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

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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