VZCZCXRO6701
RR RUEHGR
DE RUEHWN #0728/01 3501657
ZNR UUUUU ZZH
R 151657Z DEC 08
FM AMEMBASSY BRIDGETOWN
TO RUEHC/SECSTATE WASHDC 6947
INFO RUCNCOM/EC CARICOM COLLECTIVE
RUEHDG/AMEMBASSY SANTO DOMINGO 5960
RUCPDOC/DEPT OF COMMERCE WASHDC

UNCLAS SECTION 01 OF 03 BRIDGETOWN 000728 
 
SIPDIS 
 
EB/CBA FOR DENNIS WINSTEAD 
SANTO DOMINGO FOR FCS 
 
E.O. 12958: N/A 
TAGS: ETRD ENRG EINV PREL XL
SUBJECT: DOMINICA'S ECONOMY SHOWING SIGNS OF LIFE DESPITE 
GLOBAL ECONOMY 
 
REF: A. BRIDGETOWN 585 
     ¶B. BRIDGETOWN 649 
     ¶C. BRIDGETOWN 624 
 
------- 
Summary 
------- 
 
¶1.  (SBU) Despite recent turmoil in world markets, Dominica 
is showing some signs of improved economic vitality, with new 
infrastructure projects coming on line and economic growth 
projected to reach a respectable three percent.  Economic 
contacts remain cautiously optimistic that Dominica will be 
able to weather the world wide economic downturn.  End 
Summary. 
 
-------------------------------- 
Economy Shows Some Signs of Life 
-------------------------------- 
 
¶2.  (U) POLOFF's contacts unanimously confirmed that, despite 
the worldwide economic downturn, Dominica's economy is 
showing signs of vitality and appears to be on track to 
achieving a solid 3 percent growth rate this year.  The 
economy benefited from the successful hosting of the 30th 
Independence day reunion week, which saw thousands of 
overseas Dominicans returning home.  A number of them are 
reported to be considering investing in their homeland. 
Construction projects are also underway that, when finished, 
could dramatically improve Dominica's overall 
competitiveness. These include upgrades to allow for night 
landing at the international airport, which should be 
operational by late May; a new bypass to the airport that 
will reduce travel time to Roseau, also due to be completed 
by next May; and a west coast highway being funded by China. 
The Government is also moving aggressively on redevelopment 
of Roseau's port facilities, including construction of a five 
star hotel, redevelopment of the Portsmouth Cruise ship 
terminal. 
 
¶3.  (U)  The government has also signed a new Tourism 
Development plan, funded by the European Union, which will 
help foster development of 14 key eco-tourism sites.  The 
focus of the project will be on building facilities and other 
supporting infrastructure at the Indian River (one of the 
featured locations from the Pirates of the Caribbean movies), 
Wotten Waven (hot springs resort and potential geothermal 
site), and Bellevue Chopin and at the Layou river. The 
government is placing emphasis on capacity building for 
project leaders and project implementers, as well as 
destination marketing and promotion.  POLOFF's contacts also 
pointed out that there are a number of new restaurants 
opening up in both Roseau and Portsmouth, including an Omaha 
steak house, and several more Rituals coffee shops.  Church's 
Fried Chicken has also announced plans to open 10 stores in 
Dominica over the course of the next year.  POLOFF's 
government and business contacts all shared a cautiously 
optimistic belief that Dominica will weather the economic 
downturn and remain in positive growth through next year. 
 
--------------------------------------------- -------- 
Government Cuts Fuel Bills - Giving Customers a Break 
--------------------------------------------- -------- 
 
¶4. (SBU) With oil prices falling again, the government 
announced a cut in the price of gasoline, kerosene and 
diesel, giving customers a much needed break as energy costs 
in Dominica are among the highest in the region (Dominica is 
80 percent dependent on imported oil for its energy 
production). DOMLEC, the US-owned electrical utility, was 
rocked by the sudden death of the General Manager, Joel 
Huggins, in early November.  Huggins, a Vincentian, had been 
with DOMLEC since DOMLEC took over the former state-owned 
utility in a still controversial deal early in the decade. 
Since that time, DOMLEC has been widely vilified by the 
government, and thus despised by the Dominican public, who 
perceive the company to be mercenary and insensitive to the 
needs of the still poor country.  Recently, however, DOMLEC 
has been negotiating with the government to help develop 
badly needed new alternative energy sources (ref b).  A new 
office director has not yet been named, so it is still too 
early to tell how the dynamics are likely to change between 
DOMLEC and the government, but the underlying contract issues 
will remain a big part of that relationship. 
 
--------------------------------------------- ------- 
US Quarry Operator Still on The Rocks but Optimistic 
 
BRIDGETOWN 00000728  002 OF 003 
 
 
--------------------------------------------- ------- 
 
¶5. (SBU) Poloff met with Sam Holland, the managing director 
of Aggpit, an US-owned quarry.  Aggpit has had some 
difficulty obtaining a final license to operate their quarry 
(ref a).  Following a call from the Ambassador to Prime 
Minister Skerrit on behalf of Aggpit, the Prime Minister 
agreed to meet with Holland and his team, who reported that 
the Embassy's intervention had opened doors to much better 
communication with the government.  He said  the PM had a few 
remaining concerns regarding rock mitigation and 
environmental impact, which Holland said Aggpit would 
address.  Meanwhile, Aggpit has bought an adjoining quarry 
for which it has a full license and has started operating 
there.  Holland said he expects that the project will reach 
profitability once he is able to expand his operations to the 
new site.  He is currently employing 6 workers and one full 
time manager.  Once he is up to speed, he will be employing 
up to 50 workers, largely recruited from the local community. 
 He has agreed to pay his workers USD 10 per hour, which is 
double the prevailing wage, and his manager is being paid USD 
50,000 per year.  He will also offer health coverage for his 
employees, which is not common in Dominica.  The global 
recession is also helping him get started, he noted wryly, as 
he is buying previously owned equipment he needs at a deep 
discount. 
 
-------------------------------- 
Proposed Wind Farm Atop Tet Mont 
-------------------------------- 
 
¶6. (SBU)  Poloff had an opportunity to hike up to the top of 
Tet Mont, one of the biggest peaks in Dominica to take a 
close look at one of the potential wind farm sites.  Bernard 
Wiltshire, a local environmentalist, is spearheading efforts 
to establish wind power in Dominica.  This site would be 
ideal, he said, as it has sustained winds all year round, but 
it is difficult to access with no good roads to the site. 
Wiltshire has been in discussions with the government and 
DOMLEC about the possibility of constructing a wind power 
facility on top of the mountain.  USTDA sent a consultant to 
the site over the summer, who reported that the site has 
potential, despite the difficulty of building the required 
access roads.  Wiltshire envisions building an eco-tourism 
lodge at the site, along with organic farming.  In addition 
to Wiltshire's project, U.S. firm Norwin A/S, with support 
from the Sustainable Planning and Development office of the 
Ministry of Economic Planning, has successfully installed a 
wind turbine on a 40 meter mono pole at Rosalie Nature resort 
facility where it will generate up to 586 KW of energy per 
year.  Rosalie nature resort, which is owned by an American 
citizen, has been developed as an eco-tourism site dedicated 
to sea turtle conservation. 
 
--------------------------------------------- 
Government Signs Geothermal Agreement with EU 
--------------------------------------------- 
 
¶7. (SBU) Geothermal developments are also heating up.  A 
grant financing agreement has been signed between the 
government of Dominica, the Agence Francaise De Development 
for the development of the geothermal resource in Wotten 
Waven.  In January 2008, the Government of Dominica signed an 
agreement with the EU, which committed 1.5 million euros ( 
1.87 million USD) to the development of geothermal resources. 
 Vincent Philbert, the  AMCIT Permsec, told poloff that the 
government hopes to begin commercial drilling early next year 
and would welcome bids by interested U.S. firms to develop 
the site.  He anticipates full scale production in about 
three years.  He confirmed that discussions to build 
underwater HVAC power transmission cables to Martinique and 
Guadeloupe are well along, and he anticipates that Dominica 
will be able to export power successfully to neighboring 
islands.  He also said that the government has decided to 
postpone the proposed USTDA grant until the next funding 
cycle, as it is interested in developing a more comprehensive 
alternative energy program.  He promised to follow up 
directly with TDA as plans move forward.  He also promised to 
provide post with other proposals that could be shared with 
Ex-Im, OPIC, and USTDA.  In other geologic news, Public Works 
Minister Julius Timothy indicated that Dominica has 
discovered a huge underground freshwater reservoir and is 
considering exporting water to neighboring islands through 
underground pipes and pumps.  He said he would welcome 
participation by U.S. firms in this and other endeavors, but 
did not indicate any current plans to assess the feasibility 
of such a proposal. 
 
BRIDGETOWN 00000728  003 OF 003 
 
 
 
--------------------------------- 
Commercial Bodies Eager to Engage 
--------------------------------- 
 
¶8. (SBU)  Poloff met with the head of the Dominica Chamber of 
Commerce, the head of Dominica Export Import Agency and 
Invest Dominica to discuss the possibility of holding a 
commercial workshop, similar to those recently conducted in 
Barbados and St. Lucia (ref c).  There was general agreement 
to go forward with planning the workshop for mid-March. 
These workshops bring together representatives from various 
USG agencies that have commercial promotion programs to 
present their programs to local business and government 
leaders. 
 
------- 
COMMENT 
------- 
 
¶9. (SBU) There is an impressive range of economic development 
activity ongoing throughout Dominica.  Despite problems of 
corruption, crime, and a general low level of development, 
Dominica offers considerable potential, particularly in the 
eco-tourism and alternative  energy field.  POLOFF's working 
level contacts appreciate USG interest and encouragement and 
are actively looking for ways to generate U.S. investor 
interest in developing the island nation's rich natural 
resources. 
OURISMAN