KINGSTON POL/ECON ROUNDUP: May 3 - May 12, 2006

UNCLAS SECTION 01 OF 03 KINGSTON 000939 SIPDIS STATE FOR WHA/CAR (BENT) AND WHA/PDA STATE ALSO FOR INL/LP (BOZZOLO),EB/TPP, AND EB/IFD STATE ALSO DOE CA/OCS/ACS/WHA (RUTH BRANSON) STATE PASS OPIC FOR TABERNAKI CUSTOMS MIAMI FOR LOWEN AND MAHABIR SANTO DOMINGO FOR FCS, FAS, AND LEGATT STATE PASS USTR FOR A. GASH-DURKIN DOJ FOR OPDAT/R LIPMAN TREASURY FOR LAMONICA SIPDIS E.O. 12958: N/A TAGS: PGOV PREL EFIN ECON EINV PHUM ELAB KHIV JM SUBJECT: KINGSTON POL/ECON ROUNDUP: May 3 - May 12, 2006 Ref: A. Kingston 925 ¶B. Kingston 555 KINGSTON 00000939 001.2 OF 003 ¶1. This week's topics: -- Venezuelan Navy Ship Visits Kingston -- Prime Minister of Malaysia Visits -- Budget Debate Closes -- Motorola Deal Moving Forward -- Delta to Offer Atlanta-Kingston Route -- Cement Investigation Extended -- Bananas and Sugar: Help on the Way? -- Seafood Shortage -------------- Venezuelan Navy Ship Visits Kingston -------------- ¶2. (U) On May 8, Emboffs attended an evening reception aboard the visiting Venezuelan Navy transport ship "Los Llanos", which was docked at Kingston Wharf for several days to re-supply a Venezuelan military engineering team in Jamaica to construct hurricane relief housing. The guests consisted primarily of members of the diplomatic corps; emboffs did not see any GOJ or JDF representatives in attendance. Members of the Venezuelan crew were uniformly polite to Emboffs, although they did screen a short film on the 1823 Battle of Lake Maracaibo (in which the narration contained pointed references to Venezuela's ability to defend itself against unnamed "hegemonistic" powers),and another brief film highlighting Venezuelan naval prowess. -------------- Prime Minister of Malaysia Visits -------------- ¶3. (U) At the invitation of the Prime Minister of Jamaica Portia Simpson Miller, Malaysian Prime Minister Dato' Seri Abdullah Ahmad Badawi paid an official visit to Jamaica May 2-3. The Malaysian Prime Minister was accompanied by top ranking officials within his administration as well as members of the Malaysian media. Jamaican and Malaysia signed a joint statement designed to strengthen bilateral relations between the two nations and in particular, to further the development of an economic partnership through the fostering of trade and investments and the promotion of technical cooperation. -------------- Budget Debate Closes -------------- ¶4. (U) The debate over the FY2006/7 budget closed on May 10 (Ref A). In presentations from the ruling People's National Party (PNP),Prime Minister and Minister of Finance and Planning Omar Davies announced that they would introduce no new tax measures, but that capital spending for a variety of initiatives would increase. In a clear sign that a general election is imminent, Simpson Miller focused on early childhood development, education and housing for the poor. Opposition Jamaica Labor Party (JLP) Leader Bruce Golding and Spokesman on Finance Audley Shaw slammed the PNP's economic record over its 14 years in power, and argued that the JLP offers "a real alternative," suggesting the use of funds saved under PetroCaribe and multilateral institutions such as the World Bank to restructure the country's massive debt, in order to spur productive investment and economic growth. -------------- Motorola Deal Moving Forward -------------- ¶5. (SBU) Motorola, which signed a USD 10.9 million contract with the Ministry of National Security (MNS) to supply MNS with radio equipment for use by the Jamaica Constabulary Force, has finally received the first down payment of 20 KINGSTON 00000939 002.2 OF 003 percent. Motorola approached the Embassy for information on why payment was behind schedule. Motorola is now moving forward with ordering and production, and Post is attempting to determine when the balance will be remitted, and whether the deal is part of the GOJ's FY 2006/7 set-aside for MNS "technological upgrades." -------------- Delta to Offer Atlanta-Kingston Route -------------- ¶6. (U) Starting June 1, Delta Airlines will offer a daily direct flight from Atlanta Hartsfield-Jackson International Airport to Norman Manley International Airport in Kingston. Delta already flies into Sangster International Airport in Montego Bay from both Cincinnati and Atlanta. While Air Jamaica officials made no public comment - citing that they are in a code-share agreement with Delta - the increased competition cannot be welcome news to the beleaguered carrier that lost USD 120 million last year. -------------- Cement Investigation Extended -------------- ¶7. (U) A team that was appointed to investigate the production and distribution of cement that did not meet construction and strength standards has been given a two- week extension to present their report (Ref B). The team, which was assembled by Minister of Industry, Commerce, Science and Technology Phillip Paulwell on March 27, now has until May 19 to present their findings to Permanent Secretary Jean Dixon. Post will report septel on any SIPDIS substantive issues. -------------- Bananas and Sugar: Help on the Way? -------------- ¶8. (U) There is some assistance coming from the European Union that provides respite from the unrelenting beating that the Jamaican banana and sugar industries have taken. Last week, officials from the European Union (EU) and the GOJ signed the Special Framework Assistance (SFA) 2005 for the banana industry. The amount financed under SFA is JMD 322 million of which the Europeans are proving JMD 310 million. Agriculture Minister Roger Clarke said he was excited about the rural diversification component of the program, which would stimulate economic development by promoting alternative agricultural and non-agricultural activities. ¶9. (U) On May 10, EU Trade Commissioner Peter Mandelson announced that Jamaica would receive increased levels of financial support from the EU as it begins to implement it Sugar Reform Policy. That policy will reduce the price Jamaica and other African, Caribbean and Pacific (ACP) countries receive for sugar by 36 percent over four years. Although Mandelson declined to specify how much of an increase in funding there would be, he insisted that the EU will "be there practically, financially, and politically." -------------- Seafood Shortage -------------- ¶10. (U) In response to the chronic shortage of fish fillet in the Jamaican market, most fast-food restaurants have dropped seafood products from their menu. Most seafood producers export their products. This has created a domestic shortage that is expected to remain until imports increase. Traditional exporting countries such as Guyana, Suriname, Canada and Norway are unable to supply the fast- food restaurant industry's needs. KINGSTON 00000939 003.2 OF 003 TIGHE