JAMAICA: LOOKING AHEAD-- WHY THE POST-ELECTION

C O N F I D E N T I A L KINGSTON 000158

SIPDIS

SIPDIS

DEPT FOR WHA/CAR (RANDALL BUDDEN)

DEPT PASS TO CENTRAL AMERICAN CARIBBEAN BASIN COLLECTIVE

E.O. 12958: DECL: 01/27/2017
TAGS: PREL PGOV PINR SOCI EINV ENRG ECON EFIN
PTER, PHUM, KCOR, CARICOM, JM, VZ, XL
SUBJECT: JAMAICA: LOOKING AHEAD-- WHY THE POST-ELECTION
PERIOD MAY PROVE PIVOTAL IN BILATERAL RELATIONS

REF: A. KINGSTON 133 (NOTAL)

B. 06 KINGSTON 2189 (NOTAL)

C. KINGSTON 110 (NOTAL)

D. KINGSTON 89 (NOTAL)

E. 06 KINGSTON 2021 (NOTAL)

F. 06 KINGSTON 2150 (NOTAL)

Classified By: AMB. BRENDA L. JOHNSON, REASONS 1.5 (B) AND (D)

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Summary and Analysis
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1.(C) The national elections which Jamaica must hold within
the next year promise to be a fiercely contested,
down-to-the-wire affair. Regardless of their timing or
outcome, the months immediately thereafter may prove pivotal
in shaping bilateral relations for years to come. If the
ruling People's National Party (PNP) retains power,
charismatic Prime Minister Portia Simpson Miller will have
obtained a clear mandate to reconfigure her cabinet and chart
her own course-- perhaps in new directions. Conversely,
after seventeen years in opposition, a victory by the Jamaica
Labour Party (JLP) would represent a sea change in the
country's political history; a newly elected JLP Government
would look to the U.S. for advice and assistance in a variety
of areas.
End Summary and Analysis.

2.(C) Throughout Jamaica in recent weeks, speculation has
been rife as to whether:

(A) Prime Minister Portia Simpson Miller (PSM) might call
national elections for February or wait until after the
Cricket World Cup (CWC) series ending in late April (Reftel
A);

(B) the erosion of her popular support, and steady gain in
the approval rating of Opposition Leader Bruce Golding, will
continue or abate (Reftel B);

(C) the upcoming campaign, which promises to be contested
intensely, might unleash the kind of violence among
politically-affiliated criminal elements which has marred
previous Jamaican elections (Reftel C);

(D) Venezuela's Hugo Chavez is providing $5 ) 6 million in
cash to fund the reelection campaign of PSM's PNP, as alleged
by Golding (Reftel D);

(E) as he has hinted publicly, Golding will reveal further
evidence of PNP skullduggery in the Trafigura affair (Reftel
E) and/or other scandals;

(F) an informant from within the inner circle of the PNP is
passing information to the JLP regarding funding from
Trafigura, Chavez, and other embarrassing imbroglios;

(G) after seventeen years in opposition, the JLP at last may
be poised for a return to power under Golding's highly adept,
if uncharismatic, guidance.

Post-election period to be pivotal
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3.(C) In the run-up to elections, national attention will
focus on the hotly contested &swing8 parliamentary seats,
most of which are in the western parishes of Hanover,
Westmoreland, St. James, St. Elizabeth, and Trelawny.
Clearly, an intense political struggle looms; yet, regardless
of the timing or outcome of elections, for a number of
reasons the months immediately thereafter are likely to prove
pivotal in bilateral relations between Jamaica and the U.S.


Background: PNP united outwardly, but uneasily
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4.(C) PSM became PNP Leader and Prime Minister a year ago
following a bitterly divisive struggle to succeed the
retiring P.J. Patterson; Minister of National Security Peter
Phillips and Minister of Finance Omar Davies, both respected
and seasoned figures, were her principal opponents. To all
outward appearances, she since has done a masterful job of
mending fences and healing wounds within the Party.
Nevertheless, widespread doubts persist about the true
loyalties and ambitions of Phillips and, to a lesser degree,
Davies, as well as the extent of PSM,s effective control of
Government policy. Given her populist instincts and
carefully cultivated image as a woman of the people, many
observers believe that, had Davies not remained Finance
Minister, PSM would not have exercised the kind of fiscal
restraint the Government has managed thus far.

If the PNP retains power:
PSM to chart her own course, but in which direction?
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5.(C) If the PNP wins the elections, for the first time PSM
will have obtained a clear mandate from the people as a whole
to reconfigure her cabinet and shape Government policy,
domestic and foreign, as she sees fit. While nothing is
certain, this could bring substantial changes. In perhaps
the most optimistic scenario, PSM would make only minor
adjustments to the cabinet, with Davies and Phillips keeping
their respective portfolios at Finance and National Security.
This would augur well for continued close bilateral
cooperation in the areas of macroeconomic policy, security
assistance, counter-narcotics, and criminal justice.
However, the U.S. should expect PSM,s populist instincts,
together with Jamaica's heavy debt burden (debt-to-GDP ratio
of 133 percent),slow growth (2.7 percent),and high
unemployment (11.3 percent),to lead to acceptance of further
financial assistance from any quarter, in any form--
including Petrocaribe or cash from Venezuela's Hugo Chavez.
In foreign policy, on a range of issues from Iraq and
Venezuela to debt relief, deportees, trade liberalization,
and nuclear disarmament, PSM and Foreign Minister Anthony
Hylton may well become more outspoken in opposition to U.S.
policies. And of course, possible forthcoming changes in
Cuba also could complicate U.S.-Jamaican relations in
unforeseeable ways.

The Two Key Players: Davies and Phillips
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6.(C) A more interesting-- and perhaps disturbing-- scenario
would arise if PSM were to replace Phillips and/or Davies, or
either or both were to step down.

(A) PSM appreciates the value of Davies' fourteen years,
experience as Finance Minister and the trust he has earned in
international financial circles by reining in inflation and
spending; in post's estimate, she would remove him only if
she suspected he were plotting to challenge her authority.
However, a more serious risk was foreshadowed several months
ago when PSM planned to raid the national social security
fund to finance job creation projects, and Davies reportedly
threatened to resign in protest. On that occasion, PSM
backed down; whether she would do so after having won
elections is an open question. Davies almost certainly would
leave Finance rather than blemish his excellent record as
Minister. In the estimate of respected analyst Keith
Collister, Jamaica's underlying economic fundamentals
actually should justify a "B-plus" bond rating, and the
current "B" rating is entirely attributable to political
uncertainty: if Davies continues as Finance Minister,
international lenders and investors may reward the
Government; conversely, his departure could prove calamitous.


(B) Phillips is another matter. Bitterly disappointed by
his loss to PSM in the struggle to succeed P.J. Patterson, he
is suspected by many of maneuvering behind the scenes to
undermine her authority with the aim of eventually
supplanting her as Party Leader-- even at the cost of the
PNP's losing the upcoming election. If PSM remains in
office, she may well consider Phillips expendable.
Unfortunately, his successor almost certainly would be a
lesser figure, and probably less trustworthy. For years,
Phillips has cooperated closely with the U.S., U.K., and
Canada in anti-crime, anti-corruption, and counter-narcotics
efforts, and is widely perceived as among the cleanest of
Jamaica's leaders. After seventeen years of power in a
country in which corruption is endemic, the PNP has few, if
any, comparable figures as possible successors; Phillips'
departure thus would leave bilateral cooperation in the areas
of security, anti-corruption, anti-crime, counter-narcotics,
and counter-terrorism on a less solid footing.


If the JLP Wins: How will the U.S. accommodate a closer
relationship?
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7.(C) A JLP victory would represent a sea change in
Jamaica's political direction. As outlined Reftel (F),
across a broad spectrum of issues-- from Venezuela and Cuba
to trade liberalization, market-driven development,
anti-corruption efforts, and Iraq-- the fundamental
orientation of the JLP is more consonant with U.S. policies
than that of the current Government. In private discussions
with DCM and Emboff, Golding and other JLP officials have
stated that, upon taking power, they will look to the U.S.
for advice and assistance in areas as diverse as:

-- harnessing remittances to boost economic development
-- biofuels
-- expansion of microfinance
-- reform, clean-up, and training/equipping of the Jamaica
Constabulary Force (JCF)
-- financing infrastructure development.

In short, the expectations of a newly-elected JLP Government
would be high; the U.S. might well have difficulty meeting
them. Washington should accommodate to the extent possible
Golding's request for a visit (Reftel D) to discuss areas of
potential cooperation, and begin thinking about what sort of
response we would be able to make to a request for enhanced
engagement by a more U.S.-oriented JLP Government, should
that come to pass.
JOHNSON