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### Viewing cable 03SANTODOMINGO5992, DOMINICAN REPUBLIC FM ON ECONOMIC, INTERNATIONAL, AND BILATERAL ISSUES

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Reference ID | Created | Released | Classification | Origin
--- | --- | --- | --- | ---
03SANTODOMINGO5992 | 2003-10-24 19:13 | 2011-07-28 00:00 | CONFIDENTIAL | Embassy Santo Domingo

`

    This record is a partial extract of the original cable. The full text of the original cable is not available.

` `

    C O N F I D E N T I A L SECTION 01 OF 04 SANTO DOMINGO 005992

    SIPDIS

    HONG KONG FOR PATRICIA FIETZ

    E.O. 12958: DECL: 10/24/2013
    TAGS: DR EFIN ETRD MARR MX PGOV PHUM PREL SMIG SP VE XF KCOR
    SUBJECT: DOMINICAN REPUBLIC FM ON ECONOMIC, INTERNATIONAL, AND BILATERAL ISSUES

    REF: A. CARACAS 5391 (NOTAL)
    ¶B. SANTO DOMINGO 5946 (NOTAL)
    ¶C. SANTO DOMINGO 5786 (NOTAL)
    ¶D. USUN NEW YORK 2331
    ¶E. SANTO DOMINGO 5391 (NOTAL)

    Classified By: Charge Lisa Kubiske for reasons 1.5 (b) and (d).

    ¶1. (C) Summary:  Foreign Secretary Guerrero Prats, at a lunch
    hosted by the Ambassador October 7, said the GODR was trying
    through diplomatic channels to restore normal relations with
    Venezuela after President Chavez downgraded them in
    September.  Trade/economic adviser (and daughter of President
    Mejia) Carolina Mejia said the GODR was doing its utmost to
    comply with IMF requirements in the face of severe financial
    problems.  She blamed traditional corrupt behavior in
    business for the massive BANINTER banking scandal.  The
    Ambassador and DCM Kubiske stressed the need to prosecute key
    suspects in the scandal and officials who may be trafficking
    in persons or smuggling aliens.  The foreign secretary
    generally agreed with our stance on returning full authority
    to the people of Iraq and said the GODR was reviewing a draft
    SOFA with Kuwait to support Dominican troops in the region.
    He expressed optimism about WTO and hemispheric trade
    negotiations.  End summary.

    ¶2. (U) Ambassador Hertell hosted a lunch October 7 for
    Secretary of State for Foreign Relations Francisco Guerrero
    Prats, U/S of State for Foreign Relations Miguel Pichardo,
    U/S of State for Foreign Relations in Charge of Trade
    Negotiations Santiago Tejada, Acting Director of
    International Organization Affairs Jesus Hernandez, and
    FTAA/monetary affairs/TIC adviser Carolina Mejia.  DCM
    Kubiske, CG Marshall, ECOPOL counselor, poloff, and econoff
    also attended.  (Note:  We understand that Tejada has just
    been reassigned as the General Manager of the Central Bank.
    IO Director Hernandez is now permanently assigned to his
    position.)

    IMF Agreement
    - - - - - - -

    ¶3. (C) The Ambassador expressed concern that the IMF team in
    town  earlier in the week had departed after a single day.
    Carolina Mejia, the President's daughter who is involved in
    GODR economic and trade issues, seconded by the foreign
    secretary, replied that the government was doing its utmost
    to analyze the situation and take corrective action to comply
    with the requirements of the IMF standby agreement.  Some
    adverse events were beyond the administration,s control )
    e.g,. a recent decision by the Supreme Court that the use of
    a presidential decree to impose a 5 percent tax on exports
    and 2 percent on imports was unconstitutional.  The foreign
    secretary commented that this was an example of judicial
    independence typical of mature democracies.  Carolina Mejia
    added that an IMF staffer was in country, and as soon as the
    GODR assembled the required data, the IMF team would return.
    (Note:  We understand that one or several IMF staff are still
    here, working with the GODR on an unofficial basis.)
    Carolina Mejia said that the country desperately needed the
    United States' assistance in seeking prompt disbursement from
    the IFIs.

    Relations with Venezuela
    - - - - - - - - - - - - -

    ¶4. (C) On GODR efforts to restore relations with Venezuela
    after President Chavez,s withdrawal of his ambassador and
    cutoff of oil supplies to the Dominican Republic (Ref A),
    Guerrero Prats referred to President Mejia,s public
    statement October 6.  Guerrero Prats said that the Foreign
    Relations Secretariat is looking into Chavez,s public
    allegations of anti-GOV plotting here, that the foreign
    secretary has received instructions on this matter, and that
    "I do not discuss diplomatic issues on television."
    Guerrero Prats expressed regret that Chavez in early October
    reiterated the charges he had made in mid-September when
    downgrading relations with Santo Domingo.

    ¶5. (C) According to the foreign secretary, the GOV after
    months of levying accusations in the media sent a diplomatic
    note August 4 citing "denuncias" of the anti-GOV plots --
    without furnishing any evidence -- and requesting
    investigation by the GODR.  Santo Domingo, by diplomatic note
    22 days later, asked Caracas to furnish &proof8 and offered
    to investigate on the basis of any evidence that might be
    presented.  So far the GOV has failed to provide specifics.
    Guerrero Prats and his colleagues expressed their desire to
    normalize relations with Venezuela, referring to a history of
    close ties and the desirability of having the option to
    resume oil imports -- even though the Dominican Republic is
    now able to tap alternative suppliers.  (Note:  The two
    countries have been discussing the issue in diplomatic
    channels, but the oil cutoff remains in effect.)

    Prosecution of Corrupt GODR Officials
    - - - - - - - - - - -  - - - - - - - -

    ¶6. (C) Earlier, as guests were gathering, the Ambassador,
    DCM, and Consul General spoke privately with the foreign
    secretary, urging investigation of a former Dominican consul
    in Panama named Arias and the current director of the
    Dominican commercial office in Hong Kong for involvement in
    visa fraud and trafficking in persons.  (Note:  Embassy had
    previously provided details of this suspected malfeasance to
    the Foreign Secretariat.)  Guerrero Prats replied that no one
    had supplied evidence in these cases, only supposition.  With
    evidence, he said, he would pursue them.  During the lunch,
    the DCM underscored the importance we attach to the GODR's
    pending prosecution of Dominican Congressman Guillermo
    Radhames Ramos Garcia (of the ruling PRD), a suspected
    smuggler of Asian nationals from Haiti into the Dominican
    Republic.  (Note:  The Supreme Court has begun hearing this
    case, as reported Ref B.)

    Iraq
    - - -

    ¶7. (C) The Ambassador noted U.S. circulation of a draft
    resolution on Iraq in the UNSC October 2, on achieving a
    political transition as quickly as possible and returning
    full authority to the Iraqi people, and the Secretary's
    emphasis in comments to the press on a major role for the UN.
    The Ambassador asked the GODR to support this proposal.  He
    also expressed appreciation for the bravery of Dominican
    troops in the stabilization force, who had taken fire twice
    in early October, without casualties.  Guerrero Prats
    referred to his September 30 UNGA speech, in which he urged
    restoration of sovereignty in Iraq.

    SOFA with Kuwait
    - - - - - - - - -

    ¶8. (C) The Ambassador expressed concern about the slow pace
    of negotiations on a status of forces agreement (SOFA)
    between the Dominican Republic and Kuwait.  U/S Pichardo
    replied that the GODR had proposed changes to the Kuwaiti
    draft text and had passed them along  to the Secretariat of
    the Armed Forces for comment.  The Ambassador stressed the
    urgency of concluding the SOFA, to facilitate troop rotation
    and treatment of any casualties from the Dominican unit in
    Iraq.  (Note:  As reported Ref C, Embassy continues to work
    closely with Foreign Secretariat Legal Adviser Jorge Santiago
    to answer the GODR's questions on the draft SOFA.)

    Trade and the WTO
    - - - - - - - - -

    ¶9. (C) The Ambassador and DCM complimented the GODR for its
    positive contribution at the Cancun WTO ministerial.
    Guerrero Prats agreed that the Dominicans have won respect
    for their consistent support of free trade and for promptly
    submitting required documents in any negotiation.   U/S
    Ambassador Santiago Tejada took a more optimistic view of the
    Cancun outcome.  He said that contrary to appearances,
    Brazil, leading the developing nations that opposed U.S. and
    European positions, had been isolated in the Western
    Hemisphere and that Mercosur and the Andean Group had been
    deeply divided.  Tejada said that there had been consensus on
    at least two of the Singapore issues, which boded well for
    progress at the next WTO meeting in Geneva December 15.  He
    added that the GODR was surprised by the early termination of
    the ministerial, explaining that from his perspective furhter
    negotiations might have been fruitful.

    ¶10. (C) The Ambassador said that U.S. authorities looked
    forward to negotiation of a bilateral trade agreement.  The
    Foreign Secretary replied that the GODR already agreed with
    75 percent of the draft and believed the remainder could be
    finished within the timeframe (early 2004) necessary for
    &docking8 with a Central American Free Trade Agreement
    (CAFTA).

    Banking Scandal
    - - - - - - - -

    ¶11. (C) Carolina Mejia blamed the massive collapse of
    BANINTER and two other banks on longstanding behavior
    patterns among wealthy Dominican businessmen, some of whom
    were "thieves" ("ladrones").  She said this was an old Latino
    scam ) profiting from other people,s money.  The government
    had done its job properly, she asserted.  (Former) GODR Bank
    Superintendent Alberto Atallah and the U.S. accounting firm
    Price Waterhouse approved the banks, performance based on
    the data the firm had received, but many illegal transfers
    were hidden from the auditors.  The impact of the Baninter
    collapse in spring 2003, followed by the takeover of two
    smaller banks due to insolvency, has been &very hard,8 she
    commented, but perhaps this ordeal was necessary to force the
    country to modify the corrupt behavior.  According to Mejia,
    the fault lay in the society, not the government.  To create
    the kind of society that younger Dominicans such as she
    wanted, the government would have to prosecute the persons
    responsible for the banks' collapse.  The DCM strongly
    concurred with this point.

    UNGA
    - - -

    ¶12. (C) Regarding the UNGA special emergency session on the
    Middle East September 19 (Ref D), the Ambassador asked why no
    GODR representative had attended or voted.  The Dominican
    absence had been noticed in Washington.  The foreign
    secretary said the Dominican Republic prefers to vote within
    blocks on these types of measures and suggested that the USG
    should have approached regional groupings such as GRULA or
    the Rio Group to elicit support for the U.S. position, rather
    than relying on bilateral demarches.  If this is not
    possible, he said, the GODR varies its voting behavior on
    unhelpful resolutions ) sometimes voting no, sometimes
    abstaining, and sometimes being absent/not voting.

    Presidential Visit to Spain
    - - - - - - - - - - - - - -

    ¶13. (C) The foreign secretary said that President Mejia's
    September 15-23 visit to Spain and other countries had run
    into glitches, particularly in Spain where the media
    emphasized GOS leaders' criticism of the Dominican Republic's
    treatment of foreign investors.  This referred to Spanish
    investors' problems in the electricity sector and the GODR's
    October 1 renationalization of two power distribution firms
    (Ref E).  Guerrero Prats said he had publicly thanked the
    Spanish brigade commander in Iraq for having pressed for
    delivery of equipment to the approximately 300 Dominican
    troops deployed with the stabilization force.  (Note:  The
    equipment was delivered promptly.)

    President Mejia,s Government
    - - - - - - - - - - - - - - -

    ¶14. (C) Carolina Mejia said that when her father Hipolito
    Mejia assumed office as president three years ago, he had no
    idea what challenges his administration would face.  In her
    view, his election in 2000 was providential.  Confronted with
    severe economic problems, he has tried to address these
    issues and give the country its best government ever.  She
    said his controversial bid for reelection in 2004 is
    necessary to enable him to finish the job.

    Draft Dominican Law on Migration
    - - - - - - - - - - - - - - - - -

    ¶15. (C) The Ambassador inquired about progress on a draft
    migration law, designed to ensure fair treatment for one
    million Haitian immigrants present in the Dominican Republic,
    and urged expeditious handling of the legislation.  He noted
    that Congressional leaders had complained of a delay in
    receiving comments on the bill from the Secretariat of
    Foreign Affairs.  The Secretary said the comments were ready
    and he or U/S for Consular Affairs Wenceslao Guerrero Pou
    would offer to brief the relevant committees.  (Note:  The
    bill has been passed by the Chamber of Deputies, but is still
    pending in the Senate.)

    Comment
    - - - -

    ¶16. (C) The lunch afforded an opportunity for the Ambassador
    to press the Foreign Secretariat -- and the President through
    his daughter -- on pending bilateral issues, which the
    Embassy will continue to pursue.  These include the GODR's
    IMF commitments, prosecution of key suspects in the banking
    scandal, and legal action against officials who may be
    trafficking in persons or smuggling aliens.

    ¶17. (C) Concerning the Palestinian UNGA resolution, on the
    date of the special session on the Middle East, Foreign
    Secretary Guerrero Prats had to deal with the mini-crisis
    with Venezuela and thus delayed his arrival in New York.  He
    may not have sent guidance to the GODR permrep, who
    consequently was left free to avoid the controversial
    resolution.   Under other circumstances we believe the GODR
    might have attended but abstained.
    KUBISKE

`