VZCZCXRO6491
PP RUEHPA
DE RUEHAB #0286/01 1271501
ZNY CCCCC ZZH
P 061501Z MAY 08
FM AMEMBASSY ABIDJAN
TO RUEHC/SECSTATE WASHDC PRIORITY 4203
RUEATRS/DEPT OF TREASURY WASHDC PRIORITY
INFO RUEHZK/ECOWAS COLLECTIVE
RUEPGDA/USEUCOM JIC VAIHINGEN GE

C O N F I D E N T I A L SECTION 01 OF 02 ABIDJAN 000286 
 
SIPDIS 
 
DEPARTMENT FOR AF/W E.PLUMB, AF/EPS E.REPKO, EEB K.DIZOGLIO 
TREASURY FOR R.HALL, D.PETERS 
 
E.O. 12958: DECL: 05/06/2018 
TAGS: ECON EFIN IMF IBRD EAID PGOV PREL IV
SUBJECT: MINISTER OF PLANNING DISCUSSES HIPC, RELATIONSHIP 
WITH IFIS 
 
REF: ABIDJAN 276 
 
Classified By: EconChief EMassinga, Reasons 1.4 (b,d) 
 
¶1.  (C) Summary: Cote d,Ivoire,s Minister of Plan has 
established a timetable to ensure that his country is ready 
to be considered for a HIPC decision point by the end of 
¶2008. The Minister fears that Cote d,Ivoire may lose the 
opportunity to benefit from debt relief under the HIPC 
initiative if it does not qualify before HIPC expires at the 
end of this year.  Bouabre called the country's fiscal/ 
macroeconomic situation "delicate" but manageable. He urged 
the USG to play an active role in ensuring that all parties 
accept the electoral list for the November 30 presidential 
election noting that the elections will be a disaster if the 
validity of the electoral list is in question. End Summary. 
 
¶2.  (SBU) Ambassador and EconCouns called on  Minister of 
Planning Antoine Bouhoun Bouabre on April 27, to get his 
impressions, as head of the Ivoirian delegation to the 
Washington spring IFI meetings, on relations with the IFIs. 
Bouabre seemed satisfied with the delegation's meetings with 
U.S. Treasury officials, U.S. reps to the IMF and World Bank 
and the Director General of the IMF.  He tacitly acknowledged 
the need for Cote d,Ivoire,s overall performance to improve 
and described the fiscal/macroeconomic situation in Cote 
d'Ivoire as "delicate" but manageable.  According to Bouabre, 
Cote d'Ivoire has made important advances in implementing 
greater budgetary and revenue transparency, particularly in 
oil but also in coffee and cocoa, and should not have 
difficulty meeting conditions the IFIs have set. 
 
3.(C) Speaking from his experience as Finance Minister, 
Bouabre said he knew how difficult it could be to make the 
difficult decisions necessary to keep the budget in line. The 
IMF complained that public expenses were too high, and he 
agreed, pointing specifically to the "Sovereign Account" 
controlled by the Presidency. But, Bouabre observed, people 
(i.e. the IMF and WB) had to understand the demands on the 
Presidency.  He explained that the Presidency is the only 
entity in the government that former presidents and ministers 
can look to, for example, to fund travel abroad for medical 
treatment.  Often, he said, the Presidency is obliged to 
cover the cost of their entire entourage, even if the former 
official has ample assets and even homes in Europe. The same 
is true of the Prime Minister's office.  Bouabre said the 
PM's camp is full of paid "hangers on" and that the PM pays 
Forces Nouvelles soldiers to demobilize while their military 
commanders continue to operate road rackets and collect 
illicit commercial taxes.  Putting an end to bonuses paid by 
the government to "front line troops" will also require a 
tough political decision, Bouabre noted, one that the 
President has been unwilling to make in past years because 
senior officers were intransigent.  Bouabre criticized the 
recently concluded SAGEM contract (covering the production of 
national ID and voter cards), saying the USD 160 million 
demanded by SAGEM was excessive, but that the President had 
made a conscious decision to let the contract go forward in 
order to ensure an untroubled path towards elections, the 
country's top priority. 
 
¶4. (C) Turning to Cote d,Ivoire,s eagerness to obtain debt 
relief via HIPC, Bouabre pointed to the 2002 Poverty 
Reduction and Growth Facility (PRGF) and 2002 Poverty 
Reduction Strategy Paper (PRSP) and said Cote d'Ivoire would 
build on what had been accomplished in 2001-2002 under those 
interim plans to meet the conditions for reaching a HIPC 
Decision Point by the end of 2008.  (Bouabre was Finance 
Minister from 2001-2002 and led both the development and 
implementation of Cote d,Ivoire,s initial PRSP. He reminded 
Emboffs that the country had 11 months of good performance 
and was only a month away from a HIPC decision point when the 
2002 crisis disrupted everything)  Bouabre said that a review 
and revalidation process encompassing representatives of all 
elements of the society is already underway.  He believes 
Cote d'Ivoire is in a good position to finish a PRSP by the 
end of June and demonstrate sufficient accomplishments to 
qualify for HIPC before the programs runs out (as described 
by IFI staff) on December 31, 2008. 
 
¶5. (C) Bouabre said IFI staff told him in Washington that 
while the Multilateral Debt Relief Initiative could be 
achieved sometime in 2009, HIPC had to be on the table and 
under consideration by the end of 2008.  Emboff asked local 
IMF ResRep and World Bank Acting Country Manager if there is 
indeed a deadline for the HIPC program as Bouabre discussed. 
World Bank Washington staff indicated that the IFIs and major 
 
ABIDJAN 00000286  002 OF 002 
 
 
shareholders should "discuss the complexities involved" 
during upcoming meetings in Abidjan with visiting delegation 
heads, but that in principle, the end of 2008 is the HIPC 
Decision Point target. 
 
¶6. (C)  Bouabre told Ambassador that that the problem of Cote 
d'Ivoire's arrears with the World Bank has been solved and 
the arrears with the African Development Bank are in the end 
stages of resolution.  A May IMF mission is scheduled to work 
out a PRGF.  Bouabre foresaw several challenges for these 
negotiations: Energy costs and state subsidies should be 
tackled; electricity in particular is a major drain on State 
resources.  According to the 2008 budget, over USD 169 
million is spent in subsidizing consumer electricity costs. 
Similarly, the sustained high price of oil has made a hash of 
the parastatal national refinery (SIR)'s finances; it now 
operates at a USD 94 million annual deficit.  Retail petrol 
and diesel prices have not changed from CFA 615 and 545 (USD 
1.62 and USD 1.28 respectively) per liter since 2004 when oil 
was at USD 50 per barrel.  Food price increases have also 
thrown a wrench into the Finance Ministry's 2008 planning. 
Bouabre acknowledged the need for his government to tackle 
these pressing economic issues but pointed out that the 
current political atmosphere is also very delicate.  The 
government cannot afford to ignore economic issues until 
after the election, but neither can it afford to take actions 
(such as increasing the price of gasoline) that could result 
in social problems that could endanger the government's 
ability to hold elections in November. 
 
¶7. (C)  Ambassador told Bouabre that the USG, along with most 
other major donor countries, will be looking at Cote 
d'Ivoire's political progress, not just economic progress, as 
it moves closer to a HIPC Decision Point. The holding of 
transparent elections will be an important consideration. 
Bouabre said he understood the point clearly.  He also urged 
the USG to help Cote d,Ivoire meet the goal of elections 
this year. Specifically, he asked that the U.S. do its utmost 
to ensure that the electoral list is accepted by all the 
political parties.  If agreement on the electoral list isn't 
reached, he said, it will be "disastrous" for the elections. 
 
 
¶8. (C)  Comment:  Bouabre's understanding of the country's 
finances and how HIPC and MDRI play a role in solidifying 
them is unparalleled among the country's senior management 
team, with the exception of Finance Minister Diby.  He is 
clearly the President's top economic advisor, but also plays 
a consigliere role that reaches beyond his narrowly defined 
ministerial portfolio.  In that light, the obvious concern he 
expressed about a failure of the political parties to accept 
the electoral list and his appeal to the USG to be actively 
involved in helping to resolve any disputes, strikes us as an 
important message and indicator of the role President Gbagbo 
hopes we will play.  Concerning the question of HIPC and 
MDRI, Embassy Abidjan looks forward to further discussions 
with IFI staff and perhaps clearer explanations in the coming 
weeks.  End Comment. 
NESBITT