VZCZCXYZ0000
OO RUEHWEB

DE RUEHDG #0734/01 1821456
ZNR UUUUU ZZH
O 011456Z JUL 09
FM AMEMBASSY SANTO DOMINGO
TO SECSTATE WASHDC IMMEDIATE 2982

UNCLAS SANTO DOMINGO 000734 
 
SENSITIVE 
SIPDIS 
 
STATE FOR WHA/CAR BPREMONT, WHA/PPC KSTIANSEN 
 
E.O. 12958: N/A 
TAGS: PREL PGOV EIND USAID DR
SUBJECT: SCENE-SETTER FOR SENATOR GILLIBRAND 
 
¶1.  (SBU)  As much general information has been provided to 
the Senatorial Delegation Gillibrand about the Dominican 
Republic (DR), this scene-setter will focus on key issues 
relevant to the visit: Education, Dominican emigrant issues 
and economics, as well as the meeting with President 
Fernandez. 
 
Education 
--------- 
 
¶2. (SBU)  Dominican law mandates that four percent of GDP be 
spent on education but actual expenditures are less than two 
percent.  Testing in 2005 showed that Dominican students 
consistently scored two years behind all other Latin American 
countries in reading and mathematics.  Children spend an 
average of just 2.5 hours a day in school, and teachers are 
often under-qualified.  The DR's failure to invest in its 
people and its poor "control of corruption" scores are major 
reasons why the country has not been able to join the 
Millennium Challenge Corporation (MCC) process.  The current 
Secretary of Education (Melanio Paredes) has expressed 
support for USAID's programs to promote teachers' capacities. 
 
 
Dominican Emigrant Issues 
------------------------- 
 
¶3. (SBU)  There are some 9 million Dominicans, of whom about 
1 million live in the United States, many in the New York 
area.   The U.S. Consular Section in the Dominican Republic 
handles the third-highest volume of immigrant visas in the 
world (trailing only China and Mexico), and provides American 
Citizen Services to approximately 100,000 U.S. citizens 
living in the Dominican Republic. 
 
¶4. (SBU)  In 2008, Dominicans working abroad sent back $3.045 
billion dollars (down from $3.11 billion in 2007), with about 
half from the United States.  Given the global downturn, 
remittances have fallen dramatically in recent months with 
predictions that  the total will be 10 percent less in 2009 
than 2008.  Multilateral organizations have focused efforts 
to reduce the costs of international cash transfers over the 
past decade, and the costs of sending remittances have fallen 
significantly.  The Inter-American Development Bank has 
worked with the BHD bank in the Dominican Republic to reduce 
the costs of remittances received in the Dominican Republic. 
 
 
Economics 
--------- 
 
¶5. (SBU)  The United States is the Dominican Republic's 
biggest trading partner and bilateral trade totals some $9 
billion per year.  Thanks to CAFTA-DR, progress has been made 
on several fronts (including increased foreign direct 
investment  and more robust enforcement of labor and 
environmental standards),  but lack of transparency in 
certain areas has meant that the Dominican Republic has yet 
to take full advantage of the agreement.  U.S. Embassy Santo 
Domingo continues to work with the Dominicans to develop 
trade-capacity. 
 
¶6. (SBU)  The country's fiscal situation is fragile and the 
GODR is searching for ways of raising revenue.  The private 
sector and even members of the President's cabinet have urged 
the GODR to sign a stand-by agreement with the IMF, but 
President Fernandez has refused.  The GODR plans instead to 
issue over $1 billion in sovereign bonds.  The private sector 
is also concerned by the recent announcement of a plan to 
sell 49 percent of the country's sole oil refinery to the 
Venezuelan  state oil company, PDVSA. 
 
 
Meeting with President Fernandez 
-------------------------------- 
 
¶7. (SBU)  President Fernandez is still fairly popular, but 
some observers think he failed to seize an opportunity some 
years ago to crack down on corruption and narco-trafficking, 
even as he succeeded in establishing macro-economic 
stability.  Much time and political capital is being spent 
these days on Fernandez's proposed constitutional reforms, 
even though he will likely be barred from running again in 
2012 (as part of a recent deal with the opposition to approve 
a provision of the new constitution -- still to be endorsed 
by the Dominican Congress -- that would eliminate consecutive 
presidential reelection, but allow non-consecutive 
re-election).  Observers have expressed concern that these 
constitutional reforms will increase executive branch powers 
in what is already a "presidentialist" system marked by 
significant clientelism. 
 
¶8. (SBU)  The meeting with President Leonel Fernandez will be 
a short courtesy call.  He may raise any of the following 
issues: 
a)    Remittances 
b)    DR Consulates in US 
c)    Rule of Law (counter-narcotics assistance, deportees, 
pre-clearance facility for DHS) 
 
 
¶9. (SBU)  As for remittances, please see Emigrant Issues, 
above.  Items (b) consulates and (c) deportees and a 
pre-clearance facility were raised, inter alia, in a letter 
presented by new Dominican Ambassador to the United States, 
Roberto Saladin, along with his credentials, to President 
Obama.  The State Department is still reviewing these 
requests, but is unaware of any USG plans to open any further 
pre-clearance facilities overseas. (Note: Seven Dominican 
consulates in the United States were closed in 2003 due to 
problems with improper accreditation and misuse of diplomatic 
privileges by the Dominican diplomatic corps; as recently as 
December 2008 a vice consul was arrested on charges of alien 
smuggling.  With respect to counter-narcotics, our bilateral 
cooperation remains good.  While we are sometimes criticized 
for not providing enough assistance, the Dominicans have just 
signed a letter of agreement to receive the first $2.5 
million in Merida Initiative funding for FY 2008; they are 
aware that another $ 2.5 million has been allocated for the 
Dominican Republic for FY 2009; and they are also included in 
discussions with regional partners for the development of the 
new Caribbean Basin Security Initiative.  End Note.) 
 
UASD Visit 
---------- 
 
¶10. (SBU) The Autonomous University of Santo Domingo (UASD) 
has roots going back to 1538, making it the oldest university 
in the Americas.   Some 50 teachers from the Hostos Community 
College and UASD Rector Dr. Franklin Garcia Fermin will 
attend. 
BULLEN