GUINEA IMF/WB IN-BRIEFING

UNCLAS CONAKRY 000782 SIPDIS SIPDIS TREASURY FOR OFFICE OF AFRICAN NATIONS E.O. 12958: N/A TAGS: EFIN GV PGOV PINR SUBJECT: GUINEA IMF/WB IN-BRIEFING ¶1. (SBU) SUMMARY. The current joint IMF/WB inspection will focus on the Guinean Central Bank operations to determine whether Guinea has successfully instituted and sustained reforms commenced after the IMF's April visit. However, even with a favorable report, October is the earliest that a funded program will be offered to Guinea. The team expects to make a presentation of its findings at the July Paris Forum. END SUMMARY. ¶2. (SBU) On July 5, the joint International Monetary Fund (IMF)/World Bank (WB) mission to Guinea gave an in-briefing on its goals and expectations for the current visit. The evaluation will take place from July 5 through July 18. An out-briefing is currently scheduled for July 17. An itinerary for the current visit has been circulated, along with a revised Poverty Reduction Strategy Paper (provided septel). ¶3. (SBU) The mission seeks to compile a clear picture of the situation on the ground, in order to update the results from the last IMF mission in April. The ultimate goal is to tailor a coherent funded program for Guinea. However, no quick results are envisaged by the team. The IMF wants to see six (6) months of satisfactory execution of the reforms before starting a funded program. Therefore, the team is looking at October as the earliest date for commencement of the new program. ¶4. (SBU) The current mission will focus on the Central Bank's performance since April. In particular, the joint mission will investigate extra-budgetary expenditures by the Central Bank in support of the Government's budget deficit. The Prime Minister assured the IMF that these irregular transfers have stopped; however, the IMF wants to confirm that President Conte, too, has indeed fulfilled his promise to not raid the Bank. The mission will verify that the government and the Central Bank have followed normal procedures with respect to income and expenses, and furthermore, that irregular procedures are the exception. The current inspection will also include a visit to the Customs department to verify that procedures there have been normalized and continue. ¶5. (SBU) COMMENT. The IMF mission head, Jean Le Dem, is aware of the political and social obstacles facing the Kouyate government. However, Le Dem indicated that he is determined to focus on compliance with the Central Bank reform program rather than try to solve all of the political and social problems facing Kouyate. Le Dem will be watching for whether the government might try to supply unreliable data in order to speed up a return to a funded program, and will hold any new program for six months to see if the reforms are taking hold producing, in effect, a non-stated Staff-Monitored Program. The Paris Forum, then, will serve two purposes. Participants will receive and be able to ask questions on the draft IMF program and findings, and offer the opportunity for Guinea to review its current situation and put its request to potential donors for what it calls "emergency" relief in key democracy and infracture sectors. END COMMENT. KAEUPER