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.



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Visit of EGCI Could Broaden US-Suriname Relations

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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.



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Suriname Overview and International Relations

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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.



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U.S. -Suriname Bilateral Relations

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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.





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Elections 2010

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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.





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Economic Overview

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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.



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Military Coups, Desi Bouterse, and the

December Murders of 1982 Trial

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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.



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Civilian Military Relations

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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.



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Criminal Activity Pervasive, Just Below the Surface

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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