THE COST OF A NEW GOVERNMENT: CARS, HOTEL, AND A NEW SENATE

UNCLAS DAKAR 001522

SIPDIS

SIPDIS
SENSITIVE

DEPARTMENT FOR AF/W AND AF/EPS
TREASURY FOR DO/GCHRISTOPOLUS

REF: DAKAR 1454

E.O. 12958: N/A
TAGS: EFIN ECON PGOV PREL SG
SUBJECT: THE COST OF A NEW GOVERNMENT: CARS, HOTEL, AND A NEW SENATE



1. (SBU) Summary. A June 30 report in the daily "Wal Fadjri" that
the Government of Senegal (GOS) was planning to spend CFA 2.250
billion (USD 4.5 million) to purchase Chinese "Hover" brand SUVs for
the 150 newly elected Deputies, was confirmed by reliable sources at
the Ministry of Finance. The President of the National Assembly,
Macky Sall, has already signed the purchase order from a local
dealership representing the Chinese auto company. On July 4, The
National Assembly passed a bill to speed up the creation of the new
100-seat Senate. Further, the GOS has also plans to build a new
"five-star" hotel for the Deputies by December 2008. The opposition
press and public are asking where the money will come from for these
extra expenditures and if the Wade is serious about fighting poverty
and improving the country's economic performance. Moreover, rumors
persist that Wade has ordered a new Presidential plane. End
Summary.

GOS TO SPOIL THE DEPUTIES AND SENATORS
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2. (U) While Senegal is trying to sort out a CFA 22 billion (USD 44
million) budget deficit, is in arrears on payments to many suppliers
and contractors, and is considering new subsidies for basic food
items, the press and opposition are deriding the purchase of new
cars for MPs to "facilitate" their activities around the country.
Not only will this purchase gouge USD 4.5 million from an already
strained budget but the deal also includes a monthly 1,000-liter
gasoline allowance to members of the National Assembly Boards, worth
approximately USD 632.88 at current retail prices. For many
Deputies, this will be their second luxury vehicle in four years.
In 2003, the GOS purchased the then 120 MPs Mitsubishi "Pajero" 4WDs
at a cost of CFA 2.640 billion (USD 5.280 million). While in
session, the Deputies are housed, at no cost, in a hotel and the GOS
is now reportedly planning to build a new "five-star" version at an
estimated cost of CFA 10 billion (USD 20 million).


3. (U) The GOS is about to re-establish a 100-seat Senate, 65 of
whom will be directly appointed by Wade and the other 35 will be
elected by an electoral college of 15,000 members consisting of the
members of the parliament and of the regional and local councils
(largely dominated by Wade's PDS party). The Senators compensation
package includes: new cars, a monthly gasoline allowance and a
monthly salary of at least CFA 1 million (USD 2000).

A STRONG REACTION - BUT NO IMPACT
--------------

4. (SBU) While criticizing the PDS for purchasing new cars without
any public debate, the press and opposition party leaders are
questioning how the GOS can afford all these perks for a National
Assembly with a reputation for nonperformance. Even PDS members
cannot help but note the contrast between this pampering of Wade's
political supporters and recent campaign promises to seriously
address Senegal's pressing development needs. Though these perks
may facilitate the electoral strategy of the PDS and help maximize
the party's control over Senegal's legislative branch, many
commentators have questioned whether the "ruling class" standard of
living is attuned to a country whose 2006 national per capita income
was USD 550. They argue that scarce public funds could be better
spent on higher priority areas rather than creating jobs and
benefits for the political class. When the news of the vehicles
purchase was first reported, the Senegalese Consumer Association
(ASCOSEN) marched in protest at this action in the face of the high
cost of living and the increasing prices for basic commodities.

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

5. (SBU) This fiscal crisis is compounded by recent reports that
over the past two years the opaque "Presidency" budget was secretly
used to purchase a new Airbus worth CFA 50 billion (USD 100 million)
for a presidential jet. The political opposition is publicly
outraged by the PDS's manipulation of the budget and the "man on the
street" appears ready to push back: a government which can purchase
new fancy cars and build new hotel for the Deputies, enlarge the
national assembly, and create a Senate should be able to give "him"
more as well. This is one reason why the Minister of Commerce
decided not to attend the July 8-19 AGOA Forum in Accra and
concentrate on new subsidies for rice, bread, milk, and gasoline
(Reftel). End Comment.


6. (U) Visit Embassy Dakar's Intranet site at:
http://dakar.state.gov/htdocs/section/econSec tion.aspx and Embassy
Dakar's SIPRNET Web site at http://www.state.sgov.gov/p/af/dakar

Smith