VZCZCXRO6762
PP RUEHPA
DE RUEHDK #0939/01 1081831
ZNY CCCCC ZZH
P 181831Z APR 06
FM AMEMBASSY DAKAR
TO RUEHC/SECSTATE WASHDC PRIORITY 4883
INFO RUEHZK/ECOWAS COLLECTIVE PRIORITY
RUCPDOC/USDOC WASHDC PRIORITY
RUEHLMC/MCC WASHDC PRIORITY

C O N F I D E N T I A L SECTION 01 OF 02 DAKAR 000939 
 
SIPDIS 
 
SIPDIS 
 
STATE FOR AF/W, G/TIP, AF/EPS, INR/AA AND DRL/PHD 
USDOC FOR 4510/OA/PMICHELINI/AROBINSON-MORGAN/KBOYD 
USDOC FOR 3131/CS/ANESA/OIO/BORR/GLITMAN/MSTAUNTON 
PARIS FOR POL - D'ELIA 
 
E.O. 12958: DECL: 04/18/2011 
TAGS: ECON EINV ENRG PGOV PHUM KMCA SG
SUBJECT: AF/W DIRECTOR CARTER EXAMINES SENEGAL'S POLITICAL 
AND ECONOMIC SITUATION 
 
REF: A. STATE 041203 (NOTAL) 
 
     ¶B. DAKAR 0682 (NOTAL) 
 
DAKAR 00000939  001.2 OF 002 
 
 
Classified By: DCM Robert P. Jackson for reasons 1.4(b) and (d). 
 
¶1.  (C) SUMMARY: Director of West African Affairs Phillip 
Carter visited Dakar, March 26 through 29, to assess the 
political and economic situation.  He had informative 
exchanges with a variety of GOS officials, Islamic leaders 
and opposition politicians.  Carter praised recent steps 
taken by the GOS to improve communications and transparency 
with the Millennium Challenge Corporation (MCC) but cautioned 
the GOS not to let up.  Carter noted that poverty and 
economic conditions could affect the 2007 elections. 
Senegalese officials highlighted efforts to combat 
trafficking, attract investment and reduce poverty.  END 
SUMMARY. 
 
ONE WORLD FOR ALL PEOPLE 
------------------------ 
¶2.  (C) The Islamic Institute of Dakar gave Carter a warm 
welcome in its VIP room.  The Director General of the 
Institute extolled efforts the U.S. has made since the 
terrorist attacks of 9/11 to better understand Islam and help 
Muslims better understand Americans.  He said Senegalese 
remain a predominantly moderate, tolerant people.  One member 
of the Institute told Carter that Islam prescribes "one world 
for all people."  Another said, however, that the Institute 
is concerned about the problem of poverty and realizes 
Senegal must do more than just teach children the Koran. 
According to him, if Senegal is not able to reverse the cycle 
of poverty and make children into employable adults, 
Senegalese tolerance could slide into extremism ) a theme 
that the Prime Minister,s Director of Cabinet echoed. 
 
THE WEAK OPPOSITION 
------------------- 
¶3.  (C) Carter got some unique insights into Senegalese 
politics from discussions with Serigne Mbaye Thiam, a leading 
member of the Socialist Party (PS), and Abdoulaye Babou, a 
Deputy in the National Assembly and member of the Alliance of 
Forces of Progress (AFP).  Thiam described a political 
environment in constant flux.  According to Thiam, the rules 
change all the time; no one knows whether there will be one 
presidential term or two, how many Deputies will be elected 
to the Assembly, or even which electoral system will be used. 
 This has made it difficult for opposition parties to 
strategize.  Babou echoed those sentiments, saying Wade has 
"mocked the institutions" of government.  However, he noted a 
different problem for the opposition -- that they do not 
reach out to the critical voting communities in the villages 
to gain their support, as President Wade's Senegalese 
Democratic Party (PDS) does.  (COMMENT: Babou just resigned 
his position as Spokesman and National Secretary in Charge of 
Communication for the AFP.  While retaining his membership in 
the AFP, he has expressed intense bitterness about the way it 
is managed.  END COMMENT.)  Carter noted that the opposition 
must be more pro-active if it wants to change Senegal.  He 
said there are issues, such as the problem with securing land 
titles, that must be dealt with now for the country's economy 
to grow, without waiting to see what the ruling party does. 
 
TRAFFICKING 
----------- 
¶4.  (C) At the Ministry of Women, Family and Social 
Development, Carter relayed USG support for continued GOS 
efforts to combat trafficking in persons (TIP).  Director of 
Cabinet Mar Lo said the GOS has allocated 800 million CFA 
(USD 1.6 million) to fight TIP in 2006, working on 
prevention, protection and prosecution.  This is the largest 
allocation for TIP in Senegal's history.  Lo also described 
the many anti-TIP activities being led by the Ministry and 
said the GOS works "in perfect coordination" on this issue. 
During a subsequent meeting with World Bank ResRep Midani 
Tall, he said that the problem of homeless, abused and 
trafficked children is considerably worse than many people 
believe; therefore, the Bank is launching a project to 
address the problem and hopes to work in tandem with the 
Embassy and other donors. 
 
TRANSPARENCY, MCA AND THE BLAME GAME 
------------------------------------ 
¶5.  (C) In meetings with the Prime Minister,s Director of 
Cabinet, the Director General of the agency in charge of the 
Millennium Challenge Account (MCA) Compact, and the Director 
 
DAKAR 00000939  002.2 OF 002 
 
 
General of the Investment Promotion Agency (APIX), Carter 
pointed to the ongoing discussions between the GOS and the 
MCC over the MCA proposal.  He also reminded officials that 
it was necessary to maintain transparency in communications 
and to push forward with reform.  Without internally driven 
initiatives to improve the rule of law and stabilize the 
economy, the MCA will not help Senegal meet its goals of 
greater growth and development. 
 
¶6.  (C) Mahammed Dionne, the Prime Minister,s Director of 
Cabinet, said the MCA project is strategic for several 
reasons.  He noted, however, that no single project will 
transform the economy.  He also highlighted that 10 companies 
are responsible for 70 percent of Senegal,s industrial 
production, and three )- Industries Chimiques du Senegal 
(ICS), Sonacos (the recently privatized peanut oil producer) 
and the Societe Africane de Rafinage (SAR) are all facing 
severe challenges.  Dionne said Senegal must diversify and 
attract more foreign direct investment.  Senegal,s savings 
rate is 17 percent, and the economy has grown at an average 
of five percent per year for 10 years.  However, over half 
the population still live in poverty, and Senegalese lack 
employment.  Only inclusive growth can assure stability. 
Dionne averred that those who do not find jobs could become 
terrorist recruits.  Carter responded, cautioning that the 
United States and the MCC understand the strategic importance 
of Senegal and of the MCA, but more must be done to increase 
domestic savings and to bring the informal sector into the 
formal.  Foreign direct investment, while important, should 
not be construed as a panacea for growth, and it alone cannot 
ensure social stability nor economic prosperity. 
 
¶7.  (C) Habib Mbaye, the Director General of Senegal,s MCC 
(AMPMD), told Carter that he was going to Washington to work 
on Compact development.  The noted that the demand survey and 
the land study have been completed; now the architecture and 
engineering study needs to be completed.  He said AMPMD has 
now hired an engineer.  (COMMENT: Carter subsequently met 
with Mbaye, following his MCC meetings in Washington.  Mbaye 
was positive about his discussions and hopeful that the GOS 
would sign a compact nlt the end of the year.  END COMMENT.) 
 
¶8.  (C) Continuing with economic meetings, Carter sat down 
with APIX Director General Aminata Niane.  Niane said that 
Senegal had attracted USD 93 million in foreign direct 
investment in 2005 -) up from an average of USD 70 million 
per year.  Her biggest challenges are lack of land, lack of 
credit, a labor code that favors workers, an unfriendly 
administration and insufficient electricity.  (NOTE: 
Underscoring her point and highlighting the fragility of both 
the energy sector and of the entire Senegalese economy, the 
electricity went on and off during several of Carter,s 
meetings.  END NOTE.)  Niane stressed that significant 
progress is being made, and the MCA could be an important 
catalyst as Senegal targets the sub-region.  For the moment, 
Niane said she is recruiting call centers, emphasizing 
Senegal,s location, language and excellent 
telecommunications infrastructure. 
 
¶9.  (C) While these officials admitted there were economic 
and legal problems to address, such as the increasingly 
frequent electricity outages and inability to secure title to 
privately owned land, Iba Der Thiam, First Vice President of 
the National Assembly, emphatically stated that Senegal is 
doing great; any problems it had were minor and were caused 
by either the Socialists, the French or the World Bank; and 
the biggest challenge now is to curb the excessive liberty 
enjoyed by Senegalese. 
 
COMMENT 
------- 
¶10.  (C) Carter's visit bolstered the confidence of GOS 
officials in their ability to stay on track for a signed and 
delivered MCA, something they seemed to need.  Nevertheless, 
he sent an important message to all interlocutors that 
whether they are Muslim leaders, opposition politicians, 
those engaged in the fight against trafficking, or officials 
seeking to bring economic growth to Senegal, they should 
continue to be realistic, active and engaged.  Septel reports 
on Carter,s discussion of foreign policy issues.  Mr. Carter 
has cleared this message.  END COMMENT. 
JACOBS