What will be the impact of post-coup cuts in donor aid?

In a country that imports about 70 percent of its food, and where the UN estimates more than one million suffer from chronic malnutrition, some donors fear an extended embargo on development aid may hit not only the power-grabbing military, but also civilians.

Based on IRIN’s count, the European Union (EU), US government and World Bank have suspended, or threaten to cut, more than US$500 million in non-humanitarian aid in condemnation of the 6 August military takeover and continued detention of President Sidi Mohamed Ould Cheikh Abdallahi.

This money was intended to support, among other projects, rural development, health, education, de-mining, peacekeeping, anti-terrorist, military training and road construction activities, based on public listings of project funding by the EU, US government, and World Bank.

Little immediate shock

Except for US$9 million frozen by the World Bank’s funding freeze, none of these cuts touch food or humanitarian assistance.

Mauritania’s largest bilateral donor, the French Agency for Development (known as AFD) has suspended all new non-emergency funding until new leadership is in place, according to the head of the French embassy in Nouakchott, Marc Flattot.

Flattot told IRIN AFD will continue to run programming for which money has been disbursed. “Because AFD funds multi-year projects, the repercussions of this embargo will not be felt immediately. But it will be difficult for the [military] junta to ignore ; €100 million (US$142 million) over three years is not a small sum.”

He did not specify how much funding is at stake, or how much has already been disbursed of this amount.

Proposed EU freezes

The EU had negotiated to pay €300 million (US$426 million) over the next four years for the right to fish in Mauritania’s waters starting on 31 August 2008.

Weeks after the intended start date, no money has been paid on this fishing deal, according to the head of the EU delegation in Nouakchott, Geza Strammer.

EU’s development and humanitarian aid commissioner, Louis Michel, has recommended a complete freeze on the fishing contract.

Photo: Wikimedia Commons

Donors have cut, or threatened to suspend, more than US$500 million in aid following the 6 August coup

EU officials have also threatened to freeze some of the US$230 million in aid pledged to Mauritania through the year 2013. EU’s Strammer told IRIN the proposed EU funding embargo would not touch emergency or humanitarian aid.

But infrastructure projects under consideration for EU investment, such as renovations of the 200km road between the southern Mauritanian town, Rosso, and Nouakchott are on hold.

Strammer told IRIN while EU projects do not employ thousands of people, the EU investment embargo will nevertheless hit local businesses. “Obviously, when any project is frozen, that is less money for [local] workers, which means less profits for local businesses.”

But he said any immediate shock to the state or its civilians will be minimal. “It will take at least six months to one year for these aid cuts to really affect state operations [under the control of coup leaders]. And this is even truer as we anticipate a rise in oil revenue in the coming months. I think therefore military leaders can, withstanding everything else, survive the shock of this belt-tightening [reduction in donor assistance], which will not affect the everyday lives of Mauritanians.”

Oil production started in February 2006, although not with the expected yield. Mauritania’s proven and potential crude oil reserves are estimated at around 600 million barrels, and the sector is expected to grow, according to the UK-based Extractive Industries Transparency Initiative.

World Bank shutters operations, reconsiders food aid

The World Bank has announced a lending freeze to Mauritania and is hanging on to US$175 million that would have gone toward 17 aid and investment programs in Mauritania.

This money is a part of more than US$400 million in Bank commitments in rural development, health, education and infrastructure, such as road building.

Staff in Mauritania have been sent home on administrative leave, and there has been no official contact between the Nouakchott World Bank office and coup leaders, according to a World Bank Nouakchott-based officer, who asked to remain anonymous.

This officer told IRIN the World Bank may unblock some funding, “We should unblock US$9 million for food assistance, but the green light is dependent on how negotiations go between the international community and the new power [military coup leaders].”

The officer added World Bank officials are expected to meet in Washington, DC to discuss this on 25 September.

Uncertain long-term impact

The head of the UN in Mauritania, Maria Ribeiro, told IRIN a prolonged embargo may make things tough for Mauritanians, “With the potential cutbacks, in the medium to long term, there is potential for greater hardship and more vulnerability [in Mauritania] to humanitarian crises.”

The food security monitoring non-profit, Famine Early Warning System Network, has reported recent improvements in food security in Mauritania’s rural areas that grow their own food, but writes in a recent food security report that the situation is not stable. “Food security [here] is fragile…because one good rain fed harvest does not wipe out the accumulated production deficit of previous years.”

Donors’ calls for a return to constitutional law have gone unheeded by coup leaders.

President Abdallahi remains in detention; military leaders created a 22-member transitional government on 1 September, without specifying the length of its transitional powers. Coup leaders continue planning to hold an already-contested election.

...What do France and the US  have to do with Mauritania’s internal problems? Let us run our country as we wish...

When asked his views about this donor-coup leader stand-off, taxi driver Dia, a father of four, said Mauritania is rich enough to make it even without donor dollars. “What do France and the US [which have suspended non-emergency aid] have to do with Mauritania’s internal problems? Let us run our country as we wish. Mauritania can manage without Western carrots [incentives]. We are sufficiently rich; it is just a question of better management and distribution of that wealth.”

But a civil servant, who gave his name as Ahmed, told IRIN he thinks the standoff will end soon, “The coup leaders cannot hold on without international aide… I think economic sanctions will push coup leaders to rapidly change their positions. Because if people grow hungrier, that is an open invitation for chaos.”

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