VZCZCXYZ0010
RR RUEHWEB

DE RUEHKG #0922/01 3161616
ZNR UUUUU ZZH(CCY ADXD24A03 TOQ0838 540A)
R 041530Z NOV 09 ZDS
FM AMEMBASSY KINGSTON
TO RUEHC/SECSTATE WASHDC 0213
INFO RUEATRS/DEPT OF TREASURY WASHINGTON DC
RUEHDG/AMEMBASSY SANTO DOMINGO
RUEHKG/AMEMBASSY KINGSTON
RUEHLO/AMEMBASSY LONDON 0056
RUEHOT/AMEMBASSY OTTAWA

UNCLAS KINGSTON 000922 
 
C O R R E C T E D   C O P Y - ADDRESSEE ADDED - SANTO DOMINGO 
 
SIPDIS 
STATE FOR WHA/CAR (VDEPIRRO) (WSMITH) (JMACK-WILSON) 
WHA/EPSC (MROONEY) (FCORNEILLE) 
EEB/ESC/IEC (GGRIFFIN) 
EEB/ESC/IEC/EPC (MMCMANUS) 
INR/RES (RWARNER) 
INR/I (SMCCORMICK) 
SANTO DOMINGO FOR FCS AND FAS 
TREASURY FOR ERIN NEPHEW 
EXPORT IMPORT BANK FOR ANNETTE MARESH 
USTDA FOR NATHAN YOUNG AND PATRICIA ARRIAGADA 
OPIC FOR ALISON GERMAK 
 
E.O. 12958: N/A 
TAGS: ECON EAID EFIN ETRD EAIR ENRG PREL XL JM
SUBJECT: JAMAICA: OCTOBER ECONOMIC REVIEW 
 
REF: KINGSTON 638 
 
Summary 
 
------- 
 
-- Air Jamaica agreed to pay USD 180,000 to resolve a civil action 
by the U.S. Attorney's office; 
 
 
 
--  U.S. carrier JetBlue Airways initiated service between Kingston 
and JFK Airport in New York on October 30 and will add new routes 
in 2010; 
 
 
 
-- National Commercial Bank (NCB) announced a new JD 1 billion (USD 
11 million) loan fund with a concessionary interest rate of 9 
percent targeting small and medium enterprise businesses; 
 
 
 
-- The Economist Intelligence Unit reports Non Performing Loans are 
on the rise, but tourism arrivals have remained strong; 
 
 
 
-- The island power provider Jamaica Public Service (JPS) Company 
announced that its efforts to halt electricity theft have saved six 
million kilowatts hours of electricity; 
 
 
 
-- Emboffs attended a panel discussion on the potential for 
algae-to-energy as a feed stock for biofuels. 
 
 
 
-- The Tax Administration Department ended its tax amnesty on 
October 31 and has stepped up enforcement measures against those 
who have evaded taxes or have outstanding tax bills. END SUMMARY 
 
 
 
Aviation: 
 
---------- 
 
 
 
¶2. (U) The Dow Jones Newswires reported on October 8 that that Air 
Jamaica agreed to pay USD 180,000 to resolve a civil action by the 
U.S. Attorney's office in Brooklyn over maintenance issues that 
eventually led to an aircraft making an emergency landing at John 
¶F. Kennedy (JFK) International Airport in December 2001.  The U.S. 
Attorney's office said in a statement that Air Jamaica agreed to 
undertake several measures to improve its safety program, including 
implementing a more rigorous method of tracking maintenance 
discrepancies, regular meetings with Federal Aviation 
Administration (FAA) officials, and improved internal auditing of 
maintenance matters.  The case arose out of complaint that Air 
Jamaica, following the emergency landing, operated the aircraft 
with damaged parts on 58 commercial flights before making necessary 
repairs. 
 
 
 
¶3. (U) U.S. carrier JetBlue Airways initiated service between 
Kingston and JFK Airport in New York on October 30.  The new route 
adds to their existing service from Montego Bay to JFK. JetBlue 
intends to add new service from Orlando to Montego Bay in February 
2010 as well as a Saturday only flight from Boston to Montego Bay 
in January 2010. 
 
 
Banking and Finance 
 
------------------- 
 
 
 
¶4. (U) The National Commercial Bank (NCB) announced that it has 
created a JD 1 billion (USD 11 million) loan fund with a 
concessionary interest rate of 9 percent.  The loan fund is aimed 
at small and medium enterprise businesses, a segment of the economy 
that often faces costs of capital as high as 18 to 24 percent. 
Applications for the loan will opened on November 1, 2009 and close 
April 2010.  Sectors targeted are agriculture, manufacturing, women 
in business, and new business ventures. 
 
The new facility received praise from Audley Shaw, Minister of 
Finance and the Public Service, who said in a press release on 
October 23 that "access to funding continues to pose tremendous 
challenges to persons wishing to operate small businesses." A 
similar initiative was announced recently by the Bank of Nova 
Scotia. 
 
 
 
¶5. (U) Economist Intelligence Unit (EIU) reported on October 30 
that there appears to be no recovery in sight for the Caribbean 
economy.  The EIU reported that conditions may deteriorate further 
before they improve.  In Jamaica credit trends are not improving, 
despite monetary policy loosening.  Credit growth is still 
significantly below levels seen even in late 2008.  This has led to 
a marked deterioration of prudential indicators; non-performing 
loans (NPLs) in Jamaica were up by over 96 percent year on year in 
June in nominal terms, and despite remaining relatively low at 4.2 
percent of total loans, the NPL ratio has doubled since June 2008. 
In the positive side Jamaica bucked the regional trend by being the 
only country with an increase in stopover arrivals which were 3.4 
percent higher year on year in the first half of 2009, mainly owing 
to a 25 percent year-on-year increase in Canadian tourists during 
the period.  However, despite the uptick in arrivals, visitor 
expenditure has remained lower and the sector has continued to lay 
off workers. 
 
 
 
Energy 
 
------ 
 
 
 
¶6. (U) Radio Jamaica news reported on October 21 that JPS Company, 
the monopoly power provider, has embarked on an effort to reduce 
non-technical losses (theft) in major urban centers.   The JPS's 
Special Anti-theft Task Force has uncovered approximately 9,300 
cases of irregular electricity connections from March to September. 
The company says this has led to the recovery of six million 
kilowatt hours of electricity valued at USD 1.26 million over the 
seven month period.  Electricity rates in Jamaica are some of the 
highest in the region at average of US32 cents per kilowatt hour. 
The average cost of electricity in US dollar terms has increased by 
134 percent from 2003 to 2008. 
 
 
 
¶7. (U) On 29 October, Emboffs attended a panel discussion on the 
potential for algae-to-energy as a feed stock for biofuels.  The 
event was hosted by U.S. entity BioJam and included speakers from 
the University of Minnesota's Department of Bioproducts and 
Biosystems Engineering.  Interest in algae-to-energy stems from its 
high growth rate and its potential for use in wastewater treatment. 
Several companies and labs in the U.S. have made inroads in algae 
for biofuels, but three principle hurdles to cost-effective 
commercialization remain: space-efficient growth and harvesting of 
 
 
 
algae, selecting or engineering algae species with high enough oil 
content, and efficiently extracting oil from the algae cell.  A 
collaboration between the University of Minnesota, University of 
West Indies Mona Campus, and the Jamaica National Water Commission 
proposes to begin investigating wastewater treatment and other 
applications of algae at wastewater treatment plants on the island. 
The National Water Commission spends 40 percent of its revenue on 
energy and is highly motivated to collaborate in-search of lower 
cost energy sources. 
 
 
 
Tax Reform 
 
---------- 
 
 
 
¶8. (U) Viralee Latibeaudiere, the Director General of the Tax 
Administration Department, announced it has compiled a list of USD 
79.1 million in unpaid taxes.  Speaking with Emboffs, Latibeaudiere 
said the tax office is being more aggressive in stepping up 
enforcement measures and has been seizing property of those who owe 
back taxes.  The tax administration has been receiving technical 
assistance in the area of tax reform from the U.S. Mission/USAID 
during the past 18 months.  Latibeaudiere said her office has 
targeted 12,000 people not on the tax roll in order to bring them 
into compliance; the focus has been on doctors, customs brokers, 
exporters, and entertainers.  The tax office has held press events 
to announce the end of the tax amnesty (reftel A) which ended on 
October 31.  Those that voluntarily came into compliance receive 
certain waivers on interest and penalties. 
Stone