BELIZE: PM BARROW'S VISIT TO WASHINGTON

1. (C) SUMMMARY: Prime Minister Barrow looks forward to a
positive meeting with the President. He has told us that he
thinks the bilateral relationship is on a good track.
Domestically he has faced several early challenges since he
took office less than six weeks ago, the largest one being
the country's financial situation. Barrow and his senior
ministers have made several specific requests for law
enforcement assistance which we believe should be seriously
considered and supported. END SUMMARY.



2. (C) Prime Minister Dean Barrow is very pleased to be
invited to Washington and looks forward to developing a good
relationship with the President. The weeks in office since
his election in early February have been hectic ones, with
revelations of grants from foreign donors going to
questionable projects, government property sold off for
nothing to outgoing officials, a boatload of fleeing Cubans
and a plane full of cocaine making a very public landing on a
highway in northern Belize. Our previous reporting (reftels)
concerning Prime Minister Barrow's goals is still a good
guide to where his administration seeks to go. Initial
indications are that he is serious about wanting to clean up
official corruption and restore public confidence in
government.

The Big Problem -- Nothing in the Bank


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3. (C) The most serious issue the new Barrow government
faced on assuming office was the discovery that Belize's
finances were in worse shape than even the pessimists had
suspected. Each day has brought additional revelations of
financial shenanigans by the previous government, most
recently the revelation that US$20 million in grants to
Belize from Venezuela and Taiwan were never received by the
Central Bank but were instead paid out to a private bank to
cover the government-guaranteed debt of a private
corporation, Universal Health Services. Barrow told us March
12 that, although he had to be careful about appearing to be
persecuting defeated political opponents, when there were
clear violations of the law, justice had to be done.
Separately, the government has asked for USG assistance to
help trace misappropriated funds and to advise on how to
conduct an audit of government finances going back a decade.



4. (C) The problems with Belize's finances that Barrow has
inherited severely constrain his ability to deliver on his
party platform, which promised a range of populist programs.
His initial plan to approach Taipei and Caracas for
additional grants has been undermined by revelations that
previous grants do not appear to have been used
appropriately. (COMMENT: One rumor spreading recently has
the People's Republic offering Belize $200 million -- U.S. or
Belize dollars is not clear -- up front and $200 million
later in exchange for shifting recognition from Taiwan,
something Barrow has said privately and publicly he would not
do. At this point we have not confirmed the rumor with a
credible source, and the sum of money seems to be out of
proportion with Belize's significance. END COMMENT)



5. (C) In addition to problems with domestic spending,
Belize's international creditors will be looking closely at
the country's ability to service its debt, which is largely
to commercial banks. The previous government's debt
rescheduling package provides for low payments in the initial
years which rapidly escalate in subsequent years. Absent
some kind of unexpectedly good foreign exchange receipts or
external balance of payments support Belize will again need
to go to the banks to restructure its debt.

Law and Order a Top Priority


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6. (C) Barrow told the Ambassador at their initial meeting
that law and order issues were a top priority, and he
requested assistance with wireless intercept capability to
target narcotics traffickers. In subsequent meetings with
key ministers we have had additional security-related
requests, including vetting of police officers (ref C). We
believe these requests deserve serious consideration in
Washington. Barrow and his team seem determined to go after
corruption and to improve governance in Belize, something the
USG should welcome and support.

Bio Note


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7. (C) We have asked several people about the Prime
Minister's hobbies. Reading and art collecting are the only
two that come to mind. He is apparently planning to
solemnize his long-term common-law relationship with Kim
Simpliss, but we have seen no official confirmation of that.
See ref D for bio information.

HILL