GUINEA BISSAU: GOVERNMENT IS THE ONLY BUSINESS

C O N F I D E N T I A L SECTION 01 OF 03 DAKAR 000276 SIPDIS SIPDIS STATE FOR AF/W, AF/RSA, S/P, INL, INR/AA AND DRL/AE ACCRA FOR USAID/WA LISBON ALSO FOR DAO PARIS FOR POL - D'ELIA E.O. 12958: DECL: 02/02/2017 TAGS: PGOV PREL EAID ECON SNAR PU SUBJECT: GUINEA BISSAU: GOVERNMENT IS THE ONLY BUSINESS REF: DAKAR 0124 (NOTAL) DAKAR 00000276 001.3 OF 003 Classified By: Ambassador Janice L. Jacobs for reasons 1.4(b) and (d). SUMMARY -------------- ¶1. (C) As AF/W desk officer Dorsey Lockhart, PolOff, and PAO met with Bissau-Guinean government, NGO, human rights, and business leaders, January 24-26, they heard "government is the only business in Bissau." Some might have added that narcotics is fast catching on (Reftel). On January 27, the GOGB lifted the arrest warrant for the head of the Party for the Independence of Guinea-Bissau and Cape Verde (PAIGC), Carlos Domingos Gomes Jr., allowing him to return home and ending a two week political crisis in which he had taken refuge at the United Nations (UN) compound. The capital is calm, and it is business as usual. However, school teachers remain on strike, and salary arrears persist. Political parties remain divided and refuse to open meaningful dialogue with each other or the GOGB. Cashew exports have resumed, but the economy is crippled, and there is still no budget for the current fiscal year. Western donors continue to lament Guinea-Bissau's problems while China builds new government buildings. END SUMMARY. STABILITY -------------- ¶2. (U) For the moment, Guinea-Bissau is calm, and it is business as usual. Even when PAIGC leader Carlos Gomes Jr. took refuge at the UN compound to avoid arrest for implicating President Joao Bernardo "Nino" Vieira in the murder of former Navy commander Commodore Lamine Sanha, the public and the press lost interest in the outcome. The GOGB finally lifted the arrest warrant on January 27 and guaranteed Gomes' safety, allowing him to return home. ¶3. (C) The Government continued to function and high level leaders resumed their heavy travel schedule. President Vieira went to Libya January 24 for a regional conference and Prime Minister Aristides Gomes, Foreign Minister Antonio Isaac Monteiro, and Natural Resources Minister Aristides Ocante da Silva went to Cuba January 25 to renew a cooperation agreement. There have been no demonstrations or strikes since the riots that rocked a Bissau neighborhood after Sanha's assassination. However, Dr. Luis Vaz Martins, President of the Human Rights League, told EmbOffs and desk officer that his efforts to launch a march in support of peace in the days following the riots were shut down due to police threats against him. ¶4. (C) An advisor to the Prime Minister, Mario Filomeno Mendes Pereira, said salaries had been paid for all non-contract government employees through the end of December, but others with friends who are civil servants said the Government is still three months in arrears. Army Colonel Arsenio Balde said the military, which is generally paid before civil servants, has been paid through the end of November. Balde also said there is unity among the armed forces despite efforts by Vieira's political enemies to incite internal divisions. He claimed the riots that followed Sanha's assassination as well as propagation of false rumors that the military had been deployed in neighboring Guinea were designed to force a power struggle in the armed forces. In any case, both efforts at disinformation failed. FALTERING DEMOCRACY -------------- ¶5. (C) Guinea-Bissau's largest political parties offer few solutions at a time when dialog is needed to address the most significant challenges, particularly the economy and security sector reform. Both the PAIGC and the Party for Social Renewal (PRS) are weakened by divisions within their parties and have had little success arriving at a modus vivendi between themselves and the Government. PRS leaders believe they still have a claim on the presidency since Kumba Yala's 2004 ouster in a bloodless coup, but they reiterate that theirs is a peaceful party. Both parties say they are already focused on parliamentary elections scheduled for spring 2008. DAKAR 00000276 002.10 OF 003 ¶6. (C) Neither the opposition parties nor the Government (with many party-less ministers after their suspension from the PAIGC) seem to operate on democratic principles, and in fact, most party leaders had no concept of them. There are no efforts to activate or communicate with a popular base; there is no clear policy agenda; deputies are marginalized from party headquarters; and there is no discernible effort to draft legislation. The primary purpose of the political party is to wield as much power as possible in what is viewed as a zero-sum game. Foreign Minister Monteiro said this is a consequence of having no robust private sector in Guinea-Bissau. Once a party is out of government, he explained, members have no way to make a living, so they dedicate all efforts to regaining power as soon as possible. According to Monteiro, government is the only business in Bissau. ¶7. (C) One significant stumbling block to a functioning legislature according to the PRS and the National Democratic Institute (NDI),the NGO which is implementing an ESF-funded project, is Francisco Benante, President of the National Popular Assembly (ANP). Benante is a PAIGC stalwart bent on foot-dragging to make Vieira look bad. Legislation cannot be introduced without his approval, and under his stewardship, the ANP has produced almost nothing; only six pieces of legislation last year and little of relevance. ECONOMY AND AID -------------- ¶8. (U) The poverty reduction plan has not been implemented because Guinea-Bissau did not receive enough support at the international donor's conference in Geneva in November. Since the conference, China's Foreign Minister visited the country and announced additional support, including the construction of a new government palace. However, the GOGB still does not have a budget for the current fiscal year, and there is no word if it will be able to cover the budget gap and thus qualify for International Monetary Fund lending. ¶9. (U) The Minister of Agriculture recently signed a cooperation agreement with the Chamber of Commerce and Industry (CACI),focusing on stimulating cashew production and exports. One of the key parts of the accord is that the Government will turn over unused buildings around the country for refurbishment that can be used as cashew storage warehouses. Cashew growers said this is one of their most pressing needs. They will use warehouses to keep raw nuts in pristine condition for up to three years, relieving the pressure to sell in an unfavorable market, as was the case this year. Cashews continue to be exported, at a much reduced price. A boat in Bissau harbor is currently being loaded with 13 thousand tons of raw nuts. Exports have gone to India for processing, as in past years, and for the first time this year, to Vietnam. After this shipment, Guinea-Bissau will still have 15-20 thousand tons of unsold raw nuts. COMMENT -------------- ¶10. (C) Major foreign donors are not necessarily playing a constructive role. China,s significant contribution, which comes with no strings attached other than fishing rights, may undercut the influence of Western donors who urge adherence to human rights and good governance. For their part, the Portuguese Foreign Minister and Secretary of State (Deputy Foreign Minister) visited Bissau and attempted to broker a solution to the tense stand-off which kept Gomes Jr. in hiding at the UN but were unable to get an agreement. Minister Amado later told the press that the crisis was hurting Guinea-Bissau,s image abroad. In private, Portuguese officials decry the collapse of state institutions and growing organized crime, especially narcotics trafficking, but they seem unwilling to do much more than lament the problems. As we consider our next steps, we believe that FY-2008 assistance should focus on grassroots democracy education. END COMMENT. ¶11. (U) AF/W Desk Officer Dorsey Lockhart cleared this cable. ¶12. (U) Visit Embassy Dakar's classified website at DAKAR 00000276 003.3 OF 003 http://www.state.sgov.gov/p/af/dakar. JACOBS