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DE RUEHWN #0076/01 0121354
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P 121354Z JAN 06
FM AMEMBASSY BRIDGETOWN
TO RUEHC/SECSTATE WASHDC PRIORITY 1640
INFO RUCNCOM/EC CARICOM COLLECTIVE
RUEHDG/AMEMBASSY SANTO DOMINGO 5782
RUEHIN/AIT TAIPEI 0106
RUEHCV/USDAO CARACAS VE
RUMIAAA/HQ USSOUTHCOM J2 MIAMI FL
RUMIAAA/HQ USSOUTHCOM J5 MIAMI FL

UNCLAS SECTION 01 OF 04 BRIDGETOWN 000076 
 
SIPDIS 
 
SENSITIVE 
SIPDIS 
 
DEPT FOR WHA/CAR 
SANTO DOMINGO FOR FCS 
SOUTHCOM ALSO FOR POLAD 
 
E.O. 12958: N/A 
TAGS: PGOV PREL CPAS EAID EFIN TW XL
SUBJECT: THE WINDIES - SPOT REPORTS FROM THE EASTERN 
CARIBBEAN - DECEMBER 2005 
 
 
REGIONAL 
 
- IMF Official Concerned About PetroCaribe Debt 
 
ANTIGUA AND BARBUDA 
 
- Internet Gambling Operations to Expand 
 
DOMINICA 
 
- New Opposition Leader 
- Taiwanese Bank Sues Dominica 
- Machine-Readable Passport Introduced 
 
GRENADA 
 
- Criticism of Grenadian/Canadian MP Continues 
- USAID Reconstruction Program Nears Completion 
 
ST. KITTS AND NEVIS 
 
- Budget Presented to Parliament 
 
ST. LUCIA 
 
- Voter Registration Commences After Delay 
- Campaign Funding Becomes an Issue 
 
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REGIONAL 
-------- 
 
- IMF Official Concerned About PetroCaribe Debt 
 
¶1. (U) During a recent visit to the region, International 
Monetary Fund (IMF) Deputy Managing Director Agustin 
Carstens expressed concern that Caribbean nations would take 
on more debt through the concessionary financing scheme 
offered by Venezuela's PetroCaribe oil initiative.  Carstens 
spoke highly of government and fiscal reform measures in 
Antigua and St. Kitts, praised Dominica's fiscal reform 
efforts that are being implemented as part of an IMF 
economic stabilization program, and complimented Grenada's 
post-hurricane recovery, although he said the country still 
has a long way to go.  Without making any specific offer of 
assistance, Carstens said the IMF and the Eastern Caribbean 
Central Bank should work together more closely to help 
countries in the region to reduce their debt, increase 
competitiveness, attract foreign investment, and prepare to 
"fully embrace globalization." 
 
------------------- 
ANTIGUA AND BARBUDA 
------------------- 
 
- Internet Gambling Operations to Expand 
 
¶2. (U) The Government of Antigua and Barbuda will provide 
licenses to ten new Internet gambling companies that will 
allow them to begin operations on the island-state in 2006. 
Finance Minister Errol Cort said that the new companies 
would provide up to 500 new jobs and generate approximately 
US$740,000 in revenues for the Government through licensing 
fees.  This expansion of Antigua's online gaming industry 
follows an April 2005 WTO decision that found certain U.S. 
prohibitions on Internet gambling to be in violation of 
global trade rules.  The WTO gave the U.S. until April 2006 
to bring its laws into compliance with the ruling. 
According to the USTR, the U.S. needs only to implement 
minor changes to off-track-betting regulations to comply 
with the WTO ruling. 
 
¶3. (SBU) Comment:  The expansion of the Antiguan online 
gambling industry suggests that it has been a lucrative 
source of revenue despite the Government's claim that the 
U.S. prohibition on Internet gambling has hurt its economy. 
Considering that the majority of Antigua's Internet gambling 
customers are American, this development also indicates that 
it will be difficult for the U.S. to regulate or curb the 
use of offshore gaming by Americans. 
 
 
BRIDGETOWN 00000076  002 OF 004 
 
 
-------- 
DOMINICA 
-------- 
 
- New Opposition Leader 
 
¶4. (U) The opposition United Workers Party (UWP) selected 
Parliamentarian and attorney Earl Williams as its new Party 
Leader.  A committee of leading UWP members chose Williams 
in an 11 to 10 vote over Julius Timothy, who has served 
continuously as Deputy Party Leader since the UWP was 
founded 17 years ago.  Williams replaces former Prime 
Minister Edison James, who led the UWP to two consecutive 
election defeats in 2000 and 2005.  Despite handing over the 
UWP leadership, James remains the official Leader of the 
Opposition in Parliament. 
 
¶5. (SBU) Comment:  The change in UWP leadership appears to 
have been a successful move by Edison James to maintain 
control of the party while giving the appearance that he has 
stepped aside after suffering defeat in elections last year. 
James may have made a deal with certain key UWP members to 
keep his deputy, Julius Timothy, from moving up to the 
leadership role even though the close vote demonstrated 
considerable support for Timothy, a businessman who has been 
bankrolling the UWP.  Timothy is said to have been deeply 
wounded by this treachery and it is unclear what role he 
will continue to play in the UWP. 
 
- Taiwanese Bank Sues Dominica 
 
¶6. (U) A Taiwanese bank has filed suit to recover US$12 
million in loans it claims the Government of Dominica has 
defaulted on.  According to articles in Dominica and 
Trinidad newspapers, the Exim Bank of Taiwan filed the suit 
in a federal court in New York.  Dominica Prime Minister 
Roosevelt Skerrit criticized the suit as a "politically 
motivated" action intended to punish the country for 
switching diplomatic relations from Taiwan to China in 2004. 
The PM denied that Dominica had defaulted on its payments to 
the bank.  The Government of Dominica reported recently that 
it had reached agreement to reschedule its debt payments 
with creditors that hold 70 percent of the country's debt 
and was making progress on discussions with other creditors, 
including Taiwan. 
 
- Machine-Readable Passport Introduced 
 
¶7. (U) Dominica introduced a new machine-readable passport 
bearing the CARICOM seal in December.  The new passport is 
reported to contain security measures that should make it 
more difficult to alter than the existing non-machine- 
readable passports, which will be phased out as they expire. 
The Minister overseeing the introduction of the new passport 
told the press that the Government would avoid mistakes made 
in the issuance of passports under Dominica's economic 
citizenship program.  He explained that approximately 3,000 
people who were not born in Dominica currently hold the old 
passport; issuance of the new passport would "serve as a 
filter," according to the Minister, to insure that only 
those people truly entitled to a Dominica passport will have 
one. 
 
¶8. (SBU) Comment:  As one of the few countries in the region 
to maintain an active economic citizenship program, it seems 
unlikely that Dominica would deny the new passport to those 
willing to pay for it, despite the Minister's remarks.  One 
issue the Minister did not address is the delay in 
completing an OAS funded program to computerize the 
registration of Dominica's civil records, including birth 
certificates.  The Government of Dominica has fallen months 
behind in completing the project; until then, the security 
of the documents currently used to issue the new machine- 
readable passports remains questionable. 
 
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GRENADA 
------- 
 
- Criticism of Grenadian/Canadian MP Continues 
 
 
BRIDGETOWN 00000076  003 OF 004 
 
 
¶9. (U) The Government of Prime Minister Keith Mitchell has 
continued its attacks on Parliamentarian Peter David, a 
leader of the opposition National Democratic Congress (NDC), 
by asserting that his 2003 election should be nullified 
because David holds both Canadian and Grenadian citizenship. 
Though untested in court, the Grenada Constitution appears 
to bar Members of Parliament from holding dual citizenship. 
If the Government is successful in removing David from 
Parliament and replacing him with his opponent in the 2003 
election, it would give the ruling New National Party (NNP) 
a 9-6 advantage in Parliament, versus the slim 8-7 majority 
it currently holds.  The issue will ultimately be decided in 
the courts.  In the short term David's popularity has risen. 
 
- USAID Hurricane Reconstruction Program Nears Completion 
 
¶10. (U) By the end of December, USAID had concluded most of 
its US$45 million Hurricane Ivan reconstruction program, 
full completion of which was delayed by a regional shortage 
of cement.  Among the highlights of the program were the 
repair or rebuilding of about 1000 houses, 24 schools 
(almost half of Grenada's primary schools), 11 health 
clinics, and other important structures such as community 
centers and tourist sites.  The program has helped many 
Grenadian businesses, farmers and fishermen to get back on 
their feet, has trained several thousand people in new 
skills, and assisted the Government to pay some of its 
utility and other bills.  Further information on the program 
is available on Embassy Grenada's website at 
http://www.spiceisle.com/homepages/usemb_gd/. 
 
------------------- 
ST. KITTS AND NEVIS 
------------------- 
 
- Tax Reform Focus of New Government Budget 
 
¶11. (U) St. Kitts and Nevis Prime Minister Denzil Douglas 
presented a US$259.4 million budget to parliament in mid- 
December, projecting a small fiscal surplus of US$9.8 
million for fiscal year 2006.  The PM's budget focuses on 
tax reform, including revamping the property, telecom, 
corporate income and sales taxes.  The PM proposed raising 
some taxes, restructuring others, and doing away with 
"nuisance taxes."  These moves are intended to help the 
Government be less dependent on tariff revenues, which will 
allow it more easily to implement WTO-mandated tariff cuts. 
The new revenues will also help the country transition out 
of sugar production (St. Kitts ended its state-run sugar 
industry in 2005 due to severe financial losses) and pay 
down its high debt (over 150 percent of GDP). 
 
--------- 
ST. LUCIA 
--------- 
 
- Voter Registration Commences After Delay 
 
¶12. (U) Voter registration has commenced after a two-month 
delay caused by a legal challenge to the registration 
process by an independent Member of Parliament, Sarah Flood- 
Beaubrun of the Organization for National Empowerment (ONE), 
a small party built around her.  A court denied the MP's 
motion for a judicial review of the registration process 
that allows only the country's two main parties, the ruling 
St. Lucia Labor Party (SLP) and opposition United Workers' 
Party (UWP), to appoint scrutineers to monitor the voter 
registration process.  Elections are constitutionally due by 
December 2006, although it is widely believed that Prime 
Minister Kenny Anthony will call the election before then. 
 
- Campaign Funding Becomes an Issue 
 
¶13. (U) Prime Minister Kenny Anthony and opposition leader 
John Compton have traded charges over campaign funding in 
the upcoming election, with the PM suggesting that the 
opposition might obtain funds from Taiwan.  (Note:  Although 
St. Lucia recognizes China, the opposition leader met with 
the Taiwanese President in St. Vincent last year.  End 
note.)  The PM has said that campaign finance reform 
legislation that would prohibit political parties from 
 
BRIDGETOWN 00000076  004 OF 004 
 
 
accepting money from foreign governments may be in order. 
The opposition leader also called for campaign finance 
legislation in St. Lucia after commenting unfavorably on the 
large sums of money spent by the ruling party in St. Vincent 
to secure victory in that country's December 2005 election. 
 
¶13. (SBU) Comment:  It is unlikely that St. Lucia will enact 
campaign finance legislation in advance of an election this 
year.  Like other countries in the region, St. Lucia does 
not have campaign disclosure laws or place legal limits on 
campaign spending, which allows both parties to obtain 
unlimited funds from members of the diaspora, wealthy 
expatriates, and maybe even foreign governments.