Identifier
Created
Classification
Origin
09KINGSTON325
2009-04-29 15:21:00
UNCLASSIFIED//FOR OFFICIAL USE ONLY
Embassy Kingston
Cable title:  

JAMAICA: APRIL ECONOMIC REVIEW

Tags:  ECON ENRG SENV EAIR EMIN ASEC SOCI ETRD TRSY OPIC 
pdf how-to read a cable
VZCZCXRO2259
RR RUEHGR
DE RUEHKG #0325/01 1191521
ZNR UUUUU ZZH
R 291521Z APR 09
FM AMEMBASSY KINGSTON
TO RUEHC/SECSTATE WASHDC 7563
INFO RUCNCOM/EC CARICOM COLLECTIVE
RUEATRS/DEPT OF TREASURY WASHDC
UNCLAS SECTION 01 OF 02 KINGSTON 000325 

SIPDIS
SENSITIVE

STATE FOR WHA/CAR (ACADIEUX) (VDEPIRRO) (WSMITH)
WHA/EPSC (MROONEY)(FCORNEILLE)
EEB/ESC/IEC/EPC (MMcMANUS)
INR/RES (RWARNER)
SANTO DOMINGO FOR FCS AND FAS
TREASURY FOR ERIN NEPHEW
USTDA FOR NATHAN YOUNG AND PATRICIA ARRIAGADA
OPIC FOR ALISON GERMAK

E.O. 12958: N/A
TAGS: ECON ENRG SENV EAIR EMIN ASEC SOCI ETRD TRSY OPIC
AID, OAS, IBRD, XL, JM
SUBJECT: JAMAICA: APRIL ECONOMIC REVIEW

REF: A) KINGSTON 315
B) KINGSTON 269
C) KINGSTON 245
D) KINGSTON 223

UNCLAS SECTION 01 OF 02 KINGSTON 000325

SIPDIS
SENSITIVE

STATE FOR WHA/CAR (ACADIEUX) (VDEPIRRO) (WSMITH)
WHA/EPSC (MROONEY)(FCORNEILLE)
EEB/ESC/IEC/EPC (MMcMANUS)
INR/RES (RWARNER)
SANTO DOMINGO FOR FCS AND FAS
TREASURY FOR ERIN NEPHEW
USTDA FOR NATHAN YOUNG AND PATRICIA ARRIAGADA
OPIC FOR ALISON GERMAK

E.O. 12958: N/A
TAGS: ECON ENRG SENV EAIR EMIN ASEC SOCI ETRD TRSY OPIC
AID, OAS, IBRD, XL, JM
SUBJECT: JAMAICA: APRIL ECONOMIC REVIEW

REF: A) KINGSTON 315
B) KINGSTON 269
C) KINGSTON 245
D) KINGSTON 223


1. (SBU) SUMMARY:
-- Sporadic roadblocks, with some violent incidents emerged to
protest a recent US 10 cent per liter gas tax, but appear to have
passed for now.
-- Rising aluminum inventories and a 58 percent global price decline
since July, 2008 are putting a strain on Jamaica's already weakened
bauxite sector.
-- The Government of Jamaica (GOJ) will continue to add losses from
parastatals Air Jamaica and the former sugar estates, which had not
yet been privatized by the start of the fiscal year on April 1.
-- The USA Jamaica Diaspora Conference planned for July will be
rescheduled for October.
-- GreenExpo for energy efficient and environmentally friendly
products is scheduled for June 2009.
Some Roadblocks In Protest Over Gas Tax
--------------


2. (SBU) Two days after a JD 8.75 (U.S. 10 cents) per liter tax
increase went into effect, police were forced to break up sporadic
roadblocks in Kingston and in the St. Catherine parish (reftels).
There were reports of stone throwing at vehicles and a few instances
of personal injury and robberies at the roadblocks. Press reports
indicate one person was slashed on the arm at one of the roadblocks
and her cell phone stolen. Police have made several arrests for
destruction of property and obstruction of traffic. The Mission
and many schools chose to close early for the day; however, the

protests appear to have died down with no further reports on the
morning of April 29. ((Note: Although the opposition People's
National Party (PNP) publically urged Jamaicans to wear black
clothing and to drive with their headlights on; however, contacts
told Emboffs that the party had no intention to support formal
protests or roadblocks on the island in response to the tax
increases. Nevertheless, most of the roadblocks occurred in areas
of strong PNP-support. End Note.))

Bauxite Sector Takes Beating
--------------


3. (U) After the closure of two Russian-owned bauxite plants
(reftels),Jamaica's bauxite sector is facing falling world aluminum
prices and rising inventories. Prices have fallen from a high of
USD 3,200 per metric ton in July, 2008 to USD 1,339 in March 2009.
Inventories are rising as the global economic downturn further
reduces demand.

Air Jamaica: No Sale Yet
--------------


4. (SBU) The 2009-2010 GOJ budget tabled in Parliament on April 7
does not contain a funding provision for the beleaguered national
airline Air Jamaica. The GOJ is behind schedule on plans to divest
several government-owned entities including Air Jamaica. The
deadline for the sale of Air Jamaica has been pushed back from March
31 to June or possibly July (reftels),thus adding more losses to
the government balance sheet. (Note: Don Wehby, the Minister
without Portfolio in the Ministry of Finance and Public Service who
has overseen the airline divestiture for the GOJ has announced that
he will return to the private sector at the end of July. Emboffs'
contacts close to Wehby say his departure date is firm; in order to
leave having honored his promise to sell the airline, he will have
to close the deal before the end of July. End Note).

Sugar Estates: No Sale Yet, More Losses
--------------


5. (SBU) The Sugar Company of Jamaica (SCJ),which the GOJ had hoped
to sell before the start of this fiscal year, has had to undergo a
second public tender. The first tender failed when
Infinity-bio-energy (based in Brazil) was unable to raise the
requisite finances in the current global credit squeeze (reftels).
The SCJ will receive USD 8.5 million in budgetary support from the
GOJ consolidated fund for the 2009/2010 fiscal year, while the GOJ
continues to seek a suitable buyer. Other unsold parastatals
include the Caymanas horseracing track, which will receive USD 5.6
million in public funds this fiscal year and the Jamaica Urban
Transit Company (public bus system) which will receive USD 8.8

KINGSTON 00000325 002 OF 002


million to pay operating expense. In a press briefing on April 24,
Minister of Finance and the Public Service Audley Shaw hinted that
he expects to raise USD 91 million through an accelerated divestment
program, but did not elaborate on which public entities would be
sold.

Diaspora Conferences Pushed Back to Oct
--------------


6. (U) The first USA/Jamaica Diaspora Conference, initially planned
for June, has been rescheduled to October. Reasons include the
current global economic downturn and fundraising considerations.
Minister of State in the Ministry of Foreign Affairs and Foreign
Trade, Senator Dr. Ronald Robinson, confirmed the new date during an
interview following a meeting with members of the Jamaica Diaspora
Advisory Board for the Northeast USA held April 21 at the offices of
the Jamaican Consulate in New York City.

Green Products Expo
--------------


7. (U) The Jamaica Conservation and Development Trust announced the
2009 GreenExpo to be held June 5-7 at the National arena. The event
is a trade show seeking environmentally friendly products and
services including alternative energy systems, construction
materials and energy efficient appliances and products. The GOJ
accords certain products such as solar panels and solar water
heaters with reduced taxes or tax exemptions in an effort to promote
energy efficient projects.
MOSS