DOMINICAN ELECTIONS #25: MEJIA'S

UNCLAS SECTION 01 OF 04 SANTO DOMINGO 001319

SIPDIS

SENSITIVE

STATE FOR WHA, WHA/CAR, WHA/PPC, WHA/USOAS, AND DRL
NSC FOR SHANNON AND MADISON ;
LABOR FOR ILAB; DHS FOR CIS - CARLOS ITURREGUI
TREASURY FOR OASIA-LAMONICA (SEE PARA 1, SUB-PARAS 3-5, 7)
USDOC FOR 4322/ITA/MAC/WH/CARIBBEAN BASIN DIVISION
USDOC FOR 3134/ITA/USFCS/RD/WH

E.O. 12958: N/A
TAGS: PGOV EFIN ENRG DR
SUBJECT: DOMINICAN ELECTIONS #25: MEJIA'S
STATE-OF-MY-CAMPAIGN SPEECH

REF: A. (A) SANTO DOMINGO 1300


B. (B) SANTO DOMINGO 1299 (NOTAL)


1. (SBU) This is number 25 in our series on the Dominican
presidential election:

PRESIDENT MEJIA'S PUGNACIOUS CAMPAIGN SPEECH ON NATIONAL DAY

In his ceremonial annual address to Congress on Independence
Day February 27, President Mejia came off more as a feisty
election campaigner on the defensive (Ref A) than as a
statesman. Preoccupied with domestic problems, he omitted any
discussion of foreign policy issues, even Haiti. He jabbed
at front-runner and former president Leonel Fernandez (PLD),
offering voters a choice between an "uncertain, hesitant"
former president ruling on behalf of "a few insensitive
businessmen" and his own firm hand on the tiller, steering a
course through stormy seas for the good of all Dominicans
including the poor. Mejia (PRD) justified his controversial
re-election bid as necessary to complete his program and
avoid "ungovernability" under a PLD successor who would be
confronted by a PRD-dominated Congress and municipalities
until 2006.

Senate President Jesus Vasquez delivered a short opening of
the event, describing the Senate's upcoming program and
institutional reforms before introducing Mejia (septel).
Vasquez used a U.S.-style teleprompter that allowed him to
maintain eye contact with the public and the Congress. In
contrast, Mejia stood at the middle of the long table,
reading from a sheaf of papers -- appearing much of the time
to be addressing his belt buckle. Mejia's delivery was
confident and emphatic throughout.

New Proposals
- - - - - - -

The President promised "in coming days" legislative proposals
to modernize government, called for a "well articulated and
widely agreed" tax reform balancing economic efficiency and
social justice, and announced formation of a presidential
advisory council of private sector leaders on economic and
social issues. He subsequently named seven prominent
business owners/executives, chaired by himself, to formulate
national development policies.
Economic Tribulations
- - - - - - - - - - -

Mejia began by reciting reasons for the Dominican Republic's
poor economic performance under his mandate: the U.S.
economic slowdown, the 9/11 terrorist attacks, rising
petroleum prices, uncertainty provoked by the conflicts in
Afghanistan and Iraq, and a fall in foreign investment due to
economic problems elsewhere in Latin America. He said the
IMF had estimated these external shocks cost the nation US
$2.35 billion in 2001-2002. Most of these effects subsided
by early 2003, but then the "unexpected" collapse of three
commercial banks dashed hopes for recovery. This "time bomb,
hidden and cunning," had been ticking since his (unnamed)
predecessor's administration.

Mejia accepted full responsibility for his decision to
compensate fully all depositors. He maintained this was on
advice from GODR monetary authorities and "experts of the
international financial institutions," to prevent contagion
to all the banks and "a consequent collapse of the nation's
system of payments." Had he refused this assistance,
hundreds of thousands of small depositors and businesses
would have lost their life savings, he said. Among the
losers would have been depositors of 19 savings and loan
institutions, other commercial banks, and pension plans that
had big accounts in the failed banks totaling nearly RD $3
billion (about US $60 million). "My decision avoided
catastrophe," he asserted.

Rolling blackouts in the nation's electric utilities, Mejia
said, had resulted from monetary effects of the banking
crisis. He had re-nationalized two electrical distributing
companies to prevent a collapse of electricity supply to 2
million Dominicans, after the private owners (Union Fenosa, a
Spanish firm) refused to invest needed capital. Mejia blamed
the situation on the privatization model adopted by the
previous Fernandez government and its investments in
inefficient generating plants. He also defended his
decisions to resume price subsidies for electricity and
cooking gas, cushioning the impact of the Dominican peso's
devaluation on consumers.

Social/Infrastructure Projects
- - - - - - - - - - - - - - - - - -

In a more positive vein, the President highlighted his
administration's investment of more than RD $150 billion (US
$3 billion) over the past three years in education, health,
nutrition, housing, and infrastructure, which he said had
been equitably distributed to all provinces and localities,
including the poorest rural areas. He cited programs to
install potable water facilities, provide subsidized food to
low-income citizens, improve agricultural production,
encourage reforestation and fruit exports, reduce dependence
on agricultural imports, provide 1.6 million school lunches
daily, build sports facilities for the Pan American Games and
Dominican youth, create a social security system, provide
incentive payments for mothers to bring their children to
school and health checkups, and build 350,000 housing units.

An Ugly Partisan Tone
- - - - - - - - - - -

Mejia attacked his electoral opponent Leonel Fernandez
repeatedly, without ever naming him. Opponents of Mejia's
financial decisions were "the privileged, whose savings are
in dollars offshore." He blamed the previous government for
failed privatization of the electricity sector, for creating
an incoherent structure and for concluding costly, unworkable
contracts for generation.

Using an elaborately clumsy but effective metaphor, Mejia
declared he had changed his mind on re-election because the
nation's sea of troubles convinced him not to leave the helm
in "uncertain, sweaty and trembling hands, that had already
shown hesitations and fears in the past when it was their
responsibility to govern during the period that engendered
this crisis. . . and even more so, since that captain, the
same one who wrecked the ship four years ago despite the
favorable winds, cannot command a sufficient crew in the
chambers that are responsible for accelerating the vessel or
changing direction during this perilous voyage."
He concluded with an aggressive series of comparsons of the
mass-membership PRD with the "others" whose platform "is
based in purple magic, the return of the swallows to a land
of enchantment that never existed." Mejia asserted that he
was governing "like a man" (con hombria). His opponents
offered ungovernability, "promising the impossibles and
betting on illusions, clinging to an irresponsible populism
that promises that everything -- even the price of admission
to heaven -- will be less expensive. They are willing to
offer anything in order to get votes and to gain their
objective of administering public goods for the benefit of
the privileged." He wound up his rant against the PLD and
in favor of his own PRD by citing St. John -- "You shall know
the truth and the truth shall set you free."

What Mejia Didn't Say
- - - - - - - - - - -

Mejia failed to refer to the Dominican Republic's
Independence Day or founding fathers -- raising eyebrows
among press commentators who pointedly noted the Ambassador's
February 25 address to the American Chamber of Commerce
quoting ideas from independence leader Juan Pablo Duarte.

Mejia said nothing about the conflict in neighboring Haiti,
free trade negotaitions, his reinforcement of border
security, or the Dominican troop contribution to Operation
Iraqi Freedom. He promised "reforms capable of
re-establishing confidence," including fiscal reform, but did
not otherwise mention the recent IMF agreement. He promised
to represent the poor and to improve their lot, but blamed
soaring prices on "the abusive behavior of speculators."

He passed up the opportunity to reassure his listeners that
the presidential election process would be free, fair, and
transparent, amid unabated concerns about the PRD-dominated
election board. He referred briefly to fellow PRD leaders
who had challenged him for the party's nomination, but did
not acknowledge Vice President Milagros Ortiz-Bosch's
announcement the previous day that she had withdrawn and left
her supporters free to back any candidate.

What the Critics Said
- - - - - - - - - - -

Opposition leaders and some editorialists dismissed the
speech as partisan and low-ball. Fernandez took Mejia's bait
and punched back with ad-hominem fury at a February 28 rally,
characterizing the current government as "inept, mediocre,
and incompetent," its officials as "functional illiterates,"
and Mejia as "unthinking, impulsive, emotional, and
imprudent." "What he lacks is the brain mass needed to
understand current problems." Fernandez accused the
President of attempting to pack the Supreme Court with PRD
judges before leaving office (Ref B).

Mudslinging season has commenced, but so far neither
candidate has published an election platform -- a lack noted
formally by the Catholic bishops' conference on February 21
and by the Ambassador in his February 25 speech.

At the Independence Day mass following te speech, Mejia heard
a homily by Monsignor Francisco Jose Arnaiz -- top adviser to
Cardinal Archbishop Nicolas de Jesus Lopez Rodriguez, a
frequent Mejia critic -- calling on the authorities to
"dispel all doubt" that the election would be clean and its
result would accurately reflect the vote.

2. (U) Drafted by Bainbridge Cowell.


3. (U) This report, other election pieces and other material
are available on the Santo Domingo SIPRNET site:
http://www.state.sgov.gov/p/wha/santodomingo/ index.cfm
KUBISKE