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