GUINEA-BISSAU AGOA - INPUT FOR 2007 PRESIDENT'S REPORT

UNCLAS DAKAR 000587 SIPDIS SIPDIS STATE FOR AF/EPS, EB/TPP/BTA AND AF/W E.O. 12958: N/A TAGS: ETRD PU SUBJECT: GUINEA-BISSAU AGOA - INPUT FOR 2007 PRESIDENT'S REPORT REF: STATE 022438 ¶1. Embassy input on Guinea-Bissau follows for the 2007 President's report on AGOA keyed to the template outlined in reftel and last year's report as published by USTR. This text has also been provided to AF/W and AF/EPS via e-mail. ¶2. Begin Post's input: MARKET ECONOMY/ECONOMIC REFORM/ELIMINATION OF TRADE BARRIERS: The Government supports the continued transition to a market economy. It no longer dominates the commercial sector and has abolished state marketing boards, privatized some companies, and ended price controls. Restrictions on foreign operators in the cashew production sector were lifted in 2004 but government interference made business difficult for Indian cashew buyers, who traditionally acquire the vast majority of the country's cashew crop. As a result, one of the largest companies operating in Bissau, Indian investor Olam International, ceased operations in Guinea-Bissau. RULE OF LAW/POLITICAL PLURALISM/ANTI-CORRUPTION: Guinea-Bissau is a multi-party state but the outgoing government, led by Prime Minister Aristides Gomes, is not linked with any party. The President, Prime Minister and several other ministers were expelled by the Party for the Independence of Guinea-Bissau and Cape Verde (PAIGC) in a power struggle that has left the largest party deeply divided. The national court system continues to function, albeit with serious resource constraints. Customs receipts are placed directly into a treasury account; fuel import duties are collected at one controlled port of entry; and the Ministry of Finance must clear on all disbursements to ministries and public bodies. To increase transparency and gain donor confidence, the Government allows the UNDP and other donors to participate in the Treasury Committee, which implements the day-to-day fiscal management on the basis of a strict cash-rationing system. Corruption, especially related to narcotics trafficking, is pervasive up to the highest levels of the civilian government and military. POVERTY REDUCTION: Guinea-Bissau finalized a National Poverty Reduction Strategy paper (DENARP),which the Government presented to the international community at a donor's conference in Geneva in November 2006. Guinea-Bissau did not receive enough donor support to cover its 2007 budget gap or fully finance the DENARP. Still without a budget, the International Monetary Fund will not qualify Guinea-Bissau for broader post-conflict assistance, a failure that impacts the DENARP as well as efforts at security sector reform. Guinea-Bissau lacks the pool of skilled labor required for increased exports of most skill intensive products. The lack of educated workers also discourages investment in the country. LABOR/CHILD LABOR: Guinea-Bissau has ratified five of the eight fundamental ILO Conventions, but not ILO Convention 138 on minimum age or ILO Convention 182 on the worst forms of child labor. The Constitution grants all civilian workers the right to form and join trade unions. The law provides for the right to strike and protection against retribution for engaging in lawful union activity. There are no specific laws that protect children from exploitation in the workplace. The Government developed a Strategic Document for the Reduction of Poverty that includes the elimination of the worst forms of child labor as a key objective. JACOBS