Reform vs. bureaucracy in Guinea, West Africa

A mere 700 miles separate the enterprising hubbub and modern skyscrapers of the Ivory Coast's capital, Abidjan, from the sleepy markets and run-down buildings of Conakry, the capital of Guinea. But an economic chasm stands between the two. Since independence, the Ivory Coast has walked the rags-to-riches path. Guinea, meanwhile, has followed the Rake's Progress.

Guinea was once known as the ``jewel'' of French West Africa. It holds a third of the world's high-grade bauxite and vast reserves of iron ore, gold, and diamonds. Most of West Africa's big rivers start in Guinea's Fouta Djallon Mountains, giving the country both potential for hydroelectric development and some of the best-watered farmland on the continent. Before independence, Guinea exported coffee, groundnuts, pineapples, and mangoes; the capital's white beaches, luxurious hotels, and Parisian-style restaurants made it the home of a thriving tourist industry.

With all of this in its favor, there is no reason why Guinea should today rank among the world's poorest nations, with an annual per capita income of less than $300. But for 26 years after winning independence in 1958, the country slid backward under the repressive and ruinous rule of President Ahmed S'ekou Tour'e.

Today Conakry looks as if the clock stopped 28 years ago. Many of the cars that crawl along the potholed streets are relics of French colonial days. Most of the buildings are ramshackle single-story dwellings with rusted corrugated-iron roofs.

The country's decline began with Mr. Tour'e's first move in office in 1958, when he rejected Gen. Charles de Gaulle's offer of continued close cooperation with France. ``We prefer freedom in poverty,'' he told de Gaulle at a rally in Conakry, ``to slavery in riches.''

The French abruptly departed. French civil servants and technicians who ran the government and the country's utility services left overnight. They reportedly took the plans of Conakry's water and sewage system with them, ripped out telephone wires, and stripped the country of most of its assets -- even the light bulbs.

Diplomatic relations between France and Guinea were later severed for 10 years, and Tour'e turned to the East bloc for aid.

Tour'e -- a self-styled ``scientific socialist'' -- adopted the Marxist economic model. He extended state control over agriculture and industry and ruthlessly suppressed dissent.

Tens of thousands were killed or imprisoned, and about 25 percent of the population of 5.5 million fled the country. They included most of Guinea's entrepreneurs, who saw little opportunity to turn a profit under Tour'e. Those who remained sought security in the swollen ranks of government bureaucracy.

Farmers, discouraged by low official prices, reverted to subsistence farming. People living in border areas relied on smuggling to supplement their incomes. By the early 1980s Guinea was importing about one-third of its food, whereas it had been a big exporter before independence.

Declining exports led to a shortage of foreign exchange for industrial raw material imports. The disintegration of transport, power, and water supply infrastructure hastened the decline.

The government tried to maintain urban living standards by refusing to devalue the overvalued local currency. But this only encouraged the growth of a black market as scarce supplies of consumer imports were resold at huge profits. Apart from encouraging corruption, the overvaluation made imports cheap and discouraged local agricultural and industrial production.

By the end of the 1970s Tour'e realized that the socialist option had failed and began to renew ties with the West. Relations with France were restored. But Western investors held back until the government introduced economic and financial reforms -- notably devaluation, trade liberalization, and an end to subsidies. And Tour'e died before making any major changes.

His military successors, who were just as reluctant to bite the economic bullet, were much quicker to correct human rights abuses. Nevertheless, the government's inaction on the economic front sparked an attempted military coup last July led by the former prime minister, Col. Diara Traor'e. This prompted President Lansana Cont'e to start far-reaching reforms.

The most important was a 93 percent devaluation of the local currency, the syli, in January. The move had been prepared for by the introduction of a dual exchange rate for external and domestic transactions three months earlier. Immediately afterward the borders were closed and the currency was changed to the Guinean franc. The new exchange rate narrows the gap with the black market rate. Previously about 90 percent of business transactions used the black market rate.

Weekly foreign-exchange auctions are being held so that importers can help determine a realistic market rate, which has so far hovered between the new official level and the black market level.

The government has also announced plans to close or transform most of the country's 35 money-losing public enterprises, as well as the six state-owned banks. The civil service staff has been halved, agricultural producer prices raised, and the import tariff structure revised.

Devaluation and the other measures helped to pave the way for a $33 million, 13-month standby loan from the International Monetary Fund. Shortly thereafter, the World Bank approved a $43 million structural adjustment loan to help support the cost of the reforms. Donors such as France, the United States, and West Germany have pledged a further $75 million of support.

So far the sharp price increases and streamlining of public-sector employment have provoked little popular protest, giving cause for optimism that the government will persevere with its reform program.

But Guinea is still in a state of flux. It remains to be seen whether the military government has the determination to push its far-reaching economic reforms against vested interests in the government bureaucracy.

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