VZCZCXRO5713
RR RUEHGR
DE RUEHKG #0553/01 0791826
ZNR UUUUU ZZH
R 201826Z MAR 06
FM AMEMBASSY KINGSTON
TO RUEHC/SECSTATE WASHDC 2458
INFO RUCNCOM/EC CARICOM COLLECTIVE
RUEHAO/AMCONSUL CURACAO 0157
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 02 KINGSTON 000553 
 
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: MARCH 7 - MARCH 17, 2006 
 
 
KINGSTON 00000553  001.2 OF 002 
 
Ref: 
 
¶1.   This week's topics: 
 
--   New Prime Minister on March 30 
--   Delta Call Center Contract 
--   Tax Debate Heats Up 
--   New Player in Telecom Industry 
--   Tough Cement Problem 
--   Crime Rates Down 
 
 
 
 
 
 
------------------------------ 
New Prime Minister on March 30 
------------------------------ 
 
¶1. Prime Minister designate, Portia Simpson Miller, will be 
sworn into office at a ceremony scheduled for 5 p.m. on 
March 30, the same day that PJ Patterson steps down. 
 
-------------------------- 
Delta Call Center Contract 
-------------------------- 
 
¶2. E-Services Group Jamaica, a subsidiary of e-Services 
Group International, Texas, has entered into the biggest 
outsourcing contract in the English-speaking Caribbean with 
Delta Airlines.  E-Services, which currently employs 1,500 
workers, will provide customer care services for the 
airline.  CEO of e-Services, Jamaica, Patrick Casserly 
stated that the agreement was the most significant 
development in the sector since its inception in 2000. 
Technology Minister Philip Paulwell, still smarting from the 
continued failure of a GOJ funded call center, said that the 
deal was a vote of confidence in the skill and competence of 
the Jamaican workforce and confirms that the country can 
compete and win against the best in the world.  The 
agreement is a multi-year contract worth several billion 
Jamaican dollars.  Delta's VP for Reservations said the 
company was selected based on its proven ability to deliver 
high quality customer service at a significant cost saving 
and its proximity to the U.S. 
 
------------------- 
Tax Debate Heats Up 
------------------- 
 
¶3.  In connection with the upcoming budget presentation in 
Parliament, the debate on tax compliance has re-emerged, 
with tax consultant Ethlyn Norton-Coke again proposing that 
the GOJ raise the consumption tax to 22.5 percent and 
eliminate income tax.  According to Coke, self-employed 
Jamaicans often do not pay income taxes and are not held 
accountable due to the poor policing methods.  However, 
Brian Denning of PricewaterhouseCoopers has cautioned that 
while consumption taxes are easier to collect, it places a 
burden on the poor.  Norton-Coke acknowledged it was a fair 
concern and suggested that the solution was to compensate 
the poor through a social safety net. (Comment: The GOJ is 
unlikely to adopt Norton-Coke's proposal for two reasons. 
First, it is not politically palatable and secondly pay as 
you earn taxes are easiest to collect.  End Comment.) 
 
------------------------------ 
New Player in Telecom Industry 
------------------------------ 
 
¶4. Flow Jamaica (Flow), a member of the Columbus 
Communications Group, a CARICOM-based telecommunications 
provider operational in several Caribbean countries, is 
preparing to enter the Jamaican market. Flow's goal in 
Jamaica is to offer ultra high speed broadband services to 
 
KINGSTON 00000553  002.2 OF 002 
 
 
include high speed Internet, digital landline service and 
digital cable TV with over 250 channels to residential and 
business customers.  Flow expects to start offering services 
by March 2006. Other players in the telecom sector are 
bracing for the competition. 
 
-------------------- 
Tough Cement Problem 
-------------------- 
 
¶5. Tough times appear to be ahead for the construction 
sector in Jamaica in the wake of serious deficiencies in 
production quality and quantity from the Caribbean Cement 
Company. Caribbean Cement is a monopoly which has, in recent 
months, faced complaints of not being able to meet the 
demand from the booming construction sector. The shortage 
led to a reduction in duty rates for imported cement from 
41% to 15%. 
 
¶6. Additionally, some of the recently distributed cement is 
of inferior quality.  According to Jamaica's Bureau of 
Standards, all cement produced by the Caribbean Cement 
Company between February 19 and 25, is to be withdrawn 
following the failure of samples to meet compulsory 
standards. This will have severe implications since much of 
the substandard cement has already been used.  Septel 
reports further on the cement industry problems. 
 
---------------- 
Crime Rates Down 
---------------- 
 
¶7. As of March 16, Jamaica's homicide rate stood at 250, a 
30% reduction over the same time period in 2005.  The JCF 
reported a decline of 21% for overall crime.