GEORGETOWN POL/ECON ROUND-UP, OCTOBER 14-28, 2009

C O N F I D E N T I A L SECTION 01 OF 02 GEORGETOWN 000522

SIPDIS

E.O. 12958: DECL: 10/23/2019
TAGS: ECON PREL GY
SUBJECT: GEORGETOWN POL/ECON ROUND-UP, OCTOBER 14-28, 2009

Classified By: Charge d'Affaires Karen L. Williams for reasons 1.4 (b)
and (d)


1. (U) This cable inaugurates a new practice of bi-weekly
"round-up" reporting cables highlighting developments in
Guyana's politics and economy. This first installment covers
October 14-28, 2009.

CANCELLATION OF UK SECURITY SECTOR REFORM GOES PUBLIC

2. (C) Responding to a BBC Caribbean report on October 27,
Head of the Presidential Secretariat Dr. Roger Luncheon
expressed regret but defended the GoG's loss of a nearly USD
8 million security sector reform project, citing concerns
about sovereignty and "ownership" of the project's
management, but attributed cancellation to U.K. displeasure
with the GoG denying permission for a British military
livefire exercise. (Note: In reality, the live fire exercise
was approved and already took place). According to the U.K.
High Commission, the GoG resisted meaningful financial and
managerial oversight of the project as well as the policy and
structural reform aspects of the project throughout two years
of negotiations and were unwilling to compromise. The U.S.,
Canadian and EU missions have agreed not to "fill the gap"
left by the cancellation of the reform project unless the GoG
agrees to the policy and structural reforms. The IDB,
however, has initiated a substantial police training program
that largely gives the GoG what they wanted, but without the
instiutional reforms. COMMENT: This episode reinforces the
GoG's image as an unnecessarily difficult assistance partner
prone to erratic rhetorical outbursts and rash judgments when
firm and effective (and difficult to evade) conditionalities
are attached. END COMMENT.
POLICE PROBE INTO EXTRA-JUDICIAL KILLINGS/KHAN CASE LAUNCHED

3. (SBU) On October 15 Shaheed &Roger8 Khan was sentenced
in U.S. District Court to two, concurrent,15-year sentences
for narcotics trafficking. Terms of his sentencing stipulate
that he will be deported to Guyana after serving his time.
Public reaction in Guyana was muted and divided along racial
lines. On October 21, the Guyana Police Force (GPF)
announced a special investigative team to probe allegations
of nearly 200 extra-judicial killings by Khan,s &Phantom
Squad.8 Public opinion of the GPF,s capacity to undertake
such investigations is generally skeptical and commentators
believe people with sensitive knowledge may not trust the GPF
and therefore hinder the special investigative team,s
effectiveness. Nevertheless, the Guyana Human Rights
Association on October 22 submitted a list of nearly 60
people they suspect were murdered by Khan and his &Phantom
Squad.8 An alliance of opposition parties including the
PNC-R and AFC dismissed the GPF,s special investigative team
and reiterated its call for an internationally led inquiry
into the Khan-GoG saga. The GoG continues to deny any
involvement in Khan,s criminal activities and repeatedly
cites lack of information sharing from the U.S. government as
a hindrance to investigating. (Note: USDOJ is reviewing
investigative files in the case in order to respond to an
official request from the GoG for any information the U.S.
has in the Khan case.)
PROGRESS ON PRESS FREEDOM

4. (SBU) Guyana Court of Appeals ruled on October 14 that the
GoG,s de facto monopoly on radio transmissions is illegal.
State-owned radio programming dominates the air waves because
the National Frequency Management Unit has not processed any
of the nearly 60 applications for licenses it has received
since the early 1990s. The GoG issued a statement about its
commitment to liberalizing broadcast media but maintained
first it must adopt new broadcast legislation before the NFMU
grants any licenses. Media analysts widely hailed the
court,s ruling and expressed hope it would end decades of
government monopoly on radio. Released on October 22,
Reporters Without Borders Press Freedom Index for 2009 raises
Guyana,s rank to 39 from 88 in 2008, citing a mainly free
press and only intermittent tensions between the GoG and
media.
MINISTRY OF HEALTH ARSON INVESTIGATION

5. (C) On October 21 Minister of Home Affairs Clement Rohee
stated that an &intellectual author8 of the July arson at
the Ministry of Health is known and resides in the U.S. How
the Minister is certain of this individual,s involvement is
not clear, though he indicated the suspect made telephone
calls to Guyana around the time of the fire. The Minister
also would not comment on what motivation the &intellectual
author8 had in channa-bombing the Ministry. Shortly after
the arson, the GPF passed a U.S. telephone number to the
non-resident A/LEGATT and requested that the U.S. identify
the owner of the number. In his statement on the 21st Rohee
publicly referred to this transmission and expressed concern
that a &positive response8 had not yet been received from
U.S. law enforcement officials. In a meeting with the Charge
on October 28, President Jagdeo personally pressed for a
response on this item and indicated that they felt it

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belonged to someone within the Mark Benschopf political
organization. Benschopf has in the past been convicted of,
and later pardoned, on charges of treason and inciting
violence.
COMMERCIAL DISPUTE WITH VENEZUELAN POLITICAL CONNECTIONS

6. (SBU) In early October Econ Off assisted Sea Rice
Caribbean, a subsidiary of U.S.-based Seaboard Corporation,
in resolving a rice export contract dispute with the Guyana
Rice Development Board (GRDB). The GRDB had delayed approval
of signed contracts for 24,000 tons of rice between Sea Rice
and local millers for over a month. Sea Rice,s agent had
negotiated similar contracts during each of the past 30 rice
harvests in Guyana and had never experienced such a delay.
Inquiries with the GRDB President and the Minister of
Agriculture, Robert Persaud, led to a satisfactory resolution
for Sea Rice. On October 21, Minister Persaud signed a
first-ever rice export deal with Venezuela for 50,000 tons,
earning Guyana,s rice industry USD 18.8 million at
reportedly premium prices to those in traditional European
and North American markets. President Jagdeo initiated the
deal with Chavez at UNGA. This new commercial relationship
raises concerns that future contracts with millers may be
subject to political review at the GRDB and possible reneging
to satisfy commitments made to Venezuela.
LCDS GARNERS FIRST FINANCIAL COMMITMENTs FROM WORLD BANK AND
IDB

7. (SBU) President Jagdeo,s Low Carbon Development Strategy
(LCDS) ) an ambitious plan to channel hundreds of millions
of US dollars from forest conservation payments into
carbon-conscious economic development ) received its first
two financial commitments during the week of October 19-23: a
World Bank USD 200,000 grant for additional consultations
between the GoG and Amerindian communities and a USD 1.4
million IDB grant for climate change adaptation and
Amerindian consultations. The Norwegian government (GoN) and
GoG are negotiating an MOU on Norwegian financial assistance
for the LCDS expected to be completed in early November. GoN
contacts stress that Norwegian financial participation in
LCDS will be results-based, meaning GoG must produce verified
emissions reductions through REDD . GoN contacts are not
able to articulate equally clear and quantifiable performance
standards for GoG governance, widely viewed among the donor
community as the primary stumbling block to the LCDS.
SUGAR INDUSTRY CONTINUES DOWNWARD SPIRAL AFTER LOSING EU
SUBSIDY

8. (SBU) The state-owned Guyana Sugar Corporation (GUYSUCO)
continues to experience debilitating financial and labor
difficulties. The enterprise,s net operating loss this past
fiscal year was USD 12.5 million, while incurring nearly USD
25 million in new commercial debts. During the peak harvest
season in October, wage negotiations between GUYSUCO and the
Guyana Agricultural and Workers Union (GAWU) have stalled,
leaving much cane un-harvested. With a gap of 12 percent
between GAWU,s wage raise demand and GUYSUCO,s offer, no
quick and easy resolution is forthcoming. In late September
the European Union cancelled Guyana,s preferential sugar
subsidy, forcing GUYSUCO to face far lower market rates.
During the past year, the GoG and GUYSUCO have taken
extraordinary steps to maximize benefits under the expiring
EU program, including forfeiting preferential access to the
U.S. market (via tariff rate quotas) and importing sugar from
Guatemala to supply domestic demand while channeling domestic
production to Europe.
REMITTANCES HOLD STEADY DESPITE GLOBAL ECONOMIC DOWNTURN

9. (SBU) Governor of the Bank of Guyana Lawrence Williams
informed Econ Off in early October that remittance flows have
remained surprisingly consistent despite the global economic
downturn. The Governor was uncertain how to account for this
stability as globally remittances have declined significantly
in lock-step with deteriorating employment conditions.
Guyana is one of the most remittance-dependent countries in
the world with remittances accounting for nearly 25 percent
of the country's GDP.
LDS MISSIONARIES' ARBITRARY TREATMENT CONTINUES

10. (C) As of October 1, all Mormon missionaries temporarily
detained in early September and ordered to depart Guyana
within 30 days had done so. Some replacement missionaries
are beginning to arrive. LDS representatives have met with
Ministry of Home Affairs, officials, who presented the
Mormons with "guidelines8 to follow so similar incidents do
not recurr; these &guidelines8 stipulate that LDS
missionaries must obtain work permits prior to entering
Guyana and no more than 20 foreign personnel may hold such
permits at one time. No statutory bases for the new
procedure or the numerical limitation appear to exist in
Guyana law. Post's repeated requests to the Ministry of
Foreign Affairs for clarification of the work permit
procedures have gone unanswered.
Williams