VZCZCXRO9732
OO RUEHBZ RUEHGI
DE RUEHGI #0123/01 1771220
ZNR UUUUU ZZH
O R 261220Z JUN 09
FM AMEMBASSY BANGUI
TO RUEHC/SECSTATE WASHDC IMMEDIATE 0926
INFO RHMFISS/AFRICOM
RUEHBZ/AMEMBASSY BRAZZAVILLE 0174
RUEHKH/AMEMBASSY KHARTOUM 0277
RUEHKI/AMEMBASSY KINSHASA 0287
RUEHLC/AMEMBASSY LIBREVILLE 0188
RUEHLO/AMEMBASSY LONDON 0132
RUEHNJ/AMEMBASSY NDJAMENA 0466
RUEHFR/AMEMBASSY PARIS 0452
RUEHYD/AMEMBASSY YAOUNDE 0449
RUEHGI/AMEMBASSY BANGUI 1163

UNCLAS SECTION 01 OF 04 BANGUI 000123 
 
SENSITIVE 
SIPDIS 
 
DEPT FOR AF/C AND EEB 
PARIS FOR RKANEDA 
LONDON FOR PLORD 
AFRICOM FOR JKUGEL,CKOCH 
 
E.O. 12958: N/A 
TAGS: PGOV PREL PHUM PINR EAID ECIN ECON EFIN EINT
ETRD, CT 
SUBJECT: EMBASSY BANGUI'S REACTION TO THE WORLD BANK'S POVERTY 
REDUCTION STRATEGY ANNUAL PROGRESS REPORT (APR) 
 
¶1. (SBU) SUMMARY: AmEmbassy Bangui has reviewed the World Bank's 
Poverty Reduction Strategy Annual Progress Report (APR) of the 
Central African Republic and takes exception to much of the 
document. Post has seen little real progress or commitment on 
the part of Central African Republic's government (CARG) to 
implement serious economic reform, fight corruption, or 
encourage private investment. While the government has set up 
the structures mentioned in the report, the actual effectiveness 
of these structures is limited and we have seen what appears to 
be an escalation of opportunistic behaviors on the part of some 
government ministries. It is probably impossible to find real, 
hard numbers, but the circumstantial and physical evidence of 
corruption and mismanagement is overwhelming. END SUMMARY. 
 
¶2. (SBU) Post views with deep concern the CARG's lack of 
commitment to growth and national reconciliation and does not 
share the World Bank's optimistic view. The CAR was ranked 180 
out of 181 countries surveyed in the World Bank's 2009 Doing 
Business index. It was also ranked 151 out of 180 countries 
surveyed in Transparency International's 2008 Corruption 
Perceptions Index. In a country that is the fifth largest 
producer of gemstone quality diamonds, being ranked 178 of 179 
countries on the UN's Development index is a seeming non 
sequitur. (Sadly, the CAR was ranked 172 only a year ago - it is 
significant that the situation is getting worse, not better.) 
There is money in the Central African Republic, but it is often 
diverted or misappropriated. 
 
¶3. (SBU) Below are several ``achievements'' cited by the report 
and Post's analysis of the state of affairs (note: paragraphs in 
quotes are from APR, bullets are Post's comments): 
 
``The APR describes the efforts the government has made to 
restore peace and security. Staff agree that these have been 
significant. Efforts toward political stability culminated in 
the Inclusive Political Dialogue in which all major political 
actors (social, political, and rebel groups) participated in 
December 2008, and the creation of coalition government 
including members from the civil society and the opposition as 
well as the rebel groups. Such initiatives followed on the 
Libreville Agreement of June 2008, and an Amnesty Law was 
promulgated in October 2008 covering crimes committed since 2003 
by political or military leaders (except for war crimes and 
crimes against humanity that are under the jurisdiction of the 
International Criminal Court). Restoring peace throughout the 
country remains a challenge, particularly in the northern areas. 
However, it is expected that the government will be able to move 
toward another round of elections in 2010 with the support of 
the international community-especially the three peacekeeping 
missions (MINURCAT, EUFOR and MICOPAX) and the UN Peace Building 
Office'' 
 
- As reported in 09 BANGUI 09, the IPD did not create a 
coalition government. There was a minor shuffle and opposition 
figures were given insignificant ministries, but the result 
cannot not be viewed as a true power sharing accord. President 
Bozize remains surrounded by a cabal of long time ministers, all 
of whom are widely suspected of corruption. Furthermore, the 
follow up committee to the IPD has been unfunded and largely 
ignored. Its most recent snub was the disregarding by the 
government of the electoral code it wrote, despite its approval 
by the opposition and most others. 
 
- MINURCAT has no peacekeeping mandate vis a vis Central African 
disputes. It is in Birao, and Birao only, to protect 
humanitarian workers and refugees against Sudanese incursions. 
09 BANGUI 114 gives examples of how (in)effective MINURCAT has 
been at keeping the peace. Furthermore, MICOPAX has been a 
virtual none presence in the country. Charged with keeping the 
peace and training the FACA, they have done neither. Violence in 
Kaga Bandoro in Feb/March 09, site of a MICOPAX contingent, was 
not dealt with by the forces present. The FACA in private has 
been vocal in criticism of MICOPAX's performance. Finally, EUFOR 
is no longer in existence. MINURCAT, EUFOR and MICOPAX are not 
credible peacekeeping/making forces. 
 
 
BANGUI 00000123  002 OF 004 
 
 
- Lastly, the elections: there has not been, to date, a penny 
budgeted by the government for elections. Nor has an electoral 
commission been put in place. Nor do electoral lists exist. 
There has been scant evidence that the government is moving 
towards elections except through movement forced upon it by 
national and international actors. 
 
``The priority for the government in the next few months is 
rapid action on the disarmament, demobilization, and reinsertion 
(DDR) program to ensure political stability and sustain peace. 
The government and donors are discussing design and 
implementation of the program. UNDP is leading the discussion. 
Although a total of USD 20 million has been identified, the 
total costing is not yet completed. The recommendations of the 
SSR need to be implemented, in particular revision of the 
documents governing C.A.R.'s security sector to improve public 
financial management and budgetary processes and minimize 
leakages in C.A.R.'s security agencies.'' 
 
- There has been no rapid action on DDR. Money promised by CEMAC 
at the end of 2008 for DDR has only just been accepted by the 
CAR as being for DDR instead of for their own discretionary 
spending. Further money for DDR from the international community 
is proving difficult to raise according to a source close to the 
project. 
 
- Rebellion in the North and Northeast continues with little 
government intervention other than the deployment of very small 
numbers of soldiers. The Minister of the Interior visited part 
of the conflict zone, but nothing came of his trip. President 
Bozize has announced publically his intention to take a 
``muscular'' approach to solve the issues. In the past, as 
documented in 09 Bangui 46 and multiple reports from human 
rights organizations going back years, this ``muscular'' 
approach has included the killing of civilians - which only 
further reinforces the rebellion, increases the flow of Central 
Africans to Chad and Cameroon and increases the need for 
international support and feeding of internally displaced 
persons. (The United States provides between USD 5M and 15M per 
year to a country with vast reserves of rich agricultural land 
and abundant rainfall.) 
 
- Further down in the report, the IMF states "The major actions 
undertaken by the government in this sector arise from the 
Security Sector Reform (SSR) and relate to: ``open doors'' days 
have been organized; 25 illegal barriers have been dismantled; 
300 uniforms have been provided for the police by the French 
technical assistance authorities." Post does not believe that 
getting 300 uniforms from the French is a ``major action''. 
While the report cites that illegal road blocks have been 
removed from its road ways, hundreds still remain. A trip from 
Bangui to Doula, Cameroon will cost an individual passenger in a 
motor vehicle upwards of USD 200 in tolls, of which USD 15 are 
registered. 
 
``Growth is central to achievement of C.A.R.'s ambitious PRS. 
The APR rightly discusses the key growth sectors: forestry, 
mining and mineral exploitation, agriculture and tourism. It 
makes it clear that progress has been made in key areas, in 
particular infrastructure and governance in natural resources, 
which is critical for growth and poverty reduction.'' 
 
- Tourism is almost at zero in the CAR and will be so until the 
roads are fixed, banditry eradicated and basic services are 
restored to the country. The country cannot credibly claim that 
tourism is a pillar of its growth strategy as it does little to 
encourage it. 
 
- Agricultural production is mostly at a sustenance level. The 
pitiful states of roads and the ``tolls'' that police and 
military checkpoints demand make it difficult to move produce 
over any distance at all. Cash crop exploitation is at a virtual 
standstill due to a lack of infrastructure. 
 
- The mining sector is dysfunctional at best with very little 
industrial mining at all and those that do exist are harassed 
 
BANGUI 00000123  003 OF 004 
 
 
constantly by the government. 
 
- Post does not expect the timber sector to be a growth industry 
during the financial crisis. 
 
- The report also fails to mention that outside of Bangui, at 
best, there is only four hours of electricity a day, and for the 
vast majority of the country there is simply no electricity at 
all. 
 
- Unfortunately, every sector they have identified as ``growth'' 
initiatives by the CAR are anything but and are even being 
actively stunted, in the case of the mining sector, by the 
government. 
 
``The APR highlights the government's commitment to the road 
program but does not discuss other transport infrastructure. It 
is commendable that the government is providing a stable source 
of funding for road maintenance. Although the targets for 2008 
have not been achieved, the APR notes that 1,500 km of roads 
were rehabilitated, which has reduced the share of 
unrehabilitated roads from 42 percent to 17 percent. In 
addition, 206 km of rural roads were rehabilitated and 52 km 
constructed, which has increased the share of rural roads in 
good condition from 5 percent to 12 percent-above the 2008 
target.'' 
 
- Roads in the CAR are in desperately ill repair and the 
international community is often times more invested in fixing 
the dilapidated infrastructure than the government it. The 
Ministry of Equipment told a USAID team that they have USD 12 
million dollars a year for road work and the CAR needs USD 400 
million. While the government does suffer from a lack of means, 
Post does not consider doing 3 percent of the work needed is 
making road work a priority. 
 
- The report does not give a definition of ``unrehabilitated''. 
Rehabilitation often entails simply clearing overhanging brush 
or digging loose dirt from the side of the road to fill existing 
pot holes, ignoring the underlying structural issues. 
 
¶4. (SBU) One the most troubling aspects of the CARG's 
mismanagement of its economic development is in the sector of 
mining. The Ministry of Mines rejected the World Bank draft of 
EITI mining code twice, and then rewrote it themselves and may 
be using it as a ruse to take control of the mines. The new code 
contains the following troubling provisions: 
 
- A bonus payment of an unspecified amount to fund the Fonds 
Developpement Minier (a slush fund for the Minister that may be 
in contravention of the Finance Code). The amount will be 
specified in Convention Minier to be negotiated with each 
company so it gives the Minister total discretion on how much he 
demands. 
 
- 15 percent for the State in free carried interest in any 
mining project. Most countries that are more developed than CAR 
only require 10 percent and this has been mentioned as a major 
disincentive to investors. 
 
- 15 percent of the production for the State, whether in cash or 
product. It should be noted that one of the products of mining 
is uranium yellowcake. 
 
Furthermore, the Ministry has closed down all but three of the 
diamond trading companies in the country. Each of the surviving 
companies has connections to people in the highest level of 
government. Citing the provision that the collecting houses have 
not fulfilled their legal obligations, the Ministry of Mines has 
effectively consolidated the mining industry in a few well 
connected hands and done so without legal recourse or 
transparency for the closed companies. 
 
¶5. (SBU) One Canadian mining company had their long standing 
convention abrogated after a multi-year investment of over USD 
50M. Then their new agreement with the government was rescinded 
 
BANGUI 00000123  004 OF 004 
 
 
within hours of its approval by the President. An American 
company has been in litigation with the government of the CAR 
since 2005 over oil exploration rights secured under the former 
regime but disputed by the current one with little movement in 
the interim. 
 
¶6. (SBU) COMMENT: The document, while a progress report, is 
deficient in describing the reality on the ground. Currently, it 
appears that the government of CAR is more likely to use World 
Bank funds and debt relief to line the pockets of government 
officials rather than enacting real reform or broad-based 
economic development. Post suggests that debt relief is a 
powerful tool that could affect real positive results from the 
CARG and should not be approved until the CARG has made 
meaningful and tangible reforms. END COMMENT. 
COOK