THE WINDIES - SPOT REPORTS FROM THE EASTERN

UNCLAS SECTION 01 OF 03 BRIDGETOWN 000788

SIPDIS

SENSITIVE
SIPDIS

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

E.O. 12958: N/A
TAGS: EAID ECIN EFIN ENRG EPET PGOV PHUM PREL CH
CU, VE, XL
SUBJECT: THE WINDIES - SPOT REPORTS FROM THE EASTERN
CARIBBEAN - APRIL 2006


REGIONAL

- Eastern Caribbean Delays CSME Entry
- OECS PetroCaribe Meeting

ANTIGUA AND BARBUDA

- Chinese Assess Electric Power Stations

DOMINICA

- Court Throws Out Election Challenge

GRENADA

- Grenada Enters Into New IMF Program
- Opposition Leader Says Police Bugged His Phone

ST. VINCENT AND THE GRENADINES

- Cuba Continues Medical Aid
- Venezuelan Fuel Price Increase

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REGIONAL
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Eastern Caribbean Delays CSME Entry
--------------


1. (U) Leaders of the six independent nations in the
Organization of Eastern Caribbean States (OECS) reaffirmed
in April their intention to delay officially signing on to
the CARICOM Single Market and Economy (CSME) until a
Regional Development Fund (RDF) is established to help less
developed states compete in the CSME. CARICOM Finance
Ministers are due to meet May 19 to determine how to fund
the RDF, which is to be established by June 30. To date,
Trinidad and Tobago, Jamaica and Barbados have all pledged
funds to the RDF, which is anticipated to hold US$120
million that can be used by member states for development
projects.


2. (SBU) Comment: An RDF had long been a part of the CSME
treaty, although no moves were made to actually establish
the fund until the OECS insisted on it as a precondition for
their participation in the single market. In demanding
establishment of the fund, the OECS countries appear to want
compensation for further opening their markets to low-cost
goods from Trinidad, the region's manufacturing center. End
comment.

OECS PetroCaribe Meeting
--------------


3. (U) A working-level OECS "Energy Task Force" met in
Antigua April 18 to work out the details of implementing
Venezuela's PetroCaribe concessionary oil financing program.
After discovering that Antigua had obtained better terms in
its bilateral PetroCaribe agreement with Venezuela than some
of the other OECS countries, the OECS member states agreed
to undertake future negotiations with Venezuela as a bloc
instead of bilaterally. OECS leaders say they will also use
the bloc approach to help coordinate oil shipments to each
of the small Caribbean islands. Thus far, the promised flow
of oil from Venezuela to the Eastern Caribbean has not
materialized with the exception of two shipments of
liquefied petroleum gas (LPG) to St. Vincent.


4. (SBU) Comment: This bloc approach should help the OECS
negotiate a better deal for oil from Venezuela and make the
implementation of PetroCaribe more feasible. The small
market demand and low storage capacity in many OECS
countries mean that any supplier, whether Venezuela or an
international oil company, needs to make frequent, small
deliveries. For PetroCaribe to function without excessive
transport costs, Venezuela will have to work closely with
the OECS to coordinate oil shipments to the region. End
comment.


BRIDGETOWN 00000788 002 OF 003


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ANTIGUA AND BARBUDA
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Chinese Assess Electric Power Stations
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5. (U) Chinese engineers visited two of Antigua's electric
power stations in April to assess their current generating
capacity and offer possible methods to improve their
performance. The visit of engineers from the Beijing
Construction and Energy Corporation came as a result of a
December 2005 trip to Antigua by China's Minister of
Construction, who discussed with the local Government the
possibility of China offering energy-related assistance.
The Chinese engineers are expected to return to Antigua
later in the year for a follow-up visit. (Comment: Rising
oil prices have had a major impact on the region, leading to
increases in the government-regulated price of electricity
in several countries. Antigua and its neighbors are looking
to a variety of sources, particularly China, Cuba, and
Venezuela, for assistance in keeping energy costs down. End
comment.)

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

Court Throws Out Election Challenge
--------------


6. (U) In what may be the final blow to the opposition
United Workers Party's (UWP) legal challenge to the results
of Dominica's May 2005 general election, the Eastern
Caribbean Court of Appeal dismissed for lack of evidence the
UWP petitions that disputed the results in five
constituencies. The opposition had charged that electoral
irregularities should have negated the results in these five
races won by the ruling Dominica Labor Party (DLP),which
currently holds 12 Parliamentary seats to 8 for the
opposition and 1 independent. The attorney representing the
Government of Dominica explained that the matter should now
be "dead" as the UWP cannot appeal the case any higher.

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

Grenada Enters Into New IMF Program
--------------


7. (U) The International Monetary Fund (IMF) approved a
US$15.2 million loan to Grenada under the organization's
Poverty Reduction and Growth Facility (PRGF) program. The
soft loan (0.5 percent interest payable over 10 years with a
5.5 year grace period on principal payments) is intended to
help Grenada's economy, which is still struggling to recover
from the devastation caused by Hurricane Ivan in September

2004. In exchange for the loan, the IMF requires Grenada to
reduce Government spending and its current high level of
public debt, as well as to implement economic reforms to
encourage more investment and growth. (Comment: The IMF
funds will provide welcome relief to Grenada in its debt
restructuring efforts. A similar PRGF program has been
successful in Dominica and could work in Grenada if the
Government phases in public spending cuts over several years
in order to avoid causing a recession. End comment.)

Opposition Leader Says Police Bugged His Phone
-------------- -


8. (U) Leader of the opposition National Democratic Congress
(NDC),Tillman Thomas, suggested publicly in April that his
phone has been tapped by members of the police force who are
allied with the ruling New National Party (NNP) of Prime
Minister Keith Mitchell. The opposition leader explained to
the newspaper "Grenada Today" that he received this
information from a person who was able to play for him a
tape of one of Thomas' phone conversations. The opposition
leader said he would take the matter up with the

BRIDGETOWN 00000788 003 OF 003


Commissioner of Police. In covering the story, the paper
reported on public speculation that the police force has
secured several telephone lines from regional communications
monopoly Cable and Wireless (C&W) to monitor phone
conversations of certain Grenadian citizens.

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ST. VINCENT AND THE GRENADINES
--------------

Cuba Continues Medical Aid
--------------


9. (U) A team of Cuban medical practitioners visited St.
Vincent in April as part of Cuba's Vision Now Program that
provides free eye care to people in the Eastern Caribbean.
Vincentians who were found to be in need of eye glasses
during a 2005 visit by Cuban ophthalmologists were examined
during this visit to determine the specific measurements for
their glasses. According to the Government of St. Vincent
(GOSV),the measurements will be sent to Venezuela where the
glasses will be manufactured. The GOSV also announced that
a kidney expert and two architects had traveled from Cuba to
begin designs for a dialysis clinic that the Cuban
Government will build for St. Vincent.

Venezuelan Fuel Price Increase
--------------


10. (U) The price for liquefied petroleum gas (LPG) supplied
to St. Vincent by Venezuela under the PetroCaribe oil accord
will rise, according to the GOSV. The cost of a 22-pound
cylinder of LPG, the primary home cooking fuel used in the
country, will rise from US$9.25 to US$10.75; consumers will
also have to place a US$30 deposit on the metal cylinder,
which they were not required to do previously. The GOSV
explained that the two shipments of LPG already sent to St.
Vincent from Venezuela had been transported at no cost to
the GOSV via Venezuelan naval vessels. The GOSV will have
to pay commercial shipping rates for future LPG shipments,
thus the price increase. No date was given for the next
shipment of Venezuelan LPG.


11. (SBU) Comment: Even at the higher price, Venezuelan LPG
is cheaper than the fuel from St. Vincent's main source of
LPG, Texaco, which retailers sell at US$13 for a 20-pound
container. Texaco, however, as a longtime and dependable
supplier, is unlikely to be supplanted soon as St. Vincent's
primary source of home cooking fuel, considering the erratic
nature of Venezuela's shipments to date. End comment.
GILROY