Caribbean

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• DOMINICAN REPUBLIC: Mejí­a exercises power to win PRD candidacy

  24 April 2007 Hits: 305

  President Hipólito Mejí­a was as good as his word. After months of internal wrangling within the ruling Partido Revolucionario Dominicano (PRD), Mejí­a has been designated the official candidate. He infamously remarked on national television that 'power is to be exercised. Whoever speaks to the contrary should become a hairdresser's apprentice'.

  Mejí­a outmanoeuvred his credible rivals at the party convention on 20 January so their names did not appear on the ballot slips. His one opponent, Frank Joseph Thomen, was a personal friend, who garnered less than five percent of the votes cast. The national daily Diario Libre revealed that many delegates for Thomen did not even know his name. In one embarrassing case a PRD delegate ostensibly representing Thomen at a voting centre even got his name wrong, referring to him as 'José Augusto Thomen'. 

  Mejí­a was officially proclaimed the party's candidate on 31 January. On the same day the executive committee of the PRD sacked party president Hatuey De Camps, a strident critic of Mejí­a. De Camps insisted that Mejí­a's decision to run for re-election contravened party statutes. He argued that the PRD would be sure to lose the election if it backed Mejí­a. De Camps will be replaced by Vicente Sánchez Baret, a party bigwig and a leader within Mejí­a's influential faction of the PRD, the Proyecto Presidencial Hipólito (PPH).

  The convention was held directly after a two-day strike, which paralysed the country, during which seven people died and more than eighty were injured. The strike was called by an alliance of popular movements and was supported by the national business council (Conep) as well as the two main opposition parties, the Partido de la Liberación Dominicana (PLD) and the Partido Reformista Social Cristiano (PRSC), and trade unions. Protesters demanded a reversal of the government's economic policies, wage rises, reduced food and fuel prices and the severing of links with the IMF. Seven people died in the protests.

  The head of the Catholic Church in the Dominican Republic, Cardinal Nicolás de Jesús López Rodrí­guez, a man renowned for his uncompromising views, lashed out at Mejí­a at a religious service on 1 February. He said that that the country had been 'totally abandoned, unprotected and exposed,' and he called on the public to 'express their views' in the May elections. 'You must ask the government what it is doing, creating a country with no fuel or electricity: there is no hope or light, the government has been told what it has to do, but one tires of talking to them,' he added.

  Electoral reform
  Mejí­a's initial enthusiasm for changing the electoral process by introducing the so-called Ley de Lemas, under which each political party could present up to five candidates with the foremost among them accumulating the votes of the others, has dampened since he engineered it so that he is the sole official candidate of the PRD. The electoral reform bill came under fire from opposition political parties and the business sector. It failed to make it through the chamber of deputies after all 104 PLD and PRSC deputies and PRD sympathisers of Decamps boycotted the vote, leaving the session without the required quorum of 75 deputies. The leader of the private business association Conep, Elena Viyella de Paliza, also condemned the last ditch reform of the electoral system: 'This is like baseball, the game has started and it is not the moment to change the rules in the sixth or seventh inning.'

  Meanwhile, the latest opinion poll conducted by Penn, Schoen and Berland Associates predicts a sweeping victory for PLD candidate Leonel Fernández in the first round with 65% of voter intentions compared to just 13% for Mejí­a, who also trails PRSC candidate Eduardo Estrella, on 16%. 

  • One positive piece of news is that the government has paid the US$74m owing to foreign creditors. Central Bank Governor Jose Lois Malkun said that the sum included the interest payment due on the US$600m dollar sovereign bond emission, whose belated payment caused several credit assessment institutions to lower their ratings on Dominican Republic bonds and banks. It was also a prerequisite of the stalled US$600m credit agreement with the IMF. IMF deputy managing director Agustin Carstens said 'rigorous implementation of the (economic) program, together with a strong political commitment to further reform, will be critical to overcoming the current crisis in the Dominican Republic'.
    

• CUBA: Shake-up of tourism ministry

  24 April 2007 Hits: 254

  President Fidel Castro has moved to get a tighter rein on the all-important tourism industry. On 11 February he dismissed tourism minister Ibrahí­m Ferradaz Garcí­a and replaced him with a military colonel, Manuel Marrero Cruz. The reshuffle was not entirely unexpected, coming two months after a major scandal at the tourism holding company Cubanacán.

  Unsurprisingly, the daily mouthpiece of the Communist government, Granma, shed no light on the reasons for Ferradaz's dismissal, saying merely that he had been 'freed' from his post and would be given other responsibilities. 

  In December 2003, 'irregularities' were found in Cubanacán's finances for the second time in four years. The president of Cubanacán, which is reckoned to handle about 40% of Cuba's tourist trade (which totals US$2bn a year), was arrested.

  In 1999, top executives were dismissed for 'errors' and 'indiscipline'. Again, it was hushed up but it cost then-tourism minister Osmany Cienfuegos his job.

  The new broom, Marrero Cruz, served as president of the profitable tourism company Grupo de Turismo Gaviota, one of the oldest military-run corporations. It controls about 20% of Cuba's 41,000 hotel rooms. He will bring practical experience to a policymaking role as Cuba pursues its elusive target of 2m foreign tourists a year. 

  An estimated 1.9m tourists travelled to Cuba in 2003, a 12% increase on the previous year but still short of the perennial 2m goal. It should, however, be remembered that calendar years are bad units of measurement for an industry whose main season, that of the northern hemisphere's winter, straddles the year-end.

  Tourism for oil  
  It could just be that Castro is going the extra mile to push Cuba's tourism over the 2m tourist mark generating much-needed foreign exchange so that Cuba can address its debt to Venezuela. This would put Cuba in a stronger position in the event of Venezuela's President Hugo Chávez losing power. A recent article in the Wall Street Journal, citing 'people close to Venezuela's state oil company', maintains that over the past three years Cuba has run up a massive debt of US$752m for oil shipped from Venezuela. 

  The paper goes on to argue that the shipments are a crucial subsidy that is singlehandedly 'helping keep the island's economy afloat as it struggles with the impact of endemic mismanagement, declining sugar sales and US sanctions'. It also describes Venezuela as a latter day Soviet Union (the USSR sustained the Cuban economy at the height of the Cold War by supplying more than US$3bn a year in subsidies).

  Washington has made a special point of spotlighting the 'strategic alliance' between Venezuela and Cuba as a threat to democratic governments in Latin America. The Wall Street Journal cites hardliner Otto Reich, the White House special envoy for the Western Hemisphere, as saying 'We certainly see a Venezuela-Cuba axis which is broadening and deepening and which is not conducive to the promotion of democracy and human rights'.

  The renowned leader of the Cuban opposition Oswaldo Payá says that he feels constantly threatened and deems it likely that he will shortly be assassinated. In an interview with the French daily Le Figaro in his Havana house, Payá said that the arrest of 75 political dissidents last April - '50 of them artists who backed the Varela Project' - was a sure sign that Castro would stop at nothing to ensure that his grip on power remained absolute. 

  Last October, Payá submitted to the national assembly a petition signed by 14,384 people requesting a referendum on a new electoral law, legislation liberalising economic activity, and an amnesty for political prisoners - the main aims of the Varela project.

• GUYANA: Indian rights push overshadowed by death squad revelations

  24 April 2007 Hits: 1178

  President Bharrat Jagdeo is spearheading a drive to create a constitutional committee designed to protect Guyana's indigenous Amerindian population. Jagdeo met 150 Toshaos, Amerindian leaders, in Georgetown for a four-day meeting earlier this month to discuss a major revision to the Amerindian Act, which he wants to see passed in the National Assembly this year. The original Act was drawn up in 1951.

  'We know that Amerindians were historically neglected and to be frank with you, were relegated to second-class status/citizens in their own country. I know that many of their concerns and requests fell on deaf ears. The PPP/Civic Government wanted to make a positive difference, and we felt in order to address these issues we needed a focal point which would be an established channel of communication,' Jagdeo said.

  The new Constitutional Indigenous People's Commission will be comprised of 10 members, of which three representatives will be designated by the Toshaos, who represent some 50,000 Amerindians. Their role will be to select three representatives to the commission as well as training for Rural Constables and Justices of the Peace and legalising documents and birth and death certificates.

  The most controversial Amerindian issue is to do with land. The governments of Guyana, Suriname and Belize and Dominica have longstanding disputes with their respective indigenous populations about land ownership, environmental destruction, logging and mining. There are approximately 120 Amerindian communities - 76 of which have legal ownership of the lands they occupy. Some of the communities are requesting extensions to their titles. Others that do not already have legal ownership are requesting to have titles to their lands.

  Surveying and demarcating the 76 communities listed in the Act began in 1996 has proved problematic, as some 32 communities have been reluctant to accept demarcation. Their efforts to secure what they call their 'ancestral lands' have, as in so many other countries in Latin America (notably the Mapuche in Chile), run up against the interests of big business lying as they do in the midst of the country's richest natural resources.

  However, the 200-strong Wai-Wai population, a peripatetic group that ranges over 4,000 sq km in the south of the country (some 2% of Guyana's total land mass) have successfully had the entire area declared a protected zone after successful mediation from the US-based environmental group Conservation International. 'Let me make it very clear that my Government will respect and guarantee the traditional sustainable use of resources by Amerindian communities. We will guarantee, in the Protected Areas, the traditional use of the forest,' Jagdeo said.

  Death squad scandal  
  Jagdeo is pursuing the Amerindian initiative with vigour not least because it deflects attention from a highly embarrassing development surrounding his home affairs minister Ronald Gajraj, who has come under scrutiny for allegedly hiring a hit squad accused of more than 40 extra-judicial killings in the last year. 

  The allegations have attracted unwanted international attention, with both the US and Canada revoking Gajraj's visa and the British High Commissioner to Guyana, Stephen Hiscock, calling for immediate investigations into the claims: 'We believe that the integrity of the government is something that is at question here,' Hiscock said on Guyanese national television.

  A report submitted to the National Assembly in December 2003 by the Disciplined Forces Commission made reference to the possible existence of a 'phantom' squad. The allegations linking Gajraj with the squad surfaced in the same month, when businessman Bramma Nandalall said a government minister had put a contract on him because of a personal disagreement. 

  Earlier this month, George Bacchus said that he used to be an informant for the group and accused Gajraj of possible involvement. He also claimed that he was the intended victim after his brother was shot down on 5 January by three men he claims were members of the hit squad.  Reports suggested that the squad was set up in the wake of the increase in violent crime in 2002 when about 140 people were murdered -four times the annual average -including more police officers than any other year in Guyana's history. The hit squad allegedly killed criminals, including several men who escaped from Georgetown prison in February 2002.

  The swift revocation of Gajraj's visa by the US and Canada after what amounts to as yet no more than allegations has touched Caribbean sensitivities. An editorial in the Jamaica Observer said that it 'smacks of more than arrogance, and a judgement without trial […] Not to mention, of course, the public perception of taking sides in a highly sensitive, and far from resolved, national issue'.

• ANTIGUA & BARBUDA: Non-nationals key target in Antigua election

  24 April 2007 Hits: 422

  Antigua must hold an election by end-March, and the rights of non-nationals have become one of the key battlegrounds of the pre-election campaign.

  The leader of the opposition United Progressive Party (UPP), Baldwin Spencer, has promised non-nationals, who make up 25% of the 42,000 eligible voters, that if he wins the election he will introduce a Millennium Naturalization Act that will give citizenship to those who have lived in the country since the turn of the century. At the moment, Commonwealth citizens living in Antigua can only gain citizenship after seven years of unbroken residency.

  Spencer's move has outbid Prime Minister Lester Bird's move last year to grant temporary residence to non-nationals who have lived in Antigua for more than three years, and his sensitivity on the issue was made plain at a public meeting on 3 February when Bird told his audience: 'I want to talk to you non-nationals too. You are in this country because of the [ruling Antigua] Labour Party. You owe us man. You owe us to vote for us.'

  Spencer has also tried to put Bird under pressure over value-added tax (VAT), accusing the prime minister of intending to introduce the tax, which he called 'a regressive tax in that it takes a proportionately greater amount of money from the lower income groups in the society'. Spencer's allegation about VAT followed an address by Bird to the Chamber of Commerce in late January, and it left Bird scrambling (not altogether convincingly) to defend himself. 

  In a statement issued on 3 February, Bird said: 'I want to make it clear that I did not reveal the introduction of VAT. In responding to a question about making certain ports in Antigua duty free I mentioned that a study was being done for all the OECS countries which contemplated the introduction of VAT in all of them. I advised of this development in the context of the removal of duties and tariffs from goods entering the country and said that if we were to make all of Antigua and Barbuda a duty-free part, then VAT would be one way of replacing the revenue that would be lost.'

  The prime minister added: 'My party is not committed to the introduction of VAT. We have been fighting in the World Trade Organization negotiations and elsewhere for the retention of the existing system. Our intention is to ensure that there is no increase in prices through taxation.' But if Spencer has outbid Bird on the rights of non-nationals and put him on the back foot on VAT, Bird looks to have secured the pensioners by announcing on 31 January a 5% increase in pensions backdated to 1 August 2003. He also announced a minimum payment of EC$500 per month, back dated to December 2001.

  Bird also said that he had plans for exempting all pensioners from paying travel and embarkation taxes, with all those over 75 to be exempted from property taxes. Furthermore, Bird said, 'After the next election the Labour Party will review the age for exemption with a view to reducing it to 70 by April 2006.'

• EASTERN CARIBBEAN: OECS needs more time to assess benefits of FTAA

  24 April 2007 Hits: 238

  The Organization of Eastern Caribbean States (OECS) held its annual summit in Castries, St Lucia from 22-23 January. One of the main agenda items was the Free Trade Area of the Americas (FTAA), and the heads of government considered a paper on the implications of the FTAA for the OECS drawn up by the UN Economic Commission for Latin America and the Caribbean (UN-Eclac).  

  The summit noted in particular the point made by the report that about 90% of OECS exports to the main hemispheric markets (US, Caricom, Canada) already enter duty-free, with the balance of OECS exports entering the US through the Caribbean Basin Initiative (CBI) - in other words, there would be little positive benefit for merchandise exports. The Eclac paper also suggested that the FTAA would have 'a significant negative impact' on OECS intra-regional trade within Caricom.

  On the positive side, the Eclac report says that the OECS could derive greatest benefits from the FTAA in the area of services, but only if it is prepared to negotiate these benefits. As it happens, the 17th round of negotiations to create the FTAA ended without any agreements on 6 February. Peter Allgeier, the US co-chairman of the negotiating committee, denied that this represented a failure, but given the conciliatory noises coming from Brazil and the Mercosul trading bloc when the negotiations opened in Puebla, Mexico on 3 February, the result was widely seen as a setback. The FTAA is scheduled to come into force on 1 January 2005.

  Cost/benefit analysis  
  The OECS summit concluded that more work was required 'with respect to assisting the OECS member states to determine the cost versus the benefits of engagement in the FTAA'. St Lucia's Prime Minister Dr Kenny Anthony told the meeting that the current economic circumstances of the OECS 'underscore the need for a higher and deeper form of integration'.

  The final communiqué included commitments 'to develop and activate a plan of action for the subregion's tourism sector'; to reactivate a technical committee on Economic Union (the summit was presented with a case study of the institutional and governance structures of the European Union); to develop a policy framework 'for the revitalization of agriculture'; and to advance such initiatives as common OECS citizenship and common passports.  

  A commitment to implement the Caricom Single Market and Economy (CSME) by the end of this year also featured prominently in the final communiqué.

• ST.KITTS & NEVIS: The future of Nevis

  24 April 2007 Hits: 346

  At their end-January summit (see above) the leaders of the Organization of Eastern Caribbean States (OECS) took a firm line on the possibility of Nevis seceding from St Kitts & Nevis, saying: 'The Authority views with deep concern the proclaimed intention to have a referendum for Nevis to secede from St Kitts and urges that the matter be re-examined with a view towards preserving the integrity of St Kitts and Nevis.'

  The question of Nevis's secession dates as far back as 1921 when a request was made to Britain for a separation. More recently, Nevis's premier Vance Amory began moves towards secession in 1996, holding a referendum in 1998 which just failed to reach the required two-thirds majority (62% voted in favour of secession). Plans to hold another referendum are under way, and in January Amory told Nevisians to begin designing a flag and choosing a national anthem.

  The OECS's strong opposition to the break-up of St Kitts and Nevis is backed by the United States. On 16 January, US spokesman Richard Boucher issued a statement saying: 'The government of the United States unequivocally supports the position taken by Caricom heads of government at their July 2003 summit in Montego Bay when they voiced their strong preference for the Federation of St Kitts and Nevis to be preserved as a single nation.'

  At a special roundtable meeting in Basseterre on 29 January of business leaders, trade unions' representatives and other interested parties, including representatives of the Nevis Island Administration, Prime Minister Denzil Douglas insisted that the differences with Nevis could be addressed through constitutional reform. He added that not all contentious issues would have to wait for a full constitutional review and that some could be implemented by legislation.

  Douglas said: 'Of course there are petty local differences, but I think we need to look further than just what may be the political expediency and see if there is a fundamental problem that the people of Nevis have with the people of St Kitts. We need to make sure that the two sides are able to administer what will be to the benefit of the people of St Kitts and Nevis and not necessarily waiting on constitutional reform to put a number of other legislative actions in place.'

• BELIZE: Privy council backs controversial dam

  24 April 2007 Hits: 328

  The construction of the controversial Chalillo dam will go ahead as planned after the UK's Privy Council dismissed the efforts of the Belize Association of Non-governmental Organisations (Bacongo) to block the project on environmental grounds. Bacongo has unsuccessfully challenged the dam at every judicial level in Belize. The council ruling was the closest yet, with the dam winning the approval of three of the five judges.  

  The dam's supporters argue that it is the most economic option for Belize, which is highly dependent on Mexico for energy. Bacongo said the environmental impact assessment was inadequate. It also argued that the dam will not cover Belize's energy shortage and will destroy a pristine area of biodiversity into the bargain.  

  It recommended that the government should employ an alternative method of generating sustainable power, using bagasse, a by-product of sugar cane, which Belize grows in abundance. The Chalillo project has been at the centre of a fierce campaign since 1999 featuring Hollywood stars such as Harrison Ford and Cameron Diaz. The Macal River valley, where the dam is being built, is believed to be the only known Belizean breeding ground of a rare sub-species of scarlet macaw, with 1,000 survivors worldwide, as well as many big cats, such as ocelots, puma and jaguar.  

• DOMINICA: Upbeat assessment for Dominica

  24 April 2007 Hits: 215

  The International Monetary Fund (IMF) ended a 10-day mission to Dominica on 11 February with a relatively upbeat statement, saying 'there is evidence of the economy bottoming out, which marks the end of the economic decline of the last few years and signals an incipient economic recovery as reflected by positive developments in manufacturing and tourism, despite the ongoing downward trend in the banana sector'.

  The IMF is supporting the Dominican economy with a three-year Poverty Reduction and Growth Facility (PRGF), and in December it approved an US$11.25m credit, of which US$3.5m has been released.

  The IMF praised the government for 'progressively regaining control of the budgetary situation as tax collections strengthen […] and expenditures are kept in check'. It added that 'shortfalls in external financing have been reduced'.

  With the government adhering to the IMF programme, it is expected that it will achieve a primary surplus (that is a positive fiscal balance before interest) of 0.5% of GDP in 2004/05. The downside, however, is that the IMF is calling for a further reduction of 10% in the public-sector wage bill over the next two fiscal years. Not surprisingly, the demand is being opposed by Dominica Public Service Union (DPSA), while the government is trying to negotiate with the European Union for funds to pay for the redundancy packages.

• TRINIDAD & TOBAGO: Trinidad leaders discuss constitutional reform

  24 April 2007 Hits: 566

  Basdeo Panday of the opposition United National Congress (UNC) has been using the issue of the Caribbean Court of Justice (CJJ), which is to replace appeal to the UK-based Privy Council as part of reforms associated with setting up a Caribbean Single Market and Economy (CSME) by 2005, to demand fundamental constitutional reform in Trinidad & Tobago.

  Panday says that the existing constitution is inadequate and that piecemeal reform is not enough, and he has made support for the government's legislative agenda dependent on agreement to constitutional reform. With this as the background, Panday met with Prime Minister Patrick Manning on 10 February for exploratory talks on the constitution. Manning described the talks as 'very cordial' and said there would be follow up talks soon. In a separate development, Panday announced on 8 February that he would be going back on his earlier pledge to stand down as party leader when he reached 70 (which he did last May). He told party workers: 'I have heard your request that I stay on as political leader of the party. I bow to your wishes.'

  • Barbados has reacted to the arrest of two Barbadian fishermen in Tobago waters on 6 February by imposing immediate sanctions on Trinidad manufactures. Following an emergency meeting on 9 February, Barbadian Prime Minister Owen Arthur announced: 'With immediate effect [Barbados] will accord to Trinidad and Tobago goods imported into our economic space the same terms and conditions that the Trinidadian authorities are extending to our fishermen in Trinidad and Tobago's economic space.'
  • On 5 February Standard & Poor's downgraded Jamaica's long-term local currency sovereign credit rating from B+ to B, with the outlook on its long-term ratings also being downgraded form 'stable' to 'negative'. The credit-rating agency cited Jamaica's growing debt burden for the downgrade, saying that the target for the general government deficit this year of 7.6% of GDP could only be achieved if there were major cuts in capital expenditure. The agency said a further downgrade was possible if the fiscal deficit was not reduced this year. [See the January issue of Caribbean & Central America report for a full analysis of Jamaica's economic prospects.]
  • Trinidad's Prime Minister Patrick Manning said on 2 February that plans for an intra-Caribbean gas pipeline (ICGP) could not be implemented without the participation of Martinique and Guadeloupe as they would take over 70% of the gas output. Discussions are being held with Electricitie de France about the possibility of converting the two French-speaking islands to natural gas. According to Manning: 'The proposed ICGP could potentially see a reduction of 30% in energy costs, including electricity, and would guarantee these countries price stability and predictability over the medium to long term.'
  • Moody's Investors Service has assigned a B1 foreign currency country ceiling and a B2 foreign currency bank deposit ceiling to Suriname. Moody's says its ratings reflect the debt positions of both the government and the banking system and the potential political and financial volatility of the country. While investment in both gold and bauxite production is improving export prospects, imports necessary to support the increase in mineral production capacity have caused large current account deficits. Spending is also likely to increase significantly in the run up to elections next year.