PROSPECTS FOR JAMAICA

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP85T00287R000100830001-1
• Release Decision: RIPPUB
• Original Classification: S
• Document Page Count: 10
• Document Creation Date: December 22, 2016
• Document Release Date: June 14, 2010
• Sequence Number: 1
• Publication Date: April 2, 1980
• Content Type: MEMO

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2 April 1980
Prospects For Jamaica
Key Judgments
--Prime Minister Michael Manley, digging in for an uphill re-
election effort, is yielding unprecedented influence to ruling-
party radicals. The influence of the leftists, however, is
reaching a peak at a time when the tenure of Manley's govern-
ment is likely to be short-lived.
--Manley will join the leftists in a campaign effort to make the
International Monetary Fund a scapegoat for seven years of
economic decline under his administration. We doubt, however,
that he believes this short-term political tactic will Zela
--Since his private exchange with US officials last November,
Manley has softened his public criticism of Washington tohilc
still trying to keep the support of local radicals, Cuba, and
a workable strategy of economic development for Jamaica.
the Soviet Union.
--Manley is personally more committed to fundamental social and
economic change than to Jamaica's two-party system. Nevertheless,
he has made concessions to the opposition Jamaica Labor Party
(JLP) by agreeing to electoral reform and to an early election
This memorandum was prepared by the Latin America
Division of the Office of Political na yszs a y
=the Office of Economic Research. It was requested by the Assistant
Secretary of State for Inter-American Affairs. Information in this
memorandum includes all reports received through 27 March. It was
coordinated with the Clandestine Service and with the working level of
the Bureau of Intelligence and Research, Department of State. Questions
and comments may be addressed to Chief, Latin America Divisio
PA-M-80-10151
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possibly by JuZy--over a year before the end of his consti-
tutional mandate.
--Trends still strongly favor the election this year of the
moderately inclined Jamaica Labor Party, but political and
economic stability on the island is rapidly deteriorating.
The loss of IMF support will intensify the island's already
severe social and economic problems.
--Jamaica's security forces now appear demoralized and disin-
clined to secure Manley in power. As social and ec(,nc)nmic
deterioration continues, however, the weakened police and
military establishments could collapse--even against a narro,,'iy
based armed effort to impose a radical government.
--We expect Cuba to increase its clandestine assistance to
Manley in the months ahead, and we believe that the Soviets
will maintain close contact with members of Manley's party and
government. We doubt, however, that either Communist country
is now considering any action to help Manley stay in power
unconstitutionally.
Prime Minister Michael Manley, digging in for a tough
re-election fight, is yielding unprecedented influence to
ruling-party radicals. At the same time, however, he has
been trying to avoid conflict with the United States.
Trends still strongly favor the election this year of the
moderately inclined trade union-based Jamaica Labor Party
(JLP), but political and economic stability on the island is
deteriorating rapidly.
Last weekend the radicals engineered a vote by the
executive council of the ruling People's National Party
(PNP) to discontinue negotiations with the International
Monetary Fund (IMF). Jamaica's failure to adhere to IMF
targets had caused its agreement with the Fund to come
unglued last December. Eric Bell, Manley's widely respected
Finance Minister, quit in protest on Sunday before the
Cabinet approved the break. Richard Fletcher, Bell's most
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able deputy and a relative of Manley's, also resigned.
Ironically, the Cabinet earlier this month had tentatively
approved IMF conditions that would allow Jamaica to continue
Manley, who supported Bell's talks with
the IMF, bowed to the radicals and appointed one of their
foremost spokesmen, Hugh Small, as Finance Minister--the
first time a radical has held the post in any Jamaican
government. The Prime Minister probably is skeptical of the
radicals' promised alternative development plan--he rejected
a previous program in favor of the IMF in 1977--but he will
join the leftists in a campaign effort to make the IMF a
scapegoat for seven years of economic decline under his
The influence of leftists--who now control the state-
owned media as well as the key ministries of finance and
national security--has reached a peak at a time when the
tenure of Manley's government is likely to be short-lived.
Strictly from a political standpoint, Manley's support for
the radicals will enable him to exploit their considerable
energy and organizational talents through the election and
will probably keep them united behind his leadership if the
PNP loses the election. The alternative for Manley--contin-
ued'support for the IMF and a break with the left--would not
have helped his re-election chances and probably would have
left him with an insufficient power base to serve as an
effective opposition leader.
Manley and the United States
Since his frank, private exchange with US officials
last November, Manley has softened his public criticism of
Washington while still trying to maintain the support of
local radicals and of both Cuba and the Soviet Union. He
has backed down from his increasingly anti-US position of
last year, first at the Nonaligned Summit in Havana and
later in a joint communique with Iraq. In the UN he has
supported the United States on major issues concerning the
hostages in Iran and the Soviet invasion of Afghanistan.
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population.
protection.
On the other hand, Manley has done little to restrain
the anti-US pronouncements of the minority radical factions
of his party and government, and the government-controlled
media have continued to take positions sympathetic to Cuba
and the Soviet Union. Jamaican leftists, on the whole, are
conducting business as usual, confident as ever of Manley's
leak to the US press of his meeting with US officials.
cally praised the United States as a positive influence on
modern civilization. Departing from past behavior, he has
made no public effort to exploit the personally embarrassin
In a Miami television interview last December, Manley
stated that he does not believe that the CIA is trying to
destabilize his government--the first time he has exonerated
his favorite "whipping boy"--and later in Jamaica he dramati-
Economic Policy
Manley's performance on the economy also had been mixed
before he opted to side with the radicals. His most important
actions, however, had favored political moderates and the
restoration of Jamaica's three-year agreement with the IMF.
He had been openly critical of the stiff, IMF-required
austerity and had believed that the existing agreement would
impose excessive social and political strains without promoting
real economic growth. Nonetheless, he had told the radicals
that, despite his respect for their political position, he
backed a new IMF agreement. To break with the Fund, he
implied, would raise false expectations among a hard-pressed
decline this year.
In the end, Manley joined the leftist campaign to
exploit growing disenchantment with the IMF across Jamaica's
political spectrum. Even moderates--including the JLP
leadership--apparently had backed Manley's efforts to negoti-
ate easier terms. They generally agree with Manley's earlier
warning to the radicals, however, that the country has no
reasonable alternative to the IMF to stave off further economic
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strategy of economic development for Jamaica.
term political tactic will lead to a workable long-term
In an election year, Manley is trying to mobilize the
leftist, youth-oriented organization that helped him in past
elections and to distance himself from the policies that
have nearly ruined Jamaica's economy since he took office in
1972. We doubt, however, that he believes that his short-
The IMF
The IMF had stipulated that Jamaica slash public spend-
ing and repay foreign debts now in arrears to continue
access to IMF funds. Even then, with optimistic assumptions
about foreign aid inflows, Jamaica-whose real output dropped
1 percent in 1979, the seventh consecutive year of decline--
would experience no real economic growth in 1980. Widespread
layoffs, increased shortages, and probably large-scale
Jamaica's financial resources are now inadequate to
cover the country's needs, and prospects for sufficient
outside assistance are poor. The country has yet to receive
any installment of the $50 million loan promised from Libya
over two months ago. Because of its break with the IMF,
moreover, Jamaica could lose significant aid from Western
official donors, including Canada which tied their funds to
Kingston's continued adherence to the IMF program.
billion--is held in the United States.
As a result, Jamaica already has begun to seek a massive
rescheduling of its foreign debt to help ease the country's
financial squeeze. Officials have been considering this
request for some time--a probable inevitability, even with
a new IMF agreement. Kingston is asking its major commercial
creditors for a five-year deferment on the $186 million in
loans due for repayment by 1985. If the bankers would request
immediate repayment--most of the loans have recall provisions
tied to IMF compliance--Jamaica would not be able to pay its
debts. Much of Jamaica's external debt--which exceeds $1
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Democracy
Manley is personally more committed to fundamental
social and economic change than to Jamaica's traditional two-
party system. He has made no attempt in recent months to
alter the open support for authoritarian socialist states that
Nonetheless, the Prime Minister made major concessions
to his majority-based opposition when he agreed to electoral
reforms and to an early election--a year before the end of
his constitutional mandate. This action has improved pros-
pects for democracy on the island and has lessened the
has won him admiration among local and foreign leftists.
Bell's resignation and the PNP's rejection of the IMF
likely will prompt demands for immediate elections among a
moderate majority that includes the private sector, powerful
unions, and the independent press. We believe that Manley,
recognizing his decreasing options, is probably looking
beyond an election defeat to an early return to power consti-
tutionally--in the manner of his friend, Canadian Prime
Minister Trudeau. Furthermore, we believe that the break
with the IMF probably will force him to advance the date of
importance of Manley's static personal convictions.
the promised election.
The Security Forces
Jamaica's 2,000-member Army and to a less extent its
6,000-member police force still are influenced by a tradition
of political neutrality and by personal loyalties to opposing
political parties. The security forces, like most Jamaican
institutions, are "hostage" to the country's entrenched two-
party system. Although Manley has tried to politicize them,
the JLP has never lost reliable contacts who have helped it
expose the Prime Minister's efforts.
Nevertheless, both the police and military are being
weakened by budget cuts and by increasingly high attrition
resulting from Jamaica's economic deterioration. We suspect
that anti-government sentiment among the members of the
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security forces is strong and that most would be wary of
any attempt by Manley--including the imposition of a State
of Emergency as occurred before the last election in 1976--
to use them to secure his political position. If the
economic decline over the next several months leads to the
actual breakdown of law and order, however, we would expect
the security forces to intervene on behalf of the constitu-
tional government--a situation that Manley might be able to
exploit to political advantage.
Moreover, while the security forces as a whole appear
to pose no threat to Jamaican democracy, the potential
exists for the left--with nearly guaranteed cooperation from
Manley's opportunistic Minister of National Security, Dudley
Thompson--to radicalize a small core of officers and men who
might eventually prevail against a disorganized and ill-
equipped ma'orit in an atmos here of social and economic
disorder.
A possibility also exists that independent radicals, led
by prominent Marxist Trevor Munroe, might eventually attempt
to,seize control from Manley. In September 1978, the Jamaican
police raided and destroyed several guerrilla camps linked with
Munroe in the hills outside Kingston. ?At this time, however,
we would give such a coup effort only a slim chance of succeed-
ing.
Cuba and the Soviet Union
Manley is maintaining close and friendly relations with
Cuba and the Soviet Union, and he is allowing their more
vociferous local advocates to continue propagandizing on
their behalf. We expect Cuba to increase its clandestine
assistance to Manley in the months ahead, and we believe
that the Soviets will stay in close contact with members of
the Prime Minister's party and government.
Nonetheless, the investment necessary to prop up Manley
is becoming increasingly costly for any outside force. We
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doubt that either Cuba or the Soviet Union now is considering
any action to help Manley stay in power unconstitutionally--
although we expect both countries to provide increased
propaganda and intelligence assistance to the Prime Minister.
Moreover, Manley does not appear to be following a long-term
political strategy. His recent actions confirm his long-
standing tendency to employ short-term tactics in an increas-
ingly difficult effort to hold together his crumbling party
Prospects
The JLP is strongly favored to defeat Manley in the
election this year. This would greatly improve the prospects
for a new IMF agreement. A remote chance exists, however,
that the combination of the unprecedented radical control of
the ruling party and a growing potential both for social
unrest and violent political conflict could upset the
constitutional process. As chances for major social and
political. violence increase, prospects for an orderly
In the event of major unrest, Manley, spurred by his
now dominant radical advisers, could attempt to impose a
State of Emergency that would ostensibly preserve law and
order but also would restrict the JLP's campaign efforts and
entrench the Prime minister prior to the election. In this
scenario, the government or independent radicals might even
transfer of power to the JLP will decline.
We believe, however, that the union-based JLP is now
powerful enough to block the radicals or Manley himself, even
if he were to impose a State of Emergency. Radical hopes
for the near future, therefore, appear to depend on a
collapse of law and order that would break the JLP's disci-
plined control of the anti-government majority and would
justify intervention by the local security forces--and
possibly by "friendly" foreign governments--to preserve the
government of the day. For now, this is a worst-case scenario
seek large-scale Cuban security assistance.
that is unlikely to unfold.
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Any economic palliatives contemplated by the Manley
government to replace the IMF accord thus would not succeed.
Jamaicans can expect an erosion in their living standards
that would be even deeper than that contemplated under an
IMF program. Although three years of economic deterioration
under the IMF program probably have made Manley more suscep-
tible to radical solutions, he might well revert to the IMF
for help if he remains in power. In the past, the Prime
Minister has.rejected radical economic proposals when he
The odds are strongly against Manley seeking another
bauxite tax increase or authorizing other pressures against
US bauxite interests in the next few months. Manley does
not want to jeopardize crucial foreign exchange earnings
from this sector. He may ask, however, for some prepayment
of bauxite levies, a practice used by the aluminum companies
during past foreign exchange crunches. The companies have
more leverage in shifting production to other countries than
was the case several years ago, particularly in view of the
slowdown in the US economy and of the development of bauxite
sources in Australia and Brazil. Moreover, the Communist
countries have not indicated that they will provide substantial
aid to Jamaica. These nations also would be of little help
in,providing an alternative bauxite market because most of
their supplies are obtained under long-term contracts with
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