ALBA'S ALLURE TO ANTIGUA ET AL

C O N F I D E N T I A L BRIDGETOWN 000471

SIPDIS

E.O. 12958: DECL: 07/29/2019
TAGS: PREL EAID ENRG ETRD XL
SUBJECT: ALBA'S ALLURE TO ANTIGUA ET AL

REF: A. CARACAS 964

B. BRIDGETOWN 407

C. CARACAS 791

D. 08 BRIDGETOWN 646

E. BRIDGETOWN 312

Classified By: Charge d'Affaires a.i. D. Brent Hardt, reasons 1.4 (b,d)

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Summary
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1. (c) Three of the seven Eastern Caribbean countries are
now members of both ALBA and PetroCaribe. While this has
raised eyebrows among political pundits in the region and
beyond, the three island nations that have joined - Dominica,
St. Vincent, and most recently, Antigua - are doing what they
can to reassure traditional partners privately, while playing
up the new relationships for maximum political gain in their
own constituencies. At this point there is little to fear:
the Eastern Caribbean countries are simply milking what they
can from a willing cash cow. Nevertheless, smaller, more
vulnerable and less experienced politicians such as Dominica
PM Skerrit may not be able to avoid falling deeper into Hugo
Chavez's political orbit. End Summary.

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Chavez's Slowly Expanding Influence
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2. (c) It is no secret in the Eastern Caribbean that Hugo
Chavez is looking to increase his political influence, muster
support for his left-leaning socialist-populist ideology, and
woo as many countries in the region as possible away from the
U.S. as their partner of choice. Chavez has lavished
particular attention on Dominica and St. Vincent, whose
left-leaning prime ministers have been the most open to his
blandishments, such as housing programs, manpower and
machinery for airport construction and expansion, and helping
to rebuild roads and distribute food following hurricanes.
Since 2005, Chavez's PetroCaribe initiative has been the
headliner for Venezuelan assistance to the region, and while
the tangible economic benefits to Eastern Caribbean countries
have been somewhat muted, the domestic political windfall to
local politicians has been substantial. There is enough
money coming in through loan repayment deferrals (or perhaps
delinquencies, there are few hard numbers to track, see ref
a) to finance programs for the poor, including housing
schemes and some infrastructure programs, which scores easy
political points for local leaders and at the same time
painting Chavez as the region's greatest benefactor.


3. (c) More recently, Chavez's launch of ALBA, coming just
as the international financial system was teetering on the
brink of collapse, has provided a new opportunity for Eastern
Caribbean politicians to show their constituents that they
are leaving no potential funding source untapped. Initially,
EC governments were wary of ALBA and claimed no interest in
joining. When Dominica, the region's poorest country, broke
ranks and signed up (possibly at the urging of PM Gonsalves
of St. Vincent and on the heels of substantial assistance to
Dominica from Venezuela following Hurricane Dean),the move
evoked mildly negative reactions in the regional press and
raised questions about the compatibility of ALBA with other
regional structures such as the Organization od Eastern
Caribbean States (OECS) and CARICOM. Later, though, when it
became apparent that there would be no fallout with the
international community from Dominica's joining, St. Vincent
hopped aboard and ALBA began to gain legitimacy as an
organization within the region. Most recently, Antiguan PM
Baldwin Spencer announced that his country would join the
organization, bringing half the membership of the OECS into
the ALBA fold.

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What Do You See in Him?
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4. (c) With each successive accession, we have questioned
local governments at length about their motivation for
joining, their expected returns, and what the quid pro quo
might be. The answers have been consistent for all three new
members and reflect the hard realities of political
self-interest in resource-poor micro-states. Each government
has told us quite candidly that the sole reason it is
partnering with Chavez is because he is making money
available. As the global economy has tightened in recent
months, the appeal of "no strings attached" concessional
lending and possible grants, as well as the possibility of
access to a nebulously-defined "ALBA Bank," has grown
appreciably. Each country's senior leadership has given us
their solemn assurance that joining ALBA in no way affects
their desire to maintain the closest relations with the U.S.
and to keep us as their security and commercial partner of
choice. But they are also frank about the absolute necessity
for them not to leave money on the table. Taking Chavez's
money, even if it is difficult to point to specific public
goods that have resulted, is still politically smart, showing
local constituencies that the government is tapping every
available source of finance to keep economies afloat and jobs
filled while these Small Island Developing States ride out
the recession -- the same rationale some EC countries have
used to explain to the public their decisions to access
historically unpopular IMF loans.

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Payback Mostly in Lipservice
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5. (c) Of course, there has been a political piper to be
paid, mostly in the form of sycophantic rhetoric from
regional leaders in praise of Chavez. St. Vincent PM Ralph
Gonsalves has long shared Chavez's populist mentality and
personal charisma with his base -- both, it seems, see
themselves as reincarnations of Castro. So it is not
surprising to hear Gonsalves crowing about assistance from a
like-minded colleague with the resources to share. Less easy
to understand, in tone if not in substance, is the fawning
adulation of Chavez coming from Dominican PM Skerrit. While
it is true that Venezuela has produced some benefits and
promised much more for the impoverished island, Skerrit has
all but flung himself at Chavez's feet, sporting red shirts
and glorifying Chavez beyond the realm of even political
hyperbole on the latter's recent visit to Dominica (ref b).
Skerrit has also religiously attended ALBA events, looking
every bit the mascot in photos with more charismatic or
heavy-hitting regional leaders like Gonsalves, Chavez, Evo
Morales, and Daniel Ortega.


6. (c) Most surprising, though, were the fawning remarks of
Antiguan PM Spencer when he announced his country would join
ALBA. Alternately praising Chavez and obliquely lambasting
the U.S. for the global recession, Spencer's remarks were
unusual from a man who -- while not necessarily the best
friend of the U.S. -- has traditionally been a fairly
calculating pragmatist in his dealings with us and the
region. In announcing Antigua's accession to ALBA, Spencer
noted that "the historically rich and proud countries of
Latin America and the Caribbean have suffered greatly as a
result of coercive and imperialistic models of colonialism
and later the Washington Consensus..." adding "The principles
of ALBA are diametrically opposed...ALBA promotes
complementarity as an alternative to competition; solidarity
as opposed to domination; cooperation as a replacement for
exploitation; and respect for sovereignty rather than
corporate rule." Spencer went on to report that
"PetroCaribe's concessionary financing arrangements provided
some $1.17 Billion between June, 2005 and December, 2007.
U.S. Foreign Assistance to the Caribbean for the comparable
period was estimated at $340 Million per year...Further, it
must be noted that the support that has been received through
PetroCaribe did not come at the price of our dignity or
sovereignty but rather was firmly rooted in the principles of
complementarity, solidarity, cooperation and respect for
sovereignty." One almost suspects Spencer had borrowed
Chavez's speechwriter.


7. (c) Finally, not to be outdone, even tiny St. Kitts --
still just an Observer in ALBA for now -- is doing whatever
it can to stroke Chavez's ego. St. Kitts co-hosted the sixth
PetroCaribe summit with Venezuela in June, 2009, and, upon
returning from a trip to attend the African Union summit in
Libya in July (a meeting also attended by ALBA members
Skerrit and Gonsalves),St. Kitts PM Denzil Douglas heaped
praise on Chavez's initiatives: "ALBA and the PetroCaribe
initiatives are serious and stable arrangements that are
visionary and will forge a fraternity that will enable our
countries to dictate trade relations on our own terms." If
sycophantic hyperbole is a good barometer, it would appear
that for St. Kitts, ALBA membership may not be long in
coming. And with four of six OECS countries on the roster,
there will be incentives for Grenada (a PetroCaribe
beneficiary) and St. Lucia (not in PetroCaribe, but buying
PetroCaribe oil through Hess Oil, the local importer) to join
ALBA as well -- and few visible disincentives.

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No Worries Over Military Posturing
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8. (c) Leaders of the EC countries have also assured us that
they have no intention of participating in any military
aspects of the "Alliance," and that they view ALBA as nothing
more than a source of funding. That said, no leader sought
to distance himself or his country from ALBA or Chavez when
the latter started saber-rattling over the Honduras political
crisis and invoked ALBA and all its members as willing to
take action against the de facto regime there. On a similar
note, it did not go unnoticed that security forces from St.
Vincent marched in a parade at the ALBA summit (ref c).
While it is implausible that any EC country possesses either
the assets or the will to participate in any security-related
aspects of ALBA, the willingness of some of these islands to
even show tacit support for such activities under the ALBA
rubric is unhelpful.

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Where is Barbados?
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9. (c) Notably absent from the Hugo Chavez love-fest has
been Barbados, the sole non-OECS country in the Lesser
Antilles and arguably the region's most developed and
politically stable micro-state. Barbados shares the broader
CARICOM position on ALBA, which has so far been leery of the
organization as incompatible with the work of CARICOM and the
OECS. Barbados, which still has a border dispute with
Venezuela that is impacting the smaller claimant's ability to
explore its own undersea oil and gas potential, simply does
not trust Chavez. The GOB sees ALBA as a disruptive entity
in the Caribbean that retards greater unity in CARICOM and
seeks to establish political influence in the region (rightly
so, in our opinion). Barbados, with its traditional foreign
policy mantra of "friends to all, beholden to none," fiercely
guards its independence and sovereignty and actively and
vocally opposes the intrusion of external countries into the
CARICOM space. While this stubborn independence occasionally
makes our own relationship with Barbados a prickly one and
has itself been something of an impediment to greater CARICOM
unity, it has also been a steady bulwark against further
incursions by Chavez into the region. Barbados does not need
Chavez's money, and so can afford not to accept his politics.

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Comment
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10. (c) So far, EC leaders have done nothing to indicate
they want anything besides what they see as Hugo Chavez's
free money. Aided by a public largely ignorant of what ALBA
is or does, regional PM's are happy to bask in the glow of
the faint impression that this relationship is putting funds
into local coffers. And with just enough going on in
Dominica and St. Vincent to point to, with the strong
likelihood (as local grapevines have it) that Chavez is also
financing ruling parties, and with no complaints coming from
CARICOM partners or the broader international community, it
is hard to see a down side for these PMs in the short run.
The price of some political grandstanding on behalf of Chavez
seems a reasonably affordable one in exchange for some real,
and more promised, assistance to carry these vulnerable
countries through the recession. Beyond his free money,
Chavez still does not have an ideological or (more
importantly) cultural foothold in the region that has any
broader appeal beyond his checkbook. That said, while there
is little fertile ground for "Chavismo" in the long term,
that will not stop smaller and more vulnerable economies from
being his willing political agents in the short run if it
gets them money. This was most visibly illustrated in
September, 2008, when Gonsalves cheerily carried Chavez's
water throughout the CARICOM space in a letter that accused
the USG of being complicit in assassination attempts against
Chavez -- a letter that angered many CARICOM PMs as
incompatible with the responsibilities of a fellow Caribbean
leader (ref d).


11. (c) There are voices in opposition -- and even some in
the ruling parties -- who find the current arrangement
somewhat distasteful, to be sure. But as Antigua's Security
Minister, Erol Cort told us recently, without more
regularized and visible engagement by the U.S. to give
politicians the operating space needed to push back against
these Venezuelan "gifts," local politicians will have little
choice but to cozy up to Chavez to reap the local political
benefits of his promises. Cort cited the recent visit of the
USNS Comfort (ref e) as the sort of presence that, if
regularized, would swiftly wash away Chavez's inroads into
the Eastern Caribbean. The issue was not so much money, he
said, but attention. In this regard, he expressed high hopes
that the Caribbean Basin Security Initiative currently in the
planning stages would provide exactly the kind of
countermeasure needed to wean weaker politicians such as
Skerrit away from Chavez's corrosive embrace. Meanwhile,
Cort assured us, Antigua and others would continue to support
ALBA and PetroCaribe for exactly as long as the money and oil
kept flowing -- but not at the expense of their core
democratic principles.
HARDT