JAMAICA: UNDER PRIME MINISTER SEAGA

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP85T00287R000102650001-9
• Release Decision: RIPPUB
• Original Classification: S
• Document Page Count: 4
• Document Creation Date: December 22, 2016
• Document Release Date: July 21, 2010
• Sequence Number: 1
• Publication Date: November 20, 1980
• Content Type: MEMO

Sanitized Copy Approved for Release 2010/07/21 : CIA-RDP85T00287R000102650001-9
CENTRAL INTELLIGENCE AGENCY
NATIONAL FOREIGN ASSESSMENT CENTER
MEMORANDUM
Jamaica: Under Prime Minister Seaga
Summary
z
Prime Minister Edward Seaga, whose Jamaica Labor Party just won its
largest victory since the party was founded in 1943, is a strong nationalist
who enjoys the trust of the private sector. The party captured 52 of 60 seats
in ParZicbnent and won a clear mandate from a broad spectrum of Jamaican
society, including organized labor, small farmers, the professional and busi-
ness classes, and the security forces. Seaga's financially strapped govern-
ment, however, will have difficulty meeting unusually high popular expectations
and will face a long uphill struggle in attracting the assistance that appears
essential for economic reconstruction and the restoration of political stabiZ-
ity.
Seaga's Background -
The 50-year-old Seaga--Boston-born, Harvard-educated, and of
Lebanese extraction--earned respect as an economic planner and
manager from his service as finance minister during the 1960s.
In contrast to the charisma of former Prime Minister Manley,
Seaga is a more private and reserved individual. Nevertheless,
the new Prime Minister's strongest base of support is in one of
the poorest black constituencies on the island and he commands a
broad and loyal following. Married to a former Miss Jamaica,
Seaga has been an enthusiastic promoter of Jamaica's African
cultural heritage. He has an adopted Rastafarian son.
This memorandum was written byl Latin America Division, Office
of Political Analysis, in response to a request from Vice President-elect
Bush. It was coordinated with the Office of Economic Research, the Office of
Central Reference, and the National intelligence Officer for Latin America.
Comments and questions are welcome and should be directed to Chief, Latin
America Division, OPA
Duplicate of C05514164:
DIF
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Seaga has a conservative image today, but he led the party's
left wing during the early 1960s. Although he was never a radical,
he prodded conservative colleagues toward nationalistic economic
policies then considered "leftist." As a government minister, he
pushed through measures to tax the upper income brackets heavily,
backed the country's first program to redistribute unused agri-
cultural lands, and advocated increased levies on US and Canadian
bauxite companies. Seaga, who is assuming power with more experi-
ence in government than any previous Jamaican Prime Minister, has
altered many of his earlier socialist views. His cabinet,
although partisan, is drawn largely from a core of technocrats
with parliamentary experience and good managerial potential. 25X1
Seaga's Problems and Prospects
Former Prime Minister Manley's economic policies have been
so discredited that Seaga is likely to have wide latitude initially
in taking a fresh approach. Although Manley's mismanagement was
responsible for much of the decline, many of the root causes
predate his administration or derive from external economic
influences largely beyond Jamaica's control--such as skyrocketing
oil prices. At the insistence of radicals in his party, Manley
terminated an aid program by the International Monetary Fund in
March 1980, which had required unpopular austerity measures. 25X1
Faced with an empty treasury, the Seaga government is moving
quickly to avert further economic and political deterioration.
Seaga's election has improved prospects for Jamaica's recovery
across the board, but success will depend heavily on large-scale
external assistance. The short-term outlook for meeting essen-
tial needs appears favorable, although the government may be
forced further into arrears on its foreign debt--now totalling
about $1.4 billion. Seaga recognizes that a new IMF arrangement
is the first critical step in securing additional aid. 25X1
Talks between Jamaican and IMF officials this week in
Washington will concentrate on a three-year economic recovery
package that would allow Jamaica to draw about $190 million
annually from the IMF and to benefit from World Bank assistance
of as much as $60 million in the coming year. Jamaica also has
negotiated a $100 million credit from a consortium of US and
Canadian commercial banks that is tied-to the IMF negotiations.
The Fund hopes that Washington can be persuaded to contribute $50
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million to $60 million in quickly disbursed aid in the next
year. Seaga estimates that Jamaica will need about $250 million
in additional aid in 1981.
The government, particularly concerned about shortfalls over
the next two months, appears to have a good chance of bridging
the gap. Alternative sources provide Seaga a buffer. He expects
to receive $48 million in credits from the Venezuelan-Mexican oil
supply arrangement almost immediately. He also has available a
$25 million loan from Iraq, which he intends to keep in reserve
unless Caracas fails to honor its pledges. The Prime Minister
hopes that bilateral aid from Western countries will enable him
to save the Iraqi funds and to avoid requesting early payment of
Jamaica's levy--about $55 million due on 15 January--on North
American bauxite companies.
In talks with the IMF, Seaga will try hard to ease some of
the austerity requirements that weakened Manley's political
position. But like Manley before him, Seaga will have to count
on bilateral and multilateral aid from largely Western sources
for a desperately needed bailout.
Finally, Seaga expects US assistance in upgrading the ill-
equipped and overworked security forces to enable the government
to cope with street violence and possible radical-inspired
terrorism.
The Longer Term
Seaga's success in convincing Washington and other Western
donors to increase assistance both in the near and long term will
be important for the stability of his government. Despite their
current euphoria, Seaga's supporters will give him only a short
"honeymoon;" they have high expectations of "deliverance" from
the eight years of negative economic growth under the Manley
government. His first crisis will be precipitated by powerful
unions resisting further cuts in real wages under a new IMF
program. Any strains in Seaga's government eventually will
benefit the pro-Cuban left, which is certain to regain its poli-
tical influence if Seaga's moderate course does not lead visibly
to economic improvement.
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SUBJECT: Jamaica: Under Prime Minister Seaga
Orig. - Vice President-elect, Bush
1 - OCR
1 - NIO/LA
1 - D/NFAC
1 - NFAC/Registry
1 - D/OPA
1 - Prod. Staff
4 - OCO/IDCB/CB
1 - OPA/LA
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