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Jamaica Seeks $1 Billion to Rid Island of Drug Gangs (Update1)
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By Blake Schmidt and Eric Sabo
June 3 (Bloomberg) -- Jamaica is seeking $1 billion in loans and grants to rid the country of “cancerous” drug gangs that have taken over poor neighborhoods on the Caribbean island and hurt economic growth, Finance Minister Audley Shaw said.
Government officials met May 31 with representatives from the World Bank, Inter-American Development Bank, United Nations, the U.S. and European countries to seek funds to expand the police force and rebuild communities where drug lords have become de-facto governors, Shaw said today in a telephone interview. The violence can’t be allowed to continue, he said.
“It saps the energy of the country, it saps all productive capacity,” he said from Kingston. “Our investment partners have recognized that this government is demonstrating it knows how to deal with the crime problem.”
Prime Minister Bruce Golding declared a state of emergency May 23 to contain gang violence related to efforts to extradite an accused drug lord to the U.S., which Shaw said was the beginning of a broader campaign against gangs that control parts of the capital. At least 74 people have been killed during the hunt for Christopher “Dudus” Coke, who remains at large.
Shaw emphasized that most of the violence has been in Kingston, miles away from the beaches, resorts and golf courses popular with tourists on the country’s north shore. Tourism accounts for about 10 percent of gross domestic product and half of foreign exchange earnings, according to the Jamaican Tourist Board.
“What we want to do is make sure we deal with this cancerous problem,” Shaw said.
Currency, Bonds
Jamaica’s dollar gained 0.2 percent to 88.0750 per U.S. dollar today. The extra yield investors demand to own Jamaican government bonds instead of U.S. Treasuries fell 5 basis points to 5.14 percentage points, according to JPMorgan Chase & Co.
Tax revenue in May was about $226 million, 4 percent less than the government had forecast as tourists canceled trips, Shaw said. The crisis may increase the budget deficit, which is projected to reach 6.5 percent of GDP this year, should revenue from foreign visitors fall, Shaw said.
The industry may lose $350 million this year because of the violent clashes related to Coke’s extradition, Tourism Minister Edmund Bartlett said in a statement June 1.
Shaw said the government is working to trim its budget by divesting. Jamaica has sold two of the country’s five sugar plants locally and may sell the remaining three to Chinese investors. The government sold Air Jamaica to Caribbean Airlines last month and plans to sell its stake in a local unit of Alcoa to Chinese investors in coming months.
IMF Agreement
The International Monetary Fund in February approved a 27- month, $1.27 billion stand-by credit agreement to help the Caribbean country of 2.8 million people recover from the global financial crisis, which depressed prices for bauxite and aluminum exports.
Jamaica swapped $7.8 billion worth of local bonds for securities with longer maturities and lower interest rates in February. Jamaica’s credit rating was raised by Moody’s Investors Service in March after the debt exchange, which restructured 91 percent of local bonds.
Shaw said he has no immediate plans to revise down the government’s projection of 0.5 percent to 1 percent GDP growth for 2010. Inflation will stay between 7.5 percent and 9 percent, he said.
Jamaican ombudsmen are probing allegations by residents that police burned or buried bodies to hide evidence after Amnesty International called for a probe into alleged extrajudicial killings, public defender Earl Witter has said.
Coke is accused by the U.S. of leading an international criminal group known as the “Shower Posse,” with members in Jamaica and the U.S. He is charged with conspiracy to distribute marijuana and cocaine and conspiracy to illegally traffic in firearms, according to the office of the New York Attorney General. His lawyers have denied any wrongdoing by Coke.
To contact the reporter on this story: Blake Schmidt in Granada, Nicaragua at bschmidt16@bloomberg.net; Eric Sabo in Panama City at esabo1@bloomberg.net
Share Business ExchangeTwitterFacebook| Email | Print | A A A
By Blake Schmidt and Eric Sabo
June 3 (Bloomberg) -- Jamaica is seeking $1 billion in loans and grants to rid the country of “cancerous” drug gangs that have taken over poor neighborhoods on the Caribbean island and hurt economic growth, Finance Minister Audley Shaw said.
Government officials met May 31 with representatives from the World Bank, Inter-American Development Bank, United Nations, the U.S. and European countries to seek funds to expand the police force and rebuild communities where drug lords have become de-facto governors, Shaw said today in a telephone interview. The violence can’t be allowed to continue, he said.
“It saps the energy of the country, it saps all productive capacity,” he said from Kingston. “Our investment partners have recognized that this government is demonstrating it knows how to deal with the crime problem.”
Prime Minister Bruce Golding declared a state of emergency May 23 to contain gang violence related to efforts to extradite an accused drug lord to the U.S., which Shaw said was the beginning of a broader campaign against gangs that control parts of the capital. At least 74 people have been killed during the hunt for Christopher “Dudus” Coke, who remains at large.
Shaw emphasized that most of the violence has been in Kingston, miles away from the beaches, resorts and golf courses popular with tourists on the country’s north shore. Tourism accounts for about 10 percent of gross domestic product and half of foreign exchange earnings, according to the Jamaican Tourist Board.
“What we want to do is make sure we deal with this cancerous problem,” Shaw said.
Currency, Bonds
Jamaica’s dollar gained 0.2 percent to 88.0750 per U.S. dollar today. The extra yield investors demand to own Jamaican government bonds instead of U.S. Treasuries fell 5 basis points to 5.14 percentage points, according to JPMorgan Chase & Co.
Tax revenue in May was about $226 million, 4 percent less than the government had forecast as tourists canceled trips, Shaw said. The crisis may increase the budget deficit, which is projected to reach 6.5 percent of GDP this year, should revenue from foreign visitors fall, Shaw said.
The industry may lose $350 million this year because of the violent clashes related to Coke’s extradition, Tourism Minister Edmund Bartlett said in a statement June 1.
Shaw said the government is working to trim its budget by divesting. Jamaica has sold two of the country’s five sugar plants locally and may sell the remaining three to Chinese investors. The government sold Air Jamaica to Caribbean Airlines last month and plans to sell its stake in a local unit of Alcoa to Chinese investors in coming months.
IMF Agreement
The International Monetary Fund in February approved a 27- month, $1.27 billion stand-by credit agreement to help the Caribbean country of 2.8 million people recover from the global financial crisis, which depressed prices for bauxite and aluminum exports.
Jamaica swapped $7.8 billion worth of local bonds for securities with longer maturities and lower interest rates in February. Jamaica’s credit rating was raised by Moody’s Investors Service in March after the debt exchange, which restructured 91 percent of local bonds.
Shaw said he has no immediate plans to revise down the government’s projection of 0.5 percent to 1 percent GDP growth for 2010. Inflation will stay between 7.5 percent and 9 percent, he said.
Jamaican ombudsmen are probing allegations by residents that police burned or buried bodies to hide evidence after Amnesty International called for a probe into alleged extrajudicial killings, public defender Earl Witter has said.
Coke is accused by the U.S. of leading an international criminal group known as the “Shower Posse,” with members in Jamaica and the U.S. He is charged with conspiracy to distribute marijuana and cocaine and conspiracy to illegally traffic in firearms, according to the office of the New York Attorney General. His lawyers have denied any wrongdoing by Coke.
To contact the reporter on this story: Blake Schmidt in Granada, Nicaragua at bschmidt16@bloomberg.net; Eric Sabo in Panama City at esabo1@bloomberg.net
“Our investment partners have recognized that this government is demonstrating it knows how to deal with the crime problem.”
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