Congo/B: 2005 AGOA Report

UNCLAS SECTION 01 OF 02 KINSHASA 000322

SIPDIS

DEPT FOR AF/EPS AND AF/C
PARIS FOR AFRICA WATCHER AND ARS

FROM BRAZZAVILLE EMBASSY OFFICE

E.O.12958: N/A
TAGS: ETRD AGOA KPAO CF
SUBJECT: Congo/B: 2005 AGOA Report

Ref: State 024616


1. The Republic of Congo (Congo/B) leadership is committed
to meeting the eligibility requirements of AGOA. See para 3
for Government and Post public diplomacy programs


2. Post's 2005 responses are kept to template outlined in
reftel:

A) Market Economy/Economic Reform/Elimination of barriers to
U.S/ Trade: The Republic of Congo continues to transition
to a full market economy. A mixed economy is the best
description of the current environment with ongoing efforts
to privatized government-owned businesses and operations
such as the national railway. Overall, there are signs of
positive economic and commercial growth as developers and
investors gain more confidence that the country's post-
conflict environment is here to stay. The last government-
owned bank was privatized in mid 2004 as part of Congo/B's
efforts not only to meet IMF measurements but to advance its
desire to have a market economy. However, the
commercialization of the country's moribund and inefficient
railroad remains a challenge. Several potential investors
over the last year who have shown an interest have later
pulled out because of the large capital needed to repair and
run the system. On the other hand, the country surprised
most in the international community with making solid
strides to meet and qualify for an IMF Poverty Reduction
Growth Facility (PRFG) in December 2004, with improved
governance at some levels, oil transparency and better
budgeting and accounting practices. Although this was a
major positive economic development, the situation will need
continued monitoring and oversight during 2005 to ensure
that measures put in place for the PRGF remain permanent as
the ROC's moves toward a HIPIC decision point later in the
year. For the moment all is on track to date with Congo/B
meeting all its arrears payments to all multilateral and
bilateral creditors as well as domestic salary payments.
Barriers to U.S. Trade are being actively addressed and the
recently passed budget (February 23, 2005) specifically
responds to a request by U.S. company Seaboard to ensure
that pricing by other flour importers (most Lebanese) do not
disadvantage them. In addition in April 2004 Murphy Oil
received favorable consideration for two oil concessions
that are now operational and recently had a positive oil
find. The government remains open and responsive to issues
raised by US companies and the Embassy.

B) Political Pluralism/Rule of Law/Anti-Corruption: The
current President, Denis Sassou Ngeusso, was elected in 2002
in elections deemed not "to contradict the will of the
people" by independent monitors. The Presidents' Congolese
Workers' Party (PCT) also won the legislative elections and
control 121 seats in the 137-seat National Assembly.
Opposition parties, although they exist and are represented
in the assembly, lack political credibility of their own
making. Further they tend to represent personalities instead
of being constituency based with real political platforms.
The judiciary is overburdened and subject to corruption and
outside influence by anyone. Over the last few years, there
has not been any evidence of direct interference by the
Executive Branch, however, there has been by other
commercial and/or private forces. The country has put in
place two new courts - the Constitutional Court and High
Court - as well as a Human Rights Commission to assist with
addressing judicial branch issues and human rights
complaints. The Government has a strong stated anti-
corruption policy and laws, which need to be further
enforced. The President also highlights this issue in almost
every single public speech. In mid-October 2004, additional
anti-corruption laws were promulgated and enough initial
progress was made in this area in order for the country to
receive approval for an IMF PRGF program in December 2004.
However, transparency is still a key problem area which
needs continued monitoring by the international community. A
reconfigured and enlarged cabinet was announced on January
7, whose performance will need to be reviewed and analyzed
throughout 2005. It was expected that a newer, leaner
cabinet would be put in place, but this did not happen.

C) Poverty Reduction: The ROC has an inter-ministerial
poverty reduction committee and a interim poverty reduction
strategy plan (IPRSP)- an exercise done in conjunction with
moving forward on IMF measures and a World Bank program. The
IPRSP still needs some work but it primarily focuses on
infrastructure, health, and educational development. NGOs
and civil society contributed to the IPRSP. In addition, the
Government is expecting that if it is successful in reaching
the HIPIC decision point later this year, more resources can
be devoted to these areas. In early January 2005 an inter-
ministerial committee and technical working group under the
leadership of the Ministry of Plan was put in place to
ensure effective PRGF implementation. The first IMF review
under the PRGF is schedule for early March.

D) Human Rights/Labor/Child Labor: As per Post's 2004 Human
Rights submission, the Government's human rights record had
some significant improvements given the post-conflict status
of the country, but overall it remained poor and needs
improvement. At times, some uncontrolled elements of the
security forces reportedly were responsible for beatings,
physical abuse of detainees, rapes, arbitrary arrest and
detention. Also unidentified armed bandits, many former
Ninjas, were also responsible for harassment in some areas
of the Pool region. There were no reports, however, of
political killings by the Government or its agents, and the
country's Constitution does prohibit arbitrary arrest and
detention.

On labor issues, the ROC does protect international
recognized worker's rights, including the right of
association, to organize, strike and bargain collectively.
There are Constitutional prohibitions on forced or
compulsory labor and for the most part the Government
respected this in practice. The Government was committed to
protecting the rights and welfare of children. The
Constitution provides children equal protection under the
law. Education was compulsory and tuition free until the
age of 16. Children under age 16 are not permitted to work;
however, in practice, this law generally was not enforced
everywhere, particularly in rural areas and in the informal
sector in cities. In rural areas, children worked with their
families on farms or in small businesses in the informal
sector without government monitoring or supervision. The
Ministry of Labor, which is responsible for enforcing child
labor laws, concentrated its limited resources on the formal
wage sector where its efforts generally were effective.
Discrimination still strongly affects pygmies, particularly
regarding employment. Congo ratified ILO Convention 182 in
April 2002.


3. Other AGOA outreach activities: The Government through
the Ministry of Commerce has established an AGOA working
group that is actively addressing ways to rebuild pre-civil
war industries such as coffee and coco and niche herb items
for export purposes. They are also working to put in place a
visa regime for textile. Embassy public diplomacy and
outreach activities this reporting period include co-
sponsoring with the Ministry of Commerce a 3-day AGOA
seminar with the private sector to further define key
Congolese sectors which could take advantage of AGOA. The
Mission, as well as the Commerce Ministry, later worked
together to secure a $225,000 grant to design a "National
AGOA Strategy" and assist companies -- specifically in the
coffee and coco sectors -- move forward on AGOA. Strategy
efforts are ongoing. The Ministry of Commerce introduced
favorable laws to assist with AGOA programs and strategies
during the last parliamentary session. The Ministry sees
AGOA as a key development tool. Post worked with ARS to
have the AGOA product list translated into French. This list
has now been distributed to the Congolese private sector via
the Ministry of Commerce.


4. Brazzaville Embassy Office - Sanders
MEECE