VZCZCXRO1669
RR RUEHGR
DE RUEHKG #0270/01 0971410
ZNR UUUUU ZZH
R 071410Z APR 09
FM AMEMBASSY KINGSTON
TO RULGPUA/COMUSNAVSO
INFO RUEHC/SECSTATE WASHDC 7485
RUCNCOM/EC CARICOM COLLECTIVE

UNCLAS SECTION 01 OF 04 KINGSTON 000270 
 
SIPDIS 
SENSITIVE 
 
STATE FOR WHA/CAR (ACADIEUX) (VDEPIRRO) (WSMITH) 
WHA/EPSC (MROONEY) 
 
E.O. 12958:  N/A 
TAGS: OVIP PREL PGOV ECON ETRD ASEC XL JM
SUBJECT: JAMAICA: SCENE SETTER FOR RADM JOSEPH KERNAN 
 
REF: A) EMAIL LCDR JOHN MERLI 
 
¶1. (SBU) Post welcomes the visit of Rear Admiral Joseph Kernan at a 
time when Jamaica is at a crucial "tipping point."  Jamaica faces 
challenges to its resource-strapped public services sector, 
crumbling infrastructure, environmental degradation, the spread of 
HIV/AIDS, an exorbitant debt burden, and high violent crime.  There 
is concern that unchecked levels of crime and corruption, coupled 
with rising prices and the global economic crisis, could seriously 
endanger Jamaica's stability. 
 
¶2. (SBU) Prime Minister Bruce Golding's Jamaica Labour Party (JLP) 
retains a grip on 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. 
 
¶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 United States, with environmental 
and energy issues taking a greater role in recent years.  The U.S. 
remains Jamaica's primary trading partner, and tourism, 
bauxite/alumina, and remittances account for much of the country's 
foreign exchange earnings.  Remittances have fallen as a result of 
the global economic crisis, and many worry that tourism will see a 
sharp decline as well.  End Summary. 
 
Overview 
---------- 
 
¶4. (SBU) Jamaica, roughly the size of Connecticut, has a population 
of 2.7 million and a GDP of approximately USD 12.77 billion (2007 
estimate).  It gained independence from the United Kingdom 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) United States 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 Prime Minister.  He and his cabinet (Ministers drawn 
from Members of Parliament 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. 
 
Current Political Landscape 
 
KINGSTON 00000270  002 OF 004 
 
 
--------------------------- 
 
¶8. (SBU) The JLP currently maintains 32 out of the 60 parliamentary 
seats.  However, four seats were the subject of legal challenges 
relating to the status of dual citizens elected to office.  The 
controversy began immediately following the September 2007 election, 
when a PNP challenger filed a suit against an elected JLP member of 
parliament (MP).  The JLP MP held dual citizenship (Jamaican and 
U.S.) at the time he sought office, ostensibly violating a Jamaican 
constitutional clause barring from office any who "hold allegiance 
to a foreign entity."  In the wake of the lawsuit, the JLP MP 
renounced his U.S. citizenship, but a court ruled that a by-election 
for the seat must be held.  A by-election was held on March 23 and 
the JLP MP prevailed.  There are still three outstanding challenges 
filed against JLP MPs that are subject to pending court rulings.  If 
the JLP's thin parliamentary majority is imperiled, PM Golding may 
be forced to call a snap general election. 
 
¶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 
12.77 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 2.85 million visitors, an 
increase from 2 million in 1998.  The country benefited from USD 779 
million in direct foreign investment in 2007 (down - from USD 882 
million in 2006), including several major investments in the tourism 
sector by Spanish firms. 
 
¶11. (SBU) The country benefits from ample water supplies and a 
climate conducive to agriculture and tourism.  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. 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 110 percent of GDP, making Jamaica the fourth 
most indebted country in the world.  Almost 55 cents on every dollar 
of revenue earned by the Government of Jamaica (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 cutting 
corporate tax rates and reducing bureaucratic red tape that hinders 
investment.  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 
 
KINGSTON 00000270  003 OF 004 
 
 
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 United States is Jamaica's primary trading partner. In 
2007, 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 797 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 - face the impending 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 16.8 percent in 2008. 
Although it moderated in the first quarter of 2009 it could spike 
again as the GOJ is expected to announce a new tax package which 
will fuel policy induced inflation.  There is a confluence of 
factors underlying the upward movement in prices, chief among them 
the steep decline in the Jamaican currency.  The Jamaican dollar has 
depreciated by almost 14 percent since the beginning of 2009, adding 
to the 6 percent between September and December last year.  The 
foreign exchange market instability has significant implications for 
this import-dependent country.  The current exchange rate is JD 88.5 
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. 
 
Transnational Crime and Narcotics 
--------------------------------- 
 
¶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 Government of Jamaica (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) in 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 intensified and focused its law enforcement 
efforts on more effectively disrupting the trafficking of large 
amounts of cocaine in Jamaica and throughout its territorial waters. 
 The GOJ also has fully cooperated in several major international 
narcotics law enforcement initiatives, which have resulted in the 
arrest and extradition to the United States 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. 
 
¶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 
 
KINGSTON 00000270  004 OF 004 
 
 
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. Planned equipment procurement for 
the JDF includes a fixed wing maritime surveillance aircraft to 
increase  Maritime Domain Awareness capability and 
interoperability. 
 
Travel and Migration 
-------------------- 
 
¶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 issues 
approximately 7,000 immigrant visas, and receives an average of 
100,000 applications for nonimmigrant visas per year.  Travel is not 
one-way.  Well over 1.5 million Americans visit Jamaica each year, 
most as tourists.  In addition, over twenty thousand U.S. 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. 
HEG