RECOMMENDATION ON FINANCING OF MARINE PATROL

UNCLAS SANTO DOMINGO 003627 SIPDIS SENSITIVE DEPARTMENT FOR EB/IFD/ODF AND WHA/CAR; PLEASE PASS TO EX-IM BANK E.O. 12958: N/A TAGS: EFIN ECON DR SUBJECT: RECOMMENDATION ON FINANCING OF MARINE PATROL VESSELS REF: SANTO DOMINGO 3617 (SBU) Further to reftel, Embassy recommends against U.S. Ex-Im Bank financing of marine patrol vessels for the Dominican navy at this time for the following reasons: -- The Dominican Republic's fiscal deficit and inability to meet IMF debt targets presents repayment risk on existing debt, and additional loans would increase that risk; -- The Embassy's Military Assistance and Advisory Group (MAAG) does not support the GODR Navy's purchase of additional vessels until the new government (to be installed 16 August) develops cogent national security and national military strategies that demonstrate the need for such vessels; -- The Dominican Navy lacks sufficient funds to purchase fuel or to maintain adequately ships that it purchased only last year; -- Additional bilateral lending at this time conflicts with President Mejia's directive to halt project loans and with USG efforts to support fiscal discipline to meet Fund objectives. KUBISKE