GRASSROOTS SUPPORT FOR GUINEA'S BAN ON EXPORTS

UNCLAS SECTION 01 OF 02 CONAKRY 000145

SIPDIS

SENSITIVE

SIPDIS

TREASURY FOR OFFICE OF AFRICAN NATIONS

E.O. 12598: N/A
TAGS: ECON PREL PGOV ELAB ASEC PINS GV
SUBJECT: GRASSROOTS SUPPORT FOR GUINEA'S BAN ON EXPORTS

REF: Conakry 129

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Summary
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1. (SBU) On January 29, the government of Guinea issued a decree
banning the exportation of all agricultural, forestry, livestock,
fisheries and petroleum products. The ban is one of the union
demands included in the January 27 tripartite agreement that
suspended the general strike. Its objective is to "satisfy the
needs of the domestic market," and it is effective for calendar year

2007.


2. (SBU) The ban's premise is that the recent rise in the cost of
consumer goods is a direct result of goods being exported (for hard
currency, most of which vanishes into private pockets) to
neighboring countries. Average Guineans applaud the fall in the
price of some basic necessities, mostly local produce. They do not
understand WTO or ECOWAS protocols and that the decree may be
interpreted as a breach of the accords. Local government officials
in the border regions are urging customs officers to prevent the
smuggling of goods across Guinea's borders, and average Guineans
have taken enforcement in their own hands in some instances. End
summary.

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Desperate Measures for Desperate Times?
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3. (SBU) Issued as a joint decree by the Ministers of Commerce, Fish
and Aquaculture, and Agriculture and Forests, the ban on exports
seeks to increase the amount of basic consumer products on the
Guinean market in order to lower the prices of those goods. On
February 6, EconOff spoke with Mr. Dianka Koivogui, national
director of Guinea's Office for the Promotion of Investment (OPIP)
at the Ministry of Commerce. While acknowledging that a ban on
exports will likely be interpreted as a breach of bilateral and
multilateral trade agreements, Koivogui said such agreements have
provisions for emergencies, and the Guinean people are "still in the
middle of a crisis," although the general strike has been suspended.


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See, It's Working Already
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4. (SBU) EconOff asked Koivogui if he feared potential investors
might be dissuaded from doing business in Guinea because of the ad
hoc ban on exportation, and Koivogui said he had no such fear. He
noted alleged U.S. protectionist policies regarding cotton and
steel, arguing foreign investors had not been dissuaded from
investment in the U.S. as a result of those economic tactics.
Kovogui said Guinea's ban was not a policy shift, simply an
emergency measure for a finite period of time in order to meet the
immediate needs of the Guinean people.


5. (SBU) EconOff asked if Kovogui had any concern about the loss in
hard currency, as well as tax revenue (reftel),due to the export
ban. Koivogui believed the Guinean economy would stabilize if the
price of basic consumer goods stabilized. Koivogui touted the early
effects of the export ban by providing anecdotal evidence that the
price of many agricultural products had already decreased
significantly as domestic supplies increased. He concluded, "See,
it's working already."

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Robin Hood, or Robin Hoodlums?
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6. (SBU) The export ban enjoys popular support, especially as
average Guineans see lower prices for produce in the marketplace.
Grassroots support has given rise to a sort of vigilantism in some
regions. Many Guineans distrust customs officials' ability to
enforce the export ban, due both to corruption and lack of capacity.
There are credible reports of trucks with suspected foreign
destinations being blocked and their goods being taken and
"distributed" to villagers. Deliveries to legitimate Guinean
destinations have been interrupted, particularly to Guinea's border
towns and villages. In Kankan, locals attacked a truck carrying a
load of timber; villagers believed the timber was headed to Mali,
and seized the entire shipment. Even trucks destined for the
capital city, Conakry, have faced roadblocks and crowds of
vigilantes demanding to know where fruits and vegetables were to be
delivered.

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CONAKRY 00000145 002 OF 002


COMMENT
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7. (SBU) We have not yet seen the impact of Guinea's export ban in
all sectors of the economy. It is sure to have a ripple effect not
only on hard currency and tax revenues, but also on longer-term
availability of goods, especially imported goods, and in a distorted
balance of trade. Moreover, other elements of the agreement with
the unions encourage, rather than discourage, continued exports for
cash. For example, fuel, already cheap by the standards of Guinea's
neighbors, is now even cheaper. Rice is also well below market.
Equally interesting are the social dynamics highlighted by the
export ban. The average citizens who block shipments of fruits or
vegetables say they are acting out of pure nationalist pride and
reject the idea they may be judged vigilantes. Judging from
positive television reports on the deeds of watchful citizenry,
their government agrees.

MCDONALD