VZCZCXRO8308
PP RUEHBZ RUEHDU RUEHJO RUEHMR RUEHRN
DE RUEHKI #0269/01 0781550
ZNR UUUUU ZZH
P 181550Z MAR 08
FM AMEMBASSY KINSHASA
TO RUEHC/SECSTATE WASHDC PRIORITY 7692
INFO RUCNSAD/SOUTHERN AF DEVELOPMENT COMMUNITY COLLECTIVE
RUCPDOC/DEPT OF COMMERCE WASHDC
UNCLAS SECTION 01 OF 02 KINSHASA 000269
SIPDIS
SIPDIS
DEPT FOR AF/EPS JPOTASH and TDAVIDSON
E.O. 12958: N/A
TAGS: ETRD ECON AGOA PGOV CG
SUBJECT: DRC'S INPUT FOR 2008 PRESIDENT'S REPORT ON AGOA
REF: SECSTATE 20082
1. (U) Post submits the following in response to reftel.
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Economic Situation
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2. (U) The development of a market-based economy in the DRC
continues to progress slowly. The Congolese franc (FC) has floated
freely since mid-2003 without significant government intervention.
A nearly nine month period of exchange rate stability during 2007
was followed at end 2007 by ten percent depreciation of the
Congolese franc (FC). Private sector development is a key objective
for the one-year old government, in partnership with international
financial institutions. Rather than outright privatization, the
GDRC has instituted public enterprise reform of the approximately 60
Congolese parastatals, including the placement of outside management
in key administrative positions.
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Trade Liberalization
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3. (U) There are no specific barriers against U.S. trade and
investment. The GDRC has ratified key international intellectual
property rights (IPR) conventions, but there is a general lack of
IPR enforcement. Cumbersome business registration procedures,
degraded infrastructure and a complicated, opaque taxation regime
all act as deterrents to investment. The government is working with
the World Bank and the IMF to improve this poor investment climate.
Although the formal IMF program lapsed in March 2006 due to
macroeconomic instability and failure to meet key structural reform
targets, the IMF continues with its Staff-Monitored Program and
hopes to renegotiate a Poverty Reduction and Growth Facility (PRGF)
program by mid-2008. Several multinational mining corporations,
including one U.S. company, are developing large-scale projects,
with planned investments totaling billions of dollars over the next
ten years. The U.S. has a Bilateral Investment Treaty with the DRC
that includes investment dispute settlement procedures.
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Political Pluralism
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4. (U) Voters elected a president and national and provincial
assemblies in 2006, the country's first democratic elections in more
than 40 years Local elections are being planned for late 2008.
Political pluralism exists largely without government interference.
The Independent Electoral Commission registered more than 200
parties in the run-up to elections, but most are little more than
electoral platforms for their leaders. Representatives from a
coalition of several parties fill legislative and executive branch
positions. A variety of print and electronic news sources provide a
broad range of political debate.
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Rule of Law
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5. (U) The government is working with bilateral and multilateral
donors to develop capacity-building programs in the law enforcement
and judicial sectors. The judicial sector lacks independence, is
ineffective and often corrupt, and does not consistently observe due
process, particularly in connection with arbitrary or pre-trial
detention. Internationally-funded training programs aim to enhance
the effectiveness of Congolese military and police services.
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Anti-Corruption
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6. (U) Congolese institutions suffer from pervasive corruption.
Inadequate salaries and decades of mismanagement remain significant
obstacles to overcoming this. The government has identified
anti-corruption activities as a key priority and has signed on to
such international efforts as the Extractive Industry Transparency
Initiative (EITI).
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Poverty Reduction
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7. (U) The government has gradually increased its level of pro-poor
spending. The government began implementing its Poverty Reduction
Strategy Paper (PRSP) in July 2006. The government's 2008 budget of
over USD three billion dollars allocates over USD 1 billion for
social spending and poverty reduction programs, including the health
and education sectors. It is hoped that a renegotiated PRGF will
lead to Highly Indebted Poor Country (HIPC) debt relief and outside
budgetary assistance by end 2008.
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Labor Rights
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8. (U) The DRC has ratified all eight core ILO Conventions. Most
KINSHASA 00000269 002 OF 002
employees have and exercise the right to form and join trade unions
without prior authorization, but lack of GDRC protection for
workers' rights remains a problem. In 2007 the government did not
allow civil servants' unions to hold elections; however, public
enterprise unions had that right. Collective bargaining remains
ineffective for the majority of Congolese unions. An estimated 80
to 90 percent of the Congolese workforce is in the informal sector,
and therefore does not benefit from even nominal labor law
protection.
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Child Labor
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9. (U) The GDRC Labor Code requires that workers be 16 and have
completed primary school, but the government has made few if any
meaningful efforts to combat child labor. As a result, child labor
remained pervasive, particularly in the mining and informal sectors.
Men, women, and children were trafficked internally for forced
labor and sexual exploitation. A USD five million, three-year U.S.
Department of Labor program begun in 2008 seeks to improve the child
labor situation in the DRC.
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