VZCZCXYZ0058
OO RUEHWEB

DE RUEHKG #1190/01 3641427
ZNR UUUUU ZZH
O R 301425Z DEC 09
FM AMEMBASSY KINGSTON
TO RUEHC/SECSTATE WASHDC IMMEDIATE 0476
INFO EC CARICOM COLLECTIVE
RHEBAAA/DEPT OF ENERGY WASHINGTON DC
RHMFIUU/CDR USSOUTHCOM MIAMI FL
RHMFIUU/DEPT OF HOMELAND SECURITY WASHINGTON DC
RHMFIUU/DEPT OF JUSTICE WASHINGTON DC
RUEATRS/DEPT OF TREASURY WASHINGTON DC

UNCLAS KINGSTON 001190 
 
SIPDIS 
WHA FOR DAS REYNOSO 
WHA/CAR FOR (V.DEPIRRO, W.SMITH, J.MACK-WILSON) 
 
E.O. 12958: N/A 
TAGS: OVIP PREL PGOV ETRD ECON SNAR PHUM ASEC CJAN IBRD IMF
IDB, KCRM, KCOR, JM, XL 
SUBJECT: JAMAICA: SCENE-SETTER FOR DAS REYNOSO'S VISIT, JANUARY 11-13 
 
REF: KINGSTON 767 (161254Z DEC 09)(NOTAL) 
 
Summary and Analysis 
 
 
 
¶1. (SBU)  Post welcomes the visit of DAS Reynoso at a time when 
Jamaica faces serious challenges on multiple fronts: 
 
 
 
-- a crushing debt burden, negative growth, high unemployment, and 
the prospect of painful new taxes and budget cuts needed to 
conclude an indispensable standby arrangement with the 
International Monetary Fund (IMF); 
 
 
 
-- alarming levels of crime and corruption, and a disappointing 
lack of progress on a recent high-profile USG extradition request; 
 
 
 
-- crumbling infrastructure, environmental degradation, and the 
spread of HIV/AIDS; 
 
 
 
-- and a pervasive loss of confidence in both the current 
Government and the opposition party. 
 
 
 
Unless these ominous trends can be reversed, Jamaica could see 
further erosion of its stability in 2010, to include large-scale 
civil unrest.  End Summary and Analysis. 
 
 
 
¶2. (SBU) Prime Minister (PM) Bruce Golding's Jamaica Labour Party 
(JLP) clings to 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.  The next general election must be held by September, 2012. 
 
 
 
 
¶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 USA, with environmental 
and energy issues taking a greater role in recent years.  The USA 
remains Jamaica's primary trading partner.  Bauxite/alumina and 
remittances, which traditionally have accounted for much of the 
country's foreign exchange earnings, have been battered by the 
global recession; in the vital tourism sector, volume has held up 
remarkably well, but profit margins have shrunken significantly. 
 
End Summary and Analysis. 
 
 
 
Overview 
 
 
 
¶4. (SBU) Jamaica, roughly the size of Connecticut, has a population 
of 2.7 million and a GDP of approximately USD 11.21 million (2007 
estimate).  It gained independence from the U.K. 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) U.S. 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 PM.  He and his Cabinet (Ministers drawn largely 
from the House 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. 
 
 
 
Analysis:  Current Political Landscape 
 
 
 
¶8. (SBU)  The JLP currently maintains 32 out of the 60 
parliamentary seats.  However, in recent months three sitting JLP 
Members of Parliament (MPs) who had held dual citizenship at the 
time of their nomination in 2007 have been forced to face 
by-elections as a result of court decisions temporarily 
disqualifying them.  While all three MPs have been re-elected and 
reinstated, the long-running political fracas has undermined public 
confidence in politicians of both parties: Jamaicans wish their 
leaders would deal with crime and the economy rather than engaging 
in seemingly endless political one-upmanship.  Moreover, in recent 
weeks the Government's vacillation over the prospect of painful new 
taxes and budget cuts needed to conclude an indispensable standby 
arrangement with the International Monetary Fund (IMF) has 
diminished confidence in PM Golding even within his own party.  If 
the JLP's thin parliamentary majority were to be imperiled, either 
through the loss of possible future by-elections or through 
defections from its ranks, he may be forced to call a snap general 
election -- a dubious prospect under current socio-economic 
conditions. 
 
 
 
¶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 
14.9 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 3 million visitors, an 
increase from 2 million in 1998.  The country benefited from USD 
789 million in direct foreign investment in 2008 (down - from USD 
867 million in 2007), this included several major investments in 
the tourism sector by Spanish firms. 
 
 
 
¶11. (SBU) The country normally benefits from ample water supplies 
and a climate conducive to agriculture and tourism.  Although, it 
is facing a drought in the Kingston corporate area due to reduced 
rains this year.  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 for the last two decades. 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 130 percent 
of GDP, making Jamaica the fourth most indebted country in the 
world.  Almost 55 cents on every dollar of revenue earned by the 
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 creating a 
climate that is more conduce for investment and reducing 
bureaucratic red tape that hinders investment, but there has been 
little tangible progress on these efforts during his two years in 
office.  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 
 
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 USA is Jamaica's primary trading partner.  In 2008, 
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 824 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 - have faced the 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 17 percent in 2008 
and shows little sign of abating.  A confluence of factors 
underlies the upward movement in prices, chief among them the steep 
decline in the Jamaican currency.  The Jamaican dollar has 
depreciated by almost 10 percent since the beginning of 2009.  This 
foreign exchange market instability has significant implications 
for this import-dependent country.  The current exchange rate is 
over JD 89 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. 
 
 
 
Law Enforcement and Security 
 
 
 
¶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 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) 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 seized 226 kilos of cocaine this year (about 
the same as last year) in Jamaica and throughout its territorial 
waters.   The GOJ has cooperated fully in several major 
international narcotics law enforcement initiatives, which have 
resulted in the arrest and extradition to the USA 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. 
Unfortunately, over recent months the GoJ has been less cooperative 
with the USG in its response to our request for the extradition of 
Christopher "Duddas" Coke, a high-profile reputed "don" wanted to 
face charges in New York for conspiracy to illegally distribute 
drugs and weapons (reftel). 
 
 
 
¶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 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. 
 
 
 
Consular 
 
 
 
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 processed 
approximately 17,000 immigrant visas, and adjudicated over 116,000 
non-immigrant visa applications in the last year.  Kingston's Fraud 
Prevention Unit has been diligently entering known or suspected 
Jamaican criminals into CLASS before they apply for visas.  Between 
February 1 and September 30, 2009, we entered over 2,600 new CLASS 
entries.  Kingston ranks in the top 10 highest fraudulent posts 
worldwide.  Travel is not one-way. Well over 1.5 million Americans 
visited Jamaica each year, most as tourists. In addition, over 
20,000 American 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. 
Parnell