Crime and corruption flourish amid political crisis

Moussa Tanoh used to import two shipments of new car parts in to Cote d'Ivoire every month but in 2004, he only managed two all year as a protracted political crisis deepened economic woes. "Nobody buys new anymore," said Tanoh, rubbing his sleepy eyes as he hauled himself up off the floor of his Mercedes spare parts shop where he had been dozing away the afternoon. "Everybody goes to the black market and buys used or stolen car parts." According to Tanoh, the demand for cheap parts is fuelling car theft and the racket is destroying his own business. "It was in the paper today that 27 cars were stolen over the weekend in Abidjan alone! All those cars are immediately taken apart and sold in pieces," he told IRIN. "I have one employee and if worst comes to worst I'll have to fire him. But just the thought of that makes me feel terrible," Tanoh added with a sigh. Since a failed rebellion split the country in two in September 2002, Cote d'Ivoire has been plunged into a deep economic as well as political crisis. Every day businesses close, employees are laid off and more people struggle to earn a crust in what some say is the worst economic malaise the former powerhouse has seen since independence from France in 1960. A government of national reconciliation was installed in spring 2003, but its 41 ministers are largely powerless. Rebels continue to hold the rural north of the country but the government has the south where the national port and most businesses are located, and where diplomats say it is President Laurent Gbagbo's closest aides who are running the show. Many ordinary Ivorians joke that the only people profiting from the no-war-no-peace situation are politicians, the military, and rebel leaders, many of whom are building large villas for themselves and driving around in luxury cars. Jobs increasingly scarce Meanwhile the average Ivorian is suffering, as the ongoing crisis with its periodic violent flare-ups hurts what remains of the formal economy and makes real paying jobs hard to come by. Economy and Finance Minister Paul Bohoun Bouabre said at the end of last year that growth in the world's top cocoa grower would be close to zero in 2004 and at best would not top 0.9 percent. He estimated that if the situation were to normalise that would have a two point positive effect on growth, but that is looking like a remote prospect at present, with international mediators yet to break the stalemate. A resumption of hostilities in November, that was crushed by a French rapid reaction force, sparked a wave of violent anti-French riots in the main city of Abidjan and the widespread looting that followed wiped out more than 150 small or medium businesses and led to the departure of nearly 9,000 foreign nationals, most of them French.

Many foreigners fled during the November violence

Within a week, an estimated 30,000 jobs had gone down the drain, according to the Ivorian Chamber of Commerce, whose chairman Jean-Louis Billon warned that the nation's economy was "on the verge of bankruptcy." Even before the November violence, the official economy was not in great shape. Only 478,000 people out of a population of 18 million were officially employed by a total of 41,000 businesses according to data provided by the centre for social security, (CNPS). Some 64 percent of the population is under 24 years of age - that leaves a lot of disaffected unemployed youths in Cote d'Ivoire, analysts told IRIN. Most have to struggle in the expanding informal sector as petty traders, cash-in-hand workers or labourers. With the expatriate exodus and a dearth of tourists, hotels and restaurants are finding it particularly difficult, the National Council of Ivorian Patrons (CNPI) says. The automobile sector, insurance companies and construction works are also struggling, it reckons. Employers say the worst direct consequence of the crisis is growing corruption and what they call 'fiscal harassment'. Even the employers' association, the CNPI, is now actively encouraging remaining companies to exploit opportunities in the informal sector. Tax evasion on the rise For one Ivorian-born hotel manager, tax evasion may be the only way he can keep his business operating. "I'm barely surviving," he said. "I thought about it for a long time, and I don't like it, but this is the only way I can keep my hotel running." He's decided to change his home address to that of the hotel and tell tax inspectors that he's living there. As for his 16 staff, he's going to have to start paying their wages under the table. It's not just small businesses that are dodging taxes. One Lebanese national explained to IRIN on condition of anonymity how his multi-million dollar commodities company beat the taxman. "My company had to pay US $2 million in taxes," he said. "We bought it off with US $160,000 paid directly to the tax inspectors. I'm sure our financial manager pocketed a chunk of that money during the negotiations. But in the end, we saved US $1,840,000." Although such practices were widespread before 2002, the partition of the country has functioned as an "accelerator" to the problem, a financial services specialist told IRIN. "It's just getting worse. However, if you look at the south and the north, the proportions are not the same," he said on condition of anonymity. Government coffers receive no taxes from the north, where rebel forces can levy their own charges. "The north is no longer a market regulated by laws; lootings are legion, services are not being invoiced as a rule and there is no possibility to check whether taxes and levies have been raised," the CNPI said in its latest report. Exports within a country? Cotton is exclusively cultivated in the rebel-held north. But industry insiders reckon more than half of the 400,000 tonnes produced last year was illegally sold to neighbouring countries. "An estimated 220,000 tonnes were illegally exported to Mali and Burkina Faso and it looks like the same is happening this season," Nicolas N'Guetta secretary-general of the National Cotton Association told IRIN. "It's a disaster." Before the war, cotton producers sold their crop directly to ginning plants in the north. But the war economy and the absence of banks in the north has spawned a new breed of intermediaries who buy the cotton from the farmers for as little as 120 CFA (24 US cents) per kilo and sell it in Mali or Burkina Faso, where the price is state-subsidised and fixed at 220 CFA (44 US cents) per kilo. Southern-based transport companies are struggling as they've lost their market share to competitors in rebel-held towns like Bouake and Korhogo. "We used to haul cotton to the ports, but with most of the cotton disappearing north the company I work for is almost bankrupt now," the employee of a French-owned transport company based in Abidjan told IRIN. "The first months of the year were always our busy season. You should see us now: we have forty trucks and only two of them are in use."

Cocoa beans: Cote d'Ivoire is the world's largest producer

Illegal imports are also damaging local industry. Cheap sugar from Asia, that enters Cote d'Ivoire from Burkina Faso, is undermining local production, warn industry analysts. The Ivorian Refinery Company (SIR) has lost 100,000 tonnes of its annual share of the petrol market in northern Cote d'Ivoire to suppliers from Mali and Burkina Faso, according to a CNPI report. But it's not just state-owned companies that are suffering. In the western town of Man, thousands of tonnes of fresh coffee beans are waiting in vain for the rebels' authorisation before they can be shipped to the south. Things are unlikely to improve anytime soon with rebels tightening rather than loosening their control on 'exports' to the government-held south. They say government taxes on these commodities would be used by the presidency to buy arms and prolong the war. In January, the rebels slapped a ban on shipments of state-owned cotton to the south.