Scenesetter for Special Envoy David Goldwyn and EGCI

UNCLAS PARAMARIBO 000005 SENSITIVE SIPDIS DEPT FOR S/CIEA SPECIAL ENVOY DAVID GOLDWYN, S/CIEA PAUL HUEPER, S/CIEA JOE WANG DEPT FOR WHA/CAR VELIA DEPIRRO AND SEAN WHALEN USAID FOR MARK SCHLAGENHAUF DEPT PLEASE PASS TO DEPT OF INTERIOR FOR USGS CRAIG WANDREY DEPT PLEASE PASS TO DEPT OF INTERIOR FOR MMS KEVIN KUNKEL DEPT PLEASE PASS TO DEPT OF TREASURY FOR MIKE RUFFNER AND JANE ANTONOVICH E.O. 12958: N/A TAGS: ENRG EPET EAID ECON ETRD PGOV NS SUBJECT: Scenesetter for Special Envoy David Goldwyn and EGCI delegation's Visit to Suriname, March 4-7, 2010 ¶1. (SBU) SUMMARY OF PROPOSED TRIP AGENDA: Everyone at Embassy Paramaribo joins me in welcoming Special Envoy David Goldwyn and the Energy Governance and Capacity Initiative delegation to Suriname. Although we cannot yet provide a confirmed schedule, we expect our Ministerial-level and working-level meeting requests to be accepted and arranged for March 4 and March 5 respectively. We have also requested a March 6 visit to Staatsolie's Tambaredjo/Calcutta oil field site. All decisions are currently pending at the Ministry of Foreign Affairs. Hotel reservations and motorpool arrangements have been made for the delegation. Post will provide additional updates and briefing materials through email to S/CIEA's Joe Wang and WHA/CAR's Sean Whalen. END SUMMARY OF PROPOSED TRIP AGENDA; FOLLOWING TEXT PROVIDES SCENESETTER INFORMATION. -------------- -------------- - Visit of EGCI Could Broaden US-Suriname Relations -------------- -------------- - ¶2. (SBU) We expect that your visit will provide a new area of potential cooperation between the U.S. and Suriname. Expectations should be measured, however, due to Suriname's upcoming national elections and to Suriname's track record of making foreign policy decisions cautiously and deliberately, especially when dealing with the U.S. in a bilateral capacity. Engaging the government-owned company Staatsolie will be as important as engaging the government. Initial EGCI buy-in by the GOS will be more likely if support for Suriname first focuses around technical assistance. We welcome your visit. -------------- -------------- Suriname Overview and International Relations -------------- -------------- ¶3. (SBU) Suriname, formerly known as Dutch Guiana and independent from the Netherlands since 1975, lies on the northeastern coast of South America. It is approximately the size of Georgia, has a population of less than half a million, and has traditionally been the Dutch-speaking misfit of the Western Hemisphere. A member of the UN, OAS, CARICOM, G77, UNASUR, and the Islamic Conference, Suriname's political traditions, culture, history, and immigration ties are neither Spanish/Portuguese (like most of South and Central America),nor British/French (like most of the Caribbean). Although migration trends, economic assistance, and remittances still keep Surinamers looking to the Netherlands (home to an estimated 300,000 Dutch-Surinamers),historic resentments and ethnic and cultural differences also mean that Suriname does not align easily with Europe. Consequently, it engages actively with China, India, and Indonesia as part of a foreign policy initiative to reduce dependency on the Dutch. The post-independence Netherlands' donor aid, known as "Treaty Funds" ends this year, and the Netherlands wants to re-make its historically colonial relationship with Suriname into a partnership. ¶4. (SBU) Surinamers enjoy good relations with Brazil and France (French Guiana),although cross-border issues and territorial border disputes with both neighbors have occasionally caused tensions. Suriname and France are currently in the process of agreeing on demarcation of their shared maritime and riverine border. More serious border disputes complicate Suriname's relationship with Guyana, and remain an emotional issue for many Surinamers. The maritime territory dispute between Suriname and Guyana was resolved in September 2007 by an Arbitral Tribunal convened pursuant to Annex VII of the United National Convention on the Law of the Sea. However, former President and current National Assembly member Jules Wijdenbosch's unexpected, politically charged statement in Parliament on February 8 that he had prepared to invade the Tigri area in southwest Suriname during his tenure in 1999 to drive out the Guyanese military that had "illegally occupied" the area since 1969 has sparked recent diplomatic tensions. (Note: Given the tensions surrounding the borders, in March 2007 Post worked with the State Department Office of the Geographer to ensure that all official United States Government (USG) maps of Suriname (which invariably depict the borders to favor Guyana and French Guiana) include the following standard policy disclaimer: "Boundary representation is not necessarily authoritative.") In part due to the border dispute, an anti-Guyana bias permeates Suriname society. ¶5. (SBU) Suriname receives high-level attention from China, Cuba, and Venezuela. Suriname opened a diplomatic mission in Cuba in December 2008, and the Minister of Foreign Affairs officially opened Suriname's Embassy in Havana in 2009. Several high level official delegation visits to Cuba have occurred in the last two years. The Cuban Embassy in Paramaribo reopened in April 2006 after a two decade absence. Suriname's links with Cuba are primarily medical programs and educational exchanges. Venezuela is trying to garner support in Suriname with programs such as offering scholarships, providing eye care through a joint program with Cuba, and of course, PetroCaribe (While no PetroCaribe shipments have been received by Suriname, the agreement itself remains in force.) Venezuela's Ambassador to Suriname was recalled after President Venetiaan reportedly complained to President Chavez at the April 2009 Summit of the Americas about the Venezuelan Ambassador's inappropriate outreach to the opposition political party. -------------- U.S. -Suriname Bilateral Relations -------------- ¶6. (SBU) Suriname is set to hold national elections on May 25, 2010; Suriname's opposition coalition is led by Desi Bouterse, an individual who led previous coups, has ties to narcotraffickers, and is currently on trial for murder in relation to the 1982 killing of 15 prominent democracy advocates. Such a development could lead to an increase in corruption and narcotrafficking. Except in the 1980's when then-military dictator Bouterse's friendly relationship with Daniel Ortega and Fidel Castro kept Suriname on the map of U.S. foreign policy priorities, in recent years the country has received scant attention from U.S. policy makers. Nor does Suriname receive appreciable development assistance from the United States. ¶7. (SBU) For its part, the Government of Suriname (GOS) often demonstrates a lack of affinity for USG foreign policy priorities. Although the U.S. Embassy appears to enjoy some level of popular support among the people of Suriname, official USG-GOS relations are "cordial and correct,' but they are not "warm." The situation has the potential to improve because of the noted outpouring of Surinamese good will towards President Obama and because of Suriname's pragmatic approach to its foreign policy, based on self interest and complex identity. U.S.-Suriname relations have been strongest in our defense relationship with the Ministry of Defense (MOD) and the Suriname Defense Forces (SDF), and with the law enforcement community of the Ministry of Justice and Police. Not coincidentally, these are the only two Ministries that in the past could regularly count on USG development assistance (modest amounts of IMET, FMF, and INCLE). Cooperation with the Ministry of Health has been steadily increasing, as evidenced by Suriname's quickly and readily accepted participation in PEPFAR II. The Embassy also has a strong relationship with the cultural community and with Suriname's lone University. ¶8. (SBU) The United States government's highest priority interests are to ensure the continuance and strengthening of democracy, to advance good governance, and to promote transparency. Other significant U.S. interests in Suriname include cooperation on law enforcement issues; promoting strong environmental protection and practices in a country still mostly covered by rain forest; working closely with the GOS to advance the fight against malaria, HIV/AIDS, and tuberculosis and to ensure unpolluted water is available; promoting U.S trade, investment, and business links in this resource rich small country; improving GOS military professionalism and interoperability; and protecting U.S. citizens. Without a well-functioning, democratic, friendly government in Suriname, however, advancing each of those interests would be much more difficult. ¶9. (SBU) The Unites States and Suriname already have a successful bilateral relationship in many respects, but we would like to see the relationship also take the form of a positive partnership, whereby the United States can count on Suriname as a friendly partner in international forums such as the UN and OAS, and Suriname can count on the Unites States to recognize that this small country is relevant to U.S. strategic interests in both the Caribbean and on the South American continent. -------------- Elections 2010 -------------- ¶10. (U) With an area previously noted as roughly equal to the state of Georgia and a population of only 492,000, Suriname is one of the least densely populated countries in the world. It is an ethnically diverse land with people of East Indian, African, Indonesian, Chinese, and European descent whose constant wrangling for pieces of the pie color Suriname's economic and political atmosphere. Built on personal relationships and not political platforms, slowed by a bias for strong consensus, typified by a spoils-system favored by the entrenched ethnic parties, Suriname's political environment is difficult to read. On May 25, 2010 Suriname will hold elections. Political parties, including those in President Ronald Venetiaan's ruling New Front coalition, are currently occupied in selecting their coalition partners and it is simply too soon to predict whether the negotiated alliances and backroom deals will keep a version of the New Front coalition in power, led by either the current National Assembly Speaker or Vice President, or whether the current opposition, led by Bouterse's NDP, as the single strongest party, will capitalize on its populist message. -------------- Economic Overview -------------- ¶11. (SBU) Suriname's predicted growth rate for 2010 is 4 percent. This Economic Council for Latin American and the Caribbean estimate leaves Suriname with the highest predicted growth rate for the Caribbean, since the average rating for the region is not expected to surpass 1.8 percent. Suriname is a minerals-based economy with a very high dependence on the commodities oil, bauxite, and gold. While high world market prices for these commodities proved instrumental in the recovery of the economy after years of decline and high inflation in the late 1990's, the fluctuation of commodities prices has also shown the vulnerability of the Surinamese economy. Decreasing demand and world prices for aluminum along with major changes for this sector in 2009 resulted in almost no income from this sector for the government. Suralco, wholly owned subsidiary of U.S. ALCOA, is the 100 percent owner of all activities and major assets in Suriname's bauxite sector. The loss in income from alumina was made up by a significant increase in Suriname's gold exports. Through a significant increase in world market prices for gold and record production in the official gold sector of 365,000 troy ounces from the Rosebel Gold Mines owned by the Canadian based IAMGOLD, gold has officially become the largest contributor to Suriname's GDP. The GOS is currently negotiating with SURGOLD, a joint venture between the U.S.-based Newmont Mining Corporation and Suralco, on developing a new mine and refinery in Suriname's Eastern region. Activities in both this sector and construction fed the 2.5 percent growth of the GDP in 2009. ¶12. (SBU) Although earnings in Suriname's oil sector decreased by 35 percent in 2009 to US 375 million (compared to the record US $576 million in 2008),oil remains the most important source of income for the GOS because the sector is 100 percent government-owned. The State Oil Company of Suriname, Staatsolie, has embarked on a US $1 billion expansion project that includes the US$ 550 million expansion of its refining capacity to 15,000 bpd. The company has also launched a bio-fuels initiative by acquiring 12,000 hectares for planting sugarcane for ethanol production. Staatsolie is seeking to expand its oil reserves by 64 billion barrels through intensified exploration research. The company has further invested US$ 25 million to double the capacity of its electricity plant to 28MW in its offshore activities partners Murphy Oil and Inpex Corporation have acquired 3D seismic data that they will study further for planned test drilling in either 2010 or 2011, while Repsol YPF and Noble Energy are re-evaluating data from their first test drill for a possible second test frill. ¶13. (SBU) Suriname's economy has undergone some diversification. Growth was reported in the tourism, ICT, transport, construction, telecommunications, and offshoring from the Netherlands. The GOS has made improvements in liberalizing the market, but significant improvement is still need in the tax system, market standardization, and market competitiveness. The IMF has urged the GOS to intensify diversification efforts and improve the business environment in order to promote greater private sector led growth. Lumber, fishing, and agriculture are other major industries. -------------- -------------- Military Coups, Desi Bouterse, and the December Murders of 1982 Trial -------------- -------------- ¶14. (SBU) Independent in 1975, Suriname suffered military coups in 1980 and 1990; civilian rule was re-established in 1992. Under the control of Desi Bouterse, who led the first military coup, the military government executed 15 prominent citizens in 1982 for their opposition to the regime. Bouterse, who was elected as a member of the National Assembly, remains active in politics and chairs the opposition party National Democratic Pary (NDP),though he was relieved of his seat in the Parliament in March 2009 by the Speaker due to non-attendance at National Assembly meetings. In November 2007, the long-anticipated legal proceedings against those accused of participating in the brutal December 1982 murders of 15 political opponents began with the issuance of summons to 25 defendants, including Desi Bouterse. Initially, Bouterse announced he would never appear in court, and there was concern that Bouterse would instigate domestic unrest in order to avoid this trial. The trial has, however, proceeded forward without civil disruption, and is not expected to conclude before Suriname's May 25 elections. Aside from his record as the perpetrator of a military coup, a murder suspect, and his time as a military dictator, Bouterse was convicted in absentia by a Dutch court in 1999 for trafficking 474 kilos of cocaine. -------------- Civilian Military Relations -------------- ¶15. (U) Since military rule ended in Suriname, there has been a somewhat strained relationship between the civilian government and the armed forces. In 1992, during President Venetiaan's first of three terms, the civilian authority took bold steps to strip the military of its overreaching constitutional powers, despite strong protest from the military. Venetiaan and several of his close associates had been detained by the military during the military regime. During Venetiaan's last term, his Minister of Defense was disliked by many in the armed forces who perceived him as unresponsive to their needs. Still, the current Minister, Ivan Fernald, has been more engaged with members of the armed forces. However, to date, he remains criticized for failing to bring more and much-needed resources or training. Civilian-military relations seems somewhat better than a few years ago, but there remains room for improvement. -------------- -------------- Criminal Activity Pervasive, Just Below the Surface -------------- -------------- ¶16. (SBU) Although Suriname is not an openly violent society, the rule of law is nevertheless under threat. Suriname is a major transshipment point for South American cocaine en route to Europe and, to a lesser degree, to the United States. The government's inability to control its borders and the lack of law enforcement presence in the largely unmonitored interior allow traffickers to move drug shipments via sea, river, and air with little if any resistance. Suriname lacks the resources to properly equip the marine and air wings of its national military, which are responsible for protecting its borders--a mission which may be transferred to a yet-to-be established Coast Guard. (Note: There has been skepticism since 2006 of the GOS's ability to stand up a Coast Guard due to inadequate resources and legislation, complicated bureaucratic requirements, drug-related corruption, relative geographic isolation, and weak judicial institutions. End note.) Suriname is currently the Vice-Chair of the Inter-American Drug Abuse Control Commission (OAS/CICAD),and in May 2009, Suriname hosted the working group meeting on the Caribbean Basin Security Initiative. BELL