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MANLEY'S SUCCESSOR WILL INHERIT UNPOPULAR AUSTERITY MEASURES

The successor to ailing Prime Minister Michael Manley will inherit austerity policies that have eroded once-enthusiastic support for his governing People's National Party.

Manley insists that his program of deregulation, public divestiture and less state spending will not change, despite public unhappiness over higher prices for everything from food and gasoline to kerosene used for cooking.Longtime rival Edward Seaga, the conservative leader of the Jamaica Labor Party, hopes the transition government will provide an opening for the opposition. But he doubts general elections will be called soon. A new ballot is not constitutionally required until 1994.

Manley announced his retirement for health reasons a week ago. His office announced on Saturday that he will visit President Bush in Washington on Tuesday and Wednesday ahead of his formal resignation.

The odds-on favorite to replace him is a former deputy prime minister, P.J. Patterson.

A 57-year-old London-trained lawyer, Patterson is believed to enjoy enough support within the party to overcome allegations of impropriety before he was dropped from Manley's Cabinet in January. Growing public disenchantment with economic policy contributed to the Cabinet shake-up.

Also campaigning for the post is Portia Simpson, the 49-year-old minister of labor, welfare and sport.

Selecting a new leader for the Caribbean's third-largest nation and its 2.4 million people will be done at a party meeting in Kingston on March 28, when Manley plans to formally step down.

His retirement after more than 40 years in politics will mark an end to a family dynasty. His father, Norman Manley, a father of Jamaican independence, founded the People's National Party in 1938 and passed the party reins to his son in 1969.

During a first stint as prime minister from 1972 to 1980, Manley was a socialist firebrand who alienated the United States and foreign investors by nationalizing industries and establishing close ties with communist Cuba.

But when he took office again in 1989, soundly defeating Seaga, Manley took a new tack and implemented his austerity program.

Public dissatisfaction has grown as inflation has persisted - running more than 80 percent a year. The Jamaican dollar has dropped in value from 18 U.S. cents when Manley took office to 4.5 cents today.

But Manley says Jamaica will not change course.

"The succession issue will have no effect on the model, the path or the course," he said.

Manley met Tuesday with Patterson and Simpson, who emerged holding hands as a symbol of party unity despite their competition.

In January, Patterson was replaced as deputy prime minister and finance minister amid allegations he approved a waiver of $1.47 million in duties on unleaded gasoline for Shell Oil Co. The head of Shell in Jamaica, Howard Hamilton, is a member of the party's governing board.

Patterson contends there was nothing illegal or improper about his action, which he said was in the national interest. He has pledged, however, not to serve as his own finance minister if he becomes prime minister.

Seaga, meanwhile, has put his Jamaica Labor Party on "election alert."

The party suggests that Manley's replacement "may wish to call a general election on the pretext of seeking a mandate from the people."

But it also suggests that a tight state budget expected for the fiscal year starting in April is going to be so painful that Manley's party may not want to face the voters.