GUINEA ASKS FOR HELP TO ALLEVIATE ECONOMIC

C O N F I D E N T I A L SECTION 01 OF 02 CONAKRY 000110 SIPDIS SENSITIVE SIPDIS DEPT PLEASE PASS TO USAID AND DEPT OF AGRICULTURE TREASURY FOR OFFICE OF AFRICAN NATIONS DEPT PLEASE PASS TO EEB/TPP/ABT/ATP - ATTENTION JANET SPECK E.O. 12958: DECL: 04/17/2018 TAGS: ASEC EAGR EAID ECON EPET ETRD GV PGOV PREL SUBJECT: GUINEA ASKS FOR HELP TO ALLEVIATE ECONOMIC PRESSURES REF: STATE 39410 Classified By: Economic Officer Kim Jordan. Reasons 1.4 (b) and (d). ¶1. (C) SUMMARY: The Guinean Minister of Foreign Affairs urgently requested a meeting with the Ambassador in order to request help in dealing with rising prices for basic foodstuffs. The Ambassador responded with tough questions about corruption and the government's new export ban on foodstuffs, but also gave direction as to how Guinea could maximize its chances for receiving food aid from the U.S. in the future. END SUMMARY. ¶2. (SBU) On April 16, the Ambassador and Econoff met with the Minster of Foreign Affairs, S.E.M. Abdoul Kabele Camara. The meeting was friendly, but frank. ¶3. (C) The Minister told the Ambassador that prices for food are rising and that people can no longer afford to buy food. Mr. Camara then said that Guinea was luckier than other countries in West Africa because of the strike in 2007 which led to the Tripartite Agreement. His opinion is that the agreement put into place mechanisms which mitigated the world market price pressures on Guinea. (NOTE: Economically, the agreement instituted price controls and an export ban. END NOTE.) ¶4. (C) Visibly animated, the Minister warned the Ambassador that the people of Guinea can be very calm on the surface, but once they become violent, there will no stopping them. He contrasted Guinea's situation with that of other countries in the sub-region, where protests have taken place over the same issue. ¶5. (C) The Minister requested US. assistance to help Guinea address the problem. He said that while financial or material support would always be welcome, he was looking for ideas as to how the Guinean Government can respond to the current crisis. ¶6. (C) The Ambassador asked if the Minster knew about the export ban instituted by the government the night before. The Minister frowned, but acknowledged that he knew about it, and asserted that the previous ban had reduced prices in the domestic market. (COMMENT. Late on April 15, the government announced a new ban on all imports and exports of foodstuffs. END COMMENT.) ¶7. (C) The Ambassador told the Foreign Minister that the export ban is a poor policy response and that it will only hurt Guinea. The effect of the ban might lower some prices in the very short term, but it will eventually either drive local producers out of business or force them to smuggle their produce out of the country. The Ambassador asked the Foreign Minister if the export ban applied to the President's private rice exports. The Minister did not respond or even acknowledge the question. The Ambassador added that the export ban will also be a violation of many treaties and agreements; specifically, the ECOWAS, IMF and WTO agreements. The Minister agreed, but said that the export ban is only temporary. ¶8. (C) Regarding potential aid, the Ambassador said that any U.S. food aid program must be targeted at the most vulnerable populations and be short term. In addition, the GOG must have a detailed plan that makes redirection of the aid for private gain impossible. The Ambassador noted that when the Chinese government donated rice to the Government last year, much of it was sold in the local market place and did not reach the most vulnerable. The Ambassador also emphasized that communication with the population regarding the Government's actions is critical. The Minister agreed, but suggested that the US could do the communication. The Ambassador stated that the first and primary voice on this issue must be Guinean. He reinterated that the U.S. and donors were there to aid, not lead. ¶9. (C) The Ambassador stressed that a major economic problem in Guinea is the discouraging investment climate for business and commerce in general. He told the Minister that it took CONAKRY 00000110 002 OF 002 two years for one American company to get permission to set up a rice farm, an issue the Minister said he did not know anything about. The Ambassador stated that the solution to the recurring problems with the price of food is improved production. He emphasized that the GOG must encourage farmers to grow more, not ban them from selling their product. He insisted that the GOG must make it easier for firms to set up and begin business, not make it harder. ¶10. (C) COMMENT. The Foreign Minster seemed to be in a panic about how the Guinean Government could respond to the price increases for food. The prices of rice, flour, cooking oil, and fish have all increased dramatically over the past twelve months. However, the Minister would not even acknowledge that the President exports rice for personal profit, or whether or not he is subject to the current export ban. Compounding the problem is the fact that other prices have also gone up, such as the 60% increase in the price of gasoline. The Minister did say that he agreed with everything the Ambassador said. The Ambassador explained that no additional food aid was in the pipeline other than what was already scheduled, and that any new food aid would take months to get here. He also invited the Foreign Minister to put together a detailed plan in terms of his aid request, but the Ambassador did not make any promises. The Foreign Minister announced that Guinea's Ambassador to the U.S., Mory Kaba, would seek a meeting with AF officials in the Department on this issue. END COMMENT. CARTER