"ALBA" GAINS MOMENTUM IN THE EASTERN CARIBBEAN, SORT OF

Código Fecha Clasificación Origen
08BRIDGETOWN62 1 February 2008 Confidencial Embassy Bridgetown

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DE RUEHWN #0062/01 0321759
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P 011759Z FEB 08
FM AMEMBASSY BRIDGETOWN
TO RUEHC/SECSTATE WASHDC PRIORITY 6030
INFO RUCNCOM/EC CARICOM COLLECTIVE PRIORITY
RUEHCV/AMEMBASSY CARACAS PRIORITY 1860
RUEHLP/AMEMBASSY LA PAZ FEB 0240
RUEHMU/AMEMBASSY MANAGUA PRIORITY 0138
RUEHUB/USINT HAVANA PRIORITY 0101
RHMFISS/DEPT OF HOMELAND SECURITY WASHINGTON DC PRIORITY
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RUMIAAA/HQ USSOUTHCOM J2 MIAMI FL PRIORITY
RUMIAAA/HQ USSOUTHCOM J5 MIAMI FL PRIORITY
RUEHCV/USDAO CARACAS VE PRIORITY

C O N F I D E N T I A L BRIDGETOWN 000062

SIPDIS

SIPDIS

DEPARTMENT FOR WHA/CAR, WHA/AND, WHA/EPSC, AND
EEB/ESC/IEC/EPC
CARACAS FOR ANDREW BOWEN
SOUTHCOM ALSO FOR POLAD

E.O. 12958: DECL: 02/01/2018
TAGS: ECON, ENRG, PREL, PGOV, PHUM, PINR, XL, VE
SUBJECT: "ALBA" GAINS MOMENTUM IN THE EASTERN CARIBBEAN,
SORT OF

REF: A. A) 07 BRIDGETOWN 228
B. B) 08 CARACAS 118

Classified By: DCM O.P. Garza for reasons 1.4 (b) and (d).

1. (SBU) Summary: Following the participation of three
Eastern Caribbean heads of government at the sixth Bolivarian
Alternative for the Americas (ALBA) summit in Caracas in late
January 2008, the organization’s influence in the region is
making headlines and appears to be picking up steam.
Dominica’s Prime Minister Roosevelt Skerrit confirmed that it
has become a full member of ALBA, though St. Vincent and the
Grenadines and Antigua and Barbuda have stopped short of
committing to full membership, citing a legal conflict with
CARICOM’s Treaty of Chagoramas. While these Eastern
Caribbean leaders seem eager to benefit from the financial
incentives offered by ALBA (in addition to those from
Petrocaribe), Chavez’s incendiary comments calling for an
anti-U.S. military alliance make committing to ALBA awkward,
to say the least. Dominica’s business community has likewise
expressed concern that the country’s participation in ALBA
will hurt investor confidence. End Summary.

2. (U) During Venezuelan President Hugo Chavez’s February
2007 visit to the Eastern Caribbean, Dominica, Antigua &
Barbuda, and St. Vincent and the Grenadines signed a
statement agreeing to the principles of the Bolivarian
Alternative for the Americas (Ref A). Heads of government
from the three nations subsequently traveled to Caracas to
participate in the sixth ALBA summit in Caracas on January
25, 2008. According to press reports, Dominica officially
joined ALBA as a full member, with this declaration currently
under review with its cabinet. The summit subsequently made
headlines throughout the Eastern Caribbean, as did Hugo
Chavez’s comments on his weekly radio call-in show calling
for an anti-U.S. military alliance and praising Iran.
Commentators such as Trinidad’s Rickey Singh questioned
Dominica’s participation in the trade aspects of ALBA, and
pointed to the developments as a threat to the Caribbean’s
efforts at regional integration.

SVG AND A&B NOT QUITE READY TO GET ON BOARD


3. (C) In a private conversation with the Ambassador on
January 29 (septel), St. Vincent and the Grenadines Prime
Minister Ralph Gonsalves praised some of the benefits of ALBA
to Eastern Caribbean nations. In reference to SVG’s initial
signing on to the principles of ALBA in February 2007, PM
Gonsalves said that "the principles of ALBA are like the
principles of motherhood—everyone can agree to them." He
praised the Petrocaribe component of ALBA, mentioning that he
had recently used USD 5 million from Petrocaribe savings to
purchase a crane for Kingstown’s port. Gonsalves emphasized
that ALBA "does not have a military dimension, and does not
have an intelligence dimension."

4. (C) Gonsalves then gave technical, qualified explanations
of why his nation is not yet ready to fully join ALBA.
Describing Roosevelt Skerrit of Dominica as "jumping the gun"
by signing onto the trade aspects of ALBA, Gonsalves pointed
out that in doing so, there was a direct conflict with the
terms of CARICOM’s Treaty of Chagoramas. Gonsalves, a lawyer
by training, noted that "treaty arrangements are juridical,"
and that by allowing bilateral free trade with Venezuela,
Dominica would violate the principles of CARICOM’s trade
agreement. Only by limiting the benefits of free trade under
ALBA to exports to "non-reciprocal" free trade (i.e. not
allowing duty-free privileges to non-CARICOM members of ALBA)
could Dominica respect the terms of the Treaty of Chagoramas.
Gonsalves noted that Venezuela had given "assurances and
understandings" that CARICOM’s agreement would be respected,
but both Gonsalves and representatives of Antigua and Barbuda
publicly stated that this would have to be made official
before the two countries could join Dominica in ratifying
ALBA.

5. (C) When the Ambassador pressed Gonsalves on Chavez’s
remarks calling for an anti-U.S. military alliance, Gonsalves
bluntly replied, "that does not arise from ALBA." He
emphasized that Eastern Caribbean nations’ participation in
ALBA is "not an ideological construct", even though it "may
be that Daniel (Ortega) and Evo (Morales) share ideation with
Chavez." Gonsalves urged the USG to take a realistic point
of view of ALBA and the accompanying rhetoric, noting that
"Chavez and his Bolivarian revolution has a host of
contradictions." He scoffed at the notion of Venezuela
attempting to buy influence in the Eastern Caribbean, once
again noting the practical gains to be made by the
cash-strapped nations of the region, mentioning Venezuelan
funding of airports in Dominica and St. Vincent and the newly
established ALBA bank, with its USD 1 billion initial
capitalization.

6. (SBU) Antigua and Barbuda, for its part, announced that it
had signed an agreement for a USD 10 million loan from
Venezuela for the construction of over 400 homes for low and
middle income earners. The country’s non-resident Ambassador
to Venezuela Joan Underwood told the local press that despite
participating in the housing component of ALBA, the Antiguan
government was not ready to full join ALBA until the trade
reciprocity issue was resolved.

DOMINICA CLARIFIES ITS ALBA MEMBERSHIP


7. (C) By contrast, in a January 28 telcon with PolOff, Steve
Ferrol, Permanent Secretary of Foreign Affairs and Trade,
strenuously emphasized that ALBA is no more than a
development model for Dominica. According to Ferrol,
Dominica joined ALBA for development assistance, not for
ideological reasons, nor to play at international politics
with Venezuela, Iran, or the United States. Ferrol explained
that when a country joins ALBA, it is able to selectively
choose to participate in whichever aspects interests it. For
example, Dominica wants to benefit in development, housing,
and health, but is not interested in aspects that could
violate its sovereignty or agreements with CARICOM.
Specifically, he stated that Dominica will not agree to any
trade arrangements under ALBA that counter its current
agreements with CARICOM. Ferrol further insisted that
military alliance comments in the press are untrue. He
stated that general explanations of ALBA in the press do not
coincide with the actual documentation.

8. (C) Sam Raphael, a prominent American businessman in
Dominica, informed PolOff that on January 29, PM Skerrit
hosted the private sector community to alleviate their fears
concerning ALBA. According to Raphael, Skerrit stated that
he will make a statement distancing Dominica from Chavez’s
call for a military alliance. Raphael shared his impression
that Skerrit wants to pull back, but cannot pull away too
quickly because of Dominica’s extensive involvement thus far.
Raphael stated that the private community is very concerned
with Dominica’s deep ties to Venezuela and ALBA, particularly
given Chavez’s knack of unpredictability. He suggested that
continued participation in ALBA will affect the willingness
of businesses investing in Dominica.

9. (U) For its participation in ALBA, Dominica is first in
line to make withdrawls from the ALBA bank once established.
Dominica will also have a member on the bank and will be a
part of the ministerial council overseeing its operations.
Through ALBA, Dominica has now gained duty free access to the
Venezuelan market. These are recent benefits, in addition to
the over USD 37 million of promised grants in the last two
years for runway renovation, housing projects, scholarships,
and other projects (partially fulfilled). Venezuela has also
promised an USD 80 million oil refinery (promised, but as yet
still in the "planning stages.")

Comment


10. (C) While the prospect of three Eastern Caribbean nations
forming a large block of ALBA may appear disconcerting, all
three seem principally motivated by the prospect of handouts
and other financial benefits. The press reactions of Eastern
Caribbean leaders and commentators highlight the extent to
which these three nations do not want to be ideologically
associated with Venezuela and the other ALBA members, but are
looking for any way to get quick cash. Despite Gonsalves’
legalistic explanations, his (and the government of Antigua
and Barbuda’s) reticence at fully joining ALBA is likely more
related to a fear that they will be perceived to be
politically alienating the United States and CARICOM
countries. The two nations joining Dominica in ALBA appears
to be more a question of when than if, but both nations will
continue their political tightrope by succumbing to dollar
diplomacy while trying to honor its prior commitments to
integration with other Caribbean states and deep traditions
of democracy. End Comment.
OURISMAN