VZCZCXRO3627
RR RUEHPA
DE RUEHNK #0285/01 0681420
ZNR UUUUU ZZH
R 091420Z MAR 06
FM AMEMBASSY NOUAKCHOTT
TO RUEHC/SECSTATE WASHDC 5244
RUCPDOC/USDOC WASHDC
INFO RUEHZK/ECOWAS COLLECTIVE

UNCLAS SECTION 01 OF 03 NOUAKCHOTT 000285 
 
SIPDIS 
 
SIPDIS 
 
STATE FOR AF/W (B. BACHMAN), AF/EPS (M. NORMAN) 
 
E.O. 12958: N/A 
TAGS: ETRD ECON PHUM MR
SUBJECT: Mauritania: Input for the Annual AGOA Report 
 
Ref: State 26707 
 
¶1. Mauritania was one of the first 34 countries to be found 
eligible in 2000 for the trade benefits of AGOA.  On 
December 22, 2005, however, President Bush terminated 
Mauritania's designation as of January 1, 2006, because 
Mauritania is not meeting the required criteria of making 
continual progress toward establishing the rule of law and 
political pluralism. 
 
¶2. This requirement ceased to be fulfilled when a military 
coup took place on August 3, 2005.  Despite the several 
positive steps the transitional government has taken to 
prepare for democratic elections, the fact remains that the 
present military junta came to power by force, rules by 
decree and is illegitimate.  AGOA eligibility could be 
reinstated through the successful holding of democratic 
elections and the inauguration of a constitutional 
government, and in the presence of continuing progress in 
the fields of economic reform, human rights and good 
governance. 
 
------------------ 
Economic Situation 
------------------ 
 
¶3. Mauritania is a large country of 1.3 million square 
kilometers with only 3 million inhabitants.  In 2004, the 
GDP per capita was estimated at $526, the real GDP growth 
was 6.9% and the population growth rate was 2.9%.  The 
Mauritanian government has managed most of its macro- 
economic deficits through restructuring programs and the 
implementation of some budgetary policies to keep prices at 
a reduced level.  The lack of foreign currencies in 
Commercial Banks, however, counterbalances this measure. 
Mauritania's challenges are the persistent poverty affecting 
40% of the population, a fragile economy and poor 
diversification of exports.  Persistent droughts, widespread 
desertification, flooding, and the effects of the massive 
locust invasion in 2004 have strained the country's 
finances. The country is suffering from rapid urbanization, 
extensive unemployment, pervasive poverty, and a burdensome 
foreign debt. The concentration of much of the country's 
wealth in the hands of a small elite, as well as a lack of 
transparency and accountability in certain areas of 
governance, impede economic growth. 
 
¶4. In 2002, Mauritania reached its completion point under 
the enhanced HIPC initiative and Mauritania was declared 
eligible for debt relief.  As a result, Mauritania received 
approximately $1.1 billion in debt relief.  However, the IMF 
concluded in May 2005 that the disbursement was non- 
complying because Mauritania had provided inaccurate 
information to the IMF.  As a result, Mauritania voluntarily 
repaid the disbursement.  The IMF also required Mauritania 
to provide corrected data for previous years before 
implementing any new programs.  After the coup, the 
transitional government announced it would cooperate with 
the IMF to provide corrected data for the previous years. 
The IMF Board may determine that Mauritania may need to 
repay noncompliant disbursements for the years 2001 and 
¶2002.   On December 21, the IMF delayed the cancellation of 
Mauritania's IMF debt under the Multilateral Debt Relief 
(G8) Initiative. 
 
¶5. The Government of the Islamic Republic of Mauritania 
continues to encourage foreign direct investment and 
economic liberalization.  Mauritania has no discriminatory 
policies against foreign investment, imports, or exports. 
The government's investment and development policy 
emphasizes private sector development and is seen as the 
main engine of economic growth.  In line with ongoing World 
Bank/IMF structural reform programs, the government 
privatized several parastatals in the late 1990's, 
encouraging foreign investors to purchase shares.  The 
orientation towards privatization and liberalization is 
expected to continue in 2006. 
 
¶6. Foreign investors generally receive the same treatment as 
Mauritanian investors, subject to the provisions of treaties 
and agreements concluded by the government with other 
countries.  Foreign investors have the same access as 
Mauritanians to courts of law.  Nonetheless, the success of 
foreign investors will depend in large part on their 
successful collaboration with local partners who understand 
the local market and government.  Contracts are protected by 
the civil and commercial codes, although court enforcement 
and dispute settlement can in practice be difficult to 
obtain. 
 
 
NOUAKCHOTT 00000285  002 OF 003 
 
 
--------------------------------------------- -- 
Rule of Law/Political Pluralism/Anti-Corruption 
--------------------------------------------- -- 
 
¶7. On August 3, 2005, President Maaouiya Ould Sid'Ahmed Taya 
was deposed in a bloodless coup. Military commanders, led by 
Colonel Ely Ould Mohammed Fal, seized power and established 
the ruling Military Council for Justice and Democracy to run 
the country. The council dissolved the Parliament and 
appointed a transitional government. The transitional 
government has promised a return to constitutional order 
through free and fair elections, culminating with a 
presidential election in March 2007 and the complete 
turnover of power no later than the end of May 2007.  The 
transitional government has also made positive statements on 
reducing corruption, strengthening the justice system, 
increasing freedom of the press and opening the political 
system to political parties and political associations. 
 
¶8. Although the law provides for the independence of the 
judiciary in practice the executive branch exercises 
significant influence over the judiciary through its ability 
to appoint and pressure judges. In addition, poorly educated 
and poorly trained judges who are susceptible to social, 
financial, and tribal pressures limit the judicial system's 
fairness. 
 
¶9. Corrupt practices are widely believed to exist at all 
levels of Mauritanian government and society.  Wealthy 
business groups and government officials reportedly receive 
frequent favors from authorities, such as unauthorized 
exemption from taxes, special grants of land, and favorable 
treatment during bidding on government projects. Mauritanian 
and non-Mauritanian employees at every level, and in every 
organization, are believed to flout Mauritanian tax laws and 
filing requirements.  The only exceptions to this are the 
employees of the Mauritanian government, whose income taxes 
are automatically deducted from their pay.  This widespread 
corruption deprives the central government of a significant 
source of revenue, weakening the capacity of the government 
to provide necessary services. 
 
¶10. Anti-corruption measures exist, but they have not been 
effectively enforced.  Although the transitional government 
has subscribed to a broad good governance program, giving or 
accepting bribes is still not considered a criminal act 
under current Mauritanian law. Mauritania is not a signatory 
to the OECD Convention on Combating Bribery. Corruption is 
most pervasive in government procurement, bank loans, 
fishing license attribution, land distribution, and tax 
payments.  There is no systematic annual auditing of 
government accounts. 
 
¶11. The only international organization for transparency 
that operates in Mauritania is the Swiss-based SGS, confined 
to the inspection of imports.  Last September, Mauritania 
announced its intention to adhere to the Extraction Industry 
Transparency Initiative after repeated requests from the 
World Bank, IMF and foreign oil explorer consortium. 
 
------------------------------ 
Human Rights/Labor/Child Labor 
------------------------------ 
 
¶12. Both the former and transitional government's human 
rights records remain poor; although there are some 
improvements in a few areas, serious problems remain. The 
following human rights problems were reported: citizens' 
inability to change their government, arbitrary arrest and 
detention with prolonged pretrial detention, harsh prison 
conditions and ethnic and racial tensions as a result of the 
under-representation of largely southern based ethnic groups 
in political life. 
 
¶13. Both the former government and the present transitional 
government made appreciable progress in combating 
trafficking, particularly in victim protection and in 
raising public awareness of new trafficking-related laws. 
The transitional government has respected the former 
government's trafficking policies but has demonstrated 
greater diligence in its counter trafficking efforts. 
 
¶14. Mauritanian law provides for freedom of association and 
the right of citizens to join any labor organization, and 
workers exercises this right in practice. All workers except 
members of the military and police were free to associate in 
and establish unions at the local and national levels. To be 
legally recognized, a union must have the authorization of 
the public prosecutor who can provisionally suspend a trade 
union at the request of the Ministry of the Interior if it 
 
NOUAKCHOTT 00000285  003 OF 003 
 
 
believes that the union has not complied with the law. The 
government, however, has the power to decide whether to 
recognize a trade union. 
 
¶15. The majority of the labor force is in the informal 
sector, with most workers engaged in subsistence agriculture 
and animal husbandry.  Nearly 90 percent of industrial and 
commercial workers, however, are unionized.  The law 
provides that unions may organize workers freely without 
government or employer interference, and workers exercise 
this right in practice. General or sector agreements on 
wages, working conditions, and social and medical benefits 
are negotiated in tripartite discussion and formalized by 
government decree. Wages and other benefits could also be 
negotiated bilaterally between employer and union, and the 
results of such negotiations are filed with the Directorate 
of Labor. Although the directorate has the ability to change 
the negotiated settlement between labor and business, there 
were no known cases of such action during the previous year. 
The government can dissolve a union for what it considered 
an "illegal" or "politically motivated" strike; however, no 
unions were disbanded during the previous year. 
 
¶16. The former government ratified an updated labor code in 
2004 that included significant improvements in health-care 
entitlements, including the introduction of maternity leave; 
an improved paced-arbitration system; and a series of laws 
prohibiting forced labor in any form. 
 
¶17. The law prohibits forced or compulsory labor, including 
by children, but the law only applies to relations between 
employers and workers. Slavery is illegal although there are 
still areas where the attitude of master and slave prevail 
and slavery is practiced 
 
¶18. The law provides that children cannot be employed before 
the age of 14 in the nonagricultural sector or under age 13 
in the agricultural sector unless the minister of labor 
grants an exception due to local circumstances; however, 
child labor in some parts of the informal sector was common 
and a significant problem, particularly within poorer inner- 
city areas. The law states that employed children between 
the ages of 14 and 16 should receive 70 percent of the 
minimum wage and that those between the ages of 17 and 18 
should receive 90 percent of the minimum wage. 
 
¶19. Young children in the countryside are commonly employed 
in herding, cultivation, fishing, and other significant 
labor in support of their families' activities. Young 
children in urban areas often drive donkey carts and deliver 
water and building materials. In keeping with longstanding 
tradition, many children serve apprenticeships in small 
industries and in the informal sector. Reporting by some 
human-rights NGOs strongly suggested that domestic 
employment, often unpaid, of girls as young as seven in 
wealthier homes is a growing problem. There is no child 
labor in the modern industrial sector. 
 
¶20. There is a labor inspectorate with the authority to 
refer violations directly to the appropriate judicial 
authorities but the eight inspectors lack the basic 
resources, such as transport and office equipment, needed to 
enforce existing child labor and other labor laws. 
 
¶21. The government has signed and ratified ILO Convention 
¶182.  The government has not signed or ratified ILO 
Convention 29 and 105, the Optional Protocol on the 
Convention of the Rights of the Child, or the Protocol to 
Prevent, Suppress and Punish Trafficking in Persons. 
 
LeBaron