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RR RUEHGR
DE RUEHKG #0336/01 0481517
ZNR UUUUU ZZH
R 171517Z FEB 06
FM AMEMBASSY KINGSTON
TO RUEHC/SECSTATE WASHDC 2267
INFO RUCNCOM/EC CARICOM COLLECTIVE
RUEHAO/AMCONSUL CURACAO 0152
RHEFDIA/DIA WASHDC
RUEABND/DEA HQS WASHINGTON DC
RUMIAAA/CDR USSOUTHCOM MIAMI FL
RUCPDOC/DEPT OF COMMERCE WASHDC
RUEATRS/DEPT OF TREASURY WASHDC

UNCLAS SECTION 01 OF 03 KINGSTON 000336 
 
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: FEBRUARY 4, 2006 - 
FEBRUARY 17, 2006 
 
 
KINGSTON 00000336  001.2 OF 003 
 
 
¶1.   This week's topics: 
 
--   New Governor General 
--   Economic Prospects Favorable 
--   First Supplementary Estimates to Be Tabled 
--   Tourism Back In Earnest 
--   Jamaica's Hunt for Oil 
--   Sugar Industry Developments 
--   Jamaica-Cuba: Light Bulbs and Cement 
--   International Arrest 
--   Crime Rates Down 
 
-------------------- 
New Governor General 
-------------------- 
 
¶2.   On February 15, Kenneth Hall, former Pro-Vice 
Chancellor and Principal of the University of the West 
Indies Mona, was sworn in as the fifth Governor General of 
Jamaica.  Hall was a history professor in the 1980s at the 
Sate University of New York at Oswego.  He replaces Sir 
Howard Cooke, who served as Governor General for almost 15 
years.  The Ambassador represented the US at the 
installation ceremony and the reception following the 
ceremony. 
 
---------------------------- 
Economic Prospects Favorable 
---------------------------- 
 
¶3.   Minister of Finance and Planning, Dr. Omar Davies, and 
Bank of Jamaica Governor, Derick Latibeaudiere, expressed 
optimism in connection with the country's economy in the 
first quarter of the calendar year.  Speaking at a February 
14 lunch with the Canada-Jamaica Business Council, Davies 
stated that he expected inflation to remain at a low level - 
the figure for December 2005 was 0.1 percent - and remarked 
that "single-digit inflation for 2006" was likely. 
Latibeaudiere, speaking at the Bank's quarterly press 
briefing, added that he believed that as inflation subsides, 
the foreign exchange market will stabilize.  He further 
noted that increased investment in public infrastructure in 
the run-up to the 2007 Cricket World Cup would spur growth 
in 2006. 
 
------------------------------------------ 
First Supplementary Estimates To Be Tabled 
------------------------------------------ 
 
¶4.  Fin Min Davies also announced that the first 
supplementary estimates for the 2005/06 fiscal year, that 
are traditionally tabled in December, will be tabled on 
March 7, only three weeks before the end of the Jamaican 
fiscal year.  The announcement was prompted by constant 
criticisms from the opposition Jamaica Labor Party (JLP). 
The JLP attributed the delay to the campaign for the 
leadership of the governing People's National Party (PNP) in 
which Davies is a candidate.  The first estimate is expected 
to reflect the steep deterioration in the fiscal deficit due 
to a reduction in revenues relative to program.  Davies 
assured investors that regardless of the outcome of the PNP 
leadership race, the stability and policy consistency of the 
last several years will continue. 
 
----------------------- 
Tourism Back In Earnest 
----------------------- 
 
¶5.  Despite the passage of two hurricanes and the subsequent 
slump in tourist arrivals, the tourism sector still managed 
to grow 4.5 percent in 2005; its third consecutive year of 
growth.  The performance also marked another year of record 
tourist arrivals, with stopover arrivals reaching just under 
1.5 million.  The record performance was largely 
attributable to the strong recovery during the latter part 
 
KINGSTON 00000336  002.2 OF 003 
 
 
of the year, due to increased marketing and a diversion of 
visitors from hurricane ravaged Mexico.  The buoyancy 
continued into 2006, with arrivals for the month of January 
jumping by 11 percent, making it one of the best 
performances on record. 
 
---------------------- 
Jamaica's Hunt for Oil 
---------------------- 
 
¶6.  For the fifth time in 36 years, Jamaica will be 
embarking on a search for oil and gas.  However, unlike 
previous outings, the entire cost associated with the 
exploration will be borne by Finder Exploration Limited 
(Finder), the company licensed to undertake the prospecting. 
The last time (1980-1983) Jamaica was involved in oil and 
gas exploration it cost the GOJ a whopping USD 18 million 
(JMD 1.2 billion).  Exploration activities will be conducted 
under a product sharing arrangement whereby Finder would pay 
a 12.5 percent royalty to the GOJ in cash or kind and would 
split any oil or gas produced with the Petroleum Corporation 
of Jamaica.  Preliminary information from the current search 
will be available in just over six months. 
 
--------------------------- 
Sugar Industry Developments 
--------------------------- 
 
¶7.   The Jamaica Country Strategy for the Sugar Industry 
over the period 2006-2015 has been submitted to the European 
Union (EU).  In response to the EU's proposed elimination of 
special preferences, Jamaica proposes restructuring (perhaps 
by increased mechanization), diversification, and 
development programs that will enable inefficient producers 
to move out of the market, while training their employees 
for other industries.  Full details of the strategy are not 
yet publicly available, but Prime Minister Patterson has 
been clear that the industry will not be abandoned, as some 
commentators have recommended.  It is hoped that the EU will 
provide much of the funding to transition the industry. 
 
------------------------------------ 
Jamaica-Cuba: Light Bulbs and Cement 
------------------------------------ 
 
¶8.   The Cuban Government has given residents of East 
Kingston and Portmore some 30,000 energy-saving light bulbs 
in an effort to bring down Jamaica's high energy bill. 
Commerce, Science and Technology Minister Phillip Paulwell, 
on February 14, said that the donations were part of a pilot 
energy conservation project aimed at reducing the country's 
USD 1.2 billion oil bill. Meanwhile, Carib Cement - the 
monopoly producer in Jamaica - has been forced to turn to 
Cuba to help meet a shortfall of 40,000 metric tons to 
satisfy local demand. 
 
-------------------- 
International Arrest 
-------------------- 
 
¶9.   On February 15, Dwight Perry was arrested in Kingston 
without incident. Perry is wanted in the Eastern District of 
Virginia for Conspiracy and Distribution of over 1,000 kgs 
of marijuana based on a December 2005 complaint.  Perry is 
scheduled to appear in Magistrates Court on Thursday, 
February 16.  Perry will remain in custody pending 
extradition proceedings and his return to the United States. 
 
---------------- 
Crime Rates Down 
---------------- 
 
¶10. As of February 15, Jamaica's homicide rate stood at 154, 
compared to 198 for the same time period in 2005.  The JCF 
reported a decline of 12% for overall crime. 
 
KINGSTON 00000336  003.2 OF 003 
 
 
 
JOHNSON