AMBASSADOR OURISMAN'S INTRODUCTORY VISIT TO ST.

C O N F I D E N T I A L BRIDGETOWN 000299

SIPDIS

SIPDIS

DEPARTMENT FOR WHA/CAR
CARACAS FOR ANDREW BOWEN
SOUTHCOM ALSO FOR POLAD

E.O. 12958: DECL: 03/07/2017
TAGS: PREL PGOV PINR ETRD ECON EAID CMGT EAIR SNAR
KCRM, SC, XL
SUBJECT: AMBASSADOR OURISMAN'S INTRODUCTORY VISIT TO ST.
VINCENT AND THE GRENADINES

REF: A. 06 BRIDGETOWN 1897

B. 06 BRIDGETOWN 344

Classified By: Amb. Mary M. Ourisman for reasons 1.4 (b) and (d).


1. (C) Summary: On February 25-27, 2007, Ambassador Ourisman
visited St. Vincent and the Grenadines to present her
credentials. Meetings with the Prime Minister, Foreign
Minister, and Opposition Leader focused on Venezuelan
assistance, Article 98, narcotics trafficking and Cricket
World Cup. The Ambassador's visit to St. Vincent provided a
good overview of the country's current international and
domestic political landscape and shed some light on the
perceived character of the relationship between the
Governments of St. Vincent and the Grenadines (GOSVG) and the
United States. In addition, both the Prime Minister and
Deputy Prime Minister/Foreign Minister confirmed their
participation in the CARICOM conference in June, which would
provide an opportunity for the Department to address our
concerns with the Gonsalves administration's increased
dependency on Venezuela. End Summary.

VENEZUELAN ASSISTANCE: PETROCARIBE, ALBA AND A NEW AIRPORT
-------------- --------------


2. (C) A week before Ambassador Ourisman's visit, Hugo Chavez
visited St. Vincent and the Grenadines where he was met with
significant fanfare. Both Prime Minister Ralph Gonsalves and
Deputy Prime Minister and Foreign Minister, Louis Straker,
told Ambassador Ourisman that St. Vincent's relationship with
Venezuela is guided by pragmatism rather than any ideological
affinity. Venezuela has been providing assistance to
Vincentians, including cheap fuel, fuel storage, and funding
for a new airport. Straker conveyed his government's desire
to maintain good relations with the United States, but stated
firmly that his country will conduct its foreign policy
according to its own best interests.

PETROCARIBE
--------------


3. (C) Gonsalves estimated future savings of USD 8 million
per year from Petrocaribe, half of which, he informed the
Ambassador, would be put into an income-generating fund for
small business lending. The other half would be allocated
for social development projects, which Gonsalves did not
specify. Gonsalves addressed some of the criticism of
Petrocaribe, telling the Ambassador that "the indebtedness
argument is crap" and that countries that did not support
Petrocaribe, referring to Barbados, "did not have the
creative intelligence to analyze the deal." Gonsalves
admitted to the tension between him and Texaco due to past
disagreements on prices, (ref B),but told the Ambassador
that Texaco will still be allowed to operate its service
stations on the island. However, Gonsalves firmly clarified
that the GOSVG will be responsible for supplying the country
with all of its fuel, (i.e., via the Petrocaribe program).

ALBA
--------------


4. (C) Both Gonsalves and Straker also described St.
Vincent's inclusion in the Bolivarian Alternative for the
Americas (ALBA) as a pragmatic decision that will bring
tangible benefits to Vincentians. In separate meetings with
the Ambassador, Gonsalves and Straker clarified that ALBA is
a "non-trade" agreement that focuses on social development
projects such as scholarships, medical exchanges, and housing
for the poor. Therefore, in their opinions, ALBA should not
be viewed as being in conflict with potential free trade
agreements with the United States. In an attempt to
demonstrate his "non-ideological" view of ALBA, Gonsalves
told the Ambassador that he "firmly made it clear to Chavez
that ALBA cannot undermine CARICOM trade agreements or
progress toward the Caribbean Single Market Economy." (Note:
Embassy Bridgetown has not seen the ALBA memorandum of
understanding, which was signed on February 17 by the
governments of St. Vincent and the Grenadines, Antigua and
Barbuda, and Dominica during Chavez's visit to the region.
It is unclear whether the agreement signed by Gonsalves and
the others is simply a proposal for cooperation on social
development related projects or represents a bonafide
multilateral trade agreement. End note.)


NEW AIRPORT
--------------


5. (C) According to post's sources, Chavez's support for St.
Vincent's new airport in Argyle is recognized as Venezuela's
most important contribution. In 2006 Straker made clear to
then Ambassador Kramer the significance of funding for the
new airport when he promised his country's United Nations
votes in exchange for U.S. financial support for the new
airport (ref A). In his meeting with Ambassador Ourisman,
Straker again emphasized the importance of Venezuela's
assistance, as well as that of St. Vincent's other donor
governments: Taiwan, Cuba, Trinidad and Tobago, and Mexico.
(Note: The latest estimated cost of airport construction is
USD 200 million. Venezuela has committed to move over 3
million cubic meters of earth, and along with Cuba, will
provide labor for the project. Trinidad and Mexico's
contributions will focus on the new airport's runway, while
Taiwan will construct the terminal building. Exact dollar
amounts from each country are unavailable. End note.)

ARTICLE 98 AND IMET
--------------


6. (C) As one of his prime examples of overcoming
differences with the United States, Gonsalves claimed that
the Article 98 issue has been resolved, evidenced by the
restoration of International Military Education Training
(IMET) funding for the GOSVG. Ambassador Ourisman explained
that the issue is not yet resolved and that continued IMET
funding is not guaranteed for those countries that have not
yet signed on to Article 98. Gonsalves responded that at
least symbolically, the United States is no longer perceived
as "taking a defensive position" in the region. Both
Gonsalves and Straker expressed the GOSVG's unwillingness to
support Article 98 because "no convincing argument has been
made for two levels of jurisprudence." (Note: The IMET
waiver has been claimed as a major political victory by
Gonsalves' Unity Labour Party. End note.)

NARCOTICS AND MONEY LAUNDERING
--------------


7. (C) In his meeting with Ambassador Ourisman, Gonsalves
also addressed one of his current political battles
concerning a pardon of a convicted drug dealer. Gonsalves
told the Ambassador that contrary to Opposition Leader Arnhim
Eustace's accusations, his decision will not have any impact
on the GOSVG's fight against drug trafficking or money
laundering. Gonsalves boasted to the Ambassador about his
aggressive campaign to pursue drug traffickers by "targeting
their pockets." He also bragged about the GOSVG Financial
Intelligence Unit's recent invitation to become a member of
the Egmont Group, in recognition of its progress in fighting
money laundering. Gonsalves did credit U.S. and UK
assistance as having a significant impact in the fight
against money laundering and drug trafficking.

CRICKET WORLD CUP
--------------


8. (C) Gonsalves declared St. Vincent and the Grenadines as
Cricket World Cup (CWC)-ready. This achievement, he claimed,
was due to his fervent resistance to the International
Cricket Council's (ICC) request that the GOSVG spend no less
than USD 60 million for CWC preparations. Gonsalves told the
Ambassador that he gave the ICC an ultimatum: either reduce
your funding expectations or St. Vincent and the Grenadines
will not host any CWC event. According to Gonsalves, the ICC
caved in and met Gonsalves' counter-offer to spend only USD
14 million for CWC preparations.


9. (C) Gonsalves criticized the other Eastern Caribbean
countries hosting CWC matches for "competing with each other
to have the best event," and predicted that those spending
the most will "wake up with a huge hangover" after CWC.
Gonsalves did not predict any negative consequences for his
country due to his realistic expectations that no more than
10,000 people will attend CWC matches. Gonsalves also
characterized the CARICOM visa requirement as "stupid", but
observed that most of the complaints are coming from "white"
countries that "may feel a sense of entitlement."



10. (C) Venezuelan Ambassador to St. Vincent and Dean of the
Diplomatic Corps, Tibisay Urdaneta, complained to the
Ambassador that Venezuelans are being required to apply for
visas during CWC, and that already 120 Venezuelans were
denied visas. (Note: CWC was the only substantive topic
discussed between Ambassadors Ourisman and Urdaneta. The
rest of the meeting was a simple exchange of pleasantries.)

OPPOSITION PARTY
--------------


11. (C) The National Democratic Party Opposition Leader,
Arnhim Eustace, described St. Vincent as being in crisis
under Gonsalves' leadership. Eustace reminded the Ambassador
of Gonsalves' previous profession as a defense attorney for
major drug traffickers, which he believes casts serious doubt
on the genuineness of Gonsalves' anti-narcotic efforts.
Eustace told the Ambassador that Gonsalves' recent pardon of
a convicted drug trafficker is evidence of his remaining ties
to drug trafficking elements and their influence over the
GOSVG. Other criticisms by Eustace included Gonsalves' tacit
approval of Hugo Chavez's anti-U.S. rhetoric during his visit
to St. Vincent, which is perceived by many as threatening
good relations with the United States.


12. (C) Eustace offered the Ambassador his observations on
the lack of credit given to the USG for its assistance to the
region. Eustace explained the reason may be that USG funding
is often regional in scope, and therefore not captured in St.
Vincent's national budget. According to Eustace, Gonsalves
has used the perceived lack of U.S. assistance to justify his
relationship with Cuba and Venezuela.

COMMENT
--------------


13. (C) In private meetings with the Ambassador, both the
Prime Minister and Deputy Prime Minister made a conscious
effort to emphasize the pragmatic nature of their foreign
policy while lauding their close friendship with the United
States. Publicly, however, the GOSVG continues its
quasi-socialist rhetoric in order to reap the most tangible
political and economic rewards possible from its most
generous benefactor, Venezuela.


14. (C) Prime Minister Gonsalves confirmed his participation
at the CARICOM Conference this June in Washington. The
Department should use this opportunity to emphasize the
strong historical, economic and cultural ties with St.
Vincent and press Prime Minister Gonsalves to modify his
rhetoric to reflect this reality. It would also be an
opportunity to stress the full economic impact of his foreign
policy decisions. Gonsalves should be warned of the
long-term economic consequences of decisions made in haste or
for popularity's sake. Many members of the private sector
have already expressed their anxiety over Gonsalves' close
embrace of Chavez, who is nationalizing the private sector in
his own country, and cannot afford investment flight. The
Department may want to provide Gonsalves with concrete
examples of Chavez's failed economic policies in his own
country, demonstrating that he cannot be trusted to provide
counsel on other countries' economic development. This is
particularly true with regard to Petrocaribe. The Department
should remind Gonsalves that Chavez is an OPEC member and
just last year expressed his desire for production cutbacks.
The complete dependence on Venezuela for its energy would
make such a decision catastrophic. In short, Gonsalves
should be reminded that there is no free lunch and that his
decisions ought to be better weighed.
OURISMAN