JAMAICA: CODEL ENGEL DISCUSSES ECONOMY, ENERGY, AND

UNCLAS KINGSTON 000184 SIPDIS SENSITIVE WHA/CAR FOR CODEL ENGEL E.O. 12958: N/A TAGS: OVIP PREL PGOV ETRD ECON ENRG ASEC JM XL SUBJECT: JAMAICA: CODEL ENGEL DISCUSSES ECONOMY, ENERGY, AND - LAW ENFORCEMENT COOPERATION WITH GOJ OFFICIALS Summary -------------- ¶1. (U) From February 20-22, a CODEL led by WHA sub-committee Chair Eliot Engel was in Kingston, Jamaica, meeting with government officials and civil society representatives to discuss energy, environmental, and law enforcement cooperation issues. In addition to Chair Engel, the CODEL included Representatives Virginia Foxx, Jean Schmidt, Mark Souder, Ruben Hinojosa, and John Salazar. Congressional staff members Jason Steinbaum, Julie Schoenthaler, Eric Jacobstein, Janice McKinney, and Congressional Research Service staff Mark Sullivan accompanied the CODEL. Julie Bulgrin from the H Bureau, military escorts Colonel Joey Booher, Colonel Thomas Lawhead, and Dr. Ceasar Junker were also a part of the delegation. ¶2. (SBU) At a February 21 meeting with the Jamaican Prime Minister, Foreign Minister, and Energy Minister, the Government of Jamaica (GOJ) discussed the effects of the global economic crisis, the need for increased security cooperation, a hope for closer trade and investment ties, and concerns over a possible drop in the ethanol tariff that would render Jamaican ethanol less competitive in that sector. Members of the CODEL acknowledged the need for enhanced security cooperation that would benefit both nations. The CODEL later toured an ethanol production facility and visited a Coast Guard base to discuss law enforcement cooperation. They also visited three USAID projects that focus on livelihoods and environmental sustainability. In addition, the CODEL hosted a reception on February 20 attended by NGO representatives, business operators, government officials, and opposition parliamentarians. End Summary. Prime Minister and Cabinet Officials Discuss Jamaica?s Economic Concerns -------------- ¶3. (SBU) A CODEL of six Congress members led by Western Hemisphere Affairs (WHA) sub-committee Chair Eliot Engel visited Kingston from February 20-22. At a February 21 breakfast hosted by Prime Minister Bruce Golding at his official residence, Vale Royal, Chairman Engel was accompanied by the full delegation, along with Charge James Heg. In addition to Golding, the Government of Jamaica (GOJ) attendees included Foreign Minister Kenneth Baugh, Energy Minister Clive Mullins, Junior Minister of the Ministry of Foreign Affairs and Foreign Trade (MFAFT) Ronald Robinson, Cabinet Secretary Ambassador Douglas Saunders, MFAFT Permanent Secretary Ambassador Gail Mathurin, Permanent Secretary of the Office of the Prime Minister (OPM) Pat Sinclair MacCullough, OPM Chief Technical Director Oneka Miller, and MFAFT Undersecretary for bilateral and regional affairs Ambassador Paul Robothom. ¶4. (SBU) GOJ officials raised a number of issues, opening with the economy. Golding stated that the global financial crisis had made it difficult for Jamaica to gain access to capital markets. The GOJ obtained USD 1 billion through multilateral banks, which prevented a widespread economic collapse. However, severe economic strains remain. Jamaica has seen a ten percent drop in total remittances, 65 percent of which originate in the U.S. The national deficit and the large debt burden are impairing Jamaica?s progress, Golding said. The GOJ will have to cut expenditures, perhaps including public sector jobs, and there are no resources to mount a stimulus package. ¶5. (SBU) In the international economic system, there needs to be some accommodation for developing countries, which provide markets for other economies, Golding stated. He added that Jamaica has reduced poverty from 27 percent to 13 percent, but many of the gains may roll back with the current economic difficulties. Countries like Jamaica must wean themselves off aid, but foreign investment is important. To that end, the GOJ would be interested in pursuing a free trade agreement with the U.S. through CARICOM, particularly if special and differential treatment for CARICOM member states might be possible. Jamaica also needs to access its untapped economic potential, per Golding. Currently, 3.4 million tourists visit Jamaica annually, but it could support up to 10 million tourists per year. Eco-tourism and heritage tourism might prove lucrative. Jamaica also is negotiating with Spain to market medical tourism. The Spanish are primarily investors. While the number of Spanish tourists has increased from 2000 visitors to 17,000 annually, the bulk of visitors to Jamaica still come from the U.S. ¶6. (SBU) Golding underscored the importance of economic advancement, saying ?we don?t want to see this region slip into political instability. When people are poor, rationality goes through the window.? Congressman Hinojosa stated that it is crucial to invest in education and information technology. There should be a shift away from agriculture, with a focus on jobs, food, health, housing, and education. Action now prevents the need for reaction in the future, staving off the danger of social unrest, Hinojosa said. Dialogue on the Need for Security Cooperation -------------- ¶7. (SBU) Prime Minister Golding stated that Jamaica is the U.S.?s ?third border,? so cooperation on security measures is essential. Caribbean Heads of Government met with then- Secretary Rice at the UN General Assembly in September 2007, but there should be a mechanism to regularize meetings. Golding believes there needs to be follow-up on security cooperation, immigration, and development, and Chairman Engel agreed. Golding also said that Jamaica needs more assistance to combat narco-trafficking. The Merida Initiative, if effective, could channel drug traffickers looking for an alternate route to the Caribbean, he worried. ¶8. (SBU) Jamaica needs assistance in controlling the influx of small arms, Golding noted. He said an estimated 95 percent of illegal weapons are imported from the U.S. Chairman Engel explained that Mexico suffers from a similar problem, which he had discussed during the CODEL?s recent visit there. Engel stated that there is no conflict with the U.S. Constitution?s second amendment in limiting the illicit international flow of weapons, and it remains an area for enhanced bilateral cooperation. Golding said he appreciated joint efforts to date on stopping narco-traffickers, extradition, information- sharing, and on confiscating and reinvesting the proceeds of crime. Golding noted that the U.S. is willing to have a customs presence in Jamaica, but initially the GOJ said they could not be armed, which stalled the plans. Golding is holding discussions with his Minister of National Security to allow armed U.S. customs agents to serve in Jamaica. ¶9. (SBU) The crime rate in Jamaica is unacceptably high, Golding said. There has been some progress, though, and ganja cultivation is down and cocaine trafficking has decreased significantly. In 2007, it dropped to 20 percent of the initial rate. Nevertheless, Jamaica has 300 miles of coastline, and would like U.S. assistance in monitoring it through satellite technology. Golding also raised the issue of deportees, saying that many may not have ties to Jamaica when they return, and may commit crimes here. In addition, if courts in the U.S. opt for deportation in lieu of prison sentencing, the criminal is immediately released and does not serve time at all, the GOJ has no recourse when the deportee arrives. Golding said he accepts that after due process, people may be deported, but the system should be improved. Rep. Engel asked if the USG provides all information (?entire rap sheet?) on criminal deportees. Golding did not know the answer. (Comment: Post?s DHS/ICE Attach confirms that complete ?rap sheets? on criminal deportees currently are not provided to receiving countries because the information is maintained in proprietary FBI databases. End Comment.) Golding also emphasized the need to back up crime fighting with social programs. If people feel abandoned by a society, they have no commitment to it. A New York City Police Commissioner who visited Jamaica attributed the success in his city to a combination of police and social measures, Golding said. ¶10. (SBU) Golding explained that Jamaica recently had a strategic review of the police with experts from the U.S., UK, Canada, and South Africa weighing in, and the GOJ will implement 119 out of the 124 recommendations. The year-to- date murder rate is down 17 percent, which is a step in the right direction. (Note: however the aggregate homicide rate remains an unacceptable 60/100,000). Golding also explained his personal commitment to anti-corruption efforts. The current laws are weak, and corruption cases are prosecuted with all others, getting lost in the shuffle of civil cases. There is now a bill in parliament to create a special prosecutor for corruption cases. The office would fall under the Department of Public Prosecutions (DPP) but would maintain a degree of autonomy. Discussions on Energy Issues -------------- ¶11. (SBU) Energy Minister Mullings told the CODEL that Jamaica has had a wind farm since 2005, and may explore geo-thermal energy as well. The November 2008 trilateral agreement with the U.S. and Brazil can also provide a tremendous opportunity for the U.S. to export vehicles, Mullings believes. There is a regional move toward ethanol, with a 10 percent blend in use now. If the percentage of ethanol in fuel rises, manufacturers of flex-fuel vehicles stand to benefit. Foreign Minister Baugh noted the need for continued dialogue, and felt that small countries must take advantage of economies of scale through strategic partnerships. ¶12. (SBU) Prime Minister Golding noted that the Caribbean Basin Initiative (CBI) limits Jamaican exports to 7 billion gallons per year, and there may be a need for an increase on that ceiling. He expressed hope that the favorable trade provisions are not in danger of expiring when the CBI sunsets in 2010. In addition, he was concerned that a drop in the U.S. tariff would endanger Jamaica?s participation in ethanol exports. ¶13. (SBU) The GOJ wants to restructure its sugar industry to accommodate feed to ethanol programs, Golding said. Jamaica currently has duty/quota-free access to the U.S. for sugar exports, but no price guarantee. For now, Jamaica imports Brazilian feed and uses it to process ethanol. If Jamaica can produce its own feed for further processing, it can expand production. In addition, the GOJ is privatizing its sugar industry, which had been 83 percent government-owned. Golding has spoken to the President of Brazil about favorable consideration on sugar-based ethanol. ¶14. (SBU) Congressman Salazar explained that while prices remain low, it is difficult to move on the ethanol issue. In his own district, unemployment has risen from 4 percent to over 10 percent in the last year. Considering that, the Buy America provisions are important, especially for industrially declined areas that suffer under free trade arrangements. Congressman Hinojosa noted that in his district, cotton, sorghum, and cane are key crops. There is a powerful agricultural lobby in the U.S., and all nations consider it important to safeguard the agricultural sector. Fruitful Discussions with NGO, Opposition, and Government Representatives -------------- ¶15. (U) The CODEL hosted a reception on February 20 to which the Embassy invited NGO representatives, members of the business community, opposition politicians, and government officials. Organizations such as the Jamaican Forum for Lesbians, All-sexuals, and Gays (J-FLAG),People?s Action for Community Transformation (PACT),and Woman, Inc., all sent representatives to the event. Members of the CODEL were able to elicit views on a range of issues, including continued harassment and attacks on homosexuals, efforts to combat trafficking in persons, and problems of domestic violence. They also heard a variety of opinions on the current economic climate and its effect on entrepreneurs, as well as criticism of the ruling Jamaica Labour Party (JLP) from the opposition People?s National Party (PNP). Visit to Jamaica Defence Force-Coast Guard -------------- ¶16. (SBU) The delegation visited HMS Cagway, headquarters for the Jamaica Defence Force Coast Guard (JDF?CG). The JDF-CG was very appreciative for security assistance in the form of commodities and training from both the Narcotics Affairs Section (NAS) and the Military Liaison Office (MLO). The JDF- CG provided a brief overview of its mission and challenges, and then the Executive Officer led the delegation on a brief tour of the facility. At the end of the briefing, the delegation learned about JDF-CG cooperation with JIATF South and saw the JIATF ?chatroom? running on a computer. During the tour, the delegation was shown interceptor boats, trailers, and towing vehicles recently provided by MLO under ?Enduring Friendship.? The delegation also was shown three vessels, past donations from NAS, that are currently in dry- dock awaiting refit. NAS does not have the funding to assist the JDF-CG refit these vessels (USD 300,000 per) and the JDF- CG is in discussions with NAS on how to properly dispose of the vessels and use the funds to support the program. The delegation also saw a variety of other security items provided by the USG to the JDF-CG. Jamaica Broilers Ethanol (JBE) -------------- ¶17. (SBU) The delegation visited Jamaica Broilers Ethanol (JBE) on February 21. Jamaica Broilers was represented by Chairman Robert Levy, President and CEO Chris Levy, Head of the Ethanol Plant Stephen Levy, and CFO Ian Parsard. The JBE officials expressed concern about any move to reduce the tariff on Brazilian ethanol. When asked at what tariff level the sector in Jamaica would be able to survive, Parsard said it depended on a number of variables, but any floor below 54 cents could prove detrimental to current and future projects. In a private conversation with congressional staff, one JBE team member said that his company could live with a tariff level reduced to $.45/gallon, the level in one U.S. legislative proposal. He also told congressional staff that it would take at least 5 years for JBE to build in enough efficiencies to survive elimination of the tariff. The JBE team reiterated the importance of the CBI benefits and explained that this is what influenced their decision to double production capacity at the plant. Chairman Engel explained that he was a new convert to renewables, given their importance to energy independence. He said renewables were also part of the answer to breaking the dependency on oil. This was welcome news to the JBE group. HEG