Identifier
Created
Classification
Origin
06BRIDGETOWN319
2006-02-21 13:36:00
UNCLASSIFIED//FOR OFFICIAL USE ONLY
Embassy Bridgetown
Cable title:  

THE WINDIES - SPOT REPORTS FROM THE EASTERN

Tags:  PGOV PREL CPAS SNAR EAID EAIR EFIN ELAB ENRG 
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PP RUEHGR
DE RUEHWN #0319/01 0521336
ZNR UUUUU ZZH
P 211336Z FEB 06
FM AMEMBASSY BRIDGETOWN
TO RUEHC/SECSTATE WASHDC PRIORITY 1926
INFO RUCNCOM/EC CARICOM COLLECTIVE
RUEHCV/AMEMBASSY CARACAS 1380
RUEHME/AMEMBASSY MEXICO 0794
RUEHCV/USDAO CARACAS VE
RUMIAAA/HQ USSOUTHCOM J2 MIAMI FL
RUMIAAA/HQ USSOUTHCOM J5 MIAMI FL
UNCLAS SECTION 01 OF 05 BRIDGETOWN 000319 

SIPDIS

SENSITIVE
SIPDIS

DEPT FOR WHA/CAR
SANTO DOMINGO FOR FCS
SOUTHCOM ALSO FOR POLAD

E.O. 12958: N/A
TAGS: PGOV PREL CPAS SNAR EAID EAIR EFIN ELAB ENRG
ETRD, PHUM, MX, VE, XL
SUBJECT: THE WINDIES - SPOT REPORTS FROM THE EASTERN
CARIBBEAN - JANUARY 2006

REGIONAL

- EU Approves US$19 Million in Banana Aid
- Regional Trade Body to Increase Private Sector Outreach

ANTIGUA AND BARBUDA

- New Machine-Readable Passport Introduced
- Giorgio Armani Purchases House in Antigua

BARBADOS

- Major Drug Bust

DOMINICA

- Government Workers Laid Off, According to IMF Program

GRENADA

- New Income Tax Begins Despite Opposition

ST. LUCIA

- Controversial Parliamentarian Resigns Seat
- Government Reaffirms Support for PetroCaribe
- Air Jamaica Returns to St. Lucia
- St. Lucia Banana Exports at Record Low

ST. VINCENT AND THE GRENADINES

- Opposition to Take Election Officials to Court
- International Airport Plan Moves Ahead
- PM Gonsalves Presents US$214.8 Million Budget

--------
REGIONAL
--------

- Regional Trade Body to Increase Private Sector Outreach
UNCLAS SECTION 01 OF 05 BRIDGETOWN 000319

SIPDIS

SENSITIVE
SIPDIS

DEPT FOR WHA/CAR
SANTO DOMINGO FOR FCS
SOUTHCOM ALSO FOR POLAD

E.O. 12958: N/A
TAGS: PGOV PREL CPAS SNAR EAID EAIR EFIN ELAB ENRG
ETRD, PHUM, MX, VE, XL
SUBJECT: THE WINDIES - SPOT REPORTS FROM THE EASTERN
CARIBBEAN - JANUARY 2006

REGIONAL

- EU Approves US$19 Million in Banana Aid
- Regional Trade Body to Increase Private Sector Outreach

ANTIGUA AND BARBUDA

- New Machine-Readable Passport Introduced
- Giorgio Armani Purchases House in Antigua

BARBADOS

- Major Drug Bust

DOMINICA

- Government Workers Laid Off, According to IMF Program

GRENADA

- New Income Tax Begins Despite Opposition

ST. LUCIA

- Controversial Parliamentarian Resigns Seat
- Government Reaffirms Support for PetroCaribe
- Air Jamaica Returns to St. Lucia
- St. Lucia Banana Exports at Record Low

ST. VINCENT AND THE GRENADINES

- Opposition to Take Election Officials to Court
- International Airport Plan Moves Ahead
- PM Gonsalves Presents US$214.8 Million Budget

--------------
REGIONAL
--------------

- Regional Trade Body to Increase Private Sector Outreach

1. (U) The Barbados-based Caribbean Regional Negotiating
Machinery (CRNM) announced that it is expanding its private
sector outreach program, beginning in January with a
dialogue that will bring together the private and public
sectors in St. Kitts. The CRNM will also teach the private
sector how to become more involved in trade policy and take
advantage of trade opportunities. USAID provides assistance
to the CRNM, although the Inter-American Development Bank
(IDB) is funding this particular project.

2. (SBU) Comment: Private sector contacts in the region
have often complained to Post that they have little input in
their governments' trade policies. This CRNM project could

help reverse protectionist policies in the Caribbean as the
region's private sector (except for protected industries) is
generally more open to liberalizing trade than governments.
End Comment.
- EU Approves US$19 Million in Banana Aid


3. (U) The European Union (EU) has approved nearly US$19
million to help Eastern Caribbean banana-producing countries
diversify their economies. St. Lucia will receive US$7.4
million, St. Vincent and the Grenadines US$5.4 million,
Dominica US$5.4 million, and Grenada US$600,000. (Note:
The EU divided the money roughly in proportion to the size
of each island's banana crop.) The EU plans to fund
computer training and business development. This aid is
part of a larger EU fund to help African Caribbean and
Pacific (ACP) banana producers adjust to declining EU trade
preferences.

--------------
ANTIGUA AND BARBUDA
--------------

- New Machine-Readable Passport Introduced


4. (U) On January 16, Prime Minister Baldwin Spencer became
the first recipient of the new Antigua and Barbuda machine-
readable passport with the Caribbean Community (CARICOM)
logo. The new document design has features to meet

BRIDGETOWN 00000319 002 OF 005


international security requirements and includes the CARICOM
logo on the cover to signify Antigua and Barbuda's
commitment to regional integration. The PM's wife, Jacklyn,
and the Governor General, Sir James Carlisle, also received
the new documents, slated to be made available to new
passport applicants later in the month, while holders of
valid passports were directed to continue using their old
passports until the phase-out process for the old document
is announced.

- Giorgio Armani Purchases House in Antigua


5. (U) In early January, Italian fashion designer Giorgio
Armani purchased a house in Antigua. The Baldwin Spencer
administration has refused to identify the location of the
property but said that Armani has been a frequent visitor to
the tiny Caribbean island on his yacht. Tourism Minister
Harold Lovell said Armani's decision could only prove
beneficial to an island which is marketed as a mid- to up-
market destination. "The spin-offs are tremendous for our
economy and we endeavor to continue to lift our product to
attract such clientele," Lovell said.

--------------
BARBADOS
--------------

- Major Drug Bust


6. (U) Barbados police made a major drug bust on January 5,
seizing more than $5 million (US$2.5 million) worth of
marijuana. Some 51 bales of the drug were seized, weighing
1,994.5 pounds. Inspector Barry Hunte of the Royal Barbados
Police Force told reporters that the police operation was
part of a joint initiative including the Drug Squad, Coast
Guard and Police Marine Unit. According to Hunte, Drug
Squad personnel observed a group of persons on Worthings
Beach Christ Church (a highly frequented tourist beach in a
densely populated part of the island) unloading several
bales off a vessel at night. On being approached, members
of the group fled. Drug Squad personnel subsequently seized
the marijuana and the boat: no arrests have been made.

--------------
DOMINICA
--------------

- Government Workers Laid Off, According to IMF Program


7. (U) The Government of Dominica laid off the first of 100
workers who will lose their jobs between January and May

2006. The move comes as part of the ongoing implementation
of the country's IMF economic stabilization program, which
includes cutting public spending by 15 percent. In 2003,
the government announced plans to lay off ten percent of its
3,000 workers. This downsizing has been accomplished, in
part, through the privatization of certain government
functions; several companies have won contracts to provide
services such as maintenance for public buildings so long as
they hire laid-off workers.


8. (SBU) Comment: The reduction of the number of public
sector employees is further indication of the seriousness
with which Prime Minister Roosevelt Skerrit has taken the
IMF stabilization program. The PM, recognizing the dire
economic condition of his small country, has consistently
made a number of politically difficult decisions that follow
the IMF's recommendations. Many of his countrymen also
appear to understand that some belt-tightening is necessary
as they returned the popular PM to office last year. End
comment.

--------------
GRENADA
--------------

- New Income Tax Begins Despite Opposition


9. (U) The Government of Grenada has begun phasing in a five
percent tax on income over EC$1000 per month (US$370). The

BRIDGETOWN 00000319 003 OF 005


tax will be phased in at the rate of three percent for the
first six months of the year, rising to five percent in
July. Labor unions and the political opposition have
vehemently opposed the tax; several hundred Grenadians
demonstrated against the levy on January 20. Turnout,
however, was much lighter than anticipated as many
Grenadians appear to understand the need for additional
government revenues as the country continues to "Build Back
Better" after Hurricanes Ivan (2004) and Emily (2005).

--------------
ST. LUCIA
--------------

- Controversial Parliamentarian Resigns Seat


10. (U) The resignation from Parliament of the leader of a
small, third party will cause St. Lucia to hold a by-
election in advance of national elections that are expected
by the end of the year. The MP, Sarah Flood-Beaubrun,
leader of the small Organization for National Empowerment
(ONE),resigned her parliamentary seat in protest over
electoral rules that favored the country's two main parties,
the ruling St. Lucia Labor Party (SLP) and opposition United
Workers' Party (UWP),at the expense of her third party.
Flood-Beaubrun has said that she intends to run again for
the seat in the by-election, a date for which has yet to be
set. The SLP and UWP are in the process of selecting their
candidates for the by-election.


11. (SBU) Political observers believe that Flood-Beaubrun
resigned her seat with the hope of joining the opposition
UWP and being named its deputy leader. The opposition
leader, former Prime Minister John Compton, has not acceded
to her demands. This situation appears likely to keep the
opposition divided in the run-up to national elections later
this year.

- Government Reaffirms Support for PetroCaribe


12. (U) Prime Minister Kenny Anthony reaffirmed his
government's commitment to take part in PetroCaribe, despite
recent criticism of the Venezuelan oil initiative by
opposition leader and former Prime Minister John Compton.
PM Anthony said in January that his government would soon
begin further discussions with Venezuela regarding
implementation of the agreement. Anthony also called upon
Prime Minister Patrick Manning of Trinidad to be more
sensitive to the energy needs of the island states of the
Eastern Caribbean, saying the smaller nations were forced to
turn to Venezuela after Trinidad failed to offer the region
oil at affordable prices.


13. (SBU) Comment: St. Lucia's recent public support for
PetroCaribe comes after a period during which PM Anthony
appeared particularly cool to the plan in comparison to
other leaders in the region. Last year, the PM told a
regional oil executive that his country did not need the
Venezuelan oil initiative. Anthony may, however, have
changed his mind and be positioning St. Lucia to take
advantage of PetroCaribe. A few shipments of fuel to the
island under PetroCaribe's concessionary financing could
help his ruling party in upcoming elections, as it did the
ruling party in St. Vincent's December 2005 election. Also,
PM Anthony's assumption that Trinidad should offer his
country discounted oil is another example of how Eastern
Caribbean governments have come to expect aid from all
quarters, even fellow developing countries in CARICOM. End
comment.

- Air Jamaica Returns to St. Lucia


14. (U) After a one-year absence due to financial troubles,
Air Jamaica announced in January that it would to reinstate
its thrice-weekly New York-St. Lucia route on February 23.
The President of the Caribbean Hotel Association observed
that the return of Air Jamaica to St Lucia would help
achieve the government's forecast of 300,000 visitors from
the United States market this year. The New York area is
one of the largest sources of tourists traveling to St.

BRIDGETOWN 00000319 004 OF 005


Lucia.

- St. Lucia Banana Exports at Record Low

15. (U) Exports of bananas from St. Lucia fell to a record
low in 2005 as increased competition forced more farmers out
of the industry. St. Lucia exported 30,970 tons (28,096
metric tons) of the fruit, a 28 percent decline from 2004.
Exports hit a high of 133,777 tons (121,360 metric tons) in
1990 and have been dropping ever since. There are now fewer
than 2,000 banana farmers in the country, compared to more
than 10,000 in the early 1990s.

16. (U) A local commentator who studies the banana industry
said economic uncertainty over EU preference reductions,
unfavorable weather, and leaf spot disease all contributed
to the decline in production. (Note: The EU's system of
tariffs and quotas had favored former colonies in the
Caribbean and Africa over large-scale growers in Latin
American. The Latin Americans (backed by the U.S.)
successfully argued to the WTO that the arrangement was
unfair, forcing the EU to reduce its banana trade
preferences for African and Caribbean countries. End Note.)
--------------
ST. VINCENT AND THE GRENADINES
--------------

- Opposition to Take Election Officials to Court


17. (U) The opposition New Democratic Party (NDP) wants
criminal charges filed against election officials who
allegedly committed electoral fraud in St. Vincent's
December 2005 national election. The ruling Unity Labor
Party (ULP) won 12 of 15 seats, maintaining the same number
of seats as before the voting. The NDP had threatened to
file suit challenging the results in three constituencies it
lost to the ULP by only a handful of votes, but said
recently that its lawyers had advised against taking this
action. Instead, the party hopes to punish several election
officials it has publicly identified as being responsible
for destroying ballots and committing other abuses.


18. (SBU) Comment: The NDP backing down from its earlier
threat to challenge the election results raises questions
about the validity of the party's charge that significant
irregularities occurred. This development suggests that the
ruling ULP did not steal the election, or even a few
parliamentary seats, as the opposition claimed. Instead, a
few overzealous ULP supporters may have committed electoral
abuses that they could now be held accountable for. End
comment.

- International Airport Plan Moves Ahead


19. (U) The Government of St. Vincent (GOSV) reported
progress toward the construction of a new international
airport to be built with the assistance of the Governments
of Venezuela and Mexico. Engineers from the two countries
have been conducting preliminary surveys of the airport site
in advance of construction. The GOSV, meanwhile, has
identified an area to which residents currently living on
the site would be relocated. The design of the new airport
is due to be finalized this year and construction will begin
in 2007. The project is slated for completion in 2011 at a
cost of US$180 million. Until then, the GOSV plans to spend
several million dollars on improvements to its existing
airport, which is considered substandard for what St.
Vincent hopes will be a growing tourism industry.
- PM Gonsalves Presents US$214.8 Million Budget

20. (U) Prime Minister Ralph Gonsalves presented a US$214.8
million budget to Parliament, the centerpiece of which is a
proposal to introduce a value added tax and excise tax while
also improving the Government's tax administration. The PM
also pledged to reduce the number of duty-free concessions,
which cost the Government an estimated US$1.6 million in

2005. Gonsalves said much of the budget would go to fund
public works projects, including a new airport (see previous
paragraph). The PM estimated economic growth at 4.5 percent
in 2005, compared to 5.4 percent in 2004 and 3.4 percent in

2003. In addition, Gonsalves said the public debt increased
11.5 percent in 2005 to US$365.1 million or 85.2 percent of
GDP.

BRIDGETOWN 00000319 005 OF 005



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