A vote of confidence?

A vote of confidence?

Published: April 15, 2010

Foreign Direct Investment

(Read the original article here)

After a particularly turbulent year, hopes are high that Guinea – the world’s largest exporter of bauxite – is moving towards democracy following the announcement of elections in June. Michael Deibert reports.

After one of the most tumultuous years in a history that has been often fraught with dictatorship and misrule, the west African nation of Guinea faces a critical few months as it attempts to make the transition to democratic rule.

The world’s largest exporter of bauxite, containing almost half of the world’s known reserves, Guinea was a collection of small communities on the fringes of larger African empires until the area was colonised by France in the 1890s. Existing in the colonial sphere until October 1958, it gained independence under the leadership of Ahmed Sékou Touré.

On gaining independence, Mr Touré set about creating one of Africa’s more durable dictatorships, complete with one-party rule and pervasive security services. Though he fended off a rebel invasion in 1970, Mr Touré nevertheless appeared to be controlling his perceived domestic opponents until his death in 1984.

Brutal rule

Following Mr Touré’s death, a weak provisional government was soon toppled by Lansana Conté, an army officer who continued to rule the country in an authoritarian fashion for more than two decades. Despite allowing some elections a decade into his rule, brutality, including incidents such as the deaths of more than 120 people during the suppression of a nationwide strike in early 2007, continued to blight the country’s international reputation.

When Mr Conté died in December 2008, power was seized by the Conseil National de la Démocratie et du Dévelopement (National Council for Democracy and Development or CNDD), a 32-member, military-dominated body that saw power concentrated in the hands of Captain Moussa Dadis Camara, the CNDD’s president.

Though citizens initially welcomed the mercurial Mr Camara, who frequently pledged to root out corruption and set the country on the path towards democratic elections, by mid-2009 he had reneged on a pledge not to stand as a candidate in upcoming elections.

Protest clampdown

In September 2009, a rally held in Guinea’s capital, Conakry, urging Mr Camara to step down, was met with an orgy of violence by military personnel. According to the UN, at least 150 people were killed and scores of women raped in attacks that had an ethno-religious dimension. The assaults resulted in an arms embargo placed on the regime by the EU and the Economic Community of West African States.

Then in December last year, Mr Camara narrowly survived an assassination attempt by a group of soldiers, led by his top aide Abubakar ‘Toumba’ Diakite. Mr Camara was flown to Morocco for medical treatment, and then moved to Burkina Faso in January of this year to convalesce. Mr Diakite remains at large.

The military junta, now headed by Brigadier General Sékouba Konaté, who assumed the presidency after Mr Camara’s shooting, appointed Jean-Marie Doré, an opposition politician who heads the Union pour le Progrès de la Guinée (Union for the Progress of Guinea), to oversee the upcoming elections.

In late February, the formation of a new government was announced, consisting of a 32-member cabinet, including half a dozen members of the CNDD. Among their number was Lieutenant Colonel Moussa Tiegboro Camara, who has been accused by a UN panel of being one of the chief instigators of the September massacre, as well as Commander Claude Pivi, who has been accused of being party to torture. The two men now serve as special advisors to Guinea’s effort to combat the country’s drugs trade.

In an early March decree, Mr Konaté, still the acting head of state, announced that elections would be held on June 27, 2010, with a second round of voting to be held on 18 July should any candidates fail to secure an absolute majority.

Worth the risk?

Despite its tumult, Guinea has remained a tantalising prize for some investors, with the Chinese firm China International Fund, a little-known entity that has extensive operations in Angola, entering into a $7bn mining deal with the regime.

Companies such as United Company Rusal, the word’s largest aluminium producer, and AngloGold Ashanti, the planet’s third largest gold-mining company, whose previous activities in the Democratic Republic of Congo have raised the ire of some human rights advocates, also have extensive operations in the country.

The mining sector continues to account for more than 70% of the country’s exports, and though Guinea has recently benefitted from an increase in commodity prices, political instability saw the economy grow only by an estimated 1% in 2009. The country’s GDP per capita also remains among the world’s lowest, hovering around $1100 for 2009.

Election cynicism

However, despite its fitful steps towards transforming its political system, some observers think it unlikely that the June election deadline will be achieved, and that investors would be wise to approach Guinea with caution in the near term.

“The Doré government is the farthest Guinea has come to beginning to transition to democratic rule in over two decades,” says Sebastian Spio-Garbrah, west Africa analyst for the Eurasia Group, a political risk research and consulting firm based in New York. “However, lack of financial resources and the predominant role played by the military mean that the transition to democracy will still be fraught.”