Cablegate: Sao Paulo Mayor Wants U.S. Investment, May Run For

VZCZCXRO8189
PP RUEHRG
DE RUEHSO #0767/01 2571912
ZNR UUUUU ZZH
P 141912Z SEP 07
FM AMCONSUL SAO PAULO
TO RUEHC/SECSTATE WASHDC PRIORITY 7468
INFO RUEHBR/AMEMBASSY BRASILIA 8581
RUEHRG/AMCONSUL RECIFE 3782
RUEHRI/AMCONSUL RIO DE JANEIRO 8325
RUEHBU/AMEMBASSY BUENOS AIRES 2866
RUEHAC/AMEMBASSY ASUNCION 3106
RUEHMN/AMEMBASSY MONTEVIDEO 2438
RUEHSG/AMEMBASSY SANTIAGO 2140
RUEHLP/AMEMBASSY LA PAZ 3483
RUCPDOC/USDOC WASHDC 2899
RUEATRS/DEPT OF TREASURY WASHDC
RHEHNSC/NSC WASHDC

UNCLAS SECTION 01 OF 02 SAO PAULO 000767

SIPDIS

SENSITIVE
SIPDIS

STATE FOR WHA/FO, WHA/BSC
STATE PASS USTR FOR KATE DUCKWORTH
STATE PASS FED BOARD OF GOVERNORS FOR ROBITAILLE
NSC FOR TOMASULO
TREASURY FOR JHOEK
USDOC FOR 4332/ITA/MAC/WH/OLAC
USDOC ALSO FOR 3134/USFCS
STATE PASS EXIMBANK
STATE PASS OPIC FOR DEMROSE, NRIVERA, CMERVENNE
USAID FOR LAC/AA

E.O. 12958: N/A
TAGS: ECON PINR PGOV BR
SUBJECT: SAO PAULO MAYOR WANTS U.S. INVESTMENT, MAY RUN FOR
RE-ELECTION

REF: SAO PAULO 731

SENSITIVE BUT UNCLASSIFIED - PLEASE PROTECT ACCORDINGLY

SUMMARY
-------

1. (SBU) In an introductory lunch with recently arrived Consul
General (CG) and DPO, Sao Paulo Mayor Gilberto Kassab expressed an
interest in strengthening the city's cooperative relationship with
the USG and said Sao Paulo was interested in attracting U.S.
investors for infrastructure projects. He indicated he would also
like to invite New York City Mayor Michael Bloomberg to visit Sao
Paulo and perhaps develop a formal city-to-city relationship. On
the political front, Kassab fixed January 2008 as a deadline for
deciding whether he would run for re-election or instead support
former Governor and 2006 presidential candidate Geraldo Alckmin.
End Summary.

2. (U) The Mayor was relaxed throughout, and reflected on the
governance challenges posed by a city of over 11 million people and
5.5 million cars, and an annual budget of 21 billion Reals (slightly
more than USD 10 billion). He expressed satisfaction with
beautification projects, commenting that under his "Clean City"
program aimed at reducing visual pollution, some 6,300 billboards
have been removed. The Mayor has also devoted considerable effort
to cleaning up Sao Paulo's downtown area and such crime-ridden
nearby neighborhoods as "Cracolandia" by relocating residents,
tearing down abandoned buildings, and cracking down on itinerant
street vendors selling legal and other merchandise.

WANTED: FUNDS FOR INFRASTRUCTURE
--------------------------------

3. (U) CG and Mayor Kassab exchanged views on areas where USG and
the municipal government have common interests and may be able to
work together, including security and environment. The city
government is looking for interested private investors for
infrastructure development, and the Mayor mentioned several state
and municipal projects. Some improvement projects are designed as
public-private partnerships (PPPs), and would be ideal for U.S.
investment. For example, a planned rapid light rail system
connecting Sao Paulo to Guarulhos International Airport some 30 km
away will facilitate the rerouting of flights away from the
overcrowded Congonhas airport. The city's mass transit system is
being expanded, while the state and city are planning an outer ring
road to alleviate congestion. CG commented that he had recently had
a similar conversation with Central Bank President Henrique
Meirelles (reftel), and that a group of institutional investors from
the U.S., including major pension funds like CalPERS, is visiting
Rio and Sao Paulo to learn about opportunities in Brazil.

4. (U) Kassab asked the Consulate to help him invite New York City
Mayor Michael Bloomberg to Sao Paulo, possibly to develop a formal
city to city relationship. (Note: Sao Paulo is partnered with Miami
Dade County in the Sister Cities International organization, but
Kassab did not mention it. End note.) CG replied that the city
should put forward a specific program of activities that would
interest the Mayor and should think carefully about the timing of
any invitation, given next year's electoral calendar.

ELECTORAL PROSPECTS
-------------------

5. (SBU) Kassab, whose approval ratings have improved in recent
months, told CG he might run for re-election in October 2008.
Recalling that he was elected Vice-Mayor in 2004 on a PSDB-DEM
ticket with Jose Serra of the Social Democracy Party of Brazil
(PSDB), becoming Mayor in March 2006 when Serra resigned to run

SAO PAULO 00000767 002 OF 002

(successfully) for Governor, Kassab said the PSDB and DEM should
agree on a single candidate. PSDB former Governor and presidential
candidate Geraldo Alckmin appears to be interested and would
certainly be a strong, accomplished candidate who could attract a
lot of votes. Kassab expected the question to be resolved by
January of next year so the candidate can begin campaigning. The
most important thing, he said, was to maintain the PSDB-DEM
alliance.

6. Participants:

U.S.

Consul General Thomas White
Deputy Principal Officer James Story
Political officer Peter Higgins

Brazil

Sao Paulo Mayor Gilberto Kassab
Chief of Protocol Brasilia Arruda
Municipal Secretary for International Relations Alfredo Cotait Neto
Staff Assistant Guilherme Mattos.

COMMENT
-------

7. (SBU) This lunch represented an opportunity for the Mayor and
the CG to get to know one another, and to build on the existing
city-Consulate relationship. They identified a number of common
interests and areas of possible cooperation between the municipal
government and ConGen Sao Paulo. The Mayor's interest in attracting
private investment for infrastructure projects is reflected at all
levels of government as awareness grows that high costs and
logistical impediments are hurting Brazilian industries and the
economy. Much work remains to be done, however, to create the
necessary regulatory environment to attract foreign participation.
End Comment.

WHITE

© Scoop Media