VZCZCXRO8190
PP RUEHPB
DE RUEHSV #0406/01 2241212
ZNY CCCCC ZZH
P 121212Z AUG 07
FM AMEMBASSY SUVA
TO RUEHC/SECSTATE WASHDC PRIORITY 0009
INFO RUEHBJ/AMEMBASSY BEIJING 0288
RUEHBY/AMEMBASSY CANBERRA 1763
RUEHPB/AMEMBASSY PORT MORESBY 1335
RUEHWL/AMEMBASSY WELLINGTON 1533
RUEHNZ/AMCONSUL AUCKLAND 0492
RUEHDN/AMCONSUL SYDNEY 0899
RUEHUB/USINT HAVANA 0010
RUEHIN/AIT TAIPEI 0007
RHHMUNA/HQ USPACOM HONOLULU HI
RHHJJAA/JICPAC HONOLULU HI

C O N F I D E N T I A L SECTION 01 OF 03 SUVA 000406 
 
SIPDIS 
 
SIPDIS 
 
E.O. 12958: DECL: 08/10/2017 
TAGS: PREL PGOV PINR EAIR ECON KR
SUBJECT: KIRIBATI: ELECTIONS COMING, CHINA/TAIWAN 
IMPLICATIONS; CUBA RELATIONS 
 
REF: A. SUVA 397 
     ¶B. SUVA 398 
     ¶C. SUVA 399 
     ¶D. SUVA 402 
 
Classified By: Amb. Dinger.  Sec. 1.4 (B,D). 
 
Summary 
------- 
¶1. (C) During a visit by the Ambassador to Kiribati, 
President Tong reiterated his strong interest in access to 
the Millennium Challenge Account.  Tong complimented last 
May's Pacific Islands Conference of Leaders (PICL) in 
Washington, which gave excellent insights into USG checks and 
balances.  Kiribati general elections on Aug. 22 will lead to 
presidential elections in October.  President Tong expects a 
victory.  The results have geo-strategic implications.  If 
Tong's opponents win, the PRC could return and re-establish a 
satellite-tracking station on Tarawa.  Kiribati's trust fund 
is doing well.  A Cuban embassy and ten MDs are resident on 
Tarawa, with more MDs coming.  Cuba has provided 20 
scholarships to Kiribati medical students.  The Kiribati 
Government is unhappy with its current air-space control 
arrangement with Fiji and plans to raise the subject at an 
ICAO meeting later this year.  End summary. 
 
PACOM and Ambassador visit Kiribati 
----------------------------------- 
¶2. (U) The Ambassador's July 20-24 visit to Kiribati 
overlapped with a highly successful PACOM humanitarian 
assistance mission that saw 28 military personnel, mostly 
from the Air Force, spend a week providing medical and 
construction assistance, mostly to schools and clinics.  The 
Ambassador's visit gave opportunity to discuss a range of 
issues with Kiribati officials.  Topics included 
ship-registry concerns (Ref A), Peace Corps (Ref B), 
trafficking in persons (Ref C), and the China-Taiwan 
competition (Ref D).  In a meeting on July 20, President Tong 
reiterated Kiribati interest in gaining access to the 
Millennium Challenge Account.  We explained our understanding 
of the state of play.  Tong complimented Washington for its 
part in organizing the Pacific Islands Conference of Leaders 
(PICL) last May.  He said it was "very valuable," 
particularly in illustrating the checks and balances between 
the executive and legislative branches in the U.S. system. 
 
General elections Aug. 22 
------------------------- 
¶3. (SBU) Kiribati will hold its every-three-year general 
elections August 22.  In preparation, an elections commission 
has recommended expanding Parliament from 40 to 44 elected 
seats.  Two members (the attorney general and a 
representative from Rabi) sit without election.  The new 
parliamentary total will be 46.  Numbers in Parliament have 
expanded several times over the years as the Kiribati 
population has grown.  President Tong, who over the past 
three years has built his coalition from a bare majority to a 
comfortable margin, expects his group to win Parliament 
handily.  Tong has contemplated solidifying his coalition by 
means of a "Samoa approach": creating so many "assistant 
minister" positions that nearly everyone in Parliament can 
have a sinecure; however, he worries such manipulation could 
allow a President "too much power," not a good thing in a 
democracy. 
 
Oct. Presidential election; China/Taiwan implications 
--------------------------------------------- -------- 
¶4. (C) Once the new Parliament sits, it will select up to 
four persons from among its members to run for President in a 
nation-wide vote that will take place in October.  The 
Kiribati Constitution permits a President to be reelected 
twice.  Within the constitutional limits, Parliament has 
repeatedly given sitting Presidents opportunities to run 
again, and Kiribati voters have repeatedly reelected 
incumbent Presidents.  Thus, many observers figure Tong will 
retain the Presidency, and that has geo-strategic 
implications.  Per Ref D, Kiribati's loyalty between China 
and Taiwan has shifted with past election results.  Tong's 
recognition of Taiwan in 2004 caused the PRC to depart, 
taking away a satellite-tracking station that may have had 
the U.S. Kwajalein base in its sights.  Tong, the Taiwan 
Ambassador to Kiribati, and several observers all predict 
 
SUVA 00000406  002 OF 003 
 
 
that the China-Taiwan issue will not influence voters, who 
think grassroots. 
 
Issues at play: scholarships and overdrafts 
------------------------------------------- 
¶5. (SBU) Two "big" issues that could cut against Tong are 
allegations that officials manipulated the national 
scholarship program to favor children of the elite and a 
recent judicial ruling that the Tong government's use of a 
bank "overdraft" facility was against the law.  Reportedly 
two civil servants lost their jobs in the scholarship 
scandal.  The Kiribati Court of Appeals was to hear the 
overdraft issue in early August, before the election.  In the 
meantime, the Tong Government stopped using the facility and 
went on a PR offensive, explaining that past governments had 
also used overdrafts, and the intention was pure.  The 
Government could have used trust-fund revenues to cover 
expenditures, but the trust fund was earning excellent 
interest.  Tapping the overdraft facility at a lower interest 
rate made fiscal sense.  Some observers suggest, though, that 
the Tong Government had been using the overdraft facility 
much more than previous governments. 
 
Trust fund healthy 
------------------ 
¶6. (SBU) The Kiribati trust fund, established at independence 
by Australia, New Zealand, and the UK, and managed 
professionally in Australia, is healthy.  It currently has 
A$680 million in assets, and the Kiribati Government has 
never attempted to tap the corpus.  That said, the Tong 
Government reportedly has used more of the annual 
distributions from the trust for current-account expenditures 
than past governments, and has injected less back into corpus. 
 
Cuban MDs much appreciated; Embassy in place 
-------------------------------------------- 
¶7. (SBU) Within the past year, Cuba opened up an embassy in 
Kiribati, headed by a Charge who reports to Manila.  That 
embassy oversees a Cuban medical-assistance program that 
Kiribati officials laud.  Ten Cuban MDs are currently in 
Kiribati, with more coming.  Kiribati insisted that all Cuban 
MDs speak English well, and that has been honored.  The 
initial ten reportedly provided earthquake relief in Pakistan 
and tsunami relief in Indonesia prior to arriving in 
Kiribati.  In addition, Cuba has provided scholarships for 
twenty Kiribati students to study medicine in Cuba.  The 
program includes a year of Spanish and then six to seven 
years of medical training.  When we asked what caused Cuba to 
approach Kiribati, nobody had an explanation, beyond altruism. 
 
Air-space control issues for ICAO 
--------------------------------- 
¶8. (U) The Kiribati Secretary of Transportation raised his 
government's interest in re-ordering regional air-space 
control.  Currently multiple air-control centers cover 
portions of the vast Kiribati EEZ.  The Fiji center controls 
most air space over the Gilbert Islands group; and the FAA 
Oakland center controls most airspace over the Phoenix and 
Line Islands groups.  Kiribati needs funding sources.  It 
believes the Fiji center should share revenues, but Fiji 
refuses to do so.  Reportedly Australia and New Zealand have 
said that, if Kiribati can obtain the air-control rights now 
in Fiji hands, Australia and New Zealand would be willing to 
do the controlling, with the revenues flowing to Kiribati. 
Kiribati requests USG support for such a plan at the annual 
ICAO meeting later this year. 
 
Comment 
------- 
¶9. (C) We are told that Kiribati parliamentary elections are 
nearly always decided on the basis of local issues and family 
ties.  Thus, it is impossible for an outsider to predict 
results.  We expect the PRC is attempting to work behind the 
scenes to encourage its supporters (now in opposition), and 
Taiwan is presumably doing what it can to encourage 
Tong-coalition members.  The August results will give an idea 
of public sentiment.  Who the Parliament chooses as the three 
or four candidates to run for President will give an 
additional view.  Then, in October, the public will reveal 
all.  We were told to expect that Kiribati's delegation to 
the Pacific Forum in Tonga in October will be light.  Real 
movers and shakers will be hard at work back home campaigning. 
 
SUVA 00000406  003 OF 003 
 
 
DINGER