Donor roundtable as country struggles

Amidst mounting social hardship and continued political instability, a long-awaited donor roundtable on Guinea-Bissau is planned for 7-8 November in Geneva. Prime Minister Aristides Gomes made the announcement on Tuesday during a workshop on Guinea-Bissau’s poverty reduction strategy. The government faces increasing economic difficulties because of a poor rice harvest and a plunge in the sale of cashew nuts due to government-fixed prices that farmers rejected. Cashews are the country’s main foreign exchange earner. In addition, the government is struggling to pay some 10,000 public sector workers. Monthly salaries of about US $30 are two months in arrears. Guinea-Bissau is expected to ask the international community at the roundtable to provide some US $250 million to improve access to basic health services and education, support rapid and sustainable economic growth, and help create a favourable atmosphere for business and investment. The success of the roundtable, however, hinges on a couple of key factors, according to the London-based Economist Intelligence Unit (EIU). “This will depend on the president and the new government demonstrating to donors their political commitment to reform, macroeconomic stability and poverty reduction. The donor roundtable could, in addition, lead to a significant rescheduling of external debt,” the EIU said in its July country report on Guinea-Bissau. Guinea-Bissau has been wracked by political instability for years. Presidential elections last year were disputed by the country’s leading political party, the African Party for the Independence of Guinea and Cape Verde (PAIGC), which holds the majority in parliament. The party split over President Joao “Nino” Bernardo Vieira’s candidacy. Prime Minister Gomes, of the PAIGC faction that supported Vieira, was appointed without the consent of parliament. The donor roundtable has been repeatedly postponed because of the paralysis in government. Full-scale commitment from international donors “is crucial if Guinea-Bissau is to reduce the severe fiscal and economic problems that have often been at the root of its political crises,” the EIU said. Guinea-Bissau’s economy is based almost entirely on subsistence agriculture, although the country is a net food importer. There is scant manufacturing or industrialised economic activity. Some 80 percent of the population lives on less than US $2 a day, according to a 2004 National Millennium Development Goal Report. ab/cs/ccr