AMBASSADOR'S FIRST CALL ON NEW GRENADA GOVT

UNCLAS SECTION 01 OF 03 BRIDGETOWN 000574

SIPDIS

E.O. 12958: N/A
TAGS: PGOV PREL INRB XL
SUBJECT: AMBASSADOR'S FIRST CALL ON NEW GRENADA GOVT

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SUMMARY
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1. (U) The Ambassador and Grenada Charge met August 15 with newly
elected Grenadian Prime Minister Tillman Thomas, Minister for
Foreign Affairs Peter David, and Opposition Leader Keith Mitchell in
separate meetings. Thomas' National Democratic Congress (NDC) beat
out Mitchell's New National Party (NNP) by a narrow margin in the
July 8 election to take 11 seats in the lower house of Parliament.
A reserved Thomas expressed optimism over the future of a newly
proposed economic and political integration plan being pushed by
Trinidad PM Manning and St. Vincent PM Gonsalves, but admitted the
plan lacks detail. Mitchell, meanwhile, seemed to take impish
delight in his new freedom to start making political life difficult
for the new government. End Summary.

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NATIONAL DEMOCRATIC CONGRESS IN POWER
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2. (SBU) The Ambassador congratulated Prime Minister Tillman Thomas
and Minister for Foreign Affairs (MFA) Peter David for winning
re-election and for winning a majority after spending many years in
opposition. Both men described governing as a new challenge. Both
thanked the United States for its ongoing assistance and especially
for the hurricane recovery assistance provided after Hurricane Ivan
devastated the country in 2004. The Ambassador informed the
Grenadians that the U.S. Government provided an additional US$50,000
to the Organization of American States (OAS) for the Grenada
election observer mission (EOM). This enabled the OAS to expand the
number of observers. Five volunteer observers from Embassy
Bridgetown also participated. The National Democratic Congress
(NDC) was pleased that nearly 30 observers had been able to
participate and thereby minimize fears of potential fraud.

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REGIONAL INTEGRATION
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3. (SBU) David and Thomas spoke enthusiastically about their August
13-14 trip to Trinidad. Thomas, David, and Minister for Finance
Nazim Burke had traveled to Port of Spain together August 13-14 on a
jet provided by Trinidad's PM Manning. The purpose of the trip was
twofold: to meet officially with Prime Minister Manning and to
discuss moving forward on regional integration with other Eastern
Caribbean government representatives and CARICOM officials.
According to Thomas, St. Vincent Prime Minister Gonsalves and PM
Manning, long-time supporters of regional integration, were worried
about the lack of progress on CARICOM's planned economic
integration. CARICOM experts have been similarly pessimistic.
Jamaica's current government is not committed to the process,
according to Thomas, while a number of countries appear reluctant to
give up sovereignty so soon after achieving independence. They
agreed with the Ambassador that the diversity among the Caribbean
countries over levels of development adds to the challenge.


4. (SBU) While CARICOM integration may be stalled, David said
Organization of Eastern Caribbean States' (OECS) integration is well
on its way. With OECS economic union on track for 2009, Thomas said
the assembled leaders discussed expanding the agenda to include
Trinidad in a broader economic integration plan to be completed by
2011, and "some form of political integration" by 2013. Trinidad
wants to play a role in an integrated OECS, Thomas noted. David
remarked that "many" want Trinidad involved, as long as no other
agreements are violated. Thomas noted that Trinidad and Grenada had
explored integration as early as 1962, though nothing came of it.
There is a long history of movement between the two countries with
many Grenadians resident in Trinidad and vice versa. Trinidadians
have invested heavily in Grenada over the last twenty to thirty
years.


5. (U) Also discussed in Trinidad was how to resolve the maritime
boundary disputes Grenada has with Trinidad and Venezuela. Thomas
told the Ambassador that his government is eager to drill for oil
and gas, but no company will consider operating off Grenada's
islands until the boundary disputes are resolved. A bi-national
commission is being set up to resolve the dispute with Trinidad.
(NOTE: Thomas' NDC government is a latecomer to the pursuit of
offshore drilling. Prior to their election, the NDC had been
harshly critical of the previous government's attempts to promote
the search for gas and oil (which admittedly included at least one
known charlatan in the mix with genuine investors like PetroCanada.


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TOURISM AND INVESTMENT
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6. (U) Thomas and David mentioned that lack of airlift continues to
hamper plans for expansion of Grenada's tourism industry and efforts
to attract foreign investment. Grenada is interested in promoting
regional competition for LIAT, which drove out its only competitor

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on intra-island routes, Caribbean Star, in 2007. The GOG wants
Caribbean Airlines to fly to Grenada, but political support for LIAT
among other OECS countries (with St. Vincent PM Gonsalves the
loudest voice) is making that option difficult. The previous
government negotiated an agreement with American Airlines for new
airlift that will begin in November 2008. It is not clear yet
whether the daily American Eagle flights to San Juan will continue
if the American Airlines jets start flying. If American Eagle drops
out, or reduces its flights, there would be a net loss in the number
of flights from Grenada to the United States.


7. (U) The Ambassador asked about investment in Grenada, noting the
tremendous contributions made to the local community by St. George's
University Chancellor Charles Modica over the last 30 years as well
as recent large investments by investors such as British developer
Peter DeSavery. Grenada is beautiful country, offers great
opportunities for investors, and is perfectly situated for visits to
the Grenadines, she noted. David responded that the newly elected
government wants Grenada's tourism industry to become an engine of
growth for the country. Several Barbadian investors are working on
a Four Seasons hotel in St. George's; Grenadian-descent race car
driver Louis Hamilton has purchased the Grenada Grand Beach
Property; there is talk that Hilton is interested; and investors
from New York and New Jersey are developing a Baccelet Bay property.



8. (U) Grenada is feeling the pinch of the world-wide economic
downturn, said David. Economic downturns are cyclical, the
Ambassador noted, and by moving ahead now Grenada will position
itself to take advantage when the economy improves. The new NDC
government plans to institute a long-planned streamlining in the
process required to invest in the country. The Ambassador commented
that a USAID program in Antigua helped create a "one-stop-shop" for
investors, which has been quite successful. David pointed out that
the International Monetary Fund (IMF) complained that there are too
many concessions to see a regional approach to concessions so that
poorer countries are not disadvantaged.

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SECURITY
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9. (SBU) Grenada remains concerned about its lack of an effective
coast guard in light of the increase regionally in drug flows and
violence. The Ambassador reminded her interlocutors that Grenada's
coast guard remains weak on the personnel side. She added that the
previous government identified the same concerns to us. U.S.
Southern Command (USSOUTHCOM) held meetings in March and June with
regional leaders to identify security needs, but we are still
waiting on the region to provide additional detail on their priority
needs. The U.S., she said, looks forward to hearing more specifics
in the weeks ahead.

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OPPOSITION LEADER
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10. (SBU) The Ambassador congratulated former PM Keith Mitchell on
winning his seat, noting that he looked very relaxed. Mitchell
laughed as he pointed out that he had had thirteen years in
government - five more than a U.S. president's potential eight
years. He said he is in better shape and less stressed out than he
has been in a long time. He has been able to reconnect with his
community as he now has time to walk around and visit with his
neighbors. Mitchell said he tells his supporters to remember that
in a democracy "you are in sometimes and out sometimes". It may be
time to pass things on to a younger group of politicians.


11. (SBU) The Ambassador commended the progress Grenada made in
recovering from Hurricanes Ivan (2004) and Emily (2005). Mitchell
noted that the country emerged with fewer resources and more
challenges in a less than ideal international economic climate. He
added that Jamaica's Prime Minister Bruce Golding told him it was a
bad time to be in charge of a government. The new Grenadian
government made many promises during the campaign that it may find
hard to fulfill.


12. (SBU) Mitchell admitted the NNP loss was not completely
unexpected. Polling going into the election showed 9-10% undecided,
so he knew the party might lose power. However, he assured the
Ambassador that he would continue to work to keep the country calm.
Mitchell accused the new government of behaving badly, adding that
Grenada needs a better transition period, closer to the U.S. model.

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COMMENT
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13. (SBU) It is evident that the newly elected NDC government wants
to continue the good working relationship previous
post-revolutionary governments have had with the United States.
This includes ministers who, during the 1979-1983 revolutionary
period, were vocally anti-U.S. Whether it is because they have

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mellowed over the years, genuinely changed their political leanings,
or simply see that antagonizing the U.S. would be counterproductive,
the NDC government appears to be ready to work with us in all areas
of concern, including counterterrorism and counternarcotics.


14. (SBU) The contrast between former Prime Minister Mitchell and
current Prime Minister Tillman Thomas could not have been starker.
Mitchell, gregarious and knowledgeable, expounded on the election
outcome, U.S. politics, the international economic situation, and
his passport problems. Thomas, by contrast, is extremely shy and
not comfortable making small talk. In a region where political
leaders are known for their communication skills, Thomas is an
unlikely Prime Minister, who owes his election to his reputation
forhonesty and hard work.


15. (SBU) Minister for Foreign Affairs and Tourism Peter David, by
contrast, is charming and volatile. One of his favored modes of
campaigning is to pop in and "shoot the breeze" in the rum shops of
his constituency. David is also one of the several former members
of the People's Revolutionary Government (PRG) and People's
Revolutionary Army (PRA) who fled Grenada in 1983 with the collapse
of the revolution and returned in the late 1990's and early 2000's,
and some Grenadians still fear him. After the 1999 election in
which the NDC won no seats, a group of original members left the
party and a group of revolutionary returnees joined the party.
David did so and won election in 2003. In his initial meeting with
the Ambassador, however, David said all the right things about
wanting to work with the U.S.

OURISMAN