Identifier
Created
Classification
Origin
06NOUAKCHOTT285
2006-03-09 14:20:00
UNCLASSIFIED
Embassy Nouakchott
Cable title:  

Mauritania: Input for the Annual AGOA Report

Tags:  ETRD ECON PHUM MR 
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VZCZCXRO3627
RR RUEHPA
DE RUEHNK #0285/01 0681420
ZNR UUUUU ZZH
R 091420Z MAR 06
FM AMEMBASSY NOUAKCHOTT
TO RUEHC/SECSTATE WASHDC 5244
RUCPDOC/USDOC WASHDC
INFO RUEHZK/ECOWAS COLLECTIVE
UNCLAS SECTION 01 OF 03 NOUAKCHOTT 000285 

SIPDIS

SIPDIS

STATE FOR AF/W (B. BACHMAN),AF/EPS (M. NORMAN)

E.O. 12958: N/A
TAGS: ETRD ECON PHUM MR
SUBJECT: Mauritania: Input for the Annual AGOA Report

Ref: State 26707

UNCLAS SECTION 01 OF 03 NOUAKCHOTT 000285

SIPDIS

SIPDIS

STATE FOR AF/W (B. BACHMAN),AF/EPS (M. NORMAN)

E.O. 12958: N/A
TAGS: ETRD ECON PHUM MR
SUBJECT: Mauritania: Input for the Annual AGOA Report

Ref: State 26707


1. Mauritania was one of the first 34 countries to be found
eligible in 2000 for the trade benefits of AGOA. On
December 22, 2005, however, President Bush terminated
Mauritania's designation as of January 1, 2006, because
Mauritania is not meeting the required criteria of making
continual progress toward establishing the rule of law and
political pluralism.


2. This requirement ceased to be fulfilled when a military
coup took place on August 3, 2005. Despite the several
positive steps the transitional government has taken to
prepare for democratic elections, the fact remains that the
present military junta came to power by force, rules by
decree and is illegitimate. AGOA eligibility could be
reinstated through the successful holding of democratic
elections and the inauguration of a constitutional
government, and in the presence of continuing progress in
the fields of economic reform, human rights and good
governance.

--------------
Economic Situation
--------------


3. Mauritania is a large country of 1.3 million square
kilometers with only 3 million inhabitants. In 2004, the
GDP per capita was estimated at $526, the real GDP growth
was 6.9% and the population growth rate was 2.9%. The
Mauritanian government has managed most of its macro-
economic deficits through restructuring programs and the
implementation of some budgetary policies to keep prices at
a reduced level. The lack of foreign currencies in
Commercial Banks, however, counterbalances this measure.
Mauritania's challenges are the persistent poverty affecting
40% of the population, a fragile economy and poor
diversification of exports. Persistent droughts, widespread
desertification, flooding, and the effects of the massive
locust invasion in 2004 have strained the country's
finances. The country is suffering from rapid urbanization,
extensive unemployment, pervasive poverty, and a burdensome
foreign debt. The concentration of much of the country's
wealth in the hands of a small elite, as well as a lack of
transparency and accountability in certain areas of
governance, impede economic growth.


4. In 2002, Mauritania reached its completion point under

the enhanced HIPC initiative and Mauritania was declared
eligible for debt relief. As a result, Mauritania received
approximately $1.1 billion in debt relief. However, the IMF
concluded in May 2005 that the disbursement was non-
complying because Mauritania had provided inaccurate
information to the IMF. As a result, Mauritania voluntarily
repaid the disbursement. The IMF also required Mauritania
to provide corrected data for previous years before
implementing any new programs. After the coup, the
transitional government announced it would cooperate with
the IMF to provide corrected data for the previous years.
The IMF Board may determine that Mauritania may need to
repay noncompliant disbursements for the years 2001 and

2002. On December 21, the IMF delayed the cancellation of
Mauritania's IMF debt under the Multilateral Debt Relief
(G8) Initiative.


5. The Government of the Islamic Republic of Mauritania
continues to encourage foreign direct investment and
economic liberalization. Mauritania has no discriminatory
policies against foreign investment, imports, or exports.
The government's investment and development policy
emphasizes private sector development and is seen as the
main engine of economic growth. In line with ongoing World
Bank/IMF structural reform programs, the government
privatized several parastatals in the late 1990's,
encouraging foreign investors to purchase shares. The
orientation towards privatization and liberalization is
expected to continue in 2006.


6. Foreign investors generally receive the same treatment as
Mauritanian investors, subject to the provisions of treaties
and agreements concluded by the government with other
countries. Foreign investors have the same access as
Mauritanians to courts of law. Nonetheless, the success of
foreign investors will depend in large part on their
successful collaboration with local partners who understand
the local market and government. Contracts are protected by
the civil and commercial codes, although court enforcement
and dispute settlement can in practice be difficult to
obtain.


NOUAKCHOTT 00000285 002 OF 003


-------------- --
Rule of Law/Political Pluralism/Anti-Corruption
-------------- --


7. On August 3, 2005, President Maaouiya Ould Sid'Ahmed Taya
was deposed in a bloodless coup. Military commanders, led by
Colonel Ely Ould Mohammed Fal, seized power and established
the ruling Military Council for Justice and Democracy to run
the country. The council dissolved the Parliament and
appointed a transitional government. The transitional
government has promised a return to constitutional order
through free and fair elections, culminating with a
presidential election in March 2007 and the complete
turnover of power no later than the end of May 2007. The
transitional government has also made positive statements on
reducing corruption, strengthening the justice system,
increasing freedom of the press and opening the political
system to political parties and political associations.


8. Although the law provides for the independence of the
judiciary in practice the executive branch exercises
significant influence over the judiciary through its ability
to appoint and pressure judges. In addition, poorly educated
and poorly trained judges who are susceptible to social,
financial, and tribal pressures limit the judicial system's
fairness.


9. Corrupt practices are widely believed to exist at all
levels of Mauritanian government and society. Wealthy
business groups and government officials reportedly receive
frequent favors from authorities, such as unauthorized
exemption from taxes, special grants of land, and favorable
treatment during bidding on government projects. Mauritanian
and non-Mauritanian employees at every level, and in every
organization, are believed to flout Mauritanian tax laws and
filing requirements. The only exceptions to this are the
employees of the Mauritanian government, whose income taxes
are automatically deducted from their pay. This widespread
corruption deprives the central government of a significant
source of revenue, weakening the capacity of the government
to provide necessary services.


10. Anti-corruption measures exist, but they have not been
effectively enforced. Although the transitional government
has subscribed to a broad good governance program, giving or
accepting bribes is still not considered a criminal act
under current Mauritanian law. Mauritania is not a signatory
to the OECD Convention on Combating Bribery. Corruption is
most pervasive in government procurement, bank loans,
fishing license attribution, land distribution, and tax
payments. There is no systematic annual auditing of
government accounts.


11. The only international organization for transparency
that operates in Mauritania is the Swiss-based SGS, confined
to the inspection of imports. Last September, Mauritania
announced its intention to adhere to the Extraction Industry
Transparency Initiative after repeated requests from the
World Bank, IMF and foreign oil explorer consortium.

--------------
Human Rights/Labor/Child Labor
--------------


12. Both the former and transitional government's human
rights records remain poor; although there are some
improvements in a few areas, serious problems remain. The
following human rights problems were reported: citizens'
inability to change their government, arbitrary arrest and
detention with prolonged pretrial detention, harsh prison
conditions and ethnic and racial tensions as a result of the
under-representation of largely southern based ethnic groups
in political life.


13. Both the former government and the present transitional
government made appreciable progress in combating
trafficking, particularly in victim protection and in
raising public awareness of new trafficking-related laws.
The transitional government has respected the former
government's trafficking policies but has demonstrated
greater diligence in its counter trafficking efforts.


14. Mauritanian law provides for freedom of association and
the right of citizens to join any labor organization, and
workers exercises this right in practice. All workers except
members of the military and police were free to associate in
and establish unions at the local and national levels. To be
legally recognized, a union must have the authorization of
the public prosecutor who can provisionally suspend a trade
union at the request of the Ministry of the Interior if it

NOUAKCHOTT 00000285 003 OF 003


believes that the union has not complied with the law. The
government, however, has the power to decide whether to
recognize a trade union.


15. The majority of the labor force is in the informal
sector, with most workers engaged in subsistence agriculture
and animal husbandry. Nearly 90 percent of industrial and
commercial workers, however, are unionized. The law
provides that unions may organize workers freely without
government or employer interference, and workers exercise
this right in practice. General or sector agreements on
wages, working conditions, and social and medical benefits
are negotiated in tripartite discussion and formalized by
government decree. Wages and other benefits could also be
negotiated bilaterally between employer and union, and the
results of such negotiations are filed with the Directorate
of Labor. Although the directorate has the ability to change
the negotiated settlement between labor and business, there
were no known cases of such action during the previous year.
The government can dissolve a union for what it considered
an "illegal" or "politically motivated" strike; however, no
unions were disbanded during the previous year.


16. The former government ratified an updated labor code in
2004 that included significant improvements in health-care
entitlements, including the introduction of maternity leave;
an improved paced-arbitration system; and a series of laws
prohibiting forced labor in any form.


17. The law prohibits forced or compulsory labor, including
by children, but the law only applies to relations between
employers and workers. Slavery is illegal although there are
still areas where the attitude of master and slave prevail
and slavery is practiced


18. The law provides that children cannot be employed before
the age of 14 in the nonagricultural sector or under age 13
in the agricultural sector unless the minister of labor
grants an exception due to local circumstances; however,
child labor in some parts of the informal sector was common
and a significant problem, particularly within poorer inner-
city areas. The law states that employed children between
the ages of 14 and 16 should receive 70 percent of the
minimum wage and that those between the ages of 17 and 18
should receive 90 percent of the minimum wage.


19. Young children in the countryside are commonly employed
in herding, cultivation, fishing, and other significant
labor in support of their families' activities. Young
children in urban areas often drive donkey carts and deliver
water and building materials. In keeping with longstanding
tradition, many children serve apprenticeships in small
industries and in the informal sector. Reporting by some
human-rights NGOs strongly suggested that domestic
employment, often unpaid, of girls as young as seven in
wealthier homes is a growing problem. There is no child
labor in the modern industrial sector.


20. There is a labor inspectorate with the authority to
refer violations directly to the appropriate judicial
authorities but the eight inspectors lack the basic
resources, such as transport and office equipment, needed to
enforce existing child labor and other labor laws.


21. The government has signed and ratified ILO Convention

182. The government has not signed or ratified ILO
Convention 29 and 105, the Optional Protocol on the
Convention of the Rights of the Child, or the Protocol to
Prevent, Suppress and Punish Trafficking in Persons.

LeBaron