UNCERTAINTY SURROUNDS CURACAO'S MAY 15 REFERENDUM OUTCOME

UNCLAS SECTION 01 OF 02 CURACAO 000032

SIPDIS

DEPT FOR FOR L, CA, M AND WHA\CAR

E.O. 12958: N/A
TAGS: NA AA NL PGOV ECON EFIN MARR SNAR
SUBJECT: UNCERTAINTY SURROUNDS CURACAO'S MAY 15 REFERENDUM OUTCOME

REF: CURACAO 000012


1. (SBU) SUMMARY: Polls for Curacao's May 15 referendum on
agreements relating to dissolution of the Netherlands Antilles
(reftel) are limited, but seem to give the "YES" vote a solid
lead. The current governing coalition strongly supports the
agreements' provisions for Dutch assistance on Antillean debt in
exchange for enhanced financial oversight. The Opposition is
encouraging people to vote "NO", calling the agreement a form of
re-colonization. Many believe the Opposition receives funding
for its campaign from the Venezuelan government, which is
critical of the USAF counter-drug presence on Curacao and Aruba.
The Dutch have warned recently that a "NO" win would mean the
end of ongoing debt restructuring, while the effect on other
aspects of the Antilles' dismantling process remain unclear. As
Parliamentary elections are due by March 2010, the referendum is
shaping up as a political test of strength and threatens to
polarize Curacao voters. END SUMMARY


2. (U) BACKGROUND: The Netherlands Antilles (NA) is in the
process of dissolution, although all five islands will remain
part of the Kingdom of the Netherlands (KON). Curacao and St.
Maarten will have semi-autonomous status similar to Aruba, while
Bonaire, St. Eustatius, and Saba (the BES islands) will become
special municipalities of the Netherlands. The other members of
the NA say they intend to continue with dissolution regardless
of the referendum's outcome.


3. (SBU) POLLING: According to Post contacts, unpublished
surveys by ruling coalition party operatives claim a trend in
favor of a solid "YES" win, with their latest April poll of 1000
voters supposedly giving "YES" 60 percent to 22 percent for
"NO". A poll on the "NO" website (www.vota-no.com) of nearly
3000 voters shows "NO" leading 53 percent to 38 percent. A
similar poll of 1200 voters on the "YES" website
(www.korsou-si.com ) showed 77
percent supporting "YES" versus 21 percent "NO". A poll
conducted by the University of the Caribbean in early April,
which tried to create a fair sample, found approximately 50
percent intending to vote "YES" with 30 percent supporting "NO".
One indication that the race might be closer than anticipated
is that, during the 2006 parliamentary election, 34,000 voters
out of the total of 70,000 voted for parties that currently
support the "NO" campaign.


4. (SBU) VENEZUELA FUNDING "NO"?: Various business groups and
organizations funded by wealthy businessmen, including in the
Netherlands, are actively promoting the "YES" vote. Post's
business, media, and political contacts indicate that "YES"
currently outspends "NO" by approximately three to one.
Management of Curacao's leading bank is openly supporting the
"YES" campaign. The influential bank executives and others in
the financial sector have called voting "NO" "suicidal for the
investment climate" as it would put at risk approximately 2
billion USD in debt relief (nearly 70 percent of total Antillean
government debt). The "NO" supporters have had less success in
finding local funding. GONA officials, however, are concerned
that the Venezuelan Government is funneling cash to opposition
parties and the "NO" campaign, as Caracas seeks to diminish
Dutch influence and opposes the USAF counter-drug Forward
Operating Locations (FOLs) on Curacao and Aruba. Former vice-PM
Errol Cova has categorically denied any Venezuelan funding for
the "NO" campaign, but added "tell me where there is money in
Venezuela and I will go knock on the door."


5. (U) RULING COALITION CONFIDENT: The governing coalition has
beefed up its "YES" campaign this month and, if its polls are
accurate, it is having the desired effect. The coalition has
focused on the benefits of debt relief and asserted that
renegotiating with the Netherlands for a better deal would not
be possible, especially during the current worldwide economic
crisis and given the political climate in the Netherlands. One
source of criticism regarding the agreement has stemmed from
Curacao's ongoing rivalry with Aruba. Aruba stepped out of the
Netherlands Antilles in 1986, largely because of Curacao's
dominating role. Now many Curacao voters think they might
achieve less autonomy within the Kingdom than Aruba. The
governing coalition observation that Aruba did not receive debt
relief has dampened, but not eliminated, this view.


6. (U) OPPOSITION PARTIES ACTIVE: Fewer than 1000 protestors
joined in a peaceful rally in support of the "NO" vote April 19.
The rally was organized by opposition parties NPA and the
Sovereign People's Party together with the PLKP party of former
vice-PM Errol Cova. For symbolic reasons the rally started at
the "National Slavery Monument", injecting an element of racial

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identity to the event. The march ended at another symbolic
site, the downtown square named after Curacao-born Admiral
Brisn, who fought alongside Bolivar for Venezuelan independence.
The "NO" campaign has focused on the provisions for continued
financial and judicial oversight by the Dutch, calling them a
form of re-colonization. "NO" supporters are primarily from
poorer segments of society but also include several prominent
figures, including a former Island Governor who is a member of
the governing coalition National Party. The "NO" vote has not
provided an alternative for how it will proceed if victorious,
but is expected to do so shortly before the vote in hopes of a
last-minute surge.


7. (U) DUTCH DOUBTFUL: The "YES" camp received a boost recently
when the GON agreed to begin phased debt relief as of April 01
and not wait for the referendum results. The Dutch State
Secretary for Kingdom relations provided a dose of reality
during a visit here this week when she warned that the debt
restructuring will be discontinued if "NO" wins. She also
continued to cast doubt on St. Maarten's readiness to assume a
new status by January 2010.


8. (SBU) COMMENT: Although there is a lack of reliable polling
information, the governing coalition has expressed increasing
confidence in recent weeks that the "YES" vote will win. Some
Opposition party members acknowledge that "YES" support is
growing, but see the referendum as an opportunity to energize
their voting base for possible 2010 parliamentary elections. A
"NO" victory would throw the Antillean political landscape into
even greater confusion. The GON, BES islands, and St. Maarten
have all stated that dissolution will continue regardless of
Curacao's referendum outcome. This could leave Curacao more
isolated and in a weaker position to negotiate any changes to
the current agreements with the Dutch. END COMMENT.
DUNN