WHA P/DAS Craig Kelly's Discussions with President and

C O N F I D E N T I A L SANTO DOMINGO 001339 SIPDIS E.O. 12958: DECL: 2019/12/22 TAGS: PREL ETRD SNAR SCUL EAID DR HA SUBJECT: WHA P/DAS Craig Kelly's Discussions with President and Foreign Minister on Pathways to Prosperity, Narcotrafficking, DR-CAFTA, Haiti and Exchanges REF: SANTO DOMINGO 1329 CLASSIFIED BY: Alexander Margulies, Counselor for Political and Economic Affairs, State, ECOPOL; REASON: 1.4(B),(D) SUMMARY -------------- ¶1. (C) WHA P/DAS Craig Kelly, in a 12/10/09 meeting with President Leonel Fernandez and Foreign Minister Carlos Morales Troncoso, and in a 12/11/09 meeting with Morales, encouraged the Government of the Dominican Republic (GoDR) to promote the Pathways to Prosperity initiative as a mechanism for economic growth and regional integration. Fernandez welcomed this suggestion and advanced a vague proposal for a trade/investment initiative to take advantage of "synergies" between Puerto Rico, the DR and Haiti as well as the desire for increased scientific, technological and cultural exchanges. All agreed on their shared commitment to combating narcotrafficking, with the President criticizing international moves towards legalizing medical use of narcotics and decriminalizing drug use. The Foreign Minister was optimistic that bilateral relations with Haiti will continue to improve, citing President Fernandez's "excellent" relationship with President Preval and the visit of Haitian Prime Minister Bellerive in January ¶2010. P/DAS Kelly's discussions with Fernandez and Morales regarding Honduras were reported Reftel. END SUMMARY. ¶2. (U) P/DAS Kelly, accompanied by Charge, Pol/Econ Counselor and Public Affairs Counselor, met on 12/10 with President Fernandez and Foreign Minister Morales Troncoso. P/DAS Kelly, accompanied by Pol/Econ Counselor, held a follow-up meeting with Morales on 12/11. PATHWAYS TO PROSPERITY -------------- ¶3. (C) P/DAS Kelly pointed to the Pathways to Prosperity initiative as a mechanism for promoting economic growth and bringing development and progress to disadvantaged sectors, citing the recent meeting of women entrepreneurs in Washington as an example. In his consultations with Latin American business leaders, he continued, customs reform is consistently mentioned as an area that Pathways should address in order to assemble regional pressure for reforms that would facilitate greater trade efficiency. P/DAS Kelly noted that Pathways could be a significant tool in stimulating development in Haiti, and that the USG is looking at extending to other regions in the world. He saluted the GoDR's offer to host a Pathways ministerial in 2010, adding that Secretary of State Hillary Clinton is enthusiastically engaged with this program. COUNTERNARCOTICS -------------- ¶4. (C) The United States, P/DAS Kelly emphasized, remains committed to assisting the Dominican Republic and the Caribbean region in their counternarcotics and regional security efforts. He observed that Secretary Clinton took the important step during her trip to Mexico of acknowledging the United States' responsibilities as the source of demand for narcotics as a major source of supply of weaponry employed by narcotraffickers, stressing that the USG is taking steps to address both concerns. Foreign Minister Morales stated that the GoDR is optimistic about the prospects for the Caribbean Basin Security Initiative (CBSI). President Fernandez criticized the international movement to legalize the "medical" use of marijuana and narcotics, noting that this had nothing to do with rehabilitation. This practice, he complained, along with decriminalization of drug use, as done recently in Argentina, caused damage to the fight against narcotrafficking. Prohibition of alcohol and prohibition of narcotics are not the same, the President declared, as narcotics cause people to "lose their will" and to commit crimes while under the influence of drugs. The movement towards legalization and decriminalization, he reiterated, is "very dangerous" as it will lead to augmented drug use and trafficking. Those leaders who advocate it, he concluded such as Colombia's Cesar Gaviria, are "misguided." DR-CAFTA -------------- ¶5. (C) In response to P/DAS Kelly's question as to how trade and investment under DR-CAFTA could be increased, President Fernandez opined that international investors need to see the agreement as providing a bridge for the sale of their products and services to the United States. The GoDR's objective, he explained, is to provide more "value added" to services and manufacturing for re-export to the U.S. He then suggested that the U.S., the Dominican Republic and Haiti should adopt an arrangement by which goods can be jointly manufactured by "twin factories" in Puerto Rico, the DR and Haiti for duty-free entry into the U.S. taking advantage of the synergies that their economies offer one another. Puerto Rico could be the base for these operations, the President stated, positing as an example the design and cutting of textile fabric in the DR, with its assembly in Haiti (NOTE: This is a process currently being used by the textile firm Grupo M, which has its finishing factory in Santiago, but also employs some 4000 workers on the Haitian side of the border to stitch together garments. END NOTE). ¶6. (C) P/DAS Kelly requested a more detailed explanation as to how the GoDR envisioned this synergistic plan would work, including the legal aspects, noting that any arrangement would have to conform to DR-CAFTA. Morales said that he would prepare a paper and send it to the Embassy. P/DAS Kelly agreed to bring this idea to Washington's attention once it had been further fleshed out by the Foreign Minister. He also highlighted the importance of free trade agreements, such as DR-CAFTA, in advancing transparency and the rule of law in its State Parties. "We're working on those issues," the President responded. Kelly noted that in Chile, for example, the top reason foreign companies give for deciding to operate in the country is the entire gamut of rule of law issues, including lack of tolerance for corruption. HAITI -------------- ¶7. (C) With respect to Haiti, Foreign Minister Morales noted that it had entered into the Caribbean regions's Economic Partnership Agreement with the European Union the day before. He said that bilateral relations were good, as President Fernandez had an excellent relationship with President Preval, and that he looked forward to the January visit to the DR of new Haitian Prime Minister Bellerive. P/DAS Kelly stated that, while Haiti was not in Pathways, the DR was and could employ Pathways to help integrate Haiti more effectively in the region. Morales agreed that this was a proposal worth looking into . P/DAS Kelly said that there are some impressive business leaders in Haiti, who can provide the foundation for growth. The Foreign Minister was in accord, commenting that most of these businessmen had investments in the DR as well. EDUCATIONAL AND CULTURAL EXCHANGES -------------- -------------- ¶8. (U) Fernandez said that he was very interested in obtaining increased U.S. assistance in technological, scientific and cultural exchanges, adding that the GoDR wants to send 10,000 students abroad annually on scholarships. P/DAS Kelly remarked that the U.S. and Chile operate a very effective post-graduate scholarship program benefitting over 100 Chilean students annually in the areas of science and technology. We are also looking at Pathways-focused scholarships as well. The U.S., he said, wants to raise all boats in the hemisphere, for the sake of social justice and the region's economic health. ¶9. (U) The President reiterated his interest in promoting science and technology, with particular emphasis on software, biotechnology and biofuels. One priority objective, he enthused, is to present the DR as a center for start-ups and for incubating companies, observing that the GoDR is trying to attract companies to the cyberpark in Santo Domingo. It wants to attract Phds in software, biotech and other fields to come to the DR for several months to teach and perform research. By creating incentives to return for Dominicans educated abroad in science and technology, the President declared, he has no doubt that most will come back and contribute to the country's development. ¶10. (U) Fernandez also made a plea for greater cultural exchanges in the fields of music, cinema and theatre. American professors would be interested in coming to the DR during their January break, he suggested, to train Dominican teachers. COMMENT -------------- ¶11. (C) The Honduran crisis and President Fernandez's attempt to bring Zelaya and Lobo together in the DR dominated the discussions during the two meetings. That said, the Dominicans interest in promoting Pathways to Prosperity merits follow-up, particularly given their getting out front in hosting the planned ministerial in August 2010. The proposal regarding shared manufacturing/service development between the DR, Haiti and Puerto Rico needs to be fleshed out, and we will raise this with Morales as the opportunity permits. Fernandez has emphasized his interest in promoting scientific, technological and cultural exchanges on numerous occasions before, and Embassy's Public Affairs section is working closely with its Dominican counterparts to bring these to fruition, most recently with the visit of a Broadway choreographer who worked with the national ballet company on its new production of "The Nutcracker." END COMMENT. Lambert