JAMAICAN FINANCE MINISTER NOT READY TO QUIT (YET)

C O N F I D E N T I A L KINGSTON 001423 SIPDIS SIPDIS STATE FOR WHA/CAR (MCISAAC) E.O. 12958: DECL: 07/18/2016 TAGS: ECON EFIN PGOV PINR PREL JM SUBJECT: JAMAICAN FINANCE MINISTER NOT READY TO QUIT (YET) Classified By: Ambassador Brenda Johnson, reasons 1.4 (b) and (d) ¶1. (C) Summary: Minister of Finance and Planning Omar Davies will not/not resign just yet, despite widespread media reports last week indicating that Davies was preparing to leave the cabinet, his Parliamentary seat, and representational politics. Embassy contacts had confirmed that his rumored departure was true, and were surprised when Davies announced that he would remain. One contact believes that this is merely a delay to give time to find a successor, and to take the PNP through an impending general election without disruption. His replacement is likely to be one of two businessmen: Richard Byles or Peter Bunting. End summary. ¶2. (U) Widespread media reports last week indicated that longstanding Minister of Finance and Planning Omar Davies was preparing to resign from the cabinet, his Parliamentary seat, and from politics. Many expected Davies to make the announcement when he met with constituents on Saturday, 15 July. Instead, Davies was returned unopposed as the candidate for the St. Andrew South constituency, and he announced that he had no intention of resigning his Ministership. He did note, however, that he would cease his People's National Party (PNP) duties as a Regional Chairman in order to devote more time to solving the crime problems that are plaguing his community. ¶3. (C) Two Embassy contacts - both of whom are close to Davies - noted on July 14 that the rumors that Davies would step down as Minister were true, and both were surprised by the sudden reversal at Saturday's meeting. One source, who worked on the Davies campaign for PNP leader, claimed that new Prime Minister Portia Simpson Miller and Davies were at odds over spending: Davies has been known for his tight fiscal policy and spending restraint, while Simpson Miller has built her political career on social spending. The other contact claimed that the crime and violence in his community were the driving factors behind his rumored departure. He also remains convinced that Davies' departure as Minister is simply being delayed until after the General Election (which appears likely before October). ¶4. (C) According to PNP activists, there are currently two likely replacements being suggested privately as successors to Davies at the Ministry of Finance and Planning (MFP): Richard Byles and Peter Bunting. Byles is a former socialist who has been "born again." He has accumulated large shareholdings as the CEO of Pan Jamaica Investments, and also serves as CEO of the Life of Jamaica Insurance Company, Chairman of Pan Caribbean Financial Services, Director of Red Stripe, and Chairman of the National Water Commission. Byles holds a degree in Economics from the University of the West Indies, and a Masters degree in National Development from the University of Bradford, England. Most think that he has the technical expertise to run the Ministry in the Davies mold - running large primary surpluses as a way to reduce the country's crippling debt burden. Bunting is a partner in the investment firm Dehring, Bunting and Golding. He has been a staunch supporter of Davies for many years, and the PNP has always been a party that rewards loyalty. Nevertheless, he is less well regarded because Byles has the stronger academic background, and is closer to Prime Minister Simpson Miller. ¶5. (C) Comment: Rumors have persisted for a long time that Davies wishes to leave, but he is clearly concerned about his legacy and wishes to groom the incoming replacement. Post expects that whoever is selected will join MFP in some capacity - likely as Minister of State - so that Davies can shepherd him into his role. Contacts also indicated that PNP heavyweights such as Foreign Minister Hylton prevailed upon Davies to remain both as Finance Minister and as Regional PNP Chairman, to avoid any semblance of disunity in a PNP that has been rocked by crises recently. In any event, spending is almost certain to increase as a result of impending elections, as well as Simpson Miller's natural propensity towards assisting the poor. It seems that Davies wishes to ensure that the careful work he has done over the past decade to bring down the debt-to-GDP ratio, and to improve Jamaica's standing with the international financial community, is not threatened after he steps down. End comment. JOHNSON