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

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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


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Venezuelan Navy Ship Visits Kingston
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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.

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Prime Minister of Malaysia Visits
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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.
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Budget Debate Closes
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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.

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Motorola Deal Moving Forward
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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

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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."

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Delta to Offer Atlanta-Kingston Route
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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.

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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.

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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."

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Seafood Shortage
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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.



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