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Cablegate: Jamaica: Budget Debate Presages Upcoming Elections

VZCZCXRO2806
RR RUEHGR
DE RUEHKG #0705/01 1311640
ZNR UUUUU ZZH
R 111640Z MAY 07
FM AMEMBASSY KINGSTON
TO RUEHC/SECSTATE WASHDC 4745
INFO RUCNCOM/EC CARICOM COLLECTIVE

UNCLAS SECTION 01 OF 02 KINGSTON 000705

SIPDIS

SIPDIS

STATE FOR WHA/CAR (BUDDEN), WHA/EPSC (SLATTERY)

E.O. 12958: N/A
TAGS: ECON EFIN JM
SUBJECT: JAMAICA: BUDGET DEBATE PRESAGES UPCOMING ELECTIONS


This message is sensitive but unclassified, please handle
accordingly.

1. (U) Summary: Each year, the budget debates captivate
Jamaicans as each party presents its vision for the country,
thinly veiled as a presentation of the budget for the fiscal
year. With elections due to be called by October 2007, this
year was expected to be particularly grandiose. The
opposition Jamaica Labor Party (JLP) emphasized job creation
under the slogan "Is it time for a change?" while the ruling
People's National Party (PNP) made generous promises without
specifying how they would be financed. End summary.

---------------------------
Opposition on the Offensive
---------------------------

2. (U) The leader of the opposition Jamaica Labor Party,
Bruce Golding, set out a budget that was designed as an
election manifesto. It showed a clear grasp of the key
challenges facing the country, but more importantly spoke
directly to the urban and rural poor, a group that the JLP
has failed to capture in the past.

3. (U) Golding made much use of Jamaican patois, a common
tactic among politicians looking to appeal to the poor
demographic. Typically, the JLP is seen as the party of the
middle-class intelligentsia, less populist than the ruling
People's National Party. Knowing that he has their vote
secured, Golding wanted to move beyond this constituency. In
a similar vein, he quoted several times from the Bible and
popular song lyrics, employing a trademark tactic of Prime
Minister Portia Simpson Miller (PSM).

4. (U) Golding's speech also hammered the record of the PNP,
which has been in power for 18 years. He drew a grim picture
of life under PNP rule, noting that in the ten years from
1997, Jamaica had grown by a total of only 9.6 percent - only
Haiti has suffered a more anemic rate. He mocked the
official government statistics claiming that the unemployment
rate in Jamaica was below 10 percent. "If you define healthy
people as those who don't have polio, then you can declare
almost everyone in Jamaica to be healthy," he said,
referencing the government statisticians who count at least
one hour per week of work to be "employed."

5. (U) He used unemployment to segue into the major theme of
his speech: job creation. Under this rubric, he touched on
the need for a revitalized agency to aggressively pursue
foreign investment, an emphasis on education and training
(specifically calling for an abolition of secondary school
fees), and a specific national development plan similar to
one developed by JLP eminence grise Edward Seaga in the late
1960s, which set specific targets for investment in each of
the 14 parishes in Jamaica.

6. (U) Being a tour d'horizon of Jamaica, however, the speech
was short on details of how his measures would be
implemented, and in some areas presented a danger of
contradiction. For example, Golding noted Jamaica's debt
burden and its pervasive crime, both of which stifle growth.
But in the same speech he called for eliminating hospital
fees for diagnostic services, abolishing secondary school
fees, and injecting increased funds into the police force.
Less clear was how he intended to fund such measures without
the fiscal deficit skyrocketing. His proposal to mechanize
the ailing sugar industry to make it more efficient, also,
conveniently neglected to address the issue of how such
technology would displace thousands of workers on rural
plantations.

7. (U) As a piece of pre-election rhetoric, however, Golding
achieved his objective. Repeating what is sure to be the
JLP's slogan on the campaign trail, "Is it time for a
change?", Golding thrilled supporters in the gallery of
Parliament.

-----------------------
Portia Rallies the Poor
-----------------------

8. (U) Prime Minister Portia Simpson Miller, by contrast,
presented a poorly prepared, reactive budget. As expected,
it has been characterized in the media as a "bag of goodies"
budget that was designed to woo voters with promises of
handouts and benefits, without offering any new tax measures
to pay for them. It lacked a cohesive framework and vision,
instead merely listing items that would be offered to the
electorate.

9. (U) Chief among these, and the one most closely

KINGSTON 00000705 002 OF 002


scrutinized in the days since her presentation, is the
abolition of all hospital fees for persons up to the age of
18. It became obvious, however, that her flagship
announcement had been hastily prepared after Golding's
speech. In a post-speech press conference, PSM was unable to
explain which fees would be exempted, or any other details of
the measure. The next day, the Permanent Secretary from the
Ministry of Health, Grace Allen-Young, admitted on national
radio that she had received the directive to abolish hospital
fees after Golding's speech.

10. (U) That was not PSM's only treat, however. She also
promised:

-- an increase in the National Housing Trust loan ceiling for
the poor;

-- the establishment of a new children's hospital in western
Jamaica;

-- a JMD 2 billion (USD 30 million) subsidy for housing for
sugar workers;

-- the extension of the "Highway 2000" toll road project;

-- the construction of a convention center in Montego Bay
that even Ministry of Finance officials conceded would lose
approximately USD 1 million per year; and,

-- the amendment of regulations that would allow more
retirees to qualify for a state pension.

There were no new tax regimes proposed.

11. (SBU) PSM's promises, if they materialize, will carry
enormous fiscal implications. A Ministry of Finance
official, Courtney Williams (protect), confirmed that few of
the promises ) most notably the hospital fees ) had been
factored into the actual budget, and thus there would have to
be a revision of the estimate of the fiscal deficit. He also
admitted that he was "expecting a call at any moment" from
International Monetary Fund officials, who had recently met
with him to discuss the country's deficit. He noted wryly
that he was not looking forward to that call.

12. (SBU) Nevertheless, PSM will have satisfied her core
supporters - the poor - with her flamboyant populist style
and lavish promises. She also made much use of the pronoun
"I" in an apparent attempt to separate herself from the
party, which has become increasingly fractured and embattled
(Post will report septel on PNP divisions). Media analysts
have noted that to win the election, PSM must make a clear
distinction between herself (new and different) and the party
(old, arrogant, and predictable).

-------
Comment
-------

13. (SBU) This year's budget debate can best be seen as the
two parties' early election manifestos. Both contained
promises of assistance and relief for the poor, whose votes
will be the key to victory. Sadly, however, the budgets bear
no resemblance to reality, which will be revealed after the
elections. It seems that, this year at least, Jamaica is
living up to its characterization by a former U.S.
Ambassador, who noted that "Jamaicans applaud announcements,
not implementation."
Johnson

© Scoop Media

 
 
 
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