FRENCH ECONOMIC COUNSELOR ADDRESSES COTE

C O N F I D E N T I A L ABIDJAN 001253

SIPDIS

SIPDIS

TREASURY FOR DAN PETERS
TUNIS FOR AFDB USED

E.O. 12958: DECL: 11/09/2016
TAGS: EFIN ECON IBRD IV PREL
SUBJECT: FRENCH ECONOMIC COUNSELOR ADDRESSES COTE
D'IVOIRE'S DEBT TO WORLD BANK

REF: ABIDJAN 1099

Classified By: DepPolEconChief EMassinga, Reasons 1.4 (b,d)


1. (SBU) Econ Chief met with French Economic and
Commercial Counselor Jean Dolle at the French Embassy on
November 8. Dolle began by discussing French economic
interests in Cote d'Ivoire, which, despite the political
crisis and its resultant effects on the economy, remain
strong. Economic activity generated by French companies and
their subsidiaries constitute, according to statistics
provided by Dolle, 30% of Cote d'Ivoire's GDP, and these
companies pay over 50% of all business taxes. Dolle said
that Cote d'Ivoire and France would likely maintain close
economic links, and that French companies, despite having to
"do what they have to do" to remain profitable in the Ivorian
environment, provide legal structures and norms to the
Ivorian economy in a way that Lebanese business enterprises
(which have grown in importance since the events of November
2004),for example, do not.


2. (C) In discussing the question of Cote d'Ivoire's
arrears to the World Bank, Dolle clearly indicated that
France is anxious to see reengagement with the IFIs and was
accordingly somewhat upbeat on Abidjan's progress on the
three-pronged conditionality required. Aside from movement
on the peace and security front (where Dolle said things were
moving in the right direction until August),Dolle said Cote
d'Ivoire made some progress reducing the "opacity" in both
oil/gas and cocoa accounts through the creation of
governmental committees designed to oversee the flow of
funds. Pressed, Dolle conceded that whether these committees
are actually effective performing their tasks is open to
question.


3. (C) Turning to the arrears, the final prong in IFI's
conditionality formula, Doll was initially optimistic about
the government'sprogress, touting its bond floatation in May
andJune. Pressed, he acknowledged that the funds raied are
not sufficient to repay the arrears, whichcontinue to mount,
and that increasingly the chaces that the Ivorian government
will actually pa the debt is remote. In discussing
alternatives Dolle freely stated that Paris is "flexible" onthe question of partial payments, willing to considr either
a "down payment" or accepting what has een raised so far and
negotiating a solution forthe rest. (Note: Econ Chief
reported Washingtonagencies' discomfort with such an
approach. End ote) Dolle did indicate doubts as to whether
the government would be able to keep itself from eventally
spending the money as it did in 2005, despie the fact that
it is ostensibly in an escrow acount at the BCEAO. (Note:
Econ Chief heard sepaately from a well-placed German
diplomat that Berlin would not be well disposed to accepting
partil payment of the arrears. However, EU solidarity ould
play a decisive role should the question coe before the WB's
Board. End Note)


4. (C) ddressing the question of the permanent location of
the African Development Bank, Dolle said Paris spports the
eventual return to Abidjan, and was uaware of any plans or
ideas to distribute the HQfunctions to different cities.

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