VZCZCXYZ0000
RR RUEHWEB

DE RUEHAN #0226/01 0670529
ZNR UUUUU ZZH
R 080529Z MAR 07
FM AMEMBASSY ANTANANARIVO
TO RUEHC/SECSTATE WASHDC 4441
INFO RUEHFR/AMEMBASSY PARIS 0832

UNCLAS ANTANANARIVO 000226 
 
SIPDIS 
 
SIPDIS 
 
DEPT FOR AF/E MBEYZEROV 
DEPT FOR AF/EPS 
DEPT PASS USTR FLIZER AND PCOLEMAN 
PARIS FOR D'ELIA 
 
E.O. 12958: N/A 
TAGS: ETRD AGOA ECON CN
SUBJECT:  AGOA Eligibility Recommendation For Comoros 
 
REF: A) STATE 22438 
 
B) 06 ANTANANARIVO 1176 
 
¶1.  This is an Action Request for the Department - see Paragraph 4. 
 
¶2.  SUMMARY:  Democratically-elected President Ahmed Abdallah Sambi 
has made significant improvements in governance in the Union of the 
Comoros since taking office in May 2006, despite inadequate 
resources.  His government has an ambitious plan to attract 
investment in tourism and agriculture that is founded on free-market 
principles.  President Sambi sought the prosecution of corrupt 
officials and granted amnesty to unfairly sentenced persons to 
improve the rule of law in Comoros.  As acknowledged in the Human 
Rights Report and Worst Forms of Child Labor Report, conditions in 
Comoros are comparable to neighboring AGOA-eligible countries and 
are improving.  Above all, Comoros is a staunch American ally in the 
war on terrorism, participating fully in the Rewards for Justice 
Program in the hunt for Comoran-born terrorist suspect Harun Fazul. 
In light of nascent stability and progress in Comoros under Sambi's 
leadership, Post recommends the United States grant AGOA Eligibility 
in time to mark President Sambi's first year in office on May 28, 
¶2007.  END SUMMARY. 
 
¶3.  Using the Millennium Challenge Corporation's (MCC) Scorecards 
for "Ruling Justly," "Investing in People," and "Economic Freedom," 
Comoros has passing marks in five of 16 indicators.  This score puts 
Comoros ahead of nine AGOA-eligible countries.  While failing across 
the board to invest in people, Comoros scores passing marks in three 
of six in economic freedom and two of six in ruling justly.  MCC and 
AGOA criteria differ somewhat, but by this measure Comoros warrants 
at least careful consideration. 
 
¶4.  ACTION REQUESTED:  Post requests the Department initiate the 
inter-agency process for Comoros to obtain AGOA-eligibility in light 
of the country's progress in fully embracing AGOA criteria and 
making steady progress in their implementation.  Comoros is emerging 
from three decades of chaos and becoming a stable and responsible 
African nation more like the 38 AGOA-eligible countries and less 
like the dozen ineligible "pariah" states.  Paragraphs 5-11 describe 
Comoros' current performance against AGOA indicators.  END ACTION 
REQUEST. 
 
MARKET ECONOMY 
-------------- 
 
¶5.  President Sambi is an entrepreneur, having founded businesses in 
bottled water, mattresses, and perfume.  In the past, vanilla and 
ylang-ylang (a perfume essence) were exported in significant 
quantities from Comoros.  At present, most formal sector workers are 
employed by the Union or Island Governments.  There is a modest 
tourism sector, and tiny manufacturing base.  The majority of 
Comorans live on subsistence farming and fishing, as well as 
remittances from family abroad primarily in Marseilles, Mayotte, and 
Madagascar. 
 
RULE OF LAW, POLITICAL PLURALISM, RIGHT TO DUE PROCESS 
--------------------------------------------- --------- 
 
¶6.  Fourteen candidates freely contested the April 2006 presidential 
primary, and three candidates then ran for president in the May 
national election.  International observers agreed the poll was fair 
and transparent, with then opposition figure Sambi winning by a wide 
margin.  Taking office in May in the first peaceful and democratic 
transfer of power in Comoran history, Sambi vowed to install an 
effective rule of law.  Corrupt officials have been prosecuted. 
Many prisoners convicted of minor crimes who did not receive 
adequate due process were granted amnesty. 
 
ELIMINATION OF BARRIERS TO U.S. TRADE AND INVESTMENT 
--------------------------------------------- ------- 
 
¶7.  Although remote and underdeveloped, Comoros welcomes U.S. trade 
and investment.  Western Union entered the market in 2006 to access 
the substantial client base for remittances from abroad - its 
operations to date function well.  Before the collapse in vanilla 
prices, American importers purchased the commodity in Comoros. 
Several Americans live in Comoros working for humanitarian NGOs in 
health and education - their presence is welcomed by the community. 
 
There are no known specific barriers to U.S. trade and investment. 
 
ECONOMIC POLICIES TO REDUCE POVERTY 
----------------------------------- 
 
¶8.  The Union of the Comoros has performed adequately under its 
poverty reduction strategy as indicated by the World Bank.  An 
Interim Poverty Reduction Strategy Paper (I-PRSP) with a focus on 
fostering economic growth, led by the private sector, and improving 
the provision of public services in the social sectors was presented 
to the Board of Directors of the World Bank in May 2006.  The I-PRSP 
concentrates around three key objectives: (i) sustained economic 
growth; (ii) improved human capital development; and (iii) improved 
governance and political stability.  The World Bank states in its 
Country Report for the Union of the Comoros that: "Achieving the 
poverty reduction strategy objectives will require unwavering 
efforts to improve public financial management as well as continuous 
inter-island cooperation.  It will require higher international 
financial aid in the form of immediate support to finance pressing 
social services, public investment, and technical assistance needs; 
it will also require comprehensive debt relief".  Having concluded 
an Article IV consultation with the IMF in July 2006, the government 
is also seeking to formulate a full-scale poverty reduction strategy 
paper (PRSP).  In general, it appears that most of the donors are 
eager to reward the country's political transition and agreement on 
an IMF-supported Poverty Reduction and Growth Facility (PRGF) is 
possible in 2007, as long as the economic environment is reasonably 
encouraging and the government seeks to push ahead with reforms.  A 
PRGF would increase the inflow of donor funds in 2008. 
 
A SYSTEM TO COMBAT CORRUPTION 
----------------------------- 
 
¶9.  President Sambi has made his fight against graft public, stating 
repeatedly that corrupt officials will be investigated and 
prosecuted.  Given limited expertise in his government, and a poorly 
functioning judicial system, progress has been slow and corruption 
is still reported, particularly in connection with state-owned 
enterprises and customs.  In a gesture towards enhanced 
transparency, Sambi made public his own salary, a first for any 
Comoran head of state. 
 
PROTECTION OF WORKER RIGHTS 
--------------------------- 
 
¶10.  As noted in the Human Rights Report and Worst Forms of Child 
Labor Report, Comoran law meets minimum standards for the protection 
of worker rights.  Organized teachers, dockworkers, and taxi-drivers 
recently availed themselves of their right to strike and demonstrate 
to protest nonpayment of salaries or other grievances.  Government 
enforcement is weak, but several UN agencies present in Comoros 
reinforce the protection of worker rights.  In reality, there are 
virtually no formal sector jobs in Comoros after years of 
instability and low investment interest. 
 
¶11.  Comoros did not engage in activities that undermine U.S. 
national security or foreign policy interests, did not engage in 
gross violations of internationally recognized human rights, and did 
not provide support for acts of international terrorism.  In fact, 
Comoros has been an active participant in the Rewards for Justice 
Program, cooperating fully in the hunt for Comoran-born terrorism 
suspect Harun Fazul.  Former President Azali expelled, at United 
States request, the Islamic charity al-Haramain, which is suspected 
of having ties to extremist groups. 
 
MCGEE