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The financial war in Ivory Coast: Five key questions answered

The real battle for the world's No. 1 cocoa producer isn't happening on the streets of the commercial capital, Abidjan. It's unfolding in bank corridors.

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But for Gbagbo, the bank's decision means he is essentially cut off from the financial apparatus of his own country. If he wants to take out a government bond – essentially a giant IOU to investors looking for a risky buy – he'd need the central bank to advertise, auction, manage, and sell it. If he wants to make a withdrawal from Ivory Coast's tax reserves, he'd have to practice forging Mr. Outtara's signature.

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2.) Who's responsible for the government's debt?

But there's a catch: Ivory Coast doesn't just need money. It owes money.

In fact, the country owed a $29 million interest payment on a $2.3 billion bond that was due Dec. 31 – and it still hasn't paid.

"The bill should be paid only when the international community recognizes Laurent Gbagbo," the incumbent's spokesman Ahoua Don Mello told Bloomberg News last week. "I think it would be curious to ask our government to pay while the international community doesn’t recognize it."

On Tuesday, however, Gbagbo's Finance Ministry reversed that tone, and said they'd make the payment before a 30-day grace period triggered a default that would essentially excommunicate Ivory Coast from the global finance community.

But Gbagbo's government, as bond analyst Samir Gadio wrote in an e-mail, "would probably be unable to do so even if the political will existed and the treasury authorized the transaction. Indeed, the payment would have to be channeled via the Central Bank of West African States which now recognizes Outtarra as president."

3.) How long can Gbagbo pay his government?

"Although Gbagbo appears to be backed by the Army at this stage, this will be conditional on his ability to pay the security forces in the coming months," Mr. Gadio added.

He leaves out the part where soldiers pay themselves, or rather, coerce innocent people crossing borders and roadblocks to dash a little something from the bottom of their hearts/wallets. Among West African soldiers, Ivory Coast's fighting force has a reputation for masterful extortion, but it may not be enough to keep an entire government grinding on in the face of international isolation.

Salaries alone cost Gbagbo's administration $170 million a month, according to British newspaper The Guardian. Expect the military to enjoy first dibs on whatever wage money the government scrounges up. And since the election, it's been able to scrounge up enough to pay some of its servants some of their money, even if it's a few days late.

4.) How much control does Gbagbo have over cocoa and oil?

If Gbagbo has been able to keep his troops fed and his functionaries paid, it's in no small part because the lush, tropical stretch of Ivory Coast he controls happens to be the cocoa basket of the planet. The most fertile cocoa hills of Ivory Coast stretch right through sections controlled by Gbagbo's supporters.


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