VZCZCXRO6044
RR RUEHMA RUEHPA
DE RUEHBP #0391/01 1141702
ZNR UUUUU ZZH
R 231702Z APR 08
FM AMEMBASSY BAMAKO
TO RUEHC/SECSTATE WASHDC 9049
INFO RUEHZK/ECOWAS COLLECTIVE

UNCLAS SECTION 01 OF 02 BAMAKO 000391 
 
SIPDIS 
 
SIPDIS 
 
E.O. 12958: N/A 
TAGS: ECON ETRD EFIN PGOV ML
SUBJECT: PRICES RISE IN MALI: BAD, BUT NOT YET CRITICAL 
 
 
¶1.  SUMMARY:  Urban consumers are becoming increasingly 
concerned as prices of basic commodities skyrocket in Bamako 
while the government attempts to implement measures to reduce 
pressure on the cost of living.  An informal survey in the 
local markets gives a picture of the extent of the price 
hikes demonstrating the pressure put on urban consumers in a 
country where most subsist on less than a dollar a day. 
Despite interventions on the part of the government, 
including a modest salary raise, lifting import taxes on 
certain goods, and creating a new National Price Council, 
labor unions and consumer advocacy groups warned of the 
potential for civil unrest if further measures are not taken. 
 END SUMMARY. 
 
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PRICE SURVEY 
------------- 
 
¶2.  During the past year, prices of major consumer staples 
have increased from 20 - 50 percent.  While the hike in most 
prices is due to increased prices worldwide, Mali's 2007-2008 
agricultural production season, which has not met local 
demand, has also played a role.  The overall food stock 
picture is good, but with local production not meeting local 
demand for certain products, and the rise in the price of 
production factor, overall prices have risen with the impact 
being passed on to consumers.  The following approximate 
prices illustrate the extent of the increases over the past 
year. 
 
-- Rice:              .67 USD to    .84 USD / kg 
-- Millet:            .43 USD to    .60 USD / kg 
-- Beef:             2.89 USD to   3.86 USD / kg 
-- Cooking oil:      1.45 USD to   2.17 USD / liter 
-- Powdered milk:    3.14 USD to   4.59 USD / kg 
-- Sugar:           35.00 USD to  45.00 USD / 50kg bag 
-- Bread:             .60 USD to    .72 USD / baguette (on 
top of a reduction in size) 
-- Charcoal:         8.45 USD to  16.90 USD / 100kg bag 
-- Cement:         266.00 USD to 362.00 USD / ton 
-- Laundry:           .48 USD to   .72  USD / three-piece 
"ample" boubou 
 
--------------------- 
LOCAL GROUPS PROTEST 
--------------------- 
 
¶3.  Both the major umbrella labor union (UNTM) and the 
Association for the Defense of Consumers' Rights (REDECOMA) 
had made public statements as early as July 2007 on the 
deteriorating economic situation, requesting that the 
government take immediate action so that even the poorest 
Malians could afford basic necessities.  At that time, the 
GOM made several initiatives to help remedy the situation, 
including raising salaries 5 percent, freezing taxes levied 
on certain imported goods, and setting up a think tank to 
address the issue of inflation.  Despite these measures, UNTM 
Secretary General Siaka Diakite complained that tax breaks 
 
SIPDIS 
and customs duty exonerations only benefited major importers 
(and their civil service "accomplices") who did not pass the 
savings on to the consumers in the form of lower prices. 
Diakite warned the GOM during a press conference at the end 
of March that if swift and effective measures were not taken 
immediately, he "could not guarantee that Malians would not 
riot violently" as experienced in neighboring countries. 
(Note: Occasional protests to date have all been prearranged, 
small-scale, and peaceful, and violence is unlikely at this 
time. End note.)  Following Diakite's outburst and increasing 
criticism from several opposition parties, the GOM invited 
UNTM for a meeting on April 2 to assuage union leaders' fears. 
 
¶4. The consumers' advocacy group has also complained about 
the lack of consistency in the GOM's policy, noting that a) 
while the 2007-2008 rice production was insufficient for 
local demand, high quality Malian rice was exported to 
neighboring countries, reducing the quantities available on 
the market and pushing prices upward; b) rice producers did 
not have a healthy production yield due to ineffective 
management of water resources by the Niger River Valley 
Authority; and c) despite the abundance of livestock, the 
price of beef is increasing due to the lack of a sound meat 
industry policy. 
 
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GOM ACTIONS 
----------- 
 
¶5.  The Prime Minister has called for a (perhaps overly) 
ambitious 50 percent increase in rice production next year to 
allow Mali to become a net exporter in that area.  While 
arguably difficult to realize, increasing productivity is a 
sound policy response.  Some measures, such as applying 
fertilizer to each plant rather than covering the whole 
 
BAMAKO 00000391  002 OF 002 
 
 
field, and improved water usage, hold promise, but require an 
active farm extension service to train farmers; such 
technical outreach and assistance is currently beyond Malian 
capacity. 
 
¶6.  The GOM has lifted the 28% import duty on imported rice 
for the period of April 1 to September 30, 2008.  This 
measure offers the exoneration benefits to all interested 
importers as opposed to a previous initiative which only 
benefited the largest importers.  Additionally, the Director 
of Trade has imposed a ceiling on the price of the lowest 
quality of rice, capping it at 0.75 USD/kg.  Premium rice 
will not benefit from import duty exonerations or have a 
ceiling set on its price. 
 
¶7.  The GOM recently created a new inter-Ministerial Council 
on Prices charged with the tasks of evaluating prices, 
proposing measures to control prices, and presenting the GOM 
an annual report on prices, inflation and the cost of living. 
 
¶8.  Another announcement  coinciding with the uproar over 
escalating prices was the replacement of the Minister of 
Economy, Industry and Commerce Mrs. Ba Fatoumata Nene Sy with 
one of her economic advisors, Mr. Ahmadou Abdoulaye Diallo. 
While some accounts attribute her departure as a political 
casualty caused by the rising cost of living, most indicate 
it was for general incompetence; she had very poor 
communication skills, and seemed completely lost managing a 
ministry. 
 
¶9. COMMENT:  It is clear that Mali is suffering from the 
world-wide increase in prices exacerbated by its dependence 
on many imported goods, but violent protests are not likely 
for the moment.  Mali's recent focus reflected in the Prime 
Minister's plan to increase production is a sound response. 
The biggest pressure on food security is in the north, where 
local production is insufficient to meet demand and Malian 
sellers find it easier to meet orders from neighboring, and 
food-strapped, Mauritania and Niger than sell to northern 
Malian consumers.  In addition, donors have made numerous 
recommendations to Malian policy makers on medium and long 
term solutions, including leveraging domestic resources by 
processing meat locally instead of exporting live animals, or 
processing milk locally rather than importing it from a 
global market hit by skyrocketing prices.  Assistance 
agencies, including USAID, are also encouraging the GOM to 
focus on revenue generating crops, promote improved 
technologies and further improve access to all inputs to 
better increase domestic production.  In the short term, it 
seems the GOM is doing just enough to keep consumer unrest at 
bay. 
MCCULLEY