discern a difference in performance, or crime statistics,
since June 1. Our assistance priorities, and continued trade
relationship, seems closely aligned with the Funes
Administration's own goals. Foreign policy priorities will
sometimes diverge, although our problems are likely to be
less with the official GOES policies than with the FMLN's own
parallel policies. The Embassy's approach with the Funes
Administration will continue to be engagement across the
board, even with Public Security, up to and including the
Deputy Minister. Our objective is to strengthen the
institutions of Salvadoran democracy, regardless of who is in
power. Civil society, media, and the business sector take a
parallel and complementary approach. ARENA did not disappear
June 1 and its reorganization and regrouping is proceeding.
It promises to remain a significant opposition during the
entire five years of the Funes Administration.
BLA
