Identifier
Created
Classification
Origin
09KINGSTON1190
2009-12-30 14:25:00
UNCLASSIFIED
Embassy Kingston
Cable title:  

JAMAICA: SCENE-SETTER FOR DAS REYNOSO'S VISIT, JANUARY 11-13

Tags:  OVIP PREL PGOV ETRD ECON SNAR PHUM ASEC CJAN IBRD IMF 
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VZCZCXYZ0058
OO RUEHWEB

DE RUEHKG #1190/01 3641427
ZNR UUUUU ZZH
O R 301425Z DEC 09
FM AMEMBASSY KINGSTON
TO RUEHC/SECSTATE WASHDC IMMEDIATE 0476
INFO EC CARICOM COLLECTIVE
RHEBAAA/DEPT OF ENERGY WASHINGTON DC
RHMFIUU/CDR USSOUTHCOM MIAMI FL
RHMFIUU/DEPT OF HOMELAND SECURITY WASHINGTON DC
RHMFIUU/DEPT OF JUSTICE WASHINGTON DC
RUEATRS/DEPT OF TREASURY WASHINGTON DC
UNCLAS KINGSTON 001190 

SIPDIS
WHA FOR DAS REYNOSO
WHA/CAR FOR (V.DEPIRRO, W.SMITH, J.MACK-WILSON)

E.O. 12958: N/A
TAGS: OVIP PREL PGOV ETRD ECON SNAR PHUM ASEC CJAN IBRD IMF
IDB, KCRM, KCOR, JM, XL
SUBJECT: JAMAICA: SCENE-SETTER FOR DAS REYNOSO'S VISIT, JANUARY 11-13

REF: KINGSTON 767 (161254Z DEC 09)(NOTAL)

Summary and Analysis



UNCLAS KINGSTON 001190

SIPDIS
WHA FOR DAS REYNOSO
WHA/CAR FOR (V.DEPIRRO, W.SMITH, J.MACK-WILSON)

E.O. 12958: N/A
TAGS: OVIP PREL PGOV ETRD ECON SNAR PHUM ASEC CJAN IBRD IMF
IDB, KCRM, KCOR, JM, XL
SUBJECT: JAMAICA: SCENE-SETTER FOR DAS REYNOSO'S VISIT, JANUARY 11-13

REF: KINGSTON 767 (161254Z DEC 09)(NOTAL)

Summary and Analysis




1. (SBU) Post welcomes the visit of DAS Reynoso at a time when
Jamaica faces serious challenges on multiple fronts:



-- a crushing debt burden, negative growth, high unemployment, and
the prospect of painful new taxes and budget cuts needed to
conclude an indispensable standby arrangement with the
International Monetary Fund (IMF);



-- alarming levels of crime and corruption, and a disappointing
lack of progress on a recent high-profile USG extradition request;



-- crumbling infrastructure, environmental degradation, and the
spread of HIV/AIDS;



-- and a pervasive loss of confidence in both the current
Government and the opposition party.



Unless these ominous trends can be reversed, Jamaica could see
further erosion of its stability in 2010, to include large-scale
civil unrest. End Summary and Analysis.




2. (SBU) Prime Minister (PM) Bruce Golding's Jamaica Labour Party
(JLP) clings to a razor-thin 32-28 parliamentary majority. The
charismatic, populist former Prime Minister, Portia Simpson-Miller,
leads the opposition People's National Party (PNP). After eighteen
years in power, the PNP finally was ousted by a frustrated public
in the September, 2007 general election. Nevertheless, the JLP has
had a difficult time delivering on campaign promises, having
inherited a bloated, inefficient bureaucracy and massive debt
burden. The next general election must be held by September, 2012.






3. (SBU) As one of the largest Caribbean nations forming part of
the "third border" of the U.S., Jamaica is a key partner on
security issues. Trade and migration issues account for much of
the solid bilateral relationship with the USA, with environmental
and energy issues taking a greater role in recent years. The USA
remains Jamaica's primary trading partner. Bauxite/alumina and
remittances, which traditionally have accounted for much of the
country's foreign exchange earnings, have been battered by the
global recession; in the vital tourism sector, volume has held up
remarkably well, but profit margins have shrunken significantly.

End Summary and Analysis.



Overview




4. (SBU) Jamaica, roughly the size of Connecticut, has a population
of 2.7 million and a GDP of approximately USD 11.21 million (2007
estimate). It gained independence from the U.K. in 1962, and
remains a member of the Commonwealth. With its British political
and cultural heritage, a relatively educated and entrepreneurial
population, and uncommon natural beauty, Jamaica nevertheless has
weaknesses in key institutions, a bloated bureaucracy, financial
resource constraints, and lackluster (now negative) economic
growth. A high crime rate results in considerable security costs
that must be borne in doing business, particularly in Kingston.


5. (SBU) U.S. interests in Jamaica largely relate to security, as
broadly defined: combating the flow of illegal drugs, strengthening
democratic institutions, fostering sustainable economic
development, and protecting the environment. An estimated one
million or more Jamaicans live in the United States, with over
400,000 in South Florida. Virtually every Jamaican has a family
member in New York, Connecticut, New Jersey, or Florida. In
addition, over one million U.S. citizens visit Jamaica annually,
and assisting them is a primary U.S. Embassy concern. Resources
also are directed to encourage U.S. exports and support U.S.
investors and businesses.



Political Background




6. (SBU) Jamaica has a "Westminster model" parliament consisting
of: a lower house, the House of Representatives, comprised of 60
directly elected members; and an upper house, a Senate made up of
21

appointees. Power rests largely in the hands of the head of
government, the PM. He and his Cabinet (Ministers drawn largely
from the House and the Senate) decide government policy. The
British monarch, represented locally by an appointed Governor
General, is the largely ceremonial head of state. The two major
political parties have historical links with two large trade
unions--the Jamaica Labour Party (JLP) with the Bustamante
Industrial Trade Union (BITU) and the People's National Party (PNP)
with the National Workers Union (NWU).




7. (U) The PNP won four consecutive general elections up through
2002, retaining control of the government for an unprecedented
eighteen years. In March 2006, PNP leader Portia Simpson-Miller
became the nation's first female Prime Minister. She remained in
office only until September 2007, when the JLP finally regained a
majority, albeit a slim one; it was the closest national election
in Jamaican history, with only 100 votes separating the contestants
in ten of the sixty parliamentary constituencies. Despite some
election-related violence and minor irregularities, the vote was
largely free and fair, and declared as such by observers from the
Organization of American States.



Analysis: Current Political Landscape




8. (SBU) The JLP currently maintains 32 out of the 60
parliamentary seats. However, in recent months three sitting JLP
Members of Parliament (MPs) who had held dual citizenship at the
time of their nomination in 2007 have been forced to face
by-elections as a result of court decisions temporarily
disqualifying them. While all three MPs have been re-elected and
reinstated, the long-running political fracas has undermined public
confidence in politicians of both parties: Jamaicans wish their
leaders would deal with crime and the economy rather than engaging
in seemingly endless political one-upmanship. Moreover, in recent
weeks the Government's vacillation over the prospect of painful new
taxes and budget cuts needed to conclude an indispensable standby
arrangement with the International Monetary Fund (IMF) has
diminished confidence in PM Golding even within his own party. If
the JLP's thin parliamentary majority were to be imperiled, either
through the loss of possible future by-elections or through
defections from its ranks, he may be forced to call a snap general
election -- a dubious prospect under current socio-economic
conditions.




9. (SBU) Jamaica traditionally has sought to leverage its
small-nation influence through multilateralism via CARICOM, the
G77, and the Non-Aligned Movement. The country maintains cordial

relations with Cuba. Jamaica sees itself as a spokesman for
smaller economies, particularly island states, and pushes for
special and differential treatment for small economies in the FTAA
and the WTO. As the most populous English-speaking CARICOM member
(only Haiti is larger),Jamaica also views itself as a CARICOM
leader, though Trinidad and Tobago's growing economic power has
eroded Jamaica's influence within the organization. Nonetheless,
this relatively small country wields significant international
influence and prestige, and enjoys a status beyond its size in many
international fora.



Economic Background




10. (SBU) Jamaica's gross domestic product (GDP) is valued at USD
14.9 billion and the economy is considered to be in the
lower-middle income status. It relies heavily on the services
sector, which accounts for about 60 percent of GDP. The largest
foreign exchange earners are tourism and remittances, at USD 2
billion. Tourism numbers for 2008 reached 3 million visitors, an
increase from 2 million in 1998. The country benefited from USD
789 million in direct foreign investment in 2008 (down - from USD
867 million in 2007),this included several major investments in
the tourism sector by Spanish firms.




11. (SBU) The country normally benefits from ample water supplies
and a climate conducive to agriculture and tourism. Although, it
is facing a drought in the Kingston corporate area due to reduced
rains this year. Jamaica has been able to develop niche markets in
value added agri-business such as Blue Mountain coffee and high
quality rums. However, periodic hurricanes have damaged tourism
revenue as well as agriculture outputs. Although Jamaica recovered
from the devastation of Hurricane Ivan in 2004, it suffered close
to USD 300 million in damages, mostly to crops and infrastructure,
when Hurricane Dean hit the island in 2007. Tropical Storm Gustav
in August 2008 damaged agriculture as well, especially export
agriculture sectors. The shock to banana exports was so bad that
the sole exporter, Jamaica Producers Group, decided to exit the
banana export business. Gustav also caused significant
infrastructure damage to roads and bridges, including completely
washing out a bridge just outside of Kingston. Total damage caused
by Gustav is estimated at USD 214 million.




12. (SBU) Overall, the economy faces several long-term challenges
which have caused years of anemic economic growth averaging about 1
percent for the last two decades. Large-scale unemployment,
especially among the unskilled population, serious crime problems,
including gang violence related to the drug trade, lack of
available credit and an extremely high debt burden hinder growth
and erode investor confidence. The government debt is 130 percent
of GDP, making Jamaica the fourth most indebted country in the
world. Almost 55 cents on every dollar of revenue earned by the
GOJ goes to debt servicing, which limits the government's ability
to invest in infrastructure improvement or pay for public services
such as security, education, and health care. Low tax compliance
rates, hovering at about 45 percent, worsen the problem of limited
revenue.



Trade and International Investment




13. (SBU) Prime Minister Golding generally welcomes direct foreign
investment and maintains that Jamaica will only resolve its debt
problems if it can grow its economy. He has called for creating a
climate that is more conduce for investment and reducing
bureaucratic red tape that hinders investment, but there has been
little tangible progress on these efforts during his two years in
office. Overall, GOJ economic policies encourage foreign
investment in areas that earn or save foreign exchange, generate
employment, and use local raw materials. The government provides a
wide range of incentives to investors, including remittance

facilities to assist them in repatriating funds to the country of
origin; tax holidays which defer taxes; and duty-free access for
machinery and raw materials imported for approved enterprises.




14. (SBU) The USA is Jamaica's primary trading partner. In 2008,
U.S. exports to Jamaica were an estimated USD 2.7 billion,
representing almost 40 percent of Jamaica's total imports. U.S.
imports from Jamaica were an estimated USD 824 million. Some of
the major import categories were petroleum, grains, machinery and
transport equipment. The United States has been Jamaica's
principal export market over the last two decades. Jamaica exports
mostly crude materials, chemicals, and food to the United States.
Tourism, bauxite/alumina, and remittances account for most of the
country's foreign exchange earnings. Uncompetitive traditional
agricultural exports - bananas and sugar - have faced the end of
preferential regimes. The once flourishing apparel industry also
virtually has

collapsed.



Social Repercussions of Economic Downturn




15. (SBU) The spiraling cost of living is undermining social and
economic stability in Jamaica. Inflation hit 17 percent in 2008
and shows little sign of abating. A confluence of factors
underlies the upward movement in prices, chief among them the steep
decline in the Jamaican currency. The Jamaican dollar has
depreciated by almost 10 percent since the beginning of 2009. This
foreign exchange market instability has significant implications
for this import-dependent country. The current exchange rate is
over JD 89 to USD 1



Environment




17. (SBU) Jamaica's economy is heavily dependent on the island's
fragile natural resources, given that tourism, bauxite and alumina
production, and agriculture provide the bulk of foreign exchange
earnings. Large-scale hotel and resort developments under
construction along the north coast will severely strain the
island's natural resources and infrastructure. Environmental
degradation and resource depletion are serious threats to
sustainable economic growth in Jamaica. The most pressing
environmental challenges affecting the island are coastal water
quality (some estimate 80 percent of coral reefs have perished),
deforestation, and lack of

biodiversity protection. Jamaica needs to develop a long-term
environmental protection scheme that works with the private sector.



Law Enforcement and Security




18. (SBU) Jamaica is a transit point for South American cocaine en
route to the United States. It is also the largest Caribbean
producer and exporter of cannabis. The GOJ has a National Drug
Control Strategy in place that covers both supply and demand
reduction. The murder rate in Jamaica has increased steadily since
2002 with well over 1600 killings annually, while the justice
system has been unable to keep up, with only 45 trials per year on
average. Based on their past experiences, most civilians fear that
at best, the authorities can't protect them, and at worst, are
colluding with criminals, leading citizens to avoid giving evidence
or witness testimonies. The police are only able to resolve (make
arrests) thirty-four percent of homicides annually, and they only
convict perpetrators in five percent of the homicide cases. This
leads both the public and police to doubt the effectiveness of the
criminal justice system leading to vigilantism, which only
exacerbates the cycle of violence.


19. (SBU) The GOJ has seized 226 kilos of cocaine this year (about
the same as last year) in Jamaica and throughout its territorial
waters. The GOJ has cooperated fully in several major
international narcotics law enforcement initiatives, which have
resulted in the arrest and extradition to the USA of high-profile
Jamaican, Colombian, Bahamian, and Panamanian narcotics traffickers
responsible for the manufacture, trans-shipment, and distribution
of vast amounts of cocaine throughout the Central Caribbean region.
Unfortunately, over recent months the GoJ has been less cooperative
with the USG in its response to our request for the extradition of
Christopher "Duddas" Coke, a high-profile reputed "don" wanted to
face charges in New York for conspiracy to illegally distribute
drugs and weapons (reftel).




20. (SBU) The Port Authority of Jamaica (PAJ) has procured and
installed non-intrusive inspection equipment, including mobile
gamma imaging machines, x-ray machines for high-density cargo, and
pallet machine and closed-circuit television surveillance systems
for the Kingston and Montego Bay ports. While the Container
Terminal is relatively well protected, and is now a beneficiary of
the U.S. Container Security Initiative, its neighbor Kingston
Wharf, a break bulk facility, is plagued with security problems
that facilitate contraband smuggling. The Jamaican Constabulary
Force (JCF) Narcotics Vetted Unit (NVU) has taken steps to increase
its evidence and intelligence gathering capabilities to better
investigate major narcotics dealers and crime-lords. In addition,
the GOJ has agreed to the establishment of an International Airport
Interdiction Task Force comprised of Jamaican, U.S., UK, and
Canadian law enforcement elements which will focus on narcotics
trafficking and illegal migration at the country's two major
international airports.




21. (SBU) The military, or Jamaica Defence Force (JDF),devotes
considerable resources to the internal security mission in Jamaica
and conducts operations with/in support of the JCF. One such
ongoing operation is "Operation Kingfish," which targets high level
criminals in Jamaica. Other important missions are Counter-Drug
(marijuana eradication and maritime interdiction) and humanitarian
assistance in times of natural disaster (primarily hurricanes and
flooding). The U.S. conducts joint exercises and provides training
opportunities for JDF officials.



Consular



22.(SBU) Facilitating legal migration and deterring illegal
movement are key missions for Embassy Kingston. Despite its small
size, Jamaica is a major source of legal and illegal immigrants to
the United States. Embassy Kingston is one of the busiest consular
posts in the Western Hemisphere: the consular section processed
approximately 17,000 immigrant visas, and adjudicated over 116,000
non-immigrant visa applications in the last year. Kingston's Fraud
Prevention Unit has been diligently entering known or suspected
Jamaican criminals into CLASS before they apply for visas. Between
February 1 and September 30, 2009, we entered over 2,600 new CLASS
entries. Kingston ranks in the top 10 highest fraudulent posts
worldwide. Travel is not one-way. Well over 1.5 million Americans
visited Jamaica each year, most as tourists. In addition, over
20,000 American citizens are permanent residents on the island.



HIV/AIDS




23. (SBU) The Caribbean region's HIV prevalence rate of
approximately 2.4 percent is second only to sub-Saharan Africa. In
Jamaica, about 3 percent of antenatal clinic and 1.5 percent of the
general population test positive for HIV, according to GOJ
statistics. The early average age of first sexual encounter,

multiple partners among adolescents, and the stigma of
homosexuality in Jamaican culture, all contribute to the potential
risks for an accelerating epidemic in the Jamaican population.
There is a high degree of discrimination against those living with
HIV/AIDS, regardless of whether they are men, women or children.
Even if the disease is successfully contained, HIV will continue to
have serious economic consequences. According to the University
of the West Indies Health Economics Unit, if the escalation
continues at its present rate, the estimated economic cost in five
years will equal 6.5 percent of GDP.
Parnell