Identifier
Created
Classification
Origin
06BRIDGETOWN76
2006-01-12 13:54:00
UNCLASSIFIED//FOR OFFICIAL USE ONLY
Embassy Bridgetown
Cable title:  

THE WINDIES - SPOT REPORTS FROM THE EASTERN

Tags:  PGOV PREL CPAS EAID EFIN TW XL 
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PP RUEHGR
DE RUEHWN #0076/01 0121354
ZNR UUUUU ZZH
P 121354Z JAN 06
FM AMEMBASSY BRIDGETOWN
TO RUEHC/SECSTATE WASHDC PRIORITY 1640
INFO RUCNCOM/EC CARICOM COLLECTIVE
RUEHDG/AMEMBASSY SANTO DOMINGO 5782
RUEHIN/AIT TAIPEI 0106
RUEHCV/USDAO CARACAS VE
RUMIAAA/HQ USSOUTHCOM J2 MIAMI FL
RUMIAAA/HQ USSOUTHCOM J5 MIAMI FL
UNCLAS SECTION 01 OF 04 BRIDGETOWN 000076 

SIPDIS

SENSITIVE
SIPDIS

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

E.O. 12958: N/A
TAGS: PGOV PREL CPAS EAID EFIN TW XL
SUBJECT: THE WINDIES - SPOT REPORTS FROM THE EASTERN
CARIBBEAN - DECEMBER 2005


REGIONAL

- IMF Official Concerned About PetroCaribe Debt

ANTIGUA AND BARBUDA

- Internet Gambling Operations to Expand

DOMINICA

- New Opposition Leader
- Taiwanese Bank Sues Dominica
- Machine-Readable Passport Introduced

GRENADA

- Criticism of Grenadian/Canadian MP Continues
- USAID Reconstruction Program Nears Completion

ST. KITTS AND NEVIS

- Budget Presented to Parliament

ST. LUCIA

- Voter Registration Commences After Delay
- Campaign Funding Becomes an Issue

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

- IMF Official Concerned About PetroCaribe Debt

UNCLAS SECTION 01 OF 04 BRIDGETOWN 000076

SIPDIS

SENSITIVE
SIPDIS

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

E.O. 12958: N/A
TAGS: PGOV PREL CPAS EAID EFIN TW XL
SUBJECT: THE WINDIES - SPOT REPORTS FROM THE EASTERN
CARIBBEAN - DECEMBER 2005


REGIONAL

- IMF Official Concerned About PetroCaribe Debt

ANTIGUA AND BARBUDA

- Internet Gambling Operations to Expand

DOMINICA

- New Opposition Leader
- Taiwanese Bank Sues Dominica
- Machine-Readable Passport Introduced

GRENADA

- Criticism of Grenadian/Canadian MP Continues
- USAID Reconstruction Program Nears Completion

ST. KITTS AND NEVIS

- Budget Presented to Parliament

ST. LUCIA

- Voter Registration Commences After Delay
- Campaign Funding Becomes an Issue

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

- IMF Official Concerned About PetroCaribe Debt


1. (U) During a recent visit to the region, International
Monetary Fund (IMF) Deputy Managing Director Agustin
Carstens expressed concern that Caribbean nations would take
on more debt through the concessionary financing scheme
offered by Venezuela's PetroCaribe oil initiative. Carstens
spoke highly of government and fiscal reform measures in
Antigua and St. Kitts, praised Dominica's fiscal reform
efforts that are being implemented as part of an IMF
economic stabilization program, and complimented Grenada's
post-hurricane recovery, although he said the country still
has a long way to go. Without making any specific offer of
assistance, Carstens said the IMF and the Eastern Caribbean
Central Bank should work together more closely to help
countries in the region to reduce their debt, increase
competitiveness, attract foreign investment, and prepare to
"fully embrace globalization."

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

- Internet Gambling Operations to Expand


2. (U) The Government of Antigua and Barbuda will provide
licenses to ten new Internet gambling companies that will
allow them to begin operations on the island-state in 2006.
Finance Minister Errol Cort said that the new companies
would provide up to 500 new jobs and generate approximately
US$740,000 in revenues for the Government through licensing

fees. This expansion of Antigua's online gaming industry
follows an April 2005 WTO decision that found certain U.S.
prohibitions on Internet gambling to be in violation of
global trade rules. The WTO gave the U.S. until April 2006
to bring its laws into compliance with the ruling.
According to the USTR, the U.S. needs only to implement
minor changes to off-track-betting regulations to comply
with the WTO ruling.


3. (SBU) Comment: The expansion of the Antiguan online
gambling industry suggests that it has been a lucrative
source of revenue despite the Government's claim that the
U.S. prohibition on Internet gambling has hurt its economy.
Considering that the majority of Antigua's Internet gambling
customers are American, this development also indicates that
it will be difficult for the U.S. to regulate or curb the
use of offshore gaming by Americans.


BRIDGETOWN 00000076 002 OF 004


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

- New Opposition Leader


4. (U) The opposition United Workers Party (UWP) selected
Parliamentarian and attorney Earl Williams as its new Party
Leader. A committee of leading UWP members chose Williams
in an 11 to 10 vote over Julius Timothy, who has served
continuously as Deputy Party Leader since the UWP was
founded 17 years ago. Williams replaces former Prime
Minister Edison James, who led the UWP to two consecutive
election defeats in 2000 and 2005. Despite handing over the
UWP leadership, James remains the official Leader of the
Opposition in Parliament.


5. (SBU) Comment: The change in UWP leadership appears to
have been a successful move by Edison James to maintain
control of the party while giving the appearance that he has
stepped aside after suffering defeat in elections last year.
James may have made a deal with certain key UWP members to
keep his deputy, Julius Timothy, from moving up to the
leadership role even though the close vote demonstrated
considerable support for Timothy, a businessman who has been
bankrolling the UWP. Timothy is said to have been deeply
wounded by this treachery and it is unclear what role he
will continue to play in the UWP.

- Taiwanese Bank Sues Dominica


6. (U) A Taiwanese bank has filed suit to recover US$12
million in loans it claims the Government of Dominica has
defaulted on. According to articles in Dominica and
Trinidad newspapers, the Exim Bank of Taiwan filed the suit
in a federal court in New York. Dominica Prime Minister
Roosevelt Skerrit criticized the suit as a "politically
motivated" action intended to punish the country for
switching diplomatic relations from Taiwan to China in 2004.
The PM denied that Dominica had defaulted on its payments to
the bank. The Government of Dominica reported recently that
it had reached agreement to reschedule its debt payments
with creditors that hold 70 percent of the country's debt
and was making progress on discussions with other creditors,
including Taiwan.

- Machine-Readable Passport Introduced


7. (U) Dominica introduced a new machine-readable passport
bearing the CARICOM seal in December. The new passport is
reported to contain security measures that should make it
more difficult to alter than the existing non-machine-
readable passports, which will be phased out as they expire.
The Minister overseeing the introduction of the new passport
told the press that the Government would avoid mistakes made
in the issuance of passports under Dominica's economic
citizenship program. He explained that approximately 3,000
people who were not born in Dominica currently hold the old
passport; issuance of the new passport would "serve as a
filter," according to the Minister, to insure that only
those people truly entitled to a Dominica passport will have
one.


8. (SBU) Comment: As one of the few countries in the region
to maintain an active economic citizenship program, it seems
unlikely that Dominica would deny the new passport to those
willing to pay for it, despite the Minister's remarks. One
issue the Minister did not address is the delay in
completing an OAS funded program to computerize the
registration of Dominica's civil records, including birth
certificates. The Government of Dominica has fallen months
behind in completing the project; until then, the security
of the documents currently used to issue the new machine-
readable passports remains questionable.

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

- Criticism of Grenadian/Canadian MP Continues


BRIDGETOWN 00000076 003 OF 004



9. (U) The Government of Prime Minister Keith Mitchell has
continued its attacks on Parliamentarian Peter David, a
leader of the opposition National Democratic Congress (NDC),
by asserting that his 2003 election should be nullified
because David holds both Canadian and Grenadian citizenship.
Though untested in court, the Grenada Constitution appears
to bar Members of Parliament from holding dual citizenship.
If the Government is successful in removing David from
Parliament and replacing him with his opponent in the 2003
election, it would give the ruling New National Party (NNP)
a 9-6 advantage in Parliament, versus the slim 8-7 majority
it currently holds. The issue will ultimately be decided in
the courts. In the short term David's popularity has risen.

- USAID Hurricane Reconstruction Program Nears Completion


10. (U) By the end of December, USAID had concluded most of
its US$45 million Hurricane Ivan reconstruction program,
full completion of which was delayed by a regional shortage
of cement. Among the highlights of the program were the
repair or rebuilding of about 1000 houses, 24 schools
(almost half of Grenada's primary schools),11 health
clinics, and other important structures such as community
centers and tourist sites. The program has helped many
Grenadian businesses, farmers and fishermen to get back on
their feet, has trained several thousand people in new
skills, and assisted the Government to pay some of its
utility and other bills. Further information on the program
is available on Embassy Grenada's website at
http://www.spiceisle.com/homepages/usemb_gd/.

--------------
ST. KITTS AND NEVIS
--------------

- Tax Reform Focus of New Government Budget


11. (U) St. Kitts and Nevis Prime Minister Denzil Douglas
presented a US$259.4 million budget to parliament in mid-
December, projecting a small fiscal surplus of US$9.8
million for fiscal year 2006. The PM's budget focuses on
tax reform, including revamping the property, telecom,
corporate income and sales taxes. The PM proposed raising
some taxes, restructuring others, and doing away with
"nuisance taxes." These moves are intended to help the
Government be less dependent on tariff revenues, which will
allow it more easily to implement WTO-mandated tariff cuts.
The new revenues will also help the country transition out
of sugar production (St. Kitts ended its state-run sugar
industry in 2005 due to severe financial losses) and pay
down its high debt (over 150 percent of GDP).

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

- Voter Registration Commences After Delay


12. (U) Voter registration has commenced after a two-month
delay caused by a legal challenge to the registration
process by an independent Member of Parliament, Sarah Flood-
Beaubrun of the Organization for National Empowerment (ONE),
a small party built around her. A court denied the MP's
motion for a judicial review of the registration process
that allows only the country's two main parties, the ruling
St. Lucia Labor Party (SLP) and opposition United Workers'
Party (UWP),to appoint scrutineers to monitor the voter
registration process. Elections are constitutionally due by
December 2006, although it is widely believed that Prime
Minister Kenny Anthony will call the election before then.

- Campaign Funding Becomes an Issue


13. (U) Prime Minister Kenny Anthony and opposition leader
John Compton have traded charges over campaign funding in
the upcoming election, with the PM suggesting that the
opposition might obtain funds from Taiwan. (Note: Although
St. Lucia recognizes China, the opposition leader met with
the Taiwanese President in St. Vincent last year. End
note.) The PM has said that campaign finance reform
legislation that would prohibit political parties from

BRIDGETOWN 00000076 004 OF 004


accepting money from foreign governments may be in order.
The opposition leader also called for campaign finance
legislation in St. Lucia after commenting unfavorably on the
large sums of money spent by the ruling party in St. Vincent
to secure victory in that country's December 2005 election.


13. (SBU) Comment: It is unlikely that St. Lucia will enact
campaign finance legislation in advance of an election this
year. Like other countries in the region, St. Lucia does
not have campaign disclosure laws or place legal limits on
campaign spending, which allows both parties to obtain
unlimited funds from members of the diaspora, wealthy
expatriates, and maybe even foreign governments.