AF/W DIRECTOR CARTER EXAMINES SENEGAL'S POLITICAL

C O N F I D E N T I A L SECTION 01 OF 02 DAKAR 000939

SIPDIS

SIPDIS

STATE FOR AF/W, G/TIP, AF/EPS, INR/AA AND DRL/PHD
USDOC FOR 4510/OA/PMICHELINI/AROBINSON-MORGAN/KBOYD
USDOC FOR 3131/CS/ANESA/OIO/BORR/GLITMAN/MSTAUNTON
PARIS FOR POL - D'ELIA

E.O. 12958: DECL: 04/18/2011
TAGS: ECON EINV ENRG PGOV PHUM KMCA SG
SUBJECT: AF/W DIRECTOR CARTER EXAMINES SENEGAL'S POLITICAL
AND ECONOMIC SITUATION

REF: A. STATE 041203 (NOTAL)


B. DAKAR 0682 (NOTAL)

DAKAR 00000939 001.2 OF 002


Classified By: DCM Robert P. Jackson for reasons 1.4(b) and (d).


1. (C) SUMMARY: Director of West African Affairs Phillip
Carter visited Dakar, March 26 through 29, to assess the
political and economic situation. He had informative
exchanges with a variety of GOS officials, Islamic leaders
and opposition politicians. Carter praised recent steps
taken by the GOS to improve communications and transparency
with the Millennium Challenge Corporation (MCC) but cautioned
the GOS not to let up. Carter noted that poverty and
economic conditions could affect the 2007 elections.
Senegalese officials highlighted efforts to combat
trafficking, attract investment and reduce poverty. END
SUMMARY.

ONE WORLD FOR ALL PEOPLE
--------------

2. (C) The Islamic Institute of Dakar gave Carter a warm
welcome in its VIP room. The Director General of the
Institute extolled efforts the U.S. has made since the
terrorist attacks of 9/11 to better understand Islam and help
Muslims better understand Americans. He said Senegalese
remain a predominantly moderate, tolerant people. One member
of the Institute told Carter that Islam prescribes "one world
for all people." Another said, however, that the Institute
is concerned about the problem of poverty and realizes
Senegal must do more than just teach children the Koran.
According to him, if Senegal is not able to reverse the cycle
of poverty and make children into employable adults,
Senegalese tolerance could slide into extremism ) a theme
that the Prime Minister,s Director of Cabinet echoed.

THE WEAK OPPOSITION
--------------

3. (C) Carter got some unique insights into Senegalese
politics from discussions with Serigne Mbaye Thiam, a leading
member of the Socialist Party (PS),and Abdoulaye Babou, a
Deputy in the National Assembly and member of the Alliance of
Forces of Progress (AFP). Thiam described a political
environment in constant flux. According to Thiam, the rules
change all the time; no one knows whether there will be one
presidential term or two, how many Deputies will be elected
to the Assembly, or even which electoral system will be used.
This has made it difficult for opposition parties to
strategize. Babou echoed those sentiments, saying Wade has
"mocked the institutions" of government. However, he noted a
different problem for the opposition -- that they do not
reach out to the critical voting communities in the villages
to gain their support, as President Wade's Senegalese
Democratic Party (PDS) does. (COMMENT: Babou just resigned
his position as Spokesman and National Secretary in Charge of
Communication for the AFP. While retaining his membership in
the AFP, he has expressed intense bitterness about the way it
is managed. END COMMENT.) Carter noted that the opposition
must be more pro-active if it wants to change Senegal. He
said there are issues, such as the problem with securing land
titles, that must be dealt with now for the country's economy
to grow, without waiting to see what the ruling party does.

TRAFFICKING
--------------

4. (C) At the Ministry of Women, Family and Social
Development, Carter relayed USG support for continued GOS
efforts to combat trafficking in persons (TIP). Director of
Cabinet Mar Lo said the GOS has allocated 800 million CFA
(USD 1.6 million) to fight TIP in 2006, working on
prevention, protection and prosecution. This is the largest
allocation for TIP in Senegal's history. Lo also described
the many anti-TIP activities being led by the Ministry and
said the GOS works "in perfect coordination" on this issue.
During a subsequent meeting with World Bank ResRep Midani
Tall, he said that the problem of homeless, abused and
trafficked children is considerably worse than many people
believe; therefore, the Bank is launching a project to
address the problem and hopes to work in tandem with the
Embassy and other donors.

TRANSPARENCY, MCA AND THE BLAME GAME
--------------

5. (C) In meetings with the Prime Minister,s Director of
Cabinet, the Director General of the agency in charge of the
Millennium Challenge Account (MCA) Compact, and the Director

DAKAR 00000939 002.2 OF 002


General of the Investment Promotion Agency (APIX),Carter
pointed to the ongoing discussions between the GOS and the
MCC over the MCA proposal. He also reminded officials that
it was necessary to maintain transparency in communications
and to push forward with reform. Without internally driven
initiatives to improve the rule of law and stabilize the
economy, the MCA will not help Senegal meet its goals of
greater growth and development.


6. (C) Mahammed Dionne, the Prime Minister,s Director of
Cabinet, said the MCA project is strategic for several
reasons. He noted, however, that no single project will
transform the economy. He also highlighted that 10 companies
are responsible for 70 percent of Senegal,s industrial
production, and three )- Industries Chimiques du Senegal
(ICS),Sonacos (the recently privatized peanut oil producer)
and the Societe Africane de Rafinage (SAR) are all facing
severe challenges. Dionne said Senegal must diversify and
attract more foreign direct investment. Senegal,s savings
rate is 17 percent, and the economy has grown at an average
of five percent per year for 10 years. However, over half
the population still live in poverty, and Senegalese lack
employment. Only inclusive growth can assure stability.
Dionne averred that those who do not find jobs could become
terrorist recruits. Carter responded, cautioning that the
United States and the MCC understand the strategic importance
of Senegal and of the MCA, but more must be done to increase
domestic savings and to bring the informal sector into the
formal. Foreign direct investment, while important, should
not be construed as a panacea for growth, and it alone cannot
ensure social stability nor economic prosperity.


7. (C) Habib Mbaye, the Director General of Senegal,s MCC
(AMPMD),told Carter that he was going to Washington to work
on Compact development. The noted that the demand survey and
the land study have been completed; now the architecture and
engineering study needs to be completed. He said AMPMD has
now hired an engineer. (COMMENT: Carter subsequently met
with Mbaye, following his MCC meetings in Washington. Mbaye
was positive about his discussions and hopeful that the GOS
would sign a compact nlt the end of the year. END COMMENT.)


8. (C) Continuing with economic meetings, Carter sat down
with APIX Director General Aminata Niane. Niane said that
Senegal had attracted USD 93 million in foreign direct
investment in 2005 -) up from an average of USD 70 million
per year. Her biggest challenges are lack of land, lack of
credit, a labor code that favors workers, an unfriendly
administration and insufficient electricity. (NOTE:
Underscoring her point and highlighting the fragility of both
the energy sector and of the entire Senegalese economy, the
electricity went on and off during several of Carter,s
meetings. END NOTE.) Niane stressed that significant
progress is being made, and the MCA could be an important
catalyst as Senegal targets the sub-region. For the moment,
Niane said she is recruiting call centers, emphasizing
Senegal,s location, language and excellent
telecommunications infrastructure.


9. (C) While these officials admitted there were economic
and legal problems to address, such as the increasingly
frequent electricity outages and inability to secure title to
privately owned land, Iba Der Thiam, First Vice President of
the National Assembly, emphatically stated that Senegal is
doing great; any problems it had were minor and were caused
by either the Socialists, the French or the World Bank; and
the biggest challenge now is to curb the excessive liberty
enjoyed by Senegalese.

COMMENT
--------------

10. (C) Carter's visit bolstered the confidence of GOS
officials in their ability to stay on track for a signed and
delivered MCA, something they seemed to need. Nevertheless,
he sent an important message to all interlocutors that
whether they are Muslim leaders, opposition politicians,
those engaged in the fight against trafficking, or officials
seeking to bring economic growth to Senegal, they should
continue to be realistic, active and engaged. Septel reports
on Carter,s discussion of foreign policy issues. Mr. Carter
has cleared this message. END COMMENT.
JACOBS