US POLICY OPTIONS IN JAMAICA

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP85M00363R000200230005-4
• Release Decision: RIPPUB
• Original Classification: S
• Document Page Count: 3
• Document Creation Date: December 21, 2016
• Document Release Date: July 2, 2008
• Sequence Number: 5
• Publication Date: September 21, 1983
• Content Type: MEMO

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Approved For Release 2008/07/02 : CIA-RDP85M00363R000200230005-4
21 September 1983
MEMORANDUM FOR: Director of Central Intelligence
Director of African and Latin American Analysis
SUBJECT: US Policy Options in Jamaica
1. The Seaga government faces tough economic challenges as
the 1985 election nears. Chronic foreign exchange shortages have
already necessitated a series of tough austerity measures that
will have serious side effects. Public expenditure cuts will
help push official unemployment over 30 percent this year.
Recent import cuts and the defacto devaluation of the Jamaican
dollar since January will slash private sector profits and boost
consumer prices. A formal devaluation of the official exchange
rate, advocated by the IMF, probably would dampen public
confidence in the Seaga administration further and provide fuel
for opposition rhetoric, in addition to further stimulating
inflation. Without signs of a turnaround in the economy by the
election, we judge that Seaga may well go down to defeat.
2. Balance of payments su ort: Jamaica needs significant
funding from foreign and domestic urces to cover its financial
gap--absent successful debt rescheduling, we project the
country's capital requirement will be between $600 and $700
million in each of the next two years. Direct U.S. fundin would
h 1 qe constrai s an free government
resources for job-generating public works programs to defuse the
growing unemployment crisis. Such assistance would be
particularly meaningful after the current IMF program ends next
March.
3. ,,Strategic Stockpile: Further U.S. purchases of ba ite
for the jccile would increase Jamaican governm revenues
-
These resources could-not
only be used for pu is w ojects,
Approved For Release 2008/07/02 : CIA-RDP85M00363R000200230005-4
 Approved For Release 2008/07/02 : CIA-RDP85M00363R000200230005-4
but would increase the likelihood of success for the Prime
Minister's ambitious agricultural development program, Agro 21.
4. Ex anded Trade Credit: Greater support from the Export-
Import Bank to increase quic v t - g ca tal
goods and raw materials to Jamaican producers. Such assistance
'Would enable Jamaican en repreneurs to take maximum advantage of
the opportunities presented by the C.B.I. and also would
contribute significantly to alleviating the unemployment problem.
5. Encouragement of support by the Multilateral
Institutions: The U.S. should work with t ecially to
'dontinue even if, as we expect, Jamaica may be una a to
meet its quarterly targets at the end of September and December
1983. On-going support by the IMF and like institutions is
essential to continued availability to Jamaica of crucial
commercial credit.
6. pport to the Security Forces: Budget stringencies
have cut heavily into funds for muc -ne ed upgrading of
Jamaica's constabulary and defense forces, which have yet to
recover from the serious underfunding of the Manley years.
Direct assistance with U.S. equipment and training would prevent
further deterioration, improve capability, and raise morale.
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SECRET
Approved For Release 2008/07/02 : CIA-RDP85M00363R000200230005-4
 Approved For Release 2008/07/02 : CIA-RDP85M00363R000200230005-4
SUBJECT: US Policy Options in Jamaica
Distribution:
Orig. $ 1 -- DCI
1 -- DDCI
1 -- DDI
1 -- D/ALA
7 -- ALA/WD
5 -- ALA/MCD/CC
DDI/ALA/MCD/CC~
(21 September 1983)
Approved For Release 2008/07/02 : CIA-RDP85M00363R000200230005-4