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UNCLAS SECTION 01 OF 05 BRIDGETOWN 000319 
 
SIPDIS 
 
SENSITIVE 
SIPDIS 
 
DEPT FOR WHA/CAR 
SANTO DOMINGO FOR FCS 
SOUTHCOM ALSO FOR POLAD 
 
E.O. 12958: N/A 
TAGS: PGOV PREL CPAS SNAR EAID EAIR EFIN ELAB ENRG
ETRD, PHUM, MX, VE, XL 
SUBJECT: THE WINDIES - SPOT REPORTS FROM THE EASTERN 
CARIBBEAN - JANUARY 2006 
 
REGIONAL 
 
- EU Approves US$19 Million in Banana Aid 
- Regional Trade Body to Increase Private Sector Outreach 
 
ANTIGUA AND BARBUDA 
 
- New Machine-Readable Passport Introduced 
- Giorgio Armani Purchases House in Antigua 
 
BARBADOS 
 
- Major Drug Bust 
 
DOMINICA 
 
- Government Workers Laid Off, According to IMF Program 
 
GRENADA 
 
- New Income Tax Begins Despite Opposition 
 
ST. LUCIA 
 
- Controversial Parliamentarian Resigns Seat 
- Government Reaffirms Support for PetroCaribe 
- Air Jamaica Returns to St. Lucia 
- St. Lucia Banana Exports at Record Low 
 
ST. VINCENT AND THE GRENADINES 
 
- Opposition to Take Election Officials to Court 
- International Airport Plan Moves Ahead 
- PM Gonsalves Presents US$214.8 Million Budget 
 
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REGIONAL 
-------- 
 
- Regional Trade Body to Increase Private Sector Outreach 
¶1. (U) The Barbados-based Caribbean Regional Negotiating 
Machinery (CRNM) announced that it is expanding its private 
sector outreach program, beginning in January with a 
dialogue that will bring together the private and public 
sectors in St. Kitts.  The CRNM will also teach the private 
sector how to become more involved in trade policy and take 
advantage of trade opportunities.  USAID provides assistance 
to the CRNM, although the Inter-American Development Bank 
(IDB) is funding this particular project. 
¶2. (SBU) Comment:  Private sector contacts in the region 
have often complained to Post that they have little input in 
their governments' trade policies.  This CRNM project could 
help reverse protectionist policies in the Caribbean as the 
region's private sector (except for protected industries) is 
generally more open to liberalizing trade than governments. 
End Comment. 
- EU Approves US$19 Million in Banana Aid 
 
¶3. (U) The European Union (EU) has approved nearly US$19 
million to help Eastern Caribbean banana-producing countries 
diversify their economies.  St. Lucia will receive US$7.4 
million, St. Vincent and the Grenadines US$5.4 million, 
Dominica US$5.4 million, and Grenada US$600,000.  (Note: 
The EU divided the money roughly in proportion to the size 
of each island's banana crop.)   The EU plans to fund 
computer training and business development.  This aid is 
part of a larger EU fund to help African Caribbean and 
Pacific (ACP) banana producers adjust to declining EU trade 
preferences. 
 
------------------- 
ANTIGUA AND BARBUDA 
------------------- 
 
- New Machine-Readable Passport Introduced 
 
¶4. (U) On January 16, Prime Minister Baldwin Spencer became 
the first recipient of the new Antigua and Barbuda machine- 
readable passport with the Caribbean Community (CARICOM) 
logo.  The new document design has features to meet 
 
BRIDGETOWN 00000319  002 OF 005 
 
 
international security requirements and includes the CARICOM 
logo on the cover to signify Antigua and Barbuda's 
commitment to regional integration.  The PM's wife, Jacklyn, 
and the Governor General, Sir James Carlisle, also received 
the new documents, slated to be made available to new 
passport applicants later in the month, while holders of 
valid passports were directed to continue using their old 
passports until the phase-out process for the old document 
is announced. 
 
- Giorgio Armani Purchases House in Antigua 
 
¶5. (U) In early January, Italian fashion designer Giorgio 
Armani purchased a house in Antigua.  The Baldwin Spencer 
administration has refused to identify the location of the 
property but said that Armani has been a frequent visitor to 
the tiny Caribbean island on his yacht.  Tourism Minister 
Harold Lovell said Armani's decision could only prove 
beneficial to an island which is marketed as a mid- to up- 
market destination.  "The spin-offs are tremendous for our 
economy and we endeavor to continue to lift our product to 
attract such clientele," Lovell said. 
 
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BARBADOS 
-------- 
 
- Major Drug Bust 
 
¶6. (U) Barbados police made a major drug bust on January 5, 
seizing more than $5 million (US$2.5 million) worth of 
marijuana.  Some 51 bales of the drug were seized, weighing 
1,994.5 pounds.  Inspector Barry Hunte of the Royal Barbados 
Police Force told reporters that the police operation was 
part of a joint initiative including the Drug Squad, Coast 
Guard and Police Marine Unit.  According to Hunte, Drug 
Squad personnel observed a group of persons on Worthings 
Beach Christ Church (a highly frequented tourist beach in a 
densely populated part of the island) unloading several 
bales off a vessel at night.  On being approached, members 
of the group fled.  Drug Squad personnel subsequently seized 
the marijuana and the boat: no arrests have been made. 
 
-------- 
DOMINICA 
-------- 
 
- Government Workers Laid Off, According to IMF Program 
 
¶7. (U) The Government of Dominica laid off the first of 100 
workers who will lose their jobs between January and May 
¶2006.  The move comes as part of the ongoing implementation 
of the country's IMF economic stabilization program, which 
includes cutting public spending by 15 percent.  In 2003, 
the government announced plans to lay off ten percent of its 
3,000 workers.  This downsizing has been accomplished, in 
part, through the privatization of certain government 
functions; several companies have won contracts to provide 
services such as maintenance for public buildings so long as 
they hire laid-off workers. 
 
¶8. (SBU) Comment:  The reduction of the number of public 
sector employees is further indication of the seriousness 
with which Prime Minister Roosevelt Skerrit has taken the 
IMF stabilization program.  The PM, recognizing the dire 
economic condition of his small country, has consistently 
made a number of politically difficult decisions that follow 
the IMF's recommendations.  Many of his countrymen also 
appear to understand that some belt-tightening is necessary 
as they returned the popular PM to office last year.  End 
comment. 
 
------- 
GRENADA 
------- 
 
- New Income Tax Begins Despite Opposition 
 
¶9. (U) The Government of Grenada has begun phasing in a five 
percent tax on income over EC$1000 per month (US$370).  The 
 
BRIDGETOWN 00000319  003 OF 005 
 
 
tax will be phased in at the rate of three percent for the 
first six months of the year, rising to five percent in 
July.  Labor unions and the political opposition have 
vehemently opposed the tax; several hundred Grenadians 
demonstrated against the levy on January 20.  Turnout, 
however, was much lighter than anticipated as many 
Grenadians appear to understand the need for additional 
government revenues as the country continues to "Build Back 
Better" after Hurricanes Ivan (2004) and Emily (2005). 
 
--------- 
ST. LUCIA 
--------- 
 
- Controversial Parliamentarian Resigns Seat 
 
¶10. (U) The resignation from Parliament of the leader of a 
small, third party will cause St. Lucia to hold a by- 
election in advance of national elections that are expected 
by the end of the year.  The MP, Sarah Flood-Beaubrun, 
leader of the small Organization for National Empowerment 
(ONE), resigned her parliamentary seat in protest over 
electoral rules that favored the country's two main parties, 
the ruling St. Lucia Labor Party (SLP) and opposition United 
Workers' Party (UWP), at the expense of her third party. 
Flood-Beaubrun has said that she intends to run again for 
the seat in the by-election, a date for which has yet to be 
set.  The SLP and UWP are in the process of selecting their 
candidates for the by-election. 
 
¶11. (SBU) Political observers believe that Flood-Beaubrun 
resigned her seat with the hope of joining the opposition 
UWP and being named its deputy leader.  The opposition 
leader, former Prime Minister John Compton, has not acceded 
to her demands.  This situation appears likely to keep the 
opposition divided in the run-up to national elections later 
this year. 
 
- Government Reaffirms Support for PetroCaribe 
 
¶12. (U) Prime Minister Kenny Anthony reaffirmed his 
government's commitment to take part in PetroCaribe, despite 
recent criticism of the Venezuelan oil initiative by 
opposition leader and former Prime Minister John Compton. 
PM Anthony said in January that his government would soon 
begin further discussions with Venezuela regarding 
implementation of the agreement.  Anthony also called upon 
Prime Minister Patrick Manning of Trinidad to be more 
sensitive to the energy needs of the island states of the 
Eastern Caribbean, saying the smaller nations were forced to 
turn to Venezuela after Trinidad failed to offer the region 
oil at affordable prices. 
 
¶13. (SBU) Comment:  St. Lucia's recent public support for 
PetroCaribe comes after a period during which PM Anthony 
appeared particularly cool to the plan in comparison to 
other leaders in the region.  Last year, the PM told a 
regional oil executive that his country did not need the 
Venezuelan oil initiative.  Anthony may, however, have 
changed his mind and be positioning St. Lucia to take 
advantage of PetroCaribe.  A few shipments of fuel to the 
island under PetroCaribe's concessionary financing could 
help his ruling party in upcoming elections, as it did the 
ruling party in St. Vincent's December 2005 election.  Also, 
PM Anthony's assumption that Trinidad should offer his 
country discounted oil is another example of how Eastern 
Caribbean governments have come to expect aid from all 
quarters, even fellow developing countries in CARICOM.  End 
comment. 
 
- Air Jamaica Returns to St. Lucia 
 
¶14. (U) After a one-year absence due to financial troubles, 
Air Jamaica announced in January that it would to reinstate 
its thrice-weekly New York-St. Lucia route on February 23. 
The President of the Caribbean Hotel Association observed 
that the return of Air Jamaica to St Lucia would help 
achieve the government's forecast of 300,000 visitors from 
the United States market this year.  The New York area is 
one of the largest sources of tourists traveling to St. 
 
BRIDGETOWN 00000319  004 OF 005 
 
 
Lucia. 
 
-  St. Lucia Banana Exports at Record Low 
¶15. (U) Exports of bananas from St. Lucia fell to a record 
low in 2005 as increased competition forced more farmers out 
of the industry.  St. Lucia exported 30,970 tons (28,096 
metric tons) of the fruit, a 28 percent decline from 2004. 
Exports hit a high of 133,777 tons (121,360 metric tons) in 
1990 and have been dropping ever since. There are now fewer 
than 2,000 banana farmers in the country, compared to more 
than 10,000 in the early 1990s. 
¶16. (U) A local commentator who studies the banana industry 
said economic uncertainty over EU preference reductions, 
unfavorable weather, and leaf spot disease all contributed 
to the decline in production.  (Note:  The EU's system of 
tariffs and quotas had favored former colonies in the 
Caribbean and Africa over large-scale growers in Latin 
American.  The Latin Americans (backed by the U.S.) 
successfully argued to the WTO that the arrangement was 
unfair, forcing the EU to reduce its banana trade 
preferences for African and Caribbean countries.  End Note.) 
------------------------------ 
ST. VINCENT AND THE GRENADINES 
------------------------------ 
 
- Opposition to Take Election Officials to Court 
 
¶17. (U) The opposition New Democratic Party (NDP) wants 
criminal charges filed against election officials who 
allegedly committed electoral fraud in St. Vincent's 
December 2005 national election.  The ruling Unity Labor 
Party (ULP) won 12 of 15 seats, maintaining the same number 
of seats as before the voting.  The NDP had threatened to 
file suit challenging the results in three constituencies it 
lost to the ULP by only a handful of votes, but said 
recently that its lawyers had advised against taking this 
action.  Instead, the party hopes to punish several election 
officials it has publicly identified as being responsible 
for destroying ballots and committing other abuses. 
 
¶18. (SBU) Comment:  The NDP backing down from its earlier 
threat to challenge the election results raises questions 
about the validity of the party's charge that significant 
irregularities occurred.  This development suggests that the 
ruling ULP did not steal the election, or even a few 
parliamentary seats, as the opposition claimed.  Instead, a 
few overzealous ULP supporters may have committed electoral 
abuses that they could now be held accountable for.  End 
comment. 
 
- International Airport Plan Moves Ahead 
 
¶19. (U) The Government of St. Vincent (GOSV) reported 
progress toward the construction of a new international 
airport to be built with the assistance of the Governments 
of Venezuela and Mexico.  Engineers from the two countries 
have been conducting preliminary surveys of the airport site 
in advance of construction.  The GOSV, meanwhile, has 
identified an area to which residents currently living on 
the site would be relocated.  The design of the new airport 
is due to be finalized this year and construction will begin 
in 2007.  The project is slated for completion in 2011 at a 
cost of US$180 million.  Until then, the GOSV plans to spend 
several million dollars on improvements to its existing 
airport, which is considered substandard for what St. 
Vincent hopes will be a growing tourism industry. 
- PM Gonsalves Presents US$214.8 Million Budget 
¶20. (U) Prime Minister Ralph Gonsalves presented a US$214.8 
million budget to Parliament, the centerpiece of which is a 
proposal to introduce a value added tax and excise tax while 
also improving the Government's tax administration.  The PM 
also pledged to reduce the number of duty-free concessions, 
which cost the Government an estimated US$1.6 million in 
¶2005.  Gonsalves said much of the budget would go to fund 
public works projects, including a new airport (see previous 
paragraph).  The PM estimated economic growth at 4.5 percent 
in 2005, compared to 5.4 percent in 2004 and 3.4 percent in 
¶2003.  In addition, Gonsalves said the public debt increased 
11.5 percent in 2005 to US$365.1 million or 85.2 percent of 
GDP. 
 
BRIDGETOWN 00000319  005 OF 005 
 
 
 
KRAMER