VZCZCXRO9614
PP RUEHROV
DE RUEHKH #2000 2360958
ZNR UUUUU ZZH
P 240958Z AUG 06
FM AMEMBASSY KHARTOUM
TO RUEHC/SECSTATE WASHDC PRIORITY 4263
INFO RUCNIAD/IGAD COLLECTIVE

UNCLAS KHARTOUM 002000 
 
SIPDIS 
 
SIPDIS 
SENSITIVE 
 
E.O. 12958:  N/A 
TAGS: EINV ECON SOCI SU
SUBJECT:  Juba Investment Fair: A Litany of Woes 
 
Ref:  Khartoum 00721 
 
¶1. (SBU) SUMMARY:  Recent attempts at a Southern Sudan trade fair in 
Juba failed to display the region as an attractive place for doing 
business, highlighting the South's low capacity, lack of a proper 
regulatory environment, and possibility for corruption.  The INGO 
Bread of Life Africa (BOLA), run by an American living in Kenya, 
organized the Southern Sudan International Trade Fair and 
Reconstruction Exhibition at Juba University from August 10-12. 
This is the third trade fair that BOLA has put on and the first in 
Southern Sudan.  The two previous fairs, held in Kenya in May 2005 
and March 2006, also attracted much initial interest, but were 
handicapped by poor organization (reftel). End Summary. 
 
¶2. (SBU) Don Reid, the American who founded BOLA, met with the 
Acting Consul General (A/CG) after the fair and described a series 
of problems that were representative of the environment in Southern. 
 The most serious problem was with the tent camp that Mr. Reid had 
hired to provide food and accommodations.  A new camp, it only had 
49 of the promised 100 tents, served food Mr. Reid found inedible, 
and was submerged under several inches of mud and water.  After the 
event, the camp owners, affiliated with the SPLA, demanded payment 
in full of the originally contracted price and physically detained 
Mr. Reid at the airport, demanding he give them all of the USD 
12,000 they were owed in cash before departing.  Because of the 
rudimentary banking system in Southern Sudan, it took nearly a week 
to have that cash delivered, and Reid told the A/CG that he feared 
for his safety because the camp owners had threatened him and were 
getting inpatient.  A/CG subsequently spoke with Ministry of 
Commerce officials, who agreed to provide police officers to provide 
for Reid's safety until the money arrived. 
 
¶3. (SBU) Mr. Reid said that the Ministry of Commerce had been 
helpful throughout these ordeals, and had waived its normal 2 
percent fee for investment conferences.  He did, however, say that 
he had been the victim of a shakedown from the Southern Sudan 
Chamber of Commerce.  After repeated attempts to get in touch with 
the Chamber, Reid said he finally met with them the day before the 
event.  In that meeting, they demanded a USD 10,000 fee for helping 
promote the event, and said they would close down the conference if 
he did not pay. 
 
¶4. (SBU) After Mr. Reid departed, the Chamber of Commerce officials 
requested a meeting with the A/CG and explained that they had tried 
to get in touch with Reid repeatedly and were unable to until just 
before the event.  They said the USD 10,000 fee was a standard and 
legitimate fee for conferences, and that in exchange they provided 
radio and television spots and worked to attract members of the 
local business community.  They lamented that because Reid did not 
work with them until the last minute, they were unable to get a good 
turnout from local businesses.  They also commented that it was too 
soon for an investment conference in Juba and they were afraid they 
scared away more business than they attracted.  Both the Chamber of 
Commerce and some UN officials also accused Reid of corruption, 
saying he was pocketing thousands of dollars from the high 
conference fees.  Reid admitted he had inadvertently hired some 
dishonest people for his Southern Sudanese staff. 
 
¶5. (SBU) The A/CG commented to both the Ministry of Commerce and the 
Chamber of Commerce that Southern Sudan must establish rule of law 
over rule by force, and it must establish a clear regulatory 
framework for businesses.  Until that time, most of the investors 
they are likely to attract are either small companies with little 
ability to deliver, or criminals looking to exploit the south. 
Solid, legitimate businesses may show patience for a lack of 
capacity, but will quickly pull out if they are threatened by armed 
men who act with impunity, are forced to pay surprise "fees" to 
different groups, and are required to employ family members of 
influential people.  The A/CG warned that if this situation is not 
resolved by the time U.S. sanctions are lifted, it is likely many 
American businesses would quickly move in, and then quickly move 
out, never to return. 
 
HUME