SECOND VICE PRESIDENT SEES STABILITY, PRIVATE

C O N F I D E N T I A L BUJUMBURA 000392


LONDON AND PARIS FOR AFRICA WATCHERS

E.O. 12958: DECL: 08/11/2019
TAGS: PGOV PINS ETRD EINV BY
SUBJECT: SECOND VICE PRESIDENT SEES STABILITY, PRIVATE
SECTOR INVESTMENT AS FOUNDATION FOR GROWTH

Classified By: classified by CDA Charles Twining for reasons 1.4(b) and
1.4(d)


1. (C) Summary: Second Vice President Gabriel Ntisezerana
said that security would be the basis for any economic growth
and development in Burundi, during an August 11 courtesy call
by Charge and DCM. Ntisezerana was concerned that many
demobilized FNL combatants knew nothing but fighting, and
could turn to violence if they were unable to find adequate
employment. When asked about the way forward for Burundi, the
Second Vice President emphasized that private sector
investment was key to promoting economic growth, and that the
agriculture sector, and eventually tourism, provided the best
prospects for investment. He was determined to move forward
with privatization, despite the inevitable political
obstacles. Ntisezerana had high hopes for regional
integration, noting that Burundi's membership in the East
African Community could open Burundi to opportunities for
credit and trade from the sub-region. He asked the US to
consider providing further assistance in English and business
training. End Summary.

Interdependence of Jobs and Security
--------------


2. (C) Ntisezerana noted that Burundi was only now emerging
from profound crisis, and stated that the fragile security
situation would have to be monitored. Burundi needed to have
security before it could have development, he said, and
observed that employment was the key to security.
Ntisezerana said it was clear that many former combatants had
cached the weapons rather than turn them in through the
Disarmament, Demobilization and Reintegration (DDR) program.
The previous day, Ntisezerana had overseen the closure of the
last FNL Demobilization camp, and he was clearly concerned
about the prospects of integrating these young combatants,
many in their early twenties, who had only known fighting.
He observed that the USDOLS 500-1000 provided to each
ex-combatant would not last long. He affirmed that job
creation offered the best hope for the Burundian people, and
the best prospects for stabilizing the country. Ntisezerana
also noted that the political class needed another outlet --
the current mindset was to view government jobs as spoils of
war.


3. (C) The Second Vice President was nonetheless confident
that the government understood the security situation and
would prevail over the crisis. He believed that Burundi was
prepared for the 2010 elections, and that the inevitable
electoral tensions would not erupt in violence.

The Crucial Role of the Private Sector
--------------


4. (SBU) Ntisezerana stated that the private sector must be a
priority for Burundi, because it provided the best engine to
revitalize economic growth and development. He said that the
Burundian Investment Code guaranteed 100 percent of
investments against possible expropriations, and ensured
investor revenue and provided a tax credit to encourage
investors. Coffee and tea alone provided 80 percent of
Burundi's export revenues, so for the immediate future, the
agricultural sector provided the best opportunities for
investments. Ntisezerana thought that eventually, tourism on
Lake Tanganyika could become a growth sector. The Government
was also contemplating establishing free trade zones to
attract investment.


5. (SBU) The office of Second Vice President oversees
privatization, Ntisezerana said, and he affirmed that the
Government's privatization programs were on track. He
estimated that the government was about midway through the
privatization process, and was determined to move forward
with it, despite the inevitable political difficulties. The
State owned enterprises, Ntisezerana said, were inefficient
and non-productive, and needed to be privatized. Ntisezerana
said that the government had to be concerned about the
employees who are caught up in the privatization of state
enterprises.


6. (SBU) Ntisezerana was nonetheless cognizant of the
constraints that affected would-be investors, chief among
them the lack of liquidity. He noted that Burundi's banks
only provide short term loans, and interest rates are high,
currently running 17-18 percent. Furthermore, he said the
costs of production were high. Ntisezerana looked to regional
integration to provide a way forward. He was hopeful that
Burundi's new membership in the East African Community would
facilitate access to credit through the larger banks in the
sub-region, such as the Kenyan Commercial Bank and the Bank
of Tanzania.

In Search of New Commercial Ties with the US
--------------


7. (U) Burundi is a Francophone country in an Anglophone East
African Community, Ntisezerana noted, and inquired if the US
Embassy had plans to increase English language programs. He
was interested in AGOA, and asked how Burundi might better
take advantage of AGOA benefits, particularly in the coffee
sector. Ntisezerana thought that Burundians could benefit
from business training, and inquired about current exchange
programs. Embassy Bujumbura will provide this information to
him.


8. (SBU) Biographical Note. The Second Vice President
oversees the various Ministries involved with finance,
economic development and social services. As a former banker
with an advanced degree in Economics from the University of
Burundi and a prior stint as Central Bank Governor, Gabriel
Ntisezerana is well suited to the job. A member of the
CNDD-FDD party, he is an ethnic Hutu who is reputed to be
close to business leaders and to the President.


Twining