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Cablegate: After the Earth Moved: A New Hispaniola

VZCZCXRO0774
OO RUEHAO RUEHCD RUEHHO RUEHNG RUEHRD RUEHRS
DE RUEHDG #0033/01 0282153
ZNR UUUUU ZZH
O R 282153Z JAN 10
FM AMEMBASSY SANTO DOMINGO
TO RUEHC/SECSTATE WASHDC IMMEDIATE 0661
INFO WESTERN HEMISPHERIC AFFAIRS DIPL POSTS
RHEHNSC/WHITE HOUSE NATIONAL SECURITY COUNCIL WASHINGTON DC
RHMFIUU/CDR USSOUTHCOM MIAMI FL
RUCNDT/USMISSION USUN NEW YORK 0023
RUCPDOC/USDOC WASHINGTON DC
RUEAIIA/CIA WASHINGTON DC
RUEHRC/USDA FAS WASHDC

UNCLAS SECTION 01 OF 04 SANTO DOMINGO 000033

SIPDIS

E.O. 12958: N/A
TAGS: PREL ETRD EAID EINV DR HA
SUBJECT: AFTER THE EARTH MOVED: A NEW HISPANIOLA

REF: A. SANTO DOMINGO 21; B. SANTO DOMINGO 08
C. 09 SANTO DOMINGO 1339

SUMMARY

1. (SBU) The horrific earthquake in Haiti could be the cathartic
event that leads to an historic change in relations between that
country and the Dominican Republic. In its rubble, we see a
providential opening, a chance to leave behind three centuries of
enmity and distrust, to foster a new spirit of cooperation on the
island of Hispaniola, and to promote economic coordination and
integration that will advance the reconstruction of Haiti and
provide the foundation for greater growth and development in both
countries in the years ahead. In this cable, we highlight the
energy of the DR business sector, whose leaders are eager to expand
their operations with Haiti and to build business relationships
with Haitian companies. We also outline ways to expand to Haiti a
number of commercial, agricultural and technical assistance
programs that have succeeded here. And we cite possibilities
within the Pathways to Prosperity initiative that might encourage
our associates in free trade agreements to share their best
practices with Haiti through the DR. President Obama has observed
that opportunity arises from crisis; the Haitian earthquake is an
overwhelming crisis, and a huge opportunity. END SUMMARY.

BACKGROUND: HISTORICAL ENMITY CREATED AN ISLAND DIVIDED

2. (U) Relations between the two parts of Hispaniola have been
problematic for three centuries, ever since the establishment of a
French colony on the western side of the island in 1640. Following
the outbreak of the Haitian revolution, troops under Toussaint
L'Ouverture took Santo Domingo in 1801. Haiti conquered and
occupied what is now the DR from 1822-44, and sought to
re-establish its domination through military conquest on several
occasions through 1856. The border between the two countries was
not agreed to until 1935, and two years later DR dictator Rafael
Trujillo ordered his Armed Forces to carry out the massacre of up
to 35,000 Haitians on the Dominican side. Anti-Haitian demagoguery
by Dominican politicians, most notably that practiced by seven-term
President Joaquin Balaguer to demonize his principal challenger,
Jose Francisco Pena Gomez (who was of Haitian descent), served to
intensify prejudices against Haitians and work against initiatives
to meaningfully advance bilateral political ties or economic
integration. Over the past decade, relations have been complicated
by Dominican concerns over the large number of illegal Haitian
immigrants (estimated by the GoDR at between 900,000 and 1.2
million, at least 10 percent of the country's population), and
international concerns over violations of the human rights of
Haitians in the DR, particularly with respect to historic
conditions in the sugar industry and the statelessness of the
undocumented offspring of Haitian immigrants born in the DR.

ECONOMIC TIES NONETHELESS CONTINUED TO GROW . . .

3. (U) Despite these difficulties, the geographic proximity of
the two countries has ensured the development of important
commercial ties. According to the IMF's Direction of Trade
Statistics, in 2008 Haiti was the DR's second largest export market
(9.25 percent of total exports), while the DR was Haiti's second
largest supplier of imports (23.3 percent) and second largest
export market (8.85 percent). Markets in towns up and down the
border flourish, with some 20,000 Haitians on average converging on
the northern town of Dajabon twice a week to buy and sell wares.
According to the GoDR, border commerce between the two countries
before the earthquake had increased by over 14 percent this past
year alone. Dominican companies are also looking at using low-cost
unskilled Haitian labor to supplement their higher-cost operations
here, with the best example being Grupo M, a textile firm that now
employs some 4000 workers on the border in northern Haiti, who cut
and stitch the basic garments and then send their production to the
DR for finishing.

. . . AND POLITICAL RELATIONS BEGAN TO IMPROVE

4. (SBU) President Fernandez has made improved bilateral
relations with Haiti a priority well before the earthquake. He
established a good working relationship and, apparently, warm
personal ties to Haitian President Rene Preval, visiting Port au
Prince and hosting Preval in the DR, and he has sought to renew the
meetings of the Mixed Bilateral Commission, which has been moribund
for the past decade. (Dominican officials state that their working
groups have been ready to engage in talks for the past six months
and expressed frustration at the political instability in Haiti
which seemingly prevented the Haitians from participating in these
meetings.) In November, Planning Minister Temistocles Montas, in
a speech to the American Chamber of Commerce (AMCHAM), proposed
creating a Puerto Rico-DR-Haiti production chain, an idea that was
expanded on by President Fernandez and Foreign Minister Carlos
Morales during a December meeting with WHA P/DAS Craig Kelly (Ref
C). During the last quarter of 2009, Dominican outreach to Haiti
accelerated, with regular visits of GoDR ministers to Port au
Prince. In December, Haiti's Minister for Haitians Abroad, Edwin
Paraison, visited Santo Domingo to treat the sensitive issue of
Haitian migrants in the DR. Dominican businessmen welcomed Haitian
counterparts to a meeting of entrepreneurs in December, where they
launched an initiative to create a "bilateral development plan" to
be funded by the European Union. And Dominican universities, which
already have over 3000 Haitian students, were looking at
establishing up to three campuses in Haiti (Ref B). In sum, while
Hispaniola on the eve of the quake was still an island divided, a
tropical version of perestroika was well underway.

THE DR'S RESPONSE TO THE DISASTER - "AYUDAR NUESTRO VECINO PAIS"
("HELP OUR NEIGHBOR")

5. (U) The Dominican Government reacted immediately,
compassionately and effectively to the Haitian tragedy. The GoDR
mobilized its armed forces, medical services, and civil defense
units to lend assistance; sent food, water and medical supplies;
provided medical treatment to over 15,000 Haitians; offered the
country's ports and airports to serve as logistical platforms for
the delivery of international assistance; encouraged state
companies and the private sector to pitch in (the state electricity
company, for example, organized a public/private team of 40
technical experts to help electricity service resume there); and
suspended the deportation of illegal Haitian immigrants already
inside the country. The Dominican people responded similarly,
collecting millions of dollars in monetary donations and relief
supplies. President Fernandez flew to Haiti 2 days after the
earthquake - the first foreign leader to visit, to stand with
President Preval amid the aftershocks and pledge his government's
support. President Preval has since travelled to Santo Domingo,
his only travel since the disaster. Fernandez has also taken a
leading role in encouraging and organizing international assistance
to Haiti, hosting a hemispheric preparatory conference on relief
and reconstruction efforts on 18 JAN 2010, and has offered to host
a follow-on meeting in April to conclude a long-term strategic plan
for Haiti assistance (Ref A).

LOOKING TO THE FUTURE

6. (SBU) This shared outpouring of solidarity with and assistance
to Haiti from the Dominican Government, business community and
private citizens provides a dynamic opportunity to both countries
to change the history of the relationship toward political and
economic cooperation that will provide a firm base for growth and
development for the entire island of Hispaniola. We believe the
United States and the international community should promote this
process, by exploring ways to channel relief and reconstruction
assistance to Haiti through the Dominican Republic, thereby
benefiting both countries. Our belief is strengthened by our
interlocutors in the Dominican-American Chamber of Commerce, whose
chairman observed in a recent letter to Secretary Clinton, "The
reconstruction of Haiti . . . will require a large number of
skilled and semi-skilled workers in construction, transportation,
distribution, and other fields. Being based on the same island,
our member firms have a logistical advantage, and ought to allow
for a more cost-effective solution to many of the reconstruction
challenges ahead. Moreover, many of them already have business
interests in Haiti and should be able to respond quickly to local
needs. In addition to providing more cost-effective solutions,
this would facilitate and accelerate economic integration between
the two countries and contribute to the sustainable economic growth
that we all seek."

7. (SBU) We are examining how our current commercial,
agricultural and technical assistance programs and contacts here
can be expanded to Haiti. Some possibilities:

n Capitalize on the resources, energy and good will of energy
providers in this country to provide the capacity for Haiti's
reconstruction and eventual modernization. The American company
AES, for instance, has offered to make any excess natural gas
available to Haiti, and stands prepared to assist as well in any
conceivable way to bring Haiti forward in energy provision.

n Encourage U.S. companies in the DR to use their base here,
through a subsidiary or through a Dominican representative, to base
or expand their operations in Haiti. We know of two temporary
shelter companies assessing prospects there now. The Dominican
labor market could contribute to their success. Separately, we
know of a U.S. manufacturer of porta-potties that already donated
an initial 100 units to Haiti via its Dominican distributor, plans
to sell many more products to NGOs and relief organizations. The
company's DR representative has established an office in Haiti and
will hire and train Haitian workers to support the company's
operations there.

n Direct the Dominican flour mills, feedmills and meat processors,
which use U.S. inputs (100 percent in the case of wheat),that
already export to the Haitian market toward the opportunity to
build production capacity in Haiti to further penetrate the market
there. The new sites would continue to use U.S. raw materials.

n Make U.S. companies aware of the benefits of viewing the DR and
Haiti as a unified production chain, as Grupo M has done, to take
advantage of each country's competitive advantages.

n Explore Pathways to Prosperity programs that would promote
island-wide integration and cooperation - socially inclusive
reconstruction through the expansion of microcredit facilities, for
example. (Dominican microfinance institutions - particularly
successful NGOs such as ADOPEM AND IDEMI, both of which focus
primarily on women - could expand operations to Haiti.) Likewise,
practices drawn from Pathways experience elsewhere could promote
more efficient and lower-cost money exchanges for business
transactions and remittances.

n Replicate USAID and USDA agricultural capacity building,
development and extension programs that have succeeded here in
increasing crop yields, improving animal health and safety, and
creating alternative export crops, such as seedless watermelons.

COMMENT: NOT A MARSHALL PLAN, BUT A PLAN HISPANIOLA

8. (SBU) For over 150 years, Dominicans deliberately stood apart
from their neighbors on the western side of the island of
Hispaniola. Over the past few years, the disparity of economic
circumstances between the two nations compelled Dominican leaders
toward a different perspective, one that considered the advantages
of more robust engagement with Haiti. The earthquake's aftermath
presents the opportunity for the most dynamic possible engagement,
to the advantage of both nations and, ultimately, the international
community as well. Prospects for economic integration fostering
sustainable development on Hispaniola have never been greater. The
USG's commitment to a reconstruction strategy as outlined here, a
"Plan Hispaniola," would be the strongest guarantor of success for
the effort. END COMMENT.
Lambert

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