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Cablegate: Guinea-Bissau Agoa - Input for 2007 President's Report

Published: Thu 15 Mar 2007 07:40 AM
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PP RUEHMA RUEHPA
DE RUEHDK #0587 0740740
ZNR UUUUU ZZH
P 150740Z MAR 07
FM AMEMBASSY DAKAR
TO RUEHC/SECSTATE WASHDC PRIORITY 7825
INFO RUEHZK/ECOWAS COLLECTIVE PRIORITY
UNCLAS DAKAR 000587
SIPDIS
SIPDIS
STATE FOR AF/EPS, EB/TPP/BTA AND AF/W
E.O. 12958: N/A
TAGS: ETRD PU
SUBJECT: GUINEA-BISSAU AGOA - INPUT FOR 2007 PRESIDENT'S REPORT
REF: STATE 022438
1. Embassy input on Guinea-Bissau follows for the 2007 President's
report on AGOA keyed to the template outlined in reftel and last
year's report as published by USTR. This text has also been
provided to AF/W and AF/EPS via e-mail.
2. Begin Post's input:
MARKET ECONOMY/ECONOMIC REFORM/ELIMINATION OF TRADE BARRIERS: The
Government supports the continued transition to a market economy.
It no longer dominates the commercial sector and has abolished state
marketing boards, privatized some companies, and ended price
controls. Restrictions on foreign operators in the cashew
production sector were lifted in 2004 but government interference
made business difficult for Indian cashew buyers, who traditionally
acquire the vast majority of the country's cashew crop. As a
result, one of the largest companies operating in Bissau, Indian
investor Olam International, ceased operations in Guinea-Bissau.
RULE OF LAW/POLITICAL PLURALISM/ANTI-CORRUPTION: Guinea-Bissau is a
multi-party state but the outgoing government, led by Prime Minister
Aristides Gomes, is not linked with any party. The President, Prime
Minister and several other ministers were expelled by the Party for
the Independence of Guinea-Bissau and Cape Verde (PAIGC) in a power
struggle that has left the largest party deeply divided. The
national court system continues to function, albeit with serious
resource constraints. Customs receipts are placed directly into a
treasury account; fuel import duties are collected at one controlled
port of entry; and the Ministry of Finance must clear on all
disbursements to ministries and public bodies. To increase
transparency and gain donor confidence, the Government allows the
UNDP and other donors to participate in the Treasury Committee,
which implements the day-to-day fiscal management on the basis of a
strict cash-rationing system. Corruption, especially related to
narcotics trafficking, is pervasive up to the highest levels of the
civilian government and military.
POVERTY REDUCTION: Guinea-Bissau finalized a National Poverty
Reduction Strategy paper (DENARP), which the Government presented to
the international community at a donor's conference in Geneva in
November 2006. Guinea-Bissau did not receive enough donor support
to cover its 2007 budget gap or fully finance the DENARP. Still
without a budget, the International Monetary Fund will not qualify
Guinea-Bissau for broader post-conflict assistance, a failure that
impacts the DENARP as well as efforts at security sector reform.
Guinea-Bissau lacks the pool of skilled labor required for increased
exports of most skill intensive products. The lack of educated
workers also discourages investment in the country.
LABOR/CHILD LABOR: Guinea-Bissau has ratified five of the eight
fundamental ILO Conventions, but not ILO Convention 138 on minimum
age or ILO Convention 182 on the worst forms of child labor. The
Constitution grants all civilian workers the right to form and join
trade unions. The law provides for the right to strike and
protection against retribution for engaging in lawful union
activity. There are no specific laws that protect children from
exploitation in the workplace. The Government developed a Strategic
Document for the Reduction of Poverty that includes the elimination
of the worst forms of child labor as a key objective.
JACOBS
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