US embassy cable - 04SANTODOMINGO1319

UNCLAS SECTION 01 OF 04 SANTO DOMINGO 001319 
 
SIPDIS 
 
SENSITIVE 
 
STATE FOR WHA, WHA/CAR, WHA/PPC, WHA/USOAS, AND DRL 
NSC FOR SHANNON AND MADISON ; 
LABOR FOR ILAB; DHS FOR CIS - CARLOS ITURREGUI 
TREASURY FOR OASIA-LAMONICA (SEE PARA 1, SUB-PARAS 3-5, 7) 
USDOC FOR 4322/ITA/MAC/WH/CARIBBEAN BASIN DIVISION 
USDOC FOR 3134/ITA/USFCS/RD/WH 
 
E.O. 12958: N/A 
TAGS: PGOV, EFIN, ENRG, DR 
SUBJECT: DOMINICAN ELECTIONS #25: MEJIA'S 
STATE-OF-MY-CAMPAIGN SPEECH 
 
REF: A. (A) SANTO DOMINGO 1300 
 
     B. (B) SANTO DOMINGO 1299 (NOTAL) 
 
1. (SBU) This is number 25 in our series on the Dominican 
presidential election: 
 
PRESIDENT MEJIA'S PUGNACIOUS CAMPAIGN SPEECH ON NATIONAL DAY 
 
In his ceremonial annual address to Congress on Independence 
Day February 27, President Mejia came off more as a feisty 
election campaigner on the defensive (Ref A) than as a 
statesman. Preoccupied with domestic problems, he omitted any 
discussion of foreign policy issues, even Haiti.  He jabbed 
at front-runner and former president Leonel Fernandez (PLD), 
offering voters a choice between an "uncertain, hesitant" 
former president ruling on behalf of "a few insensitive 
businessmen" and his own firm hand on the tiller, steering a 
course through stormy seas for the good of all Dominicans 
including the poor.  Mejia (PRD) justified his controversial 
re-election bid as necessary to complete his program and 
avoid "ungovernability" under a PLD successor who would be 
confronted by a PRD-dominated Congress and municipalities 
until 2006. 
 
Senate President Jesus Vasquez delivered a short opening of 
the event, describing the Senate's upcoming program and 
institutional reforms before introducing Mejia (septel). 
Vasquez used a U.S.-style teleprompter that allowed him to 
maintain eye contact with the public and the Congress.  In 
contrast, Mejia stood at the middle of the long table, 
reading from a sheaf of papers -- appearing much of the time 
to be addressing his belt buckle.  Mejia's delivery was 
confident and emphatic throughout. 
 
New Proposals 
- - - - - - - 
 
The President promised "in coming days" legislative proposals 
to modernize government, called for a "well articulated and 
widely agreed" tax reform balancing economic efficiency and 
social justice, and announced formation of a presidential 
advisory council of private sector leaders on economic and 
social issues.  He subsequently named seven prominent 
business owners/executives, chaired by himself, to formulate 
national development policies. 
Economic Tribulations 
- - - - - - - - - - - 
 
Mejia began by reciting reasons for the Dominican Republic's 
poor economic performance under his mandate: the U.S. 
economic slowdown, the 9/11 terrorist attacks, rising 
petroleum prices, uncertainty provoked by the conflicts in 
Afghanistan and Iraq, and a fall in foreign investment due to 
economic problems elsewhere in Latin America.  He said the 
IMF had estimated these external shocks cost the nation US 
$2.35 billion in 2001-2002.  Most of these effects subsided 
by early 2003, but then the "unexpected" collapse of three 
commercial banks dashed hopes for recovery.  This "time bomb, 
hidden and cunning," had been ticking since his (unnamed) 
predecessor's administration. 
 
Mejia accepted full responsibility for his decision to 
compensate fully all depositors.  He maintained this was on 
advice from GODR monetary authorities and "experts of the 
international financial institutions," to prevent contagion 
to all the banks and "a consequent collapse of the nation's 
system of payments."  Had he refused this assistance, 
hundreds of thousands of small depositors and businesses 
would have lost their life savings, he said.  Among the 
losers would have been depositors of 19 savings and loan 
institutions, other commercial banks, and pension plans that 
had big accounts in the failed banks totaling nearly RD $3 
billion (about US $60 million).  "My decision avoided 
catastrophe," he asserted. 
 
Rolling blackouts in the nation's electric utilities, Mejia 
said, had resulted from monetary effects of the banking 
crisis.  He had re-nationalized two electrical distributing 
companies to prevent a collapse of electricity supply to 2 
million Dominicans, after the private owners (Union Fenosa, a 
Spanish firm) refused to invest needed capital.  Mejia blamed 
the situation on the privatization model adopted by the 
previous Fernandez government and its investments in 
inefficient generating plants.  He also defended his 
decisions to resume price subsidies for electricity and 
cooking gas, cushioning the impact of the Dominican peso's 
devaluation on consumers. 
 
Social/Infrastructure Projects 
- - - - - - - - - - - - - - - - - - 
 
In a more positive vein, the President highlighted his 
administration's investment of more than RD $150 billion (US 
$3 billion) over the past three years in education, health, 
nutrition, housing, and infrastructure, which he said had 
been equitably distributed to all provinces and localities, 
including the poorest rural areas.  He cited programs to 
install potable water facilities, provide subsidized food to 
low-income citizens, improve agricultural production, 
encourage reforestation and fruit exports, reduce dependence 
on agricultural imports, provide 1.6 million school lunches 
daily, build sports facilities for the Pan American Games and 
Dominican youth, create a social security system, provide 
incentive payments for mothers to bring their children to 
school and health checkups, and build 350,000 housing units. 
 
An Ugly Partisan Tone 
- - - - - - - - - - - 
 
Mejia attacked his electoral opponent Leonel Fernandez 
repeatedly, without ever naming him.  Opponents of Mejia's 
financial decisions were "the privileged, whose savings are 
in dollars offshore."  He blamed the previous government for 
failed privatization of the electricity sector, for creating 
an incoherent structure and for concluding costly, unworkable 
contracts for generation. 
 
Using an elaborately clumsy but effective metaphor, Mejia 
declared he had changed his mind on re-election because the 
nation's sea of troubles convinced him not to leave the helm 
in "uncertain, sweaty and trembling hands, that had already 
shown hesitations and fears in the past when it was their 
responsibility to govern during the period that engendered 
this crisis. . . and even more so, since that captain, the 
same one who wrecked the ship four years ago despite the 
favorable winds, cannot command a sufficient crew in the 
chambers that are responsible for accelerating the vessel or 
changing direction during this perilous voyage." 
He concluded with an aggressive series of comparsons of the 
mass-membership PRD with the "others" whose platform "is 
based in purple magic, the return of the swallows to a land 
of enchantment that never existed."  Mejia asserted that he 
was governing "like a man" (con hombria).  His opponents 
offered ungovernability, "promising the impossibles and 
betting on illusions, clinging to an irresponsible populism 
that promises that everything -- even the price of admission 
to heaven -- will be less expensive.  They are willing to 
offer anything in order to get votes and to gain their 
objective of administering public goods for the benefit of 
the privileged."   He wound up his rant against the PLD and 
in favor of his own PRD by citing St. John -- "You shall know 
the truth and the truth shall set you free." 
 
What Mejia Didn't Say 
- - - - - - - - - - - 
 
Mejia failed to refer to the Dominican Republic's 
Independence Day or founding fathers -- raising eyebrows 
among press commentators who pointedly noted the Ambassador's 
February 25 address to the American Chamber of Commerce 
quoting ideas from independence leader Juan Pablo Duarte. 
 
Mejia said nothing about the conflict in neighboring Haiti, 
free trade negotaitions, his reinforcement of border 
security, or the Dominican troop contribution to Operation 
Iraqi Freedom. He promised "reforms capable of 
re-establishing confidence," including fiscal reform, but did 
not otherwise mention the recent IMF agreement.  He promised 
to represent the poor and to improve their lot, but blamed 
soaring prices on "the abusive behavior of speculators." 
 
He passed up the opportunity to reassure his listeners that 
the presidential election process would be free, fair, and 
transparent, amid unabated concerns about the PRD-dominated 
election board.  He referred briefly to fellow PRD leaders 
who had challenged him for the party's nomination, but did 
not acknowledge Vice President Milagros Ortiz-Bosch's 
announcement the previous day that she had withdrawn and left 
her supporters free to back any candidate. 
 
What the Critics Said 
- - - - - - - - - - - 
 
Opposition leaders and some editorialists dismissed the 
speech as partisan and low-ball.  Fernandez took Mejia's bait 
and punched back with ad-hominem fury at a February 28 rally, 
characterizing the current government as "inept, mediocre, 
and incompetent," its officials as "functional illiterates," 
and Mejia as "unthinking, impulsive, emotional, and 
imprudent."  "What he lacks is the brain mass needed to 
understand current problems."  Fernandez accused the 
President of attempting to pack the Supreme Court with PRD 
judges before leaving office (Ref B). 
 
Mudslinging season has commenced, but so far neither 
candidate has published an election platform -- a lack noted 
formally by the Catholic bishops' conference on February 21 
and by the Ambassador in his February 25 speech. 
 
At the Independence Day mass following te speech, Mejia heard 
a homily by Monsignor Francisco Jose Arnaiz -- top adviser to 
Cardinal Archbishop Nicolas de Jesus Lopez Rodriguez, a 
frequent Mejia critic -- calling on the authorities to 
"dispel all doubt" that the election would be clean and its 
result would accurately reflect the vote. 
2. (U) Drafted by Bainbridge Cowell. 
 
3. (U) This report, other election pieces and other material 
are available on the Santo Domingo SIPRNET site: 
http://www.state.sgov.gov/p/wha/santodomingo/ index.cfm 
KUBISKE