Identifier
Created
Classification
Origin
07BRIDGETOWN1420
2007-11-13 17:56:00
UNCLASSIFIED
Embassy Bridgetown
Cable title:  

BRIDGETOWN SUBMISSION FOR THE OPERATION OF THE CARIBBEAN

Tags:  ETRD ELAB AMGT XK XL USTR OECS 
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VZCZCXYZ0010
PP RUEHWEB

DE RUEHWN #1420/01 3171756
ZNR UUUUU ZZH
P 131756Z NOV 07
FM AMEMBASSY BRIDGETOWN
TO SECSTATE WASHDC PRIORITY 5753
UNCLAS BRIDGETOWN 001420 

SIPDIS

SIPDIS

USTR FOR KENT SHIGETOMI
DEPT. FOR WHA/CAR

E.O. 12958: N/A
TAGS: ETRD ELAB AMGT XK XL USTR OECS
SUBJECT: BRIDGETOWN SUBMISSION FOR THE OPERATION OF THE CARIBBEAN
BASIN ECONOMIC RECOVERY ACT REPORT

REF: STATE 143212
UNCLAS BRIDGETOWN 001420

SIPDIS

SIPDIS

USTR FOR KENT SHIGETOMI
DEPT. FOR WHA/CAR

E.O. 12958: N/A
TAGS: ETRD ELAB AMGT XK XL USTR OECS
SUBJECT: BRIDGETOWN SUBMISSION FOR THE OPERATION OF THE CARIBBEAN
BASIN ECONOMIC RECOVERY ACT REPORT

REF: STATE 143212

1) Summary: This is Embassy Bridgetown's submission for the
situation in the Organization of Eastern Caribbean States (OECS) as a
whole, and country specific information on the seven countries to
which we are accredited, namely Antigua and Barbuda, Barbados,
Dominica, Grenada, St. Kitts and Nevis, St. Lucia, and St. Vincent
and the Grenadines. Although members of the OECS and part of our
consular district, Anguilla, the British Virgin Islands, and
Montserrat are not formally part of our reporting responsibilities.
We did not include them in this report, other than as part of the
OECS. End summary

The Organization of Eastern Caribbean States
--------------

The Organization of Eastern Caribbean States
Department of Commerce 2004 Trade Statistics
U.S. Exports $446,243,268
U.S. Imports $72,987,011
U.S. Trade Balance $373,256,257
The OECS comprises the countries of Antigua and Barbuda, Dominica,
Grenada, St. Kitts and Nevis, St. Lucia, St. Vincent and the
Grenadines, and Montserrat, an overseas territory of the United
Kingdom. Anguilla and the British Virgin Islands are associate
members.

2) Economic Overview: Although several states of the OECS suffered
crisis or near-crisis financial situations in the late 1990s and
early 2000s, most have recovered and currently show economic growth.
Others, including Grenada, which was devastated by Hurricane Ivan in
2004 and Hurricane Emily in 2005, and Montserrat, which has suffered
from ongoing eruptions of the Soufriere Hills Volcano, beginning in
1995, are still struggling. After years as sugar and banana
monocultures, OECS members are shifting toward service-based
economies, built on tourism and financial services, with offshore
medical, nursing, and veterinary schools and niche agriculture also
playing important roles. The United States is gradually becoming the
principal trading partner and source of tourism revenue for OECS
members, a role long occupied by the United Kingdom, which was the

colonial power in much of the region.

3) Commitment to WTO and FTAA: Although hindered by a lack of
government resources and technical expertise, the OECS Members (not
including Montserrat, which is a U.K. overseas territory) have
demonstrated a commitment to fulfill their WTO obligations on
schedule. As members of the Caribbean Community (CARICOM),the OECS
members have, in coordination with other CARICOM countries, been
supporters of the FTAA process (Montserrat, which is not a sovereign
state, cannot participate in the FTAA negotiations.) The OECS
members are vocal advocates of special and differential treatment for
the small-island economies of the Caribbean region. USAID maintains
an active technical assistance program in the region to help these
small nations meet their international trade obligations.

4) Protection of Intellectual Property: Egregious violations of
intellectual property rights are few and far between in the OECS.
Although the OECS members suffer from a lack of resources, they are
moving toward harmonization of intellectual property (IP) legislation
and education of the population on the benefits that accrue from the
establishment of an effective IP regime and are striving to comply
with international obligations and strengthen protection. However,
video, music and DVD piracy remains a problem throughout the region.

5) Provision of Internationally Recognized Worker Rights: In the
OECS, workers have the right to associate freely and to form labor
unions; this right is generally respected. Workers also have the
right to organize and bargain collectively and there is a prohibition
on any form of forced or compulsory labor.

6) Commitment to Eliminate the Worst Forms of Child Labor: All the
OECS countries have ratified ILO Convention 182 (Montserrat is a
member via the United Kingdom's ratification of the Convention).
Although there is no evidence to suggest it is a widespread problem,
there have been some reports of exploitative child labor in the
region. There have been reports that children may be involved in
pornography, prostitution, and the distribution of drugs in a few of
the OECS members. In addition, reports exist of children involved in
commercial sexual exploitation in order to pay for basic needs such
as school fees and food. On the more agriculturally dependent
islands, such as Dominica, St. Lucia, and St. Vincent, children
sometimes work on family banana farms, generally outside of school
hours. Child labor is slightly more common in rural areas where some
older children may work as domestics or in family-owned cottage
industries. Because all of the OECS islands have compulsory
schooling until age fifteen or sixteen, there are few children in the
labor force.

7) Counter-Narcotics Cooperation: The President has not identified
any of the OECS members as a major drug transit or major illicit drug

producing country under the provision of the FRAA.

8) Implementation of the Inter-American Convention Against
Corruption: Of the seven OECS members, Antigua and Barbuda, Grenada,
and St. Kitts and Nevis have ratified the IACAC; Dominica, St. Lucia,
and St. Vincent and the Grenadines have acceded to the Convention.

9) Transparency in Government Procurement: The OECS members'
government procurement policies are generally quite open and
transparent, and the Administration is not aware of any
non-competitive bidding procedures.

Additional Issues
--------------

10) Nationalization/Expropriation: Some U.S. investors have
outstanding disputes with the governments of Antigua and St. Kitts
concerning expropriated land. They are currently attempting to
resolve those disputes within the local legal systems, and ask for
occasional advice from the U.S. Government. The U.S. Government has
stressed to authorities in both countries its interest in seeing the
disputes resolved.

Antigua and Barbuda
--------------
Population: 82,800
Per capita GDP in current prices (US Dollars) 10,513

11) Having abandoned its unprofitable sugar industry several years
ago, Antigua and Barbuda is the most developed of the OECS Members
and the most dependent on tourism. The present government, which
took office in early 2004, has embarked on a reform program,
including restructuring its massive debt to GDP ratio of 128 percent,
reintroducing the income tax, and making government more transparent.
The current administration also plans to cut the public sector
workforce and has introduced a value added tax (VAT) to reduce
dependence on tariff revenues and put the country in a better
position to handle WTO tariff cuts. Long-term growth prospects
depend on the continued vibrancy of the tourism and financial
services sectors, foreign investment in new tourism projects, and
Antigua's ability to exercise fiscal restraint.

12) In Antigua and Barbuda, workers may not be required to work more
than a forty-eight hour, six-day workweek. In practice the standard
workweek is forty hours in five days. Workers generally receive
annual leave and maternity leave. The minimum working age is
sixteen. Although a section of the labor code includes some
provisions regarding occupational health and safety, the government
has not developed comprehensive occupational health and safety laws
or regulations.

Barbados
--------------
Population: 280,946
Per Capita GDP: 13,312 (CDB figures, 2006 in US dollars)
Trade Statistics
U.S. Exports $347,578,725
U.S. Imports $36,871,668
U.S. Trade Balance $310,707,057

13) Economic Review: Barbados enjoys a long-standing democratic
tradition, a strong commitment to the rule of law, and an open
economy with a marked dependence upon imports, over 37 percent of
which come from the United States. As in many of the small Caribbean
island states, tourism is a major contributor to the country's
economy: over 75 percent of Barbados' GDP in 2006 came from the
services sector, with tourism accounting for not less than 12
percent. As reported by the Central Bank of Barbados, most of the
country's economic indicators were strong in 2006, GDP rose 3.9
percent, unemployment was relatively static at 8.7 percent, inflation
was down fractionally to 7.3 percent, and the debt-to-GDP ration
continued to fall, to 71.5 percent. Tourism receipts were up
slightly, with a noticeable shift from cruise tourism to "long stay"
tourism.

14) Commitment to WTO and FTAA: Barbados, as is the case with many
other Caribbean countries, has its tariffs bound at high levels. In
WTO negotiations, Barbados is a vocal advocate of special and
differential treatment for small-island developing states. The
country is also a strong and active supporter of the FTAA process,
individually and in coordination with other CARICOM countries, and
played a constructive role in advancing the FTAA process at the
November 2005 Summit of the Americas in Mar del Plata. USAID has an
active technical assistance program to help Barbados meet its
commitments under international trade agreements.

15) Protection of Intellectual Property: The Government of Barbados
strengthened its 1998 Copyright Act in 2004. The Government of
Barbados has also passed several laws to comply with the TRIPS
Agreement. Although Barbados has strong intellectual property

legislation, the government needs to improve its enforcement of the
anti-piracy laws. For example, shops openly sell and rent pirated
CDs, videos, and DVDs.

16) Provision of Internationally Recognized Worker Rights:
In Barbados, the legal minimum working age of sixteen is widely
observed. Labor inspectors are employed to enforce the law. Only
two categories of workers have a formally regulated minimum wage -
household domestics and shop assistants. The standard legal workweek
is forty hours in five days, and the law requires overtime payment
for hours worked in excess. The Labor Ministry enforces health and
safety standards and follows up to ensure that management corrects
problems cited. Trade union monitors identify safety problems for
government factory inspectors to ensure the enforcement of safety and
health regulations and effective correction by management. When it
enacted the Occupational Safety and Health at Work Act early in 2005,
the government of Barbados upgraded standards for use of machinery
and chemicals and for protecting workers from poor lighting, noise,
and vibration. The Labor Ministry also plans to propose two other
pieces of worker rights legislation to Parliament this year, an
employment rights bill and a gender-neutral sexual harassment bill.
The government is also considering enacting a national minimum wage
bill, which will replace the current Shop Act which mandates a
minimum wage of 5.00 Barbados dollars (approximately 2.50 US dollars)
an hour for retail clerks only. The Labor Ministry recommends that
companies pay at least this amount, but some sectors do not.

17) Commitments to Eliminate the Worst Forms of Child Labor:
Barbados ratified ILO Convention 182 on October 23, 2000. There is
no widespread pattern of child labor in the country. A rapid
assessment conducted in 2002 by the ILO's Caribbean office found that
most children who worked did so part-time, after school and on
weekends. However, the report also indicated evidence of commercial
sexual exploitation of children and other worst forms of child labor,
such as involvement in drug sales and hazardous activities such as
construction. The legal minimum working age of sixteen is generally
observed. Local law prohibits forced or bonded labor by children,
and those prohibitions are enforced.

18) Counter-Narcotics Cooperation: The President has not identified
Barbados as a major drug transit or major illicit drug producing
country under the provision of the FRAA.

19) Implementation of the Inter-American Convention Against
Corruption: Barbados signed the IACAC in April 2001 but has not
ratified it.

20) Transparency in Government Procurement: The government, through
the Ministry of Finance's Special Tenders Committee, follows
competitive bidding standards for most contracts and acquisitions.
Ocasionally, a proposal to use other methods is presnted to the
funding institution for its non-objetion if sole-sourcing is the
only option or uniqe expertise is required.

Dominica
--------------
opulation: 70,600
Per Capita GDP (in current pries, US dollars) 4,251

21) The Commonwealth of Doinica is widely recognized as having the
worst fnancial situation of all the OECS Member. However, in an
effort to repair the economy, Dominica completed a three-year IMF
stabilization and adjustment program in December 2006. The IMF
concluded that it was satisfied with the manner Dominica implemented
the program. In completing this program, the country implemented
several difficult economic reforms and is back on the path of
economic growth. Dominica has turned its economy around, but still
faces major challenges in diversifying its economy and improving
infrastructure. Hurricane Dean, which struck in August 2007, was one
of these challenges, having wiped out virtually 100% of Dominica's
crucial banana crop, as well as the vast majority of most other
agricultural crops. In addition to agricultural damage, Hurricane
Dean left major infrastructural damage to roads, bridges, and
riverbed and seabed walls.

22) In Dominica, minimum wages are set for various categories of
worker. However, these were last revised in 1989. Dominica is a
signatory of the ILO Minimum Wage Convention, which specifies that
fifteen is the minimum working age. The Employment Safety Act
provides occupational health and safety regulations that are
consistent with international standards.

Grenada
--------------
Population: 105,900
Per Capita GDP (in current prices, US dollars) 4,758

23) Grenada's economy, dependent on tourism, education, and
agriculture, was hit hard by the post-9/11 decline in tourism. It
was then devastated by Hurricanes Ivan (2004) and Emily (2005). Ivan

brought the economy to a near-standstill, doing damage equal to two
and one-half times Grenada's GDP. With assistance from the United
States and other sources of international aid, reconstruction
proceeded quickly. Despite initial high unemployment in the tourist
and other sectors, urban Grenadians benefited post-hurricane from job
opportunities in the surging construction sector. Agricultural
workers did not fare as well. Hurricane Ivan in 2004 destroyed or
significantly damaged a large percentage of Grenada's nutmeg, cocoa,
and other tree crops. Hurricane Emily eight months later in 2005
further damaged the sector. Complete recovery will take years as
many farmers simply walked away from their land. Grenada continues
to import many of the basic foods which are no longer grown in
sufficient quantities on the island. In anticipation of Cricket
World Cup matches held on the island in the spring of 2007, many
Grenadians renewed their focus on the rebuilding process. The number
of hotel and home-stay rooms in the tri-island state increased in
2007 as a result. Predictions are for an increase in tourism.
However, Grenada lags behind its neighbors in marketing the island
overseas and many rooms still remain empty for much of each year.
St. George's University, a large American medical and veterinary
school with 3,700 students, about 1,200 of them American citizens, is
in full operation and making a significant contribution to the
economy. Due to the closure of SGU's St. Vincent campus, there are
350 additional students in Grenada, resulting in a construction
boomlet on the St. George's campus in 2007 to create housing and
teaching space for them. Grenada has good infrastructure, a
relatively high literacy rate, and stable political system. High
public debt resulting from rebuilding efforts following the two
hurricanes continues to be a drag on the economy. Further economic
diversification, especially in tourism and education services and
higher-end niche agricultural markets, should improve Grenada's
longer-term prospects.

24) Grenada's minimum wage was last raised in July 2002 for domestic
workers, plumbers, agricultural workers, and shop assistants. The
normal workweek is forty hours in five days. Unemployment,
especially among youth aged 18-25, is over 20%. The cost of living
has been going up for the last several years.

St. Kitts and Nevis
--------------
Population: 49,300
Per Capita GDP (in current prices, US dollars) 8,695

25) As for the other islands in the Eastern Caribbean, tourism is the
most important sector of the St. Kitts and Nevis economy. The
government decided to close the nation's unprofitable sugar industry
in 2005 after three centuries of sugar production, and the country
gave its roughly 1200 former sugar workers the equivalent of a year's
pay in severance. With an economy otherwise thriving, finding new
employment for these former sugar company employees is the
government's main challenge. Many of them are expected to retire,
but opportunities are available for others in the expanding tourism
sector and related occupations, such as growing food and flowers for
hotels.

26) Minimum wages in St. Kitts and Nevis vary by category of worker.
The minimum wage provides a barely adequate living for a wage earner
and family; many workers supplement wages by keeping small animals
such as goats and chickens. The law provides for a forty to
forty-four hour workweek in five days. While there are no specific
health and safety regulations, the Factories Law provides general
health and safety guidance to Labor Ministry inspectors. The Labor
Commission settles disputes over health and safety conditions.

St Lucia
--------------
Population: 164,200
Per Capita GDP (in current prices, US dollars) 5,374

27) The Government of St. Lucia, one of the most effective and stable
governments in the Eastern Caribbean, has turned to tourism to
revitalize its economy. During 2005, the hotel and restaurant
industry grew by 6.3 percent during and stay-over arrivals increased
by 6.5 percent, with the United States accounting for 35.4 percent of
these arrivals. Yacht passengers rose by 21.9 percent. Meanwhile,
the banana industry declined 29.1 percent during the year. The
current government currently plans to further promote tourism
investment, bringing in various new large-scale resorts.
Simultaneously, the government hopes to stabilize agriculture by
promoting new techniques, such as agri-processing.

28) Minimum wage regulations in St. Lucia have remained in effect
since their institution in 1985. The legislated workweek is 41
hours, although the common practice is to work forty hours in five
days. Occupational health and safety regulations are relatively well
developed; however, there are only two qualified inspectors for the
entire country.

St. Vincent and the Grenadines

--------------
Population: 49,300
Per Capita GDP (in current prices, US dollars) 4,101

29) The economy of St. Vincent and the Grenadines is small and weak
and the Government is heavily in debt. The economy of the country
relies heavily on the declining banana industry, which employs
upwards of 60 percent of the work force and accounts for 50 percent
of merchandise exports. St. Vincent, like other Caribbean banana
producers, is striving to diversify its economy. Crop substitution
has given rise to increased marijuana production, and some segments
of the population now depend on marijuana production and trafficking
for their income. Tourism in the Grenadines is flourishing, with
several new world-class hotels planned for the island of Canouan.

30) The Government of St. Vincent and the Grenadines updated its
minimum wage laws in 2003. Minimum wages vary by category of worker.
The law prescribes workweek length according to category. For
example, industrial employees work forty hours a week, and store
clerks work forty-four hours a week. The law stipulates a minimum
working age of sixteen. The government also added hazardous work
legislation to protect workers, particularly in the agriculture
sector.

HOWARD