P 070927Z APR 09
FM AMEMBASSY ABIDJAN
TO SECSTATE WASHDC PRIORITY 5056
INFO ECOWAS COLLECTIVE PRIORITY
AMEMBASSY NEW DELHI PRIORITY

UNCLAS ABIDJAN 000227 
 
 
E.O. 12958: N/A 
TAGS: ECON PGOV EMIN SENV EAGR EFIN EAID IV
SUBJECT: DIFFICULT ECONOMIC CONDITIONS IN CENTRAL-WESTERN 
COTE D'IVOIRE 
 
REF: ABIDJAN 216 
 
 
¶1. Summary.  During a March 16-19 visit to the 
central-western region of Cote d'Ivoire, DCM and econoff 
found residents and local leaders to be greatly concerned 
about economic conditions, despite improved security in the 
area.  The national political crisis has hampered the area's 
economic progress since 2002.  The worldwide recession, with 
its accompanying decrease in demand for commodities, is now 
also taking a toll on the region, a major timber- and 
rubber-producing area.  The diminishing productivity of 
Ivorian cocoa farms, another mainstay of the regional 
economy, is also cause for concern.  End summary. 
 
¶2. Emboffs met with political leaders, NGO staff members, 
community organizations, and business representatives during 
a four-day trip to Man, Guiglo, Toulepleu, Daloa, and some 
small villages in the area.  This cable focuses on economic 
matters; political and security issues were covered in reftel. 
 
¶3. In general, economic concerns seemed to outweigh political 
issues in the minds of emboffs' interlocutors in the region. 
Malnutrition, unemployment, and poverty are significant 
problems for residents and local leaders.  Nationwide, the 
poverty rate increased by more than 10 percentage points, to 
48.9 percent from 38.4 percent, between 2002 and 2008.  In 
the Daloa region, poverty increased to 62.9 percent from 50.3 
percent during the same period.  In the Man region, poverty 
actually fell by one percentage point during that period, but 
remains extraordinarily high, at 63.2 percent. 
 
¶4. As farmers in this hard-hit area abandoned their fields, 
the agricultural sector, which accounts for most of the 
region's economic activity, declined sharply, according to 
local authorities.  Agricultural producers who have returned 
find little local demand for their goods.  Many secure better 
prices for their products (e.g., palm oil, rice, and cassava) 
by exporting them--either legally or illegally--to 
neighboring countries, driving up food costs for local 
residents.  Local authorities also reported that the crisis 
resulted in significant damage to forest reserves in the 
region, as looters took advantage of the absence of forest 
rangers to cut and sell trees illegally.  Banks have yet to 
reopen in Man, forcing residents to travel almost 60 miles to 
Duekoue or over 120 miles to Daloa for banking services. 
 
¶5. In recent months, the global economic slowdown has 
exacerbated the effects of the national political crisis. 
The manager of the Thanry sawmill in Guiglo reported that the 
contraction in demand for wood products has led to major 
layoffs at the Thanry facility. 
 
¶6. According to the Ministry of Environment, Water, and 
Forests (EWF), approximately 10 Ivorian sawmills have closed 
recently, and 6,000 of the 40,000 workers in the Ivorian 
timber industry have lost their jobs.  Ninety-five percent of 
Ivorian wood products are exported:  eighty percent of those 
exports go to Europe, and ten percent go to the United 
States.  Orders are now down 50 percent.  The timber 
industry, which is concentrated in the center-west and 
southwest regions of the country, is a significant element of 
the Ivorian economy.  Before the crisis, annual sales were in 
the range of USD 380 million.  EWF, in partnership with the 
national forestry development agency (SODEFOR), organized a 
seminar in Grand Bassam to address the industry crisis April 
2-3. 
 
¶7. Thanry's experience in Guiglo demonstrates that declines 
in business may have effects beyond layoffs.  Thanry has been 
an active player in the community.  The firm built a public 
junior high school and renovated and expanded a primary 
school in Guiglo.  The company also maintains roads in the 
area and has reforested some 50 hectares (approximately 124 
acres) in the Guiglo area.  Such assistance is only possible 
when the company is profitable. 
 
¶8. Declines in the quality and quantity of cocoa produced are 
also having a negative effect on the region, independent of 
the world recession and largely independent of the political 
crisis.  Although cocoa prices are relatively high, cocoa 
productivity throughout the country continues to fall. 
Cargill and other major companies in the cocoa/chocolate 
industry are greatly concerned about the decline and have 
been working to reverse the trend.  Several programs are 
underway around the country; the Gates Foundation recently 
announced a new regional program valued at approximately USD 
40 million to help improve cocoa quality and yields. 
 
¶9. While in the Daloa area, Emboffs toured a Cargill cocoa 
buying station and visited one of Cargill's "farmer field 
schools," where Ivorian extension agents, funded by Cargill, 
teach farmers how to increase farm yields through better 
pruning, treatment of diseases, wiser application of 
pesticides, etc.  Cargill uses these schools to combat the 
worst forms of child labor as well. 
 
¶10. Although NGOs, USAID, cocoa exporters, and other 
participants in the cocoa/chocolate industry are conducting 
programs like Cargill's farmer field schools, in industry's 
view the GOCI, which has invested little in the cocoa sector, 
carries overall responsibility for the decline.  The new 
program approved for Cote d'Ivoire by the World Bank Board on 
March 31, contains measures to address problems in the sector. 
 
¶11. Comment.  While emboffs found the security situation in 
the region to be generally calm, they did not find much 
encouraging news on the economic front.  Post notes that Tata 
Steel intends to undertake an iron-mining project valued at 
between USD 1.0 billion and 1.5 billion near Man.  Local 
authorities with whom emboffs spoke were oblivious to this 
development, which will not produce significant employment in 
the short term, but could be an economic boon if it reaches 
fruition.  End comment. 
 
 
NESBITT