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P 281906Z OCT 09
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RUEHLMC/MILLENNIUM CHALLENGE CORPORATION WASHINGTON DC PRIORITY
RHMCSUU/CDR USSOUTHCOM MIAMI FL PRIORITY

C O N F I D E N T I A L SECTION 01 OF 02 GEORGETOWN 000522 
 
SIPDIS 
 
E.O. 12958: DECL: 10/23/2019 
TAGS: ECON PREL GY
SUBJECT: GEORGETOWN POL/ECON ROUND-UP, OCTOBER 14-28, 2009 
 
Classified By: Charge d'Affaires Karen L. Williams for reasons 1.4 (b) 
and (d) 
 
¶1. (U) This cable inaugurates a new practice of bi-weekly 
"round-up" reporting cables highlighting developments in 
Guyana's politics and economy.  This first installment covers 
October 14-28, 2009. 
 
CANCELLATION OF UK SECURITY SECTOR REFORM GOES PUBLIC 
¶2. (C) Responding to a BBC Caribbean report on October 27, 
Head of the Presidential Secretariat Dr. Roger Luncheon 
expressed regret but defended the GoG's loss of a nearly USD 
8 million security sector reform project, citing concerns 
about sovereignty and "ownership" of the project's 
management, but attributed cancellation to U.K. displeasure 
with the GoG denying permission for a British military 
livefire exercise.  (Note: In reality, the live fire exercise 
was approved and already took place).  According to the U.K. 
High Commission, the GoG resisted meaningful financial and 
managerial oversight of the project as well as the policy and 
structural reform aspects of the project throughout two years 
of negotiations and were unwilling to compromise.  The U.S., 
Canadian and EU missions have agreed not to "fill the gap" 
left by the cancellation of the reform project unless the GoG 
agrees to the policy and structural reforms.  The IDB, 
however, has initiated a substantial police training program 
that largely gives the GoG what they wanted, but without the 
instiutional reforms.  COMMENT: This episode reinforces the 
GoG's image as an unnecessarily difficult assistance partner 
prone to erratic rhetorical outbursts and rash judgments when 
firm and effective (and difficult to evade) conditionalities 
are attached.  END COMMENT. 
POLICE PROBE INTO EXTRA-JUDICIAL KILLINGS/KHAN CASE LAUNCHED 
¶3. (SBU) On October 15 Shaheed &Roger8 Khan was sentenced 
in U.S. District Court to two, concurrent,15-year sentences 
for narcotics trafficking.  Terms of his sentencing stipulate 
that he will be deported to Guyana after serving his time. 
Public reaction in Guyana was muted and divided along racial 
lines.  On October 21, the Guyana Police Force (GPF) 
announced a special investigative team to probe allegations 
of nearly 200 extra-judicial killings by Khan,s &Phantom 
Squad.8  Public opinion of the GPF,s capacity to undertake 
such investigations is generally skeptical and commentators 
believe people with sensitive knowledge may not trust the GPF 
and therefore hinder the special investigative team,s 
effectiveness.  Nevertheless, the Guyana Human Rights 
Association on October 22 submitted a list of nearly 60 
people they suspect were murdered by Khan and his &Phantom 
Squad.8  An alliance of opposition parties including the 
PNC-R and AFC dismissed the GPF,s special investigative team 
and reiterated its call for an internationally led inquiry 
into the Khan-GoG saga.  The GoG continues to deny any 
involvement in Khan,s criminal activities and repeatedly 
cites lack of information sharing from the U.S. government as 
a hindrance to investigating.   (Note:  USDOJ is reviewing 
investigative files in the case in order to respond to an 
official request from the GoG for any information the U.S. 
has in the Khan case.) 
PROGRESS ON PRESS FREEDOM 
¶4. (SBU) Guyana Court of Appeals ruled on October 14 that the 
GoG,s de facto monopoly on radio transmissions is illegal. 
State-owned radio programming dominates the air waves because 
the National Frequency Management Unit has not processed any 
of the nearly 60 applications for licenses it has received 
since the early 1990s.  The GoG issued a statement about its 
commitment to liberalizing broadcast media but maintained 
first it must adopt new broadcast legislation before the NFMU 
grants any licenses.  Media analysts widely hailed the 
court,s ruling and expressed hope it would end decades of 
government monopoly on radio.  Released on October 22, 
Reporters Without Borders Press Freedom Index for 2009 raises 
Guyana,s rank to 39 from 88 in 2008, citing a mainly free 
press and only intermittent tensions between the GoG and 
media. 
MINISTRY OF HEALTH ARSON INVESTIGATION 
¶5. (C) On October 21 Minister of Home Affairs Clement Rohee 
stated that an &intellectual author8 of the July arson at 
the Ministry of Health is known and resides in the U.S.  How 
the Minister is certain of this individual,s involvement is 
not clear, though he indicated the suspect made telephone 
calls to Guyana around the time of the fire.  The Minister 
also would not comment on what motivation the &intellectual 
author8 had in channa-bombing the Ministry.  Shortly after 
the arson, the GPF passed a U.S. telephone number to the 
non-resident A/LEGATT and requested that the U.S. identify 
the owner of the number.  In his statement on the 21st Rohee 
publicly referred to this transmission and expressed concern 
that a &positive response8 had not yet been received from 
U.S. law enforcement officials.  In a meeting with the Charge 
on October 28, President Jagdeo personally pressed for a 
response on this item and indicated that they felt it 
 
GEORGETOWN 00000522  002 OF 002 
 
 
belonged to someone within the Mark Benschopf political 
organization.  Benschopf has in the past been convicted of, 
and later pardoned, on charges of treason and inciting 
violence. 
COMMERCIAL DISPUTE WITH VENEZUELAN POLITICAL CONNECTIONS 
¶6. (SBU) In early October Econ Off assisted Sea Rice 
Caribbean, a subsidiary of U.S.-based Seaboard Corporation, 
in resolving a rice export contract dispute with the Guyana 
Rice Development Board (GRDB).  The GRDB had delayed approval 
of signed contracts for 24,000 tons of rice between Sea Rice 
and local millers for over a month.  Sea Rice,s agent had 
negotiated similar contracts during each of the past 30 rice 
harvests in Guyana and had never experienced such a delay. 
Inquiries with the GRDB President and the Minister of 
Agriculture, Robert Persaud, led to a satisfactory resolution 
for Sea Rice.  On October 21, Minister Persaud signed a 
first-ever rice export deal with Venezuela for 50,000 tons, 
earning Guyana,s rice industry USD 18.8 million at 
reportedly premium prices to those in traditional European 
and North American markets. President Jagdeo initiated the 
deal with Chavez at UNGA.  This new commercial relationship 
raises concerns that future contracts with millers may be 
subject to political review at the GRDB and possible reneging 
to satisfy commitments made to Venezuela. 
LCDS GARNERS FIRST FINANCIAL COMMITMENTs FROM WORLD BANK AND 
IDB 
¶7. (SBU) President Jagdeo,s Low Carbon Development Strategy 
(LCDS) ) an ambitious plan to channel hundreds of millions 
of US dollars from forest conservation payments into 
carbon-conscious economic development ) received its first 
two financial commitments during the week of October 19-23: a 
World Bank USD 200,000 grant for additional consultations 
between the GoG and Amerindian communities and a USD 1.4 
million IDB grant for climate change adaptation and 
Amerindian consultations.  The Norwegian government (GoN) and 
GoG are negotiating an MOU on Norwegian financial assistance 
for the LCDS expected to be completed in early November.  GoN 
contacts stress that Norwegian financial participation in 
LCDS will be results-based, meaning GoG must produce verified 
emissions reductions through REDD .  GoN contacts are not 
able to articulate equally clear and quantifiable performance 
standards for GoG governance, widely viewed among the donor 
community as the primary stumbling block to the LCDS. 
SUGAR INDUSTRY CONTINUES DOWNWARD SPIRAL AFTER LOSING EU 
SUBSIDY 
¶8. (SBU) The state-owned Guyana Sugar Corporation (GUYSUCO) 
continues to experience debilitating financial and labor 
difficulties.  The enterprise,s net operating loss this past 
fiscal year was USD 12.5 million, while incurring nearly USD 
25 million in new commercial debts.  During the peak harvest 
season in October, wage negotiations between GUYSUCO and the 
Guyana Agricultural and Workers Union (GAWU) have stalled, 
leaving much cane un-harvested.  With a gap of 12 percent 
between GAWU,s wage raise demand and GUYSUCO,s offer, no 
quick and easy resolution is forthcoming.  In late September 
the European Union cancelled Guyana,s preferential sugar 
subsidy, forcing GUYSUCO to face far lower market rates. 
During the past year, the GoG and GUYSUCO have taken 
extraordinary steps to maximize benefits under the expiring 
EU program, including forfeiting preferential access to the 
U.S. market (via tariff rate quotas) and importing sugar from 
Guatemala to supply domestic demand while channeling domestic 
production to Europe. 
REMITTANCES HOLD STEADY DESPITE GLOBAL ECONOMIC DOWNTURN 
¶9. (SBU) Governor of the Bank of Guyana Lawrence Williams 
informed Econ Off in early October that remittance flows have 
remained surprisingly consistent despite the global economic 
downturn.  The Governor was uncertain how to account for this 
stability as globally remittances have declined significantly 
in lock-step with deteriorating employment conditions. 
Guyana is one of the most remittance-dependent countries in 
the world with remittances accounting for  nearly 25 percent 
of the country's GDP. 
LDS MISSIONARIES' ARBITRARY TREATMENT CONTINUES 
¶10. (C) As of October 1, all Mormon missionaries temporarily 
detained in early September and ordered to depart Guyana 
within 30 days had done so.  Some replacement missionaries 
are beginning to arrive.  LDS representatives have met with 
Ministry of Home Affairs, officials, who presented the 
Mormons with  "guidelines8 to follow so similar incidents do 
not recurr; these &guidelines8 stipulate that LDS 
missionaries must obtain work permits prior to entering 
Guyana and no more than 20 foreign personnel may hold such 
permits at one time.  No statutory bases for the new 
procedure or the numerical limitation appear to exist in 
Guyana law.  Post's repeated requests to the Ministry of 
Foreign Affairs for clarification of the work permit 
procedures have gone unanswered. 
Williams