WEST AFRICA: THE SOCIALIST HARDCORE LOOKS WESTWARD

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP86T00589R000200200005-9
• Release Decision: RIPPUB
• Original Classification: S
• Document Page Count: 73
• Document Creation Date: December 22, 2016
• Document Release Date: October 14, 2010
• Sequence Number: 5
• Publication Date: June 1, 1985
• Content Type: REPORT

Directorate of Secret
Intelligence
West Africa:
The Socialist Hardcore
Looks Westward
Secret
ALA 85-10050
June 1985
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Directorate of Secret
Intelligence
Looks Westward
West Africa:
The Socialist Hardcore
The main body of this paper was prepared by l
Office of African and Latin American Analysis,
Intelligence Officer for Africa.
ALA's West Africa Branch. It was coordinated
with the Directorate of Operations and the National
Comments and queries are welcome and may be
directed to the Chief, Africa Division, ALA, on
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ALA 85-10050
June 1985
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West Africa:
The Socialist Hardcore
Looks Westward
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continued denial of formal basing rights to the Soviets.
Key Judgments The self-proclaimed socialist states of West Africa are openly moderating
Information available their ideologically inspired policies of the postcolonial era, a development
as of 6 May 1985 we judge to be advantageous to US interests. The process, which varies in
was used in this report.
extent and pace from country to country, first began in Guinea in the late
1970s and is now evident in the region's other original hardcore leftist
states-Benin, Cape Verde, Guinea-Bissau, Congo, and Mali. The trend
has accelerated since 1980 and entails improved relations with the United
States and Western Europe, some liberalization of state-controlled econo-
mies, the ascendancy of political moderates in governments, and the
We believe the leftist regimes' moderation represents a pragmatic-and no
doubt somewhat opportunistic-response to their desperate need for
additional aid, investment, and debt relief to deal with mounting economic
problems and the growing realization that the USSR is unwilling or unable
to provide help in these areas. Whether this trend will continue, or is simply
a short-lived aberration, depends in no small measure on the perceived
gains and losses that each country views as associated with Western aid.
The financially strapped regimes almost certainly will seek additional
Western capital to help pay for oil and food, service debts that are large for
the size of their economies, and cope with chronic drought and declining
terms of trade. Demands for reform from Western donors and ascendant
moderate political factions probably will encourage the socialist states to
continue to make pragmatic policy adjustments. For these reasons, we
believe these left-leaning regimes are likely further to encourage Western
free market principles and improve relations with the United States and
their former European colonial metropoles.
Nevertheless, we believe that powerful forces will work against a wholesale
political reorientation of the socialist states in the near-to-medium term.
Indeed, despite their turn to the West for financial support, the Soviet
Union has retained some important equities that were established after the
former colonies won their independence from France and Portugal in the
early 1960s and 1970s:
? The leftist regimes still support many positions favorable to the Soviets in
international forums and maintain commercial ties profitable to Moscow.
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June 1985
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? The Soviets have limited access to Guinea's military facilities where, over
the last two decades, Soviet use of naval and air support installations has
aided their surveillance of Western naval forces in the south Atlantic and
material support of the MPLA regime in Angola.
? The USSR maintains a profitable arms supply relationship with the
socialist states and plays a lucrative role in Guinea's bauxite industry,
gold mining in Mali, and the rich fishing industry in Guinea and Guinea-
Bissau.
Moreover, liberalization is tempered, we believe, by trepidation and
uncertainty about what the West has to offer and Moscow's reaction. In
particular, fear that IMF-recommended policies and reforms could spur
violent urban protests, uncertainty over levels of Western assistance, and
foot-dragging and plotting by Communist-trained cadre in the bureaucracy
and military probably will slow the turn Westward. We believe Moscow,
for its part, will carefully monitor the socialists' flirtation with the West
and try to protect its key interests. The Soviets almost certainly will
continue to rely on military sales-which traditionally have served as a
primary lever for Soviet influence-and security ties to ensure their
influence.
The USSR is not the only leftist country with a stake in West Africa's po-
litical orientation. We believe that Libyan leader Qadhafi's efforts to limit
the socialist states' rapprochement with the West will indirectly serve
Soviet interests. Tripoli almost certainly will continue to use tried-and-true
tactics, such as bribery, attractive offers of financial aid, and threats of
subversion, to try to induce the socialists to return to the radical fold. In
our judgment, West African leaders view Qadhafi as a serious factor to be
reckoned with, mainly because they believe he helped engineer the
replacement of moderate governments with radical regimes in Ghana and
Burkina.
It is difficult to predict where the current turn to the West will ultimately
lead over the longer haul. Perhaps the best the West can hope for is a proc-
ess marked by fits and starts as the beleaguered regimes attempt to steer a
course among conflicting pressures. In such a situation, any progress will
be met by occasional backtracking. Should Western aid levels prove less
generous than the moderate factions expect, for instance, socialist leaders
could become disillusioned with the West and more receptive to Soviet and
Libyan blandishments. We also suspect that some socialist regimes may
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shy away from the political risks of far-reaching reform, giving an opening
to extreme leftists to exploit discontent with living conditions and festering
ethnic rivalries to recoup influence or to seize power. However, in such
cases, we believe their economies would deteriorate further and, barring an
unanticipated willingness on Moscow's part to make major aid injections,
create new pressures for pragmatic approaches to the West.
There is, of course, also the risk that over time the countries of the region
may simply become overwhelmed by their economic plight and thoroughly
disillusioned with Western solutions. If aid and private investment fails to
materialize or is unable to make any perceived economic difference, leaders
in the region will be forced to make some hard decisions. In such
circumstances, the Soviets almost certainly would stand ready to provide,
at low cost, the military equipment and training needed to bolster the local
security apparatus in individual countries. A major shift back to the East
would, of course, not be taken lightly since it almost certainly would mean
a cutoff in Western economic aid, which the Soviets might not be readily
willing to offset.
We believe that the perceived success or failure of the turn to the West by
the socialist states could have important regional implications for US
interests. The effectiveness of reform programs recommended by Western
governments and the IMF could encourage other governments in the
region to initiate or to pursue austerity more vigorously. On the other hand,
a failure by these regimes to reach an agreement with the Fund and gain
access to greater amounts of hard currency and, other Western aid could
contribute to a new mood of African exasperation with the West.
Moreover, if the reforms advocated by the West fail to strengthen the
African economies-which is certainly a primary concern given the gravity
of their problems-the Soviets and the Libyans over time will cite this as
evidence of the inapplicability of the free market policies advocated by the
United States, the World Bank, and the IMF.
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Scope Note This Research Paper reviews moderating economic and political trends in
the six West African countries that have been the foremost proponents of
the socialist model and that have close ties to the Soviet Union. It assesses
the prospects for further movement toward the West and greater economic
liberalization by these West African socialist states as they grapple with
deteriorating economies and unstable security conditions. The structure of
this paper was developed in close consultation with State Department
representatives. It consists of a broad, self-contained analytical essay
covering the principal issues of concern to US policymakers and detailed
country appendixes designed for African specialists.
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Key Judgments
Scope Note
The Setting
The Soviet Role in the Region
Pressure for Change
Limits to Change
The Soviet Response
The Libyan Factor
C. Guinea-Bissau: Looking Westward
D. Congo: Limited Move Toward the West
E. Cape Verde: A Slight Tilt Toward the West
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Figure 1
Hardcore Socialist States of West Africa
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Ir-,
II
West Africa:
The Socialist Hardcore
Looks Westward
The Setting
Following independence in the early 1960s, the lead-
ers of the self-proclaimed socialist states of West
Africa' perceived Africa's poverty as a legacy of the
colonial era in which the West had exploited Africa's
resources. Moreover, Soviet support for the guerrilla
struggles in the former Portuguese colonies of Cape
Verde and Guinea-Bissau strongly swayed the inde-
pendence movements that assumed power in the early
1970s. According to speeches as well as US Embassy
reporting at the time, the new leaders viewed firm
government control as the only way to achieve eco-
nomic independence from the West and to consolidate
political power at home. The Soviet system offered a
model for centralized control to nations lacking estab-
lished institutions and plagued by ethnic and regional
divisions. Strong demand in the industrialized coun-
tries for their exports and increased foreign aid in the
1960s-as the East and West vied for influence in
Africa-provided revenue to establish and subsidize
state-run development programs. Moreover, the re-
cord shows that Moscow and its allies helped friendly
regimes to consolidate power by developing an effec-
tive security apparatus for them.'
Over the last decade, however, West Africa has fallen
on hard economic times. Such factors as increased oil
prices, high interest rates, the accumulation of mas-
sive debt, chronic drought, and declining terms of
trade have contributed to a sharp downturn in eco-
nomic growth and living standards. Mismanagement
and corruption have compounded economic problems.
Highly inefficient state-owned enterprises have not
been able to compete in world markets and now are a
drain on government budgets. Moreover, the socialist
regimes favored urban consumers and kept agricultur-
al prices artificially low, which, as a consequence,
slowed farm production and increased dependence on
imported foodstuffs, particularly grain. Once these
adverse trends were under way, the six countries
covered in this study soon lacked sufficient foreign
exchange to pay for imported goods and finance large-
scale development projects undertaken during the
postcolonial era. Their regimes finally were forced to
limit imports, curb government spending and avoid
additional external borrowing just to make ends meet,
and seek additional sources of foreign aid among
bilateral and multilateral donors. Between 1979 and
1984, Congo, Mali, and Guinea-Bissau negotiated
arrangements with the IMF, while Benin and Guinea
In exchange for Moscow's tutelage, the six countries
examined in this paper accorded the Soviets special
advantages and privileges. By the early 1970s, Mos-
cow had successfully increased its influence in the
region generally, expanded its access to military
facilities in Guinea, and gained new and useful allies
in international forums. The USSR also cultivated
new markets for arms sales and, in some cases,
developed profitable economic links.
' For purposes of this paper we refer to Mali, Benin, Congo, Guinea,
Cape Verde, and Guinea-Bissau as the socialist states of West
Africa. See the individual studies on these countries in the appen-
dixes for an elaboration and documentation of the broad themes
discussed in this introductory essay, which, except as noted, is based
on our analysis of the open, historical record.
began talks this year with the Fund.'
The Soviet Role in the Region
Against this backdrop of economic deterioration, we
believe that Moscow's unwillingness to respond to
West Africa's pressing financial needs reflects the
Soviets' limited strategic interests in the region, which
are overshadowed by their concerns in southern Afri-
ca and the Horn. Instead, the Soviet Union has relied
largely on military sales and security assistance to
gain and retain influence. The meager amount of
Soviet economic aid to the area has been channeled
particularly into high-return commercial projects
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Figure 2
West African Socialist States:
Economic Profile
Benin
Cape Verde
Congo
Guinea
Guinea-Bissau
Mali
17
Note: Remittances from Cape Verdeans abroad account for nearly
two-thirds of the GDP.
Benin
Cape Verde
Congo
Guinea
Guinea -Bissau
Mali
O Exports
O Imports
Benin
Cape Verde
Congob
Guineab
Guinea-Bissau
Mali b
a Average annually.
b Estimated.
Projected.
Benin
Cape Verde
Congo
Guinea
Guinea-Bissau
Mali
Benin`
Cape Verde`
Congo t,
Guinea b
Guinea-Bissau
Mali b
Benin
Cape Verde
Congo
Guinea
Guinea-Bissau
Mali
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such as involvement in Guinea's bauxite mines, Mali's
gold mines, and rich fisheries off Cape Verde, Guinea,
Guinea-Bissau, and Congo. Supplementary efforts,
such as educational exchanges and underwriting occa-
sional high-profile development projects, are clearly
designed to develop future assets rather than achieve
immediate gain.
We believe that the Soviets have acquiesced in the
socialist states' overtures to the West and the West's
consequent greater economic involvement because
they will not foot the bill for West Africa's economic
needs and their concrete interests have not yet been
seriously jeopardized. Indeed, despite the stingy Sovi-
et response to their financial plight, US Embassy
reporting has shown that the leftist regimes have
given every sign that they view existing security ties to
the USSR as vital to their retaining power. Conakry
continues to allow Soviet access to its air and port
facilities, while Guinea and the other socialist states
lend political support to Soviet positions in interna-
tional forums, and maintain some commercial ties
profitable to Moscow:
? Over the last two decades, Guinea's naval and air
facilities have aided Soviet surveillance of Western
naval forces in the south Atlantic and Soviet mili-
tary support of Angola's MPLA regime. US Embas-
sy reporting also indicates that Moscow would like
to establish alternative installations in Congo, Cape
Verde, Mali, Benin, and Guinea-Bissau to ensure
air and sea access to West Africa.
? In exchange for some financial and technical assis-
tance, Guinea and Guinea-Bissau grant the USSR
fishing rights in their rich territorial waters, Guinea
allows port rights for the Soviet fishing fleet, and
Cape Verde grants limited use of its port facilities,
according to Embassy reporting.
? The public record shows that in the United Nations
and elsewhere in the international arena, all six
socialist states continue to take stands that often
parallel Moscow's positions.
Pressure for Change
In our view, as long as West Africa is plagued by
economic decline-and we see no early end to the
crisis-the socialist states will continue making prag-
matic, and no doubt opportunistic, adjustments to
their domestic policies and control their anti-Western
rhetoric in exchange for vital assistance. Pressure
from ascendant moderate factions, demands for re-
form from Western donors, and recurrent discontent
in the military with declining living conditions and the 25X1
amount and quality of Soviet equipment will force
left-leaning regimes to improve relations with the
United States and their former European colonial
metropoles. Nevertheless, we believe that the left-
leaning regimes are encouraging Western, free mar-
ket principles more to make ends meet than out of
ideological conviction. In the unlikely event that the
economic crisis were reversed, they would probably
revert to earlier socialist ways.
Political. Pragmatic technocrats who have gained the
upper hand in the socialist states in the last several
years almost certainly will continue to lobby for a
modification of past policies. US Embassy reporting
indicates that in all six leftist states moderate politi-
cians are now disillusioned with Moscow's tightfisted
economic aid policy. In our view, pragmatic techno-
crats throughout the region are likely to press-albeit
with different resolve-for the removal or demotion of
the remaining influential radicals from important
government positions. If they fail, they may resort to
coup plotting,
Economic. Given the dismal outlook for West African
economies over the next decade, socialist leaders
probably will continue to strive for modest liberaliza-
tion of state-controlled economies in hopes of winning
additional Western aid, trade, and investment. Open
literature, as well as State Department reporting,
shows that the regimes in Mali, Guinea, Congo, and
Guinea-Bissau are attempting to reform inefficient
state enterprises, boost agricultural production by
removing price subsidies, and trim civil service pay-
rolls to meet criteria for IMF accords. Revision of
investment codes and efforts to cut government red-
tape also have encouraged US and West European
commercial interest in socialist states, particularly in
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 Figure 3
Soviet and Western Economic Aid to
West African Socialist States
Soviet Economic Aid, 1958-84
Million US S Note change in scales
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Western Economic Aid, 1958-83
Million US $
United States Portion of Western Economic Aid, 1958-83
Million US $
U
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Figure 4
Soviet and United States Military Aid to
West African Socialist States, 1958-84
Soviet Military Aid
Million US $
United States Military Aid
Million US S
Note: US aid includes funds provided under the International Military
Education and Training Program. Data for US not available before 1970.
O Agreements
EJ Deliveries,
including
unscheduled
additional
Consists mostly
of IMET aid
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West Africa has a higher portion of poor and under-
developed countries than the rest of Sub-Saharan
Africa. Almost all West African states are experienc-
ing economic crises, resulting from the impact of
several years of adverse internal and external factors:
? Two oil price shocks in the 1970s.
? Balkanized economies dependent on a few agricul-
tural or mineral exports, with small internal mar-
kets, unbalanced resource bases, and high-cost
transportation.
? The collapse of commodity prices in 1978-80 that
have only recovered moderately since then.
? Growth-inhibiting government economic policies,
including inadequate price incentives for agricultur-
al producers, costly and inefficient marketing sys-
tems, overvalued exchange rates, troublesome bud-
get deficits, and inflationary monetary expansion.
? Declining food production, mushrooming popula-
tion, and growing international indebtedness.
? The worst drought in decades that has ravaged the
region for the past two years, creating widespread
food shortages and famine in some areas.
Unable to finance widened current account deficits,
West African countries-both left-leaning and
moderate-have been forced to adjust their econo-
mies, primarily by squeezing imports. This, in turn,
has resulted in curtailment of economic growth and
caused social and political strains. In the face of
economic pressures, 15 of West Africa's 25 countries
resource-rich Congo and Guinea. Reporting from US
Embassies in the region indicates that business deal-
ings with the West have underscored for socialist
states both the value of Western ties and the limita-
tions of Soviet development aid.
Although we believe that these socialist countries will
continue, albeit unevenly, to undertake economic re-
forms, the cumulative effect of these pragmatic mea-
sures is unlikely to relieve the economic plight of the
signed standby or extended fund arrangements with
the IMF between 1978 and 1984 linked to economic
policy adjustments. At least nine-including seven
repeaters-have also had to reschedule their external
debt. IMF programs are designed to reduce govern-
ment deficits, slow inflation, and ease balance-of-
payments problems in exchangefor assistance. Ad-
justment has been slow, painful, and fragile, with
governments avoiding implementation of the most
far-reaching reforms.
The economic outlook for West Africa is one of
continued deterioration throughout the 1980s, ac-
cording to World Bank and most other forecasts,
despite the world economic upturn and growing Afri-
can resort to economic adjustment programs. Eco-
nomic growth will be very low or even negative,
balance-of-payments pressures will not diminish, and
debt service payments will increase throughout the
decade. Several years of normal rainfall will be
required to rehabilitate agriculture and reverse indi-
rect effects of drought, such as shortages of hydro-
electric power. Improvement in the terms of trade is
likely to be slow for most agricultural and mineral
exporters. West Africa will face strong competition
for market shares in coming years as other debt-
problem countries, particularly in Latin America, try
to export their way out of balance-of-payments diffi-
culties and recession. The region, with limited financ-
ing alternatives, will be no less dependent on interna-
tionalfinancial institutions, Western bilaterial
assistance, and debt reschedulings. The process of
economic adjustment will continue, but with frequent
interruptions, backtracking, and disappointing re-
sults.
region. In some cases the financially strapped regimes
have no alternative but to turn to Western donors to
avert government bankruptcy. President Kerekou of
Benin, for example, agreed in 1984 to implement
reforms in exchange for French funds-to pay credi-
tors and long overdue government salaries-after his
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international plea for emergency assistance met with
no response from other donors, according to US
Embassy reporting. Ultimately, we believe that the
overall economic impact of these emerging reformist
policies will be relatively marginal, enabling these
countries to stem the pace of their economic decline
but without significantly reversing it. Consequently,
we expect the economic pressure for reform to contin-
ue for at least the next several years.
Military. Our review of US Embassy reporting indi-
cates that socialist regimes over the last several years
have been under recurrent pressure to stem dissatis-
faction with deteriorating living conditions among the
ranks of their militaries. In large measure, falling
standards of living among the military are directly
linked to the economic difficulties faced by the region
as a whole. Moreover, according to US defense
attache reporting, the Soviet arms connection is a
double-edged sword. While regimes have found the
Soviets the most convenient and financially competi-
tive source of needed security and arms assistance,
their rank-and-file military have become disillusioned
with equipment that is dated and poorly maintained
and with poor quality training. US Embassies in the
area report that soldiers who are exposed to Western
equipment and training prefer them to Soviet
programs.
Embassy and US defense attache reporting indicates
that moderate senior Army officers in Guinea, Benin,
and Mali are disillusioned by the Marxist experiment
and unhappy with radical influence on their govern-
ments and that they continue to press the leaderships
to deal effectively with the countries' economic prob-
lems. Moreover, junior officers and enlisted men in
Benin and Mali have been unhappy over slow promo-
tions and delays in salary payments and have resorted
periodically to coup plotting, according to Embassy
reporting.
Limits to Change
In our view, however, the socialist states' turn toward
moderation will be slow and subject to backtracking.
We believe that domestic political cleavages founded
in ethnic, regional, and ideological differences pre-
clude the complete abandonment of socialist policies.
Moreover, the socialist regimes' perceived need for a
reliable and low-cost source of arms ensures continued
Soviet influence. Based on reactions so far, the West's
response to regional needs likely will be constrained
by its own economic imperatives. Among the socialist
states, potential disappointment with the level of
Western aid and the possible fallout from politically
risky austerity measures supported by the IMF will
provide hardcore radicals opportunities to rally oppo-
sition to moderate policies. Moreover, we expect the
Soviets to maneuver behind the scenes to protect both 25X1
their own interests and those of the leftists opposed to
Western influence.
Political Ferment. US Embassy reporting indicates
that despite the ascendancy of the moderates, hard-
core leftists continue to wield influence in the bureau-
cracies and militaries of the West African socialist
countries. For example, the Beninese regime-where
committed Marxists occupy several important posi-
tions such as the presidency of the National Assembly
and the head of the country's UN mission-
periodically attacks US positions in international
forums. It so far has been unable to reach an agree-
ment with the IMF due to opposition from hardcore
leftists who have a vested interest in the state enter-
prise system. Hardliners in any of the six left-leaning
states are likely to use far-reaching and painful
austerity measures, particularly severe cutbacks in
state-owned enterprises that employ large numbers of
urban dwellers, as a rallying point for opposition to
the incumbent regimes. Moreover, despite US Embas-
sy reporting that the vast majority of West Africans
trained in the USSR return home disillusioned, we
believe at least some probably return home committed
to the Soviet model.
The Soviet Response. Until their real interests are
threatened, the Soviets will probably continue to
acquiesce in a somewhat greater level of Western
involvement in the West African socialist states. We
base this view on Moscow's apparent decision not to
provide significant economic aid to a region of only
secondary strategic importance. Some Soviet writers
have even publicly suggested that acceptance of West-
ern aid does not interfere with the ability of a
developing country to progress along the "socialist
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Figure 5
Military Students From West African Socialist States
Trained by Soviet Union and United States, 1958-84
Guinea
Congo I
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path of development." These writers claim that devel-
oping nations will look to the USSR as a counter-
weight to the "forces of imperialism" and that the
Soviets should exploit such opportunities as they arise.
In line with this reasoning, Beninese President Kere-
kou announced in a speech early this year that he was
fully committed to development along Marxist-Lenin-
ist lines, but was prepared to achieve his aims for
relieving poverty by different methods, saying, "A
pilot can land his. plane from any direction, East or
West."
Nevertheless, Moscow is certainly aware of the socia-
lists' flirtation with the West and is seeking to
preserve its military and security ties. For example, in
Congo and Guinea-Bissau, the Soviets have finally
delivered long-promised military materiel and offered
new contracts to replace and refurbish equipment in
Guinea's inventory, according to US Embassy report-
ing. They also have completed construction of a new
headquarters for Benin's Navy. In addition to expand-
ing military aid, the Embassy reports that the Soviets
in Mali are pushing greater party-to-party coopera-
tion, restructuring of front organizations, and the
education of increased numbers of Malians. Accord-
ing to Embassy reports, the Soviets also have stirred
unrest in both Mali and Benin in recent years to
discourage moves toward the West.
Despite dissatisfaction with the quality of Soviet
military equipment, the West's reluctance to provide
major military hardware and offer terms competitive
with the USSR has, we believe, led all six socialist
states to preserve access to Soviet arms. In addition,
incumbents like Congolese President Sassou Nguesso
almost certainly worry that Moscow could exploit
chronic regional and tribal tensions by supporting
opposition elements should Soviet interests be serious-
ly threatened. Moreover, we believe he and other
leaders feel vulnerable to coup plotting by the Soviet-
trained personnel in their security apparatus
percent of Congo's officer corps is Communist-
trained.
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Table 1
Soviet-Cuban-Libyan Personnel in
West African Socialist States, 1984
We believe that the threatened loss of military access
rights would provoke Moscow to take stronger mea-
sures to counter Western inroads in West Africa's
socialist states. In the event that Guinea, for example,
cut off remaining Soviet air and naval access, we
believe Moscow would probably use offers of large-
scale security and economic aid to try to gain access
to alternate facilities in Cape Verde, Guinea-Bissau,
or Benin.
The Libyan Factor. In our view, Libyan leader Qa-
dhafi also will work to prevent the socialist countries
from strengthening relations with the West. Qadhafi
almost certainly will continue to use a mix of attrac-
tive offers of aid, widespread bribery of government
officials, and occasional support for domestic opposi-
tion when dealing with regimes that he views as
drifting too far into the Western camp. For example,
Congo-where Tripoli maintains a large diplomatic
presence-recently signed an open military agreement
providing for Libyan training and supplies for the
Congolese Army and the security service.
last year Tripoli donated a Boeing
707, a fully equipped mobile television studio, and
funds for a new housing project to Benin to ensure
Libya's continued access.
Libyan officials periodically bribe
local officials to help achieve Libya's interests, such as
the undermining of Chadian reconciliation talks held
in Congo last year. Moreover, US Embassy reporting
also indicates that Libya has tried to stir domestic
unrest in predominantly Muslim Mali and was impli-
cated in coup plotting in Benin in recent years.
Western Donor Response. We believe that some of the
socialist regimes, disappointed with what they per-
ceive as less than generous Western aid, could sour on
the benefits of closer ties to the West. In our judg-
ment, the leaders of socialist states probably harbor
unrealistic expectations of European and US aid and
investment over the next several years, which risks
disappointment and frustration.
From their own budget statements, we judge that
France and Portugal-the former having important
ties to Benin, Mali, Guinea, and Congo and the latter
to Cape Verde and Guinea-Bissau-are unprepared to
increase levels of assistance significantly. In addition
to their own budgetary constraints there also exist
more important commitments elsewhere in Africa,
such as Ivory Coast, Senegal, Chad, Angola, and
Mozambique. French military and technical aid levels
to Sub-Saharan Africa have dropped sharply under
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France's 1985 budget. US Embassies in the region
indicate that both Paris and Lisbon have pressed
recipient states as a condition for additional bilateral
aid to negotiate IMF programs and reschedule their
debts. Moreover, in Congo and Mali, France has
refused to reschedule bilateral debts, demanded cash
payments on military deliveries, and cut additional
tranches of economic assistance until they reach
agreement with the IMF.
Outlook and Implications for the United States
We believe that this opportunistic shift toward the
West is the result of deep-seated political pressures
and economic realities in all six West African socialist
states. Leaders of the left-leaning regimes are balanc-
ing the demands of influential moderate and radical
factions in an effort to retain power. In our view,
disputes between these competing factions are found-
ed in ethnic, regional, and personal differences that
are unlikely to be resolved over the near term. There-
fore, we expect the socialist leaders to continue these
efforts to satisfy demands by moderate factions and
Western donors for reform, while trying to avoid
offending the radicals and their Soviet and Libyan
allies.
We believe that the moderating trend will benefit US
interests so long as it continues. The socialist states'
growing need for bilateral economic aid, support from
international lending institutions, and Western trade
and investment almost certainly will enhance US
leverage. In exchange for greater Western support,
the socialist states are likely to continue experimenta-
tion with free market Western principles and to
implement cautiously some additional reforms. They
also are likely to keep diplomatic relations with key
Western donors on an even keel, soften their anti-
Western rhetoric, and improve slightly their anti-US
voting pattern in the United Nations. At the same
time, the resurgence of Western influence has provid-
ed a counterweight to Moscow's interests in the
region, largely derived from Soviet security and mili-
tary assistance.
In our view, the moderating trend is fragile and
periodic setbacks are likely. Efforts by the financially
strapped regimes to steer a moderate course are likely
to suffer periodic reversals and backtracking. More-
over, should moderate factions become discouraged
by lower than expected Western aid levels, the leftists
regimes could become more receptive to Soviet or
Libyan blandishments. We suspect that in some cases
the socialist leaders may resist the political risk of
extensive reform that could provide hardline radicals
with an opportunity to exploit public unhappiness with
living conditions and chronic ethnic and regional
rivalries. These radicals could use popular unrest to
recoup their waning influence or even to seize power.
A coup in any of the six socialist states by leftist
military or civilian leaders embittered by the turn
toward moderation is always possible and could come
with relatively little warning. Radical leaders of a
populist coup probably would look initially to the
Soviets and Libyans to provide military equipment
and training to bolster their security apparatus. They
would probably resort to repressive tactics to suppress
outbreaks of unrest stemming from declining living
conditions rather than make reforms required by
Western donors. Nevertheless, in the event of new
financial or food crises, however, radical leaders
would probably be forced to look primarily to the
West for help in view of Moscow's unwillingness to
supply economic assistance and emergency food aid.
These new ties would then afford an opening for the
United States and its European allies to make gains at
Soviet and Libyan expense.
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Appendix A
Guinea, one of the first black African countries to opt
for socialism and close relations with the USSR after
independence, was also among the earliest to become
disenchanted with socialist policies and Communist
ties that have left this potentially rich country's
economy in a shambles. A coup last year swept away
the repressive political system of Guinea's founding
father, Sekou Toure, and accelerated efforts-belat-
edly begun by the late Toure-to liberalize the econo-
my and to attract a greater Western economic role.
US Embassy reporting indicates, however, that Presi-
dent Lansana Conte's moderate military government
faces a number of pressures-from ethnic divisions,
rising economic expectations, and the lower ranks of
the military-that will test its unity and ability to
translate promises into reality.
Although trends in Guinea probably will remain
generally favorable to US interests while Conte is in
power, we believe the near-term prospects are poor for
genuine economic reform, a pro-Western tilt in Guin-
ea's foreign policy, or even a reduction in Soviet
military access and presence. In fact, Conakry's open-
door approach to foreign aid has led it to accept
promises of new assistance from the Soviets and
Libyans. Although not likely in the near term, we
believe Guinea may reestablish close ties to the
Communist world if it becomes disillusioned with the
degree of Western responsiveness to its economic
needs, or if Conte is replaced by an unstable new
regime vulnerable to Soviet and Libyan blandish-
ments of political and security aid.
Toure's Legacy
Guinea, the first French-speaking state in black Afri-
ca to achieve nationhood, labors under the legacy of
Sekou Toure's 26 years of authoritarian rule and
ineffective economic policies. Toure's death in early
1984 led to a quick takeover by President Lansana
Conte's moderate military regime. The new leader-
ship's proclaimed aims were to eliminate past injus-
tices, revive the economy, and continue a nonaligned
foreign policy while looking for development aid from
any source. The US Embassy reports, however, that
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Conte clearly wants to foster closer ties to the West, a
process that Toure had begun during his last years.
Sekou Toure, one of the most radical and anti-
Western leaders south of the Sahara, broke with
France at independence in 1958 to pursue state
socialism and close ties to the Soviet Union and other
Communist states. His policies made a shambles out
of a potentially thriving economy, drove hundreds of
thousands of Guineans into exile, and isolated the
country from the mainstream of African development.
In exchange for Soviet arms, Moscow gained limited
access to Guinea's air and naval facilities as well as to
its rich bauxite deposits.
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Guinea slowly started in the late 1970s to move
toward greater collaboration with the West. US Em-
bassy reports indicate that Toure was concerned that
his rigid socialist policies risked serious political insta-
bility and that he had become strongly dissatisfied
with the paucity of Moscow's economic and military
aid. Moreover, the Embassy reported that the Guin-
ean leader was impressed by the performance of
Western firms that began in the 1960s to help develop
the country's mining sector.
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Figure 7
k Niandak
KOUROUSSA \.
OUGOU j
QKis idsugau A
GUECKDO ?~-J J
iana
O`UNDARA
'Sangarddi
gmamau
MA iOU
Y u
Bissikrima
r rya? io
wMAIIII l
Doug
Guinea
-?- Region boundary
O Region capital
- Railroad
Road
Ft t.%Ni Tribe
A Bauxite
Diamonds
Fe Iron ore
100 Kilometers
100 Miles
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tures to establish a naval base.
Toure made clear his displeasure with Moscow in
1977 by withdrawing landing rights for Soviet TU-95
naval reconnaissance aircraft and refusing transit for
Soviet aircraft carrying Cuban troops to Ethiopia. In
subsequent years, the Embassy reported that Toure
sharply reduced the number of Soviet military techni-
cians in Guinea and continued to rebuff Soviet over-
dent on the Soviets.
Toure started to repair Guinea's relations with moder-
ate African neighbors, as well as with France, West-
ern Europe generally, and the United States. Accord-
ing to the US Embassy, he became a vigorous
spokesman for West African states concerned about
Tripoli's interference in regional affairs and was
criticized frequently by Libyan leader Qadhafi for
abandoning Africa's revolutionary cause. Toure re-
laxed some state control of trade and agriculture,
adopted a more liberal investment code, and personal-
ly courted potential Western investors. Toure's eco-
nomic steps had borne little fruit before he died,
however, and Guinea was still militarily wholly depen-
The Soviet Connection
Although ties to Moscow have loosened since 1977,
both the Soviets and Guineans still derive useful
military and economic benefits from their relation-
ship, according to US Embassy reports. The Soviets
continue to use Conakry as a transit stop for military
transport flights to Angola. Conakry also is the only
West African port routinely used by the Soviets'
small, Luanda-based West African naval patrol, al-
though the number and length of ship days in port
have fallen steadily since the mid-1970s. Moreover,
Guinea serves as the primary transshipment point for
sea-delivered Soviet arms bound for Mali.
years.
Moscow continues to be Guinea's primary source of
military equipment, training, and spare parts. Accord-
ing to US Embassy figures, the USSR has provided
some $341 million in such aid to Guinea, mostly
during the 1960s and 1970s. The military equipment
includes MIG-21 fighter aircraft, T-34 and T-54
tanks, MI-8 helicopters, and transport aircraft. The
current number of Soviet military advisers is about
50, down from 200 a decade ago. Over 900 Guineans
have received military training in the USSR over the
Although bilateral trade has declined steadily in
recent years, Conakry still depends on the Soviets in
several economic areas, according to reports from the
US Embassy. Between 315 and 450 Soviet profession-
als and technicians are in Guinea, including some 200
teachers and 25 medical personnel, while some 350
Guineans are taking courses in the Soviet Union. The
Soviets developed a bauxite mine at Kindia, which 25X1
accounts for nearly half of the $223 million in
economic credits Moscow provided to Guinea in earli-
er decades, supplies about one-eighth of the USSR's
bauxite needs, and generates export revenues that
enable Guinea to repay loans to Moscow in hard
currency! Soviet fishing operations in Guinea and
adjacent coastal waters make up about 25 percent of
the USSR's annual regional catch in West Africa.
Moscow has agreed to sell some 10,000 tons of its
yearly catch to Conakry.
New Directions
The 25 officers who compose the ruling Military
Committee for National Redressment strike US Em-
bassy observers as a pragmatic lot. Most are familiar 25X1
faces drawn from Guinea's second tier of leadership.
Some of the older ones-like President Conte-go
back 25 to 30 years and have been trained by the
French. The younger members have been schooled in
Communist countries.
Conte has swept away the repressive practices, all-
pervasive party structure, and the ideology of the
Toure era, according to the US Embassy, while
keeping the existing administrative machinery intact.
Freedom of movement and personal expression now
exist, as does limited press freedom. Directives have
' Under the terms of a 12-year Soviet-Guinea accord signed in
1976, 40 percent of annual planned production of bauxite goes to
the USSR as a direct loan payment. Fifty percent of the bauxite is
sold to the USSR under a fixed-price contract, which is below
world market price of bauxite. While Moscow pays in hard
currency, the funds are placed in a bilateral clearing account, from
which Conakry draws to repay its debt to the USSR for military
aid and other services. Ten percent is available to Guinea for sale
on the open market, though there is little evidence that it has done
so in the past. Guinea's hard currency earnings from separate
Western-developed bauxite mining operations are not used to repay
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Table 2
Guinea: Selected Economic Indicators
Million US $
(except where noted)
100
494
Imports (f.o.b.)
394
446
378
392
403
Current account balance
-91
-96
-63
-24
7
Gross foreign reserves
-239
-289
-281
-349
NA
External debt
1,020
1,249
1,231
1,216
1,564
Real GDP growth (percent)
3.0
1.0
2.0
1.0
1.5
Inflation (GDP deflator) (percent)
NA
25
25
25
25
Debt service ratio (percent)
19.2
16.8
17.0
13.4
15
a Preliminary.
b Estimated.
been issued to liberalize education, the judicial sys-
tem, and the labor movement, while essential econom-
ic changes continue to be studied and debated. Inter-
nationally, the regime has taken pains to stress
Guinea's nonalignment and-despite counting on sub-
stantial Western economic support-its willingness to
look anywhere for development aid.
While the regime has made a promising beginning in
some areas, according to the US Embassy, it is having
to deal with some pent-up tribal frictions among
Guinea's three main tribes, the Malinke, Sousou, and
Fulani.
The Economy at a Crossroads. The Conte regime has
taken some modest steps to liberalize the economy,
according to US Embassy reporting, and has begun
negotiations with the IMF on a standby agreement.
Conakry also is consulting with the World Bank and
potential bilateral donor governments to provide tech-
nical and material assistance for restructuring the
economy. To encourage agricultural production and
distribution, collective farms have been abolished and
official prices for export crops have been increased. A
more liberal investment code has been introduced that
is designed to encourage free enterprise. The govern-
ment is exploring the possibility of setting up more
joint ventures with foreign investors to better exploit
agriculture and minerals. Moreover, private com-
merce is being encouraged.
Guinea's most vital financial negotiations are those
with the IMF. The US Embassy reports that resched-
uling Guinea's large debt hinges on conclusion of an
IMF accord, as does Guinea's possible entrance into
the French-backed African franc zone. The IMF has
called on Guinea to institute basic changes in policy,
including a substantial devaluation of its currency,
removal of subsidies on rice and petroleum products,
elimination or reform of many state enterprises, and a
large reduction in civil service personnel.
Broadening the Stable of International Donors.
Guinea's new leaders appear willing to accept eco-
nomic aid from any source as long as it carries no
political strings.
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Guinea's extensive mineral and agricultural re-
sources form the basis for one of the potentially
strongest economies in black Africa. Data from US
Government and international financial institutions
show that Guinea's mineral wealth includes one-third
of the world's known reserves of high-grade bauxite
and sizable deposits of high-grade iron ore and
diamonds. The Guinean watershed can support the
cultivation of a wide variety of tropical agricultural
products. Moreover, the country's hydroelectric pow-
er potential is over 62 billion kilowatts.
Despite its promise, the economy is foundering after a
quarter century of rigid state socialism and misman-
agement. The little-developed modern sector centers
on a variety of state-owned agricultural and industri-
al enterprises and on the mining industry which has
few linkages to the rest of the economy. Bauxite
provides 96 percent of the country's export earnings
and almost all government revenues. Firms from the
United States, Canada, France, West Germany, Italy,
the Netherlands, Australia, Switzerland, and the
USSR are involved in Guinea's major joint mining
ventures.
Production of cash crops, which accounted for the
bulk of Guinea's export earnings before independence,
now represents only 3 percent of the total value of
exports. Today more than 80 percent of the popula-
tion engages in subsistence agriculture. According to
press reports, at least half of the country's crops are
smuggled out of the country or sold on the black
market, which has transformed Guinea from a posi-
tion of near self-sufficiency in food production to a
net importer. Guinea now spends some 30 percent of
annual hard currency earnings on food imports.
Public services are in a shambles because Conakry
has not replaced roads, telecommunications facilities,
industrial plants, and public buildings built by the
French prior to independence.
We estimate that real GDP growth from 1958 to 1982
averaged 1.3 percent a year, less than half the rate of
increase in population. As a result, per capita income
is only about $100, making Guinea one of the world's
poorest countries. IMF reports indicate that Guinea
also had persistent current account deficits over the
past several years, with an external debt of over $1.5
billion. We estimate that servicing this debt will
consume 18 percent of Guinea's annual foreign ex-
change earnings in 1985. Soaring food and fuel costs
have pushed inflation to 25 percent annually in recent
years. The cost of living for the average urban dweller
probably has increased even more. US Embassy
reporting shows that most commercial transactions
occur on the black market, where the value of the
Guinea's currency is as little as one-tenth the official
exchange rate.
reports that as a result, Conakry has simultaneously
solicited assistance from both North and South Ko-
rea, Taiwan and China, moderate and radical Arabs,
Libya and Israel, and from the USSR as well as the
West. In our view, the regime's willingness to solicit
new aid from Communist states reflects primarily
opportunism, not a reversal of Guinea's previous
disillusionment with Soviet bloc assistance.
Conte has made special efforts to cultivate France
and the United States. After a high-level French
Government delegation received red carpet treatment
last fall, according to the US Embassy, the French aid
program in Guinea grew significantly. Paris increased
direct aid and credits in 1984 from $2.4 to $7.9
million to help revitalize transportation, telecommuni-
cations, electrical power, agriculture, and education.
Although Conte has requested large-scale assistance
to reorganize the Guinean Army, Paris has agreed
only to a modest $1.8 million military program for
1985, according to the Embassy. France will provide a
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light helicopter, two small naval patrol boats, some
engineering equipment, and military training in
uranium. The United States purchased an average of
31 percent of Guinea's exports, mainly bauxite and
France for 30 to 40 Guinean officers.
Guinea's new investment code and professed intention
to give market forces freer play have stirred growing
French commercial interest, according to the US
Embassy. At least four high-level French business
groups visited Conakry during the past year. The
Embassy reported that even before the coup some 50
French firms and 1,000 French nationals were in
Guinea, involved in engineering, construction, and
industrial renovation projects. France has become
Guinea's chief supplier of capital goods, according to
the Embassy, and trade increased 25 percent between
1977 and 1982-the last period for which data are
available. Almost 90 percent of French purchases
from Guinea consist of bauxite and alumina.
The United States also has growing economic ties to
Guinea. US food aid has been the cornerstone of US
assistance to Guinea since 1971, when Washington
terminated an earlier AID program that had provided
almost $100 million since independence, and which
was focused on technical assistance, transportation
equipment, and machinery in addition to agricultural
commodities. The United States increased its food aid
from $2 million in FY 1983 to $5 million in FY 1984,
following smaller increases in agricultural and man-
power development projects that date from 1976. The
United States provided a $3 million grant for FY
1985 to purchase military equipment, including patrol
boats.
American firms, like their French counterparts, are
showing growing interest in post-Toure Guinea, and
have started exploring trade and investment opportu-
nities in the mining, agriculture, and energy sectors.
The Conte government also has begun to use the US
Embassy as a regular channel to solicit private Ameri-
can financing for planned development projects. US
private investment, primarily in bauxite and iron ore
mining, totals $185 million. US firms are developing
diamond mining projects and exploring for oil and
alumina, between 1979 and 1983.
Constraints on Moderating Trends
In our view, Conte faces a number of potentially
serious constraints as he seeks to liberalize the econo-
my and to involve the West to a greater extent in
Guinea's development. In particular, according to the
US Embassy, the regime faces difficult challenges in
meeting popular expectations for improvements in
living conditions and in dealing with tribal frictions
between key groups sharing power within the regime.
US Embassy reporting suggests that impatience
among the populace and the junior military over the
economy, together with ethnic rivalries between Con-
te's Sousou tribesmen and the formerly dominant
Malinke, contributed to Conte's reorganization of the
government late last year and his raising of salaries
for civil servants and the armed forces. Conte consoli-
dated his position, at least for the short term, by
downgrading the prime minister and several other
Malinke, even though a large number of Malinke
remain in the government and armed forces. More-
over, the Fulani, prominent during the French colo-
nial period, still feel left out of the country's main-
stream.
Western Donor Response. Western responsiveness to
Guinea's aid and investment needs will continue to
weigh heavily in Conte's willingness and ability to
tackle difficult economic reforms. We suspect Conte
may be disappointed by the amount of new aid that
actually is tendered by key Western governments;
Embassy reporting suggests that budgetary con-
straints on France and the United States will cause
new assistance to fall short of Guinea's expectations.
Furthermore, we believe that the regime's open-door
policy of accepting aid from any source may backfire
if Western supporters become discouraged when they
perceive no further reduction of Conakry's ties to
Communist and radical Third World governments.
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The Soviets and Libyans. Another constraint to last-
ing adoption of Western-oriented policies is Guinea's
dependence on the Soviets for military security. Cona-
kry clearly continues to be dependent on the Soviets
for major arms, spare parts, and military mainte-
nance. Moreover, we see little likelihood that Guinea's
continued collaboration with the Soviets in the Kindia
bauxite project and in the fishing industry will end.
According to the Embassy, a high-level Soviet mili-
tary delegation visited Conakry late last year to
discuss the possible replacement of aircraft for the Air
Force and refurbishing other equipment in the Guin-
of these cooperation proposals.
the Soviets last yea
government and the armed forces. His primary politi-
cal challenges will be to maintain cohesion among the
senior military leadership, while keeping popular eco-
nomic expectations within bounds, ethnic tension in
check, and junior officers pacified. A serious threat to
Conte's personal survival, however, would divert him
from pursuing further economic reform and openings
toward the West.
We believe, however, that the near-term prospects are
poor for a decisive pro-Western tilt in Guinea's
foreign policy even if Conte's power is not challenged.
Conte is unlikely to press for further major cuts in the
Soviet presence primarily because of Guinea's depen-
dence on Moscow for military supplies.
offered to establish a new fishing port near Conakry
in return for exclusive fishing rights in Guinean
waters and permission to refurbish another port for
use by Soviet-manned patrol boats for protection of
their fishing fleet. We do not know the present status
to be made in bauxite or in hard currency.
In addition to these military-related measures, the
Soviets are becoming more active in trying to protect
and expand their economic presence. The US Embas-
sy reports that Moscow signed a $115 million loan
accord in late 1984 for a variety of agricultural and
industrial projects, involving a 10-year repayment
period at an interest rate of 4 percent. Repayment is
cumspect in its opening toward the West.
The Libyans, too, are a potential constraint on Cona-
kry's turn to the West, even though Tripoli is now not
very active in Guinea. US Embassy reporting indi-
cates, however, that Libya's influence in the region
has grown in the wake of its success in getting French
forces out of Chad. Libya has meddled among dis-
gruntled Muslim elements in neighboring Senegal and
The Gambia, and may follow suit in Guinea-partic-
ularly if Paris were perceived to be regaining predom-
inance in Conakry. In our view, fear of active Libyan
subversion could cause Guinea to become more cir-
Outlook
Guinea's greater receptivity to Western economic
involvement probably will continue, in our judgment,
as long as Conte remains firmly in charge of the
Alternative Scenarios. Although we do not believe
Guinea's disillusionment with its formerly close ties to
the Communist world will soon fade, Conte's over-
throw in a military coup could afford new, exploitable
opportunities to the Soviets and Libyans, at least in
the near term. A power grab by disgruntled tribal
groups or by young and inexperienced populist radi-
cals probably would be followed by considerable
domestic turbulence and uncertainty in Guinea's for-
eign policy. A vulnerable new regime might prove
susceptible to Soviet and Libyan offers of military and
economic aid. On balance, however, we believe Guin-
ea would find itself dependent primarily on the West
for aid, trade, and investment, even though a succes-
sor regime might take some time to realize this, as
was the case in Ghana under Rawlings.
Alternatively, Conte may hold on to power and
become less favorably disposed toward the West.
Although probably unlikely in the near term, he could
become disenchanted with Western responsiveness to
Guinea's aid and investment needs. Conte might
calculate that increasing ties to Moscow and Tripoli
could prompt the West to provide needed new assis-
tance that could help his regime ride out any increase
in popular dissatisfaction over economic conditions.
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Appendix B
Mali: Traore's Accommodation
to Economic Realities
Mali, with a socialist, state-controlled economy and
closely associated with Moscow since the 1960s, has
been showing signs of moderating its domestic and
foreign policies since 1980, according to US Embassy
reporting. Bamako is loosening ties somewhat to the
Soviets, improving relations with France and the
United States, and liberalizing some areas of its
economy in search of greater Western economic aid
and investment. We believe President Traore, in office
since 1968, is responding to unavoidable economic
realities and a growing realization that the Soviets
will not provide desperately needed economic assis-
tance.
Background
Impoverished Mali gained independence from France
in 1960 under the leadership of leftist President
Modibo Keita, who ruled until 1968. Keita, like many
African leaders in the immediate postindependence
period, admired the Marxist-Leninist model of a
single, elite party and believed socialism was the
solution to Mali's ills. He combined a centralized one-
party political system with socialist policies based on
extensive nationalization of the agriculturally based
economy. Keita also forged close military ties to the
USSR and withdrew Mali from the French political
community and the African franc zone, with debilitat-
ing consequences for the economy. Academic studies
show that Keita's ambitious development plans quick-
ly ran afoul of Mali's peasants, who opposed collectiv-
ization, and traders, who disliked restrictions on free
enterprise. As a result, black-market activities in-
creased, the foreign debt grew to five times that of the
national budget, and the failure of the government to
provide substantial incentives for peasants to increase
their production led to a growing distrust of govern-
mental policies in rural areas. By 1968, the govern-
ment faced severe internal discord between young,
radical officials and more moderate French-trained
military officers and bureaucrats; farmers produced
only for subsistence; and workers endured rising
inflation, salary cuts, and new taxes.
Keita was ousted in 1968 in a bloodless coup by junior
officers led by Moussa Traore, who is now in his 16th
year as Head of State. Traore sought to improve
relations with France, without straining his ties to the
USSR, which continued to provide significant mili-
tary assistance. Traore labeled his ruling ideology
"progressive" rather than socialist and publicly sup-
ported a mixed economy. He moved very gradually in
trying to make the public sector more efficient,
according to the US Embassy, realizing only in the
late 1970s that state companies-Keita's legacy-
faced such serious managerial and financial difficul-
ties that real reform could no longer be postponed.
Traore, who has weathered three coup attempts over
the years, has begun a lengthy transition from a
military to a civilian form of government, according to
the Embassy. In 1979, he created a single ruling
party, the Democratic Union of Malian People, and
was elected President for a six-year term. Party
officials now dominate key government positions,
although the US Embassy notes that the military
remains Traore's main power base.
The Soviet Connection
Despite Traore's less-doctrinaire ideology, Mali's re-
lationship with the USSR has remained steadfast
until recent years. Moscow provides minimal econom-
ic assistance, but promotes ties through provision of
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 Figure 9
Lac de
Kossou
Lake
Volta
-?- Region boundary
Region capital
Railroad
Road
MAURITANIA
200 Kilometers
200 Miles
;Ayotn of ?AtroOs
Moro ~ Nara
du Sahel`' '- (i
`~Mourdiah
ULI PRO(
TO lokani Se
Siguiri
Kattraussay
Beyla
4
``1
:Nionar,
----.Menaka
,nsongo
NIGERIA
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arms and military training, party-to-party relations,
and student scholarships. The USSR continues to be
the only supplier willing to gratify Mali's desire for
expensive and relatively sophisticated weapons. In our
view, Mali faces no immediate regional security
threats; the regime's desire for advanced equipment
stems largely from the country's martial traditions.
vided equipment from 1974 to 1983 valued at $166
million, including T-34 tanks, six MIG-21 and 21
MIG-17 fighter aircraft, and MI-8 helicopters=
Union, as Mali's principal military supplier, has pro-
he Soviet
about 50 Soviet mili-
I
L
}n,
L
tary advisers were in Mali in 1984. An unknown
number of Soviets advise Malian pilots, according to
the attache, and perform all major maintenance for
the Air Force. Moscow also provides some training to
the Malian security service.
the Soviets first offered such training in 1981;
five Malian security officers returned to Bamako two
years later, after six months of KGB training,
In addition to its military support to Mali, Moscow
has fostered ties to the ruling party, encouraging
Malian party members to attend the Soviet Commu-
nist party school in the USSR. The first group of
Malian party functionaries trained by the Soviets
returned home in 1983,
According to the US Embassy, some 100
Malian students attended schools in the USSR in
1984.
In our judgment, Soviet military aid not only curries
favor with its armed forces-the key political force in
the country-but also advances Moscow's military
interests in West Africa as a whole. The US defense
attache reports that the Soviets for several years have
been lengthening runways at the airfields in Gao and
Mopti to approximately 3,000 meters-too long for
current Malian needs-and that SA-3 surface-to-air
missiles are deployed at these airfields. The US
Embassy believes the airfields could be used to trans-
port Soviet arms and supplies to client states in
southern Africa or even Latin America. US Embassy
reporting a decade ago indicated that Mali was
among several left-leaning African states that allowed
Soviet cargo aircraft to transit their territory in 1975
when Moscow mounted an emergency arms ferry to
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Signs of Change
The US Embassy reports that despite Mali's heritage
of socialism and close ties to the Soviets, Bamako has
been expanding contacts with the West since 1980,
primarily with France and the United States. Mali
also has moved toward more pragmatic and market-
oriented economic policies. In international forums,
the public record shows that Mali increasingly takes
US concerns into consideration, although it still pre-
fers to abstain on most sensitive East-West issues.
Moreover, in spite of continued Soviet security aid,
political relations with Moscow have cooled in recent
years, according to the Embassy.
Economic Liberalization. According to the US Em-
bassy, the government genuinely is attempting to
liberalize the country's socialist economic policies,
with strong support from the IMF, the World Bank,
and Western donor countries. In 1982, the IMF
granted Mali a $34 million standby credit on the basis
of its promise to implement more efficient economic
policies, and a year later Mali received another $42.3
million standby credit. While the IMF has praised
Bamako's efforts, Fund officials point out that the
Malians so far have enacted only preliminary struc-
tural changes.
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Embassy, are aimed at stimulating agricultural pro-
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state enterprises. So far, Mali has:
? Reduced government involvement in the marketing
of cereal grains and increased prices paid to agricul-
tural producers.
? Adopted a more realistic currency exchange rate.
? Reduced subsidies on food and fuel for urban
dwellers.
? Tried to cut public spending that does not contribute
to economic development.
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Table 3
Mali: Selected Economic Indicators
Million US $
(except where noted)
-203.5
-292.2
-236.9
-213.6
-167.7
-179.4
147.1
204.9
153.8
119.5
165.5
184.4
350.6
497.1
390.7
333.1
333.2
363.8
Services (net)
-40.8
-39.4
-39.9
-40.9
-35.4
Private transfers (net)
32.4
33.2
29.5
28.7
24.1
21.6
Public transfers
87.8
145.9
129.6
93.0
107.2
121.4
Current account balance
-82.3
-153.9
-117.1
-131.8
-77.3
-71.8
Capital (net)
103.3
117.4
75.1
103.1
91.1
NA
Overall balance
-20.8
-32.2
-38.6
-2.5
4.0
-9.1
External debt, medium and long term
712.6
842.7
965.7
1,024.0
1,130.0
NA
Real GDP growth (percent)
NA
-1.0
-2.0
4.0
2.0
1.8
Debt service ratio (percent)
7
15
8
23
32
35
Inflation (percent)
-8.3
7.1
11.0
8.8
7.9
8.1
Although Bamako has tried to liquidate some ineffi-
cient state enterprises, only three of the 27 companies
so far have been sold to the private sector.
believe that their appointments reflect the ascension
to power of moderates and indicate the government's
continuing disillusionment with the socialist model.
The government's program was dealt a serious blow
this year by the worst drought of the past 10 years.
Food shortfalls are increasing, and Mali will have to
rely on donor aid for at least the next several years.
The US Embassy believes Bamako has coped fairly
well with the drought, although government efforts at
alleviating suffering are hindered by poor logistics
and congestion at coastal ports through which inter-
national food aid must pass to landlocked Mali. F_
Moderates Gain Influence. Western-oriented techno-
crats have been appointed to key ministerial positions
in recent years, according to US Embassy reports. For
example, in a 1982 cabinet shuffle, Oumar
Coulibaly-who played a key role in negotiating
Mali's first IMF standby agreement and who is
Traore's principal economic adviser-assumed the
crucial post of Minister of State for Economics and
Planning. The move toward technocrats continued in
1984, when Col. Amadou Diarra became Minister of
State for Planning and Djibril Diallo became Minister
of State for Industrial Development and Tourism. We
Warming Relations With France and the United
States. Franco-Malian relations have improved, as
demonstrated by Traore's state visit to France in
1982-his first since coming to power-and Mali's
rejoining the African franc zone two years later.'
' Thirteen formerly French territories, in addition to Mali, are
members of the French-backed African franc zone. Other members
are Benin, Burkina, Cameroon, Central African Republic, Chad,
Comoros, Congo, Equatorial Guinea, Gabon, Ivory Coast, Niger,
Senegal, and Togo. The African member states receive monetary
stability and accept conservative French monetary and banking
policies in place of national control. Zone arrangements protect
France's privileged trade by setting effective ceilings on imports by
Africans from outside the zone and from the EC, and minimum
levels for certain imports from France. African issuing banks must
hold their members' pooled currency reserves and foreign exchange
earnings in French francs in a French treasury account into which
receipts are credited and payments debited. Member states ordi-
narily cannot impose exchange controls or revalue their currencies
without the consent of all parties, and they are obliged to follow the
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Two decades of socialist economic policies have
failed to promote economic growth, according to US
Embassy reporting. Mali is one of the poorest coun-
tries in Sub-Saharan Africa, with an annual per
capita income estimated by the United Nations at
$180. Periodic severe drought and endemic govern-
ment mismanagement have devastated production of
food crops, as well as cotton, which is the principal
cash crop and source of export earnings. World Bank
data show that per capita food production declined
steadily in the 1970s even as the population grew by
an estimated 2.7 percent per year. Drought ravaged
Mali from 1968 to 1974, and again is afflicting the
country this year. UN and Western donor estimates
suggest that about one quarter of the country's 7.7
million people may face famine in 1985.
Mali's long-term economic prospects are grim. With
the exception of cotton, cattle, and peanuts, Mali has
few exportable commodities. A poor infrastructure
further hinders development efforts. And while Ba-
mako is fairly optimistic about oil prospects in the
north, it has failed to attract Western petroleum
companies who are willing to make the significant
financial commitment to explore and develop the
reserves.
Mali does have the potential to feed itself, although
drought and desertification are barriers. Western
agricultural specialists note that some 40 percent of
Mali's farmland is cultivable-as contrasted with 12
percent in Niger, which had been self-sufficient in
cereal grain production in the early 1980s. Bamako's
most prominent agricultural effort is the $1 billion
Manantali Dam project on the Senegal River, which
is a joint project with Mauritania and Senegal.
Bamako hopes the dam will irrigate its Sahelian zone
and enable Mali to become self-sufficient in food.
Cost overruns-the project was estimated originally
at $582 million-and funding problems may delay
the 1988 target date for completion. Moreover, some
observers question whether there will be enough
water, because of the low river levels, for the dam to
generate electricity.
According to the US Embassy, France's refusal in
1980 to continue to support the Malian franc outside
the framework of the African franc zone, as it had
since 1962, was a major impetus for the Traore
government to turn to the IMF and to embark on
economic reform. Paris is Mali's main bilateral aid
donor-providing at least $40 million annually, ac-
cording to US Embassy reporting-as well as its main
trading partner. In 1984, France provided 51 percent
of Bamako's total imports and took 17 percent of its
exports. French investment, however, has been insig-
nificant, although small amounts of French private
capital are a component of most new foreign invest-
ments in Mali, according to the US Embassy. Despite
government encouragment, Mali's inadequate bank-
ing system, shortage of entrepreneurial ability, and
geographic isolation hinder further French and West-
ern investment, in the view of most observers.
Mali has begun to look to France for military aid as
well. Indeed, according to US Embassy reporting,
Bamako would like to increase arms acquisitions from
France as it gradually reduces dependence on Soviet
arms. France now maintains only one military attache
in Bamako, and provides approximately $1 million in
annual military aid, making Paris a distant second to
the USSR in this area. Only a small number of
Malian soldiers are undergoing training in France.
credit for military purchases, which Bamako other-
wise could not afford. Paris, however, intends to
demand cash for future arms sales, according to the
Embassy, and any sales will depend upon Mali's
ability to arrange third-party financing. In our esti-
mation, Mali is most likely to look to conservative
Persian Gulf states for such financing, especially
Saudi Arabia. As a Muslim state, Mali may believe
the Saudis would underwrite Bamako's Western shift.
Senior Malian officials have been telling US officials
over the last several years that Bamako wants to
improve bilateral relations with Washington. They
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also have expressed considerable satisfaction with the
US AID program and appreciation for US emergency
food assistance-the United States will provide some
34 percent of all food contributions this year, accord-
ing to Embassy reporting. We believe Bamako will
look increasingly to the United States for food aid as
drought and agricultural shortfalls continue.
The United States provides 12 percent of Mali's total
imports and purchases about 1 percent of its exports.
Cooler Relations With the USSR. Although Malian-
Soviet relations are outwardly correct, political rela-
tions have cooled over the last four years and private
tensions continue, according to the US Embassy.
Traore's recent travels to the West-including West
Berlin in the face of Soviet pressure not to go-
contrast with his failure thus far to schedule an
official visit to the USSR in response to a longstand-
ing invitation. In addition, the official press has
criticized the Soviet treatment of Malian students in
Moscow.
In the past few years, Bamako also has questioned the
value of its military ties to the Soviets, which form the
core of the bilateral relationship. The US Embassy
has reported frequent complaints by Malian military
personnel about the quality of Soviet equipment as
well as long delays in delivery of weapons.
attitudes of the Soviet advisers in Mali.
some Malians training in the USSR
resented not being allowed to handle advanced Soviet
equipment, unlike their Angolan and Cuban counter-
Mali, I lis also
irritated with the Soviets' 20-year-old gold mining
operation at Kalana, whose production is unprofitably
low from Mali's perspective. The Soviets have been
smuggling gold out of the mines for several years,
the Malian Government
discovered illegal gold shipments in 1967, 1974, and
1981. Bamako did not openly protest, however, for
fear of jeopardizing its access to Soviet military
hardware and spare parts.
Pace of Change: Determining Factors
We believe that both the pace and substance of Mali's
shift toward the West will be slow and fragile,
reflecting a government commitment that is pragmat-
ic, but far from firm. How far Mali leans toward the
West will depend on such factors as Traore's hold on
power, the success of economic reforms, and reactions
of both the United States and the USSR and its allies.
We believe the trend toward greater pragmatism in
Mali depends heavily on the continued dominance by
Traore and his key supporters. We agree with the US
Embassy that, although Traore has had some shaky
periods in his 16 years in power, he appears to be in
control for now. Trade unionists and students, the
principal urban elements displeased with the belt-
tightening associated with economic reform, lack the
resources and unity to challenge the government. We
do not know of any significant faction of pro-Soviet
officials in influential military or government posi-
tions who oppose the trend toward economic liberal-
ization and closer ties to the West. We further believe
that Traore's consensus style of government offers
limited opportunities for radicals to influence directly
the decisionmaking process.
Nevertheless, we believe that Traore still will face
some pressure from those lower ranking military
officers and bureaucrats-including holdovers from
the Keita era-who have a vested interest in the
parastatal system. Junior officers trained in the Soviet
Union also may become troublesome. While US
Embassy reporting consistently suggests that Malians
trained in the USSR return home disillusioned, we
cannot dismiss the possibility that at least some of
them are committed to following Soviet economic and
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cast.
political models. In addition, some see their opportu-
nities for self-advancement and personal gain cur-
tailed by Traore's efforts to give his regime a civilian
budget and must be cut.
Economic. We agree with the US Embassy's judg-
ment that the process of economic reform is made
more difficult as the economy continues to deteriorate
and resources shrink under the weight of drought and
the legacy of socialist inefficiency. Traore has and, in
our view, likely will continue to proceed very cautious-
ly with dismantling the state enterprises to avoid
increasing social stresses and alienating key interest
groups. The state sector is Mali's largest employer
and traditionally has absorbed some 90 percent of
university graduates, according to government data.
Public salaries consume about 80 percent of the
jobseekers.
The regime has taken some modest steps to reduce
public-sector employment, but the need to find alter-
native sources of employment is one of Traore's
biggest challenges. In early 1984, according to the
Embassy, the government laid off approximately
1,000 workers as part of an IMF-recommended re-
duction of the state sector, only to grant a 10-percent
wage hike to remaining public-sector employees a few
months later to help them make ends meet. Nonethe-
less, the regime has introduced a civil service exami-
nation for university graduates, instead of hiring them
automatically as in the past. Moreover, graduates are
first encouraged to seek employment in the private
sector. This sector, however, offers scant opportunity
and we believe the swelling population will once again
place pressure on the government to absorb workers
into the state system. In addition, the contracting
economies of Ivory Coast, Nigeria, and Libya-
traditional sources of unskilled and semiskilled jobs
for more than half a million Malians-are causing
many nationals to return home and swell the ranks of
The West. In our judgment, the extent of future
Western, especially French, support for Mali's eco-
nomic reforms will be an important element affecting
Mali's retreat from socialism. So far, the prospects
are not promising. US Embassy reporting suggests
that French economic aid and investment will not
increase significantly in the near term. Moreover, US
Embassy reporting indicates that French assistance
for the deteriorating economies of Ivory Coast and
Senegal takes priority over Mali, where France has
fewer interests.
The Soviets. The Soviets almost certainly will contin-
ue to try to limit Mali's moves toward the West. As
Mali's principal supplier of military equipment and
training, the Soviets are well positioned to influence
Mali's security officials, party cadres, and university
students through training in the USSR and through
the presence of Soviet personnel stationed in Mali. L
the
USSR has adopted a long-term plan to bring Malians
"back to socialism," mainly by educating a new corps
of Malians receptive to Soviet ideas.
The Soviets also have sought from time to time to stir
up antiregime sentiment. In 1981, for example, Mali
expelled a Soviet military attache on charges of
having been in contact with coup plotters. At the coup
plotters' trial, the government presented evidence of
Soviet incitement of dissident students two years
earlier, and of Soviet funding for antigovernment
propaganda. Malian officials believed the Soviets
hoped to destabilize Mali and make it unattractive to
prospective Western investors,
concern over Soviet subversion also appeared in 1984
when two Soviet diplomats on home leave were asked
not to return to Mali. According to the US Embassy,
Mali accused the diplomats of trying to incite stu-
dents at a teachers college in Bamako.
The Libyans. While we have no evidence that the
Libyans are actively proselytizing Malians or subvert-
ing the Traore regime, we believe Libya may seek to
undermine France's position in Mali if, in Tripoli's
view, Bamako's Westward shift goes too far. Al-
though Chad, Sudan, and Niger are Libya's priority
targets, according to Embassy reporting, Tripoli in
recent years has sought sporadically to stir opposition
to the Bamako government by Mali's Tuareg peoples.
We further believe that Tripoli may recruit sympa-
thizers from the 1,000 to 2,000 Malians who work in
Libya.
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Outlook
Mali most likely will continue to move slowly toward
the West. We judge it likely that Traore will stay in
power, but may come under slowly mounting pressure
from bureaucrats with vested interests in the public, if
not socialist, sector of the economy. He has main-
tained the support of the armed forces even while
giving his regime a more civilian cast. We believe that
as long as Traore remains in power, present trends
will continue slowly-experimentation with economic
reform, closer ties to the West, and a somewhat more
balanced foreign policy.
In our judgment, Malians for now seem willing to give
Traore the benefit of the doubt as he pursues IMF
austerity programs. Despite the IMF's public opti-
mism that these programs will position the country for
economic growth, the economy continues to deterio-
rate, particularly because of severe drought. If notice-
able improvements are not soon evident, we believe
Traore will come under increasing pressure to modify
his reformist tack. Continued economic decline will
undermine Traore's support, and the potential for a
successful coup or assassination will grow.
Continued Western food and other economic aid will
be critical to Traore's ability to pursue a gradual shift
to the West. In the absence of significant Western
military help as well, however, we believe the Soviets
will retain important leverage because of Bamako's
unpaid arms debt and continuing military dependence
on Moscow. As a result, we expect the Traore govern-
ment will try to steer a careful path between East and
West, with no dramatic lessening of Soviet influence
or abrupt shift to the West in Mali's votes in interna-
tional forums.
Other Scenarios. Less likely, in our view, is a palace
coup, probably motivated by growing economic dis-
tress. Such a coup would not necessarily represent a
rejection of Mali's Westward shift, although the
process could be slowed or altered. Most of Traore's
key colleagues who might be involved in such a coup
appear to us to be moderates, although pro-Soviet
officers might in time acquire greater influence. In
any case, a new senior military government would
continue to be dependent on the West for economic
aid and food assistance and on the Soviets for arms,
which we believe would argue for continued pragmat-
ic dealings with both East and West.
We cannot rule out, however, the possibility of a
junior officers' coup that might create a situation
affording wholly new opportunities for exploitation by
the Soviets or the Libyans. Such a scenario would be
more likely if inexperienced and ill-educated junior
officers assumed power and tried to emulate the
nationalist revolutions in neighboring Burkina or
Ghana. A radical coup would hinder US efforts to
promote economic reform in the region-as other
regimes would fear implementing austerity pro-
grams-and could give Moscow a psychological vic-
tory. Libya might also gain a new foothold for
meddling in the area. We believe, however, that a
majority of Malians do not want a return to the Keita-
style radicalism of the early 1960s and that such a
regime would not have lasting public support.
On balance, a regime of radical junior officers would
face the same serious economic problems as the
present government and we believe they would find it
necessary to cooperate uneasily with the West to
assure continued economic aid. As a result, we would
expect such a new government to try to play down its
radical intentions as well as its connections with the
Soviets or the Libyans.
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Appendix C
Guinea-Bissau: Looking Westward
Soviets.
Guinea-Bissau gained independence from Portugal in
1974 after a 14-year, Soviet-supported guerrilla strug-
gle that helped spark the revolution in Portugal and
the decolonization of all Portuguese Africa. Faced
with a deteriorating economy and unworkable social-
ist policies, President Vieira's military regime has
attempted since 1982 to attract from the West the
economic assistance it has failed to get from the
program.
The US Embassy reports that moderates in the
government have successfully encouraged it to give
freer rein to private enterprise and market forces,
improve relations with the United States, Portugal,
and other Western donors, soften Bissau's anti-West-
ern rhetoric, and establish a voting record more
favorable to the West in international forums. In our
view, the ability and willingness of Western govern-
ments, particularly Portugal, to keep providing crucial
economic assistance will largely determine the extent
of Bissau's continued movement toward more West-
leaning policies. Direct US leverage, however, is
restricted by its modest bilateral economic aid
Background
The African Party for the Independence of Guinea-
Bissau and Cape Verde (PAIGC) 6 initiated in 1961 its
guerrilla struggle against 500 years of Portuguese
colonial rule. With strong Soviet backing, the
PAIGC's campaign quickly became the most success-
ful anti-Portuguese struggle in all of Lisbon's African
possessions. By the early 1970s, according to US
Embassy reporting, the PAIGC controlled much of
the countryside, where it set up an effective civil
administration despite the presence of more than
30,000 Portuguese troops in urban areas. A coup in
6 Most of the PAIGC's intellectual and political leaders were from
Cape Verde, a group of small islands 640 kilometers off the west
coast of Afri
Figure 10. Brig. Gen. Joao
Bernardo Vieira, President of
Portugal in 1974 by officers returning from Africa
and frustrated with the unending colonial war led to
independence by 1975 for all of Portugal's African
possessions. The PAIGC immediately established a
socialist-leaning, pro-Soviet, one-party government
over both Guinea-Bissau and Cape Verde.
In 1980, a coup by ethnic Bissauans established
separate governments for each sovereign state. Eco-
nomic domination by Cape Verdeans in Guinea-
Bissau and their predominance in the party had led to
discord despite close collaboration between the two
peoples in the liberation struggle. The coup also was
fueled, according to the Embassy, by resentment of
corruption and steady economic deterioration under
the state-dominated economic system. Brig. Gen. Joao
Bernardo Vieira in 1984 was elected President of
Guinea-Bissau for a five-year term under a constitu-
tional form of one-party government-the party re-
taining its original title, PAIGC-with an elected
popular assembly.
The Soviet and Libyan Connection
The Soviets effectively used the anticolonial struggle
to strengthen ties to Guinea-Bissau. Senior Bissauan
leaders, especially those who participated directly in
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Figure 11
Bissora J/ 1 B A F ~rI A Gaba
13 C L A Sri / v 1
Buhaque. / Cat'ldpT OM BA L I
Guinea-Bissau
-?- Region boundary
0 Region capital
- Railroad
Road
0
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0
40 Kilometers
40 Miles
Boundary representation is
not necessarily authoritative.
Sangaridi. {
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.Mensoa S j
i Bambadinca
BissaIuu* \
O Enxudd
Fola~unda
BISS U
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pendence.
the guerrilla war, still feel indebted to the Soviets for
Moscow's support during their fight for independence,
according to the US Embassy. The colonial period left
a legacy of suspicion against the West as a whole for
its political support to Portugal, a member of NATO.
PAIGC leaders, many of whom were educated in the
Soviet Union, saw Moscow as the only counter to
Western colonialism and sought to emulate its social-
ist political and economic teachings following inde-
The Soviet Union continues to be the principal suppli-
er of military assistance, technicians, and advisers to
Guinea-Bissau. Since independence, Soviet arms de-
liveries have included MIG-17 and MIG-21 fighter
aircraft, T-54 and PT-76 tanks, trucks, armored
personnel carriers, and howitzers, according to the US
Embassy. The Embassy estimates that there are 55
Soviet military advisers in Bissau, and perhaps 150
civilian technical advisers. The 350 scholarships of-
fered by the Soviets to Bissauan students in 1983
exceeded the combined total of all Western academic
and vocational scholarship assistance provided to the
country, most of which has come from Portugal.
There are frequent exchanges of delegations between
Bissau's ruling party and the Soviet Communist par-
ty, according to the US Embassy, and Vieira visited
According to US Embassy reporting, Moscow hopes
to obtain formal military air and naval access rights,
beyond simple port calls, which successive Bissauan
governments have refused to grant.
southern Africa.
would
put the Soviets far closer to the mid-Atlantic shipping
routes. Such access also would give Moscow a forward
supply facility for aircraft and ships en route to
Notwithstanding their denial of military air access,
since 1981 the
Bissauans have undertaken extensive improvement of
the country's main airfield, which when completed
will be capable of supporting large civilian and mili-
tary aircraft. The improvements are similar to work
that is under way at two remote airfields in Mali,
where, we suspect, the Soviets have limited air access
rights. The US Embassy in Bamako believes the work
reflects contingency planning by the Soviets, who may
hope that the airfields could be used if required to
help transport arms to client states in southern Africa
or even in Latin America.
The US Embassy reports that besides access to air
and port facilities, other Soviet objectives in Guinea-
Bissau include keeping the country in the African
socialist camp, assuring continued Bissauan support
of Soviet positions in international forums, and up- 25X1
grading presently limited trade ties. The Soviets also
value continued access to rich fisheries off Guinea-
Bissau, according to Embassy reporting. Moscow has
spent nearly $30 million in economic aid and $40
million in military assistance between 1975 and 1982
to Guinea-Bissau.
The Libyan Connection. Libya's revolutionary cre-
dentials and offers of financial and military assistance
have given Tripoli access, but have not yielded signifi-
cant influence since establishment of diplomatic rela-
tions in 1975. Although Libya has delivered some
munitions and supplies,
Vieira recently ignored a military
cooperation agreement an aide had signed with Tripo-
li and refused to provide Libya unlimited air access
for fear of jeopardizing financial aid from Saudi
Arabia and Kuwait, according to the US Embassy.
Bissau impounded a shipment of Qadhafi's "Green
Book" in 1984, and expelled the Libyan charge in
1981 for bankrolling political activity among the
country's Muslims, who comprise 35 percent of the
population and who had opposed the PAIGC during
colonial times. The US Embassy reports that
Bissauan delegations to Tripoli over the past three
years have failed to obtain implementation of military
training and other assistance agreements, which we
believe may lead to further downgrading of relations.
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Since 1982, according to the US Embassy, the Vieira 25X1
government has begun to modify unworkable Marxist
economic policies to give more scope to market forces
and private enterprise. Ties have warmed to Portugal,
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the United States, and the European Community
generally, while relations with the Soviets have lost
some of their former intimacy.
Pressures for Change. The US Embassy observes that
misguided socialist economic policies in the 1970s,
whose effects were reinforced by world economic
recession and prolonged drought, left Bissau in no
better shape in 1981 than at independence. Bissau's
leaders inherited an economy that was undeveloped by
the Portuguese and devastated by war. Then as now,
the country's meager export earnings were dependent
on the production of peanuts and fishing, with most of
the population of 842,000 engaged in subsistence
agriculture. The country has experienced a decade of
disappointing economic growth, low agricultural pro-
ductivity, and chronic balance-of-payments deficits.
We agree with US Embassy reporting that Vieira has
been forced to modify his country's socialist policies
and to turn more to the West primarily in search of
additional, desperately needed aid-at least probably
$80 million annually, according to recent US esti-
mates. Moreover, as early as 1982, according to the
Embassy, the government realized it could not attract
aid from Western governments and the IMF without
making major adjustments in the socialist economy.
The US Embassy reports that Moscow's tight-fisted
economic aid policies have added to Bissau's willing-
ness to turn Westward. Bissau privately claims that
the Soviets have not abided by the terms of a bilateral
fishing agreement, according to the Embassy, which
underscores the growing belief among local observers
that the country's commercial and trade relations
with the Soviets have been one-sided. In addition,
For example, Soviet-supplied MI-8 helicopters
are grounded for lack of spare parts.
Signs of Change
Among signs of government movement away from
radical policies are the promotion of moderates to
The violent struggle for independence, coming after
decades of general neglect by the Portuguese colonial
authorities, left Bissau with virtually no productive
facilities and restricted growth and development. In
addition, Portuguese colonial policies, according to
the US Embassy, cut the country offrom the outside
world and denied it policymaking and managerial
capabilities. At independence Bissau possessed one
industrial concern, a brewery.
Socialist policies, however, have not lifted Bissau
from the ranks of the poorest nations of the world.
Estimated GDP per capita is under $200 per year and
only 5 percent of Bissauan workers earn a salary. The
US Embassy estimates that agriculture-mainly the
cultivation of rice and peanuts-accounts for about
50 percent of annual GDP, 85 percent of the country's
employment, and about 60 percent of annual exports.
The industrial sector remains undeveloped and ac-
counts for only 10 percent of GDP. Only 30 percent of
arable land is farmed and more than 70 percent of the
annual agricultural production is illegally marketed
outside the country because of low government pro-
ducer prices.
53 percent annually.
The Embassy reports that Bissau's economic troubles
include:
? Chronic budget deficits and a sharp reduction of
imports and exports in recent years.
? Debt service payments equal to 50 to 70 percent of
imports, an extreme shortage of hard currency
reserves, and chronic balance-of-payments deficits.
? Severe shortages of all essential commodities, ser-
vices, and trained technical and management per-
sonnel, and a thriving black market.
? A burgeoning inflation rate, which the IMF put at
promise of oil and bauxite deposits.
Despite these figures, the US Embassy believes that
long-term prospects for growth and development are
encouraging. The country has rich, underutilized
arable land; a demonstrated potential in fishing, in
timber, peanut, and palm oil production; and some
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Table 4
Guinea-Bissau: Selected Economic Indicators
Trade balance -49.8
Exports (f.o.b.) 11.3
Imports (f.o.b.) 61.1
Current account balance -26.4
Gross foreign reserves
External debt
Real GDP growth (percent) 1.0 a
Inflation (GDP deflator) (percent) NA
Debt service ratio (percent) 16
moderate international stance.
influential positions in the government, warming rela-
tions with the United States and Portugal, and a more
Moderate Reformers and Economic Change. Key
indicators of change in Guinea-Bissau, according to
US Embassy reporting, are the ascendency of moder-
ates in the Vieira government and the regime's adop-
tion of a potentially significant program of economic
reform. In a series of Cabinet shuffles since 1982,
Vieira has shunted aside ministers known or suspected
to oppose closer ties to the West, including former
Foreign Minister Samba Lamine Mane and economic
overseer Vasco Cabral. More moderate technocrats
now hold key portfolios, such as Minister of State for
Defense Camara and First Deputy President Cor-
reira. Despite a purge in 1984 in which former Prime
Minister Saude Maria was sacked for alleged coup
plotting, Vieira kept on Saude Maria's colleague,
Finance Minister Montero, largely because he was a
moderating influence who had the confidence of
international financiers.
Largely as a consequence of these newly promoted
moderates, Bissau adopted an IMF-supported eco-
nomic stabilization program in 1983. According to
government planning documents, the program, cover-
ing the 1983-86 period, aims to reduce budget deficits
Million US $
(except where noted)
-38.1 -57.6 -48.5 -48.8
13.9 11.8 8.6 20.7
52.0 69.4 57.1 69.5
-23.1 -35.2 -25.1 -27.5
15.1 8.4 7.6 9.1
96.3 134.7 163.1 193.0
2.0 -2.0 -11.0 6.0
11.6 16.5 23.4 52.9
8.6 22.5 26.4 51.2
and foreign debts, improve the performance of state-
owned industries, give more leeway to private enter-
prise, and stimulate the production of food and cash
crops. The US Embassy reports several other steps,
including a more flexible monetary policy that began
with a 50-percent devaluation in 1983 and is continu-
ing with weekly adjustments. Public spending has
been reduced through a government-wide hiring
freeze and restrictions on nonpriority expenditures.
Prices paid to agricultural producers have been in-
creased between 77 and 144 percent, and prices of
imported consumer goods raised to deter import de-
mand and reduce the country's import bill. Moreover,
the government has authorized private retailers to
engage in domestic trade for the first time since
independence. These moves have led to a $1.8 million
IMF first credit tranche and a $6 million World Bank
credit, the latter earmarked to revamp the bu-
reaucracy.
Warming Relations With the United States and
Portugal. US Embassy reporting indicates that as
Bissau's economic plight has worsened since 1982,
senior Bissauan leaders have shown increasing inter-
est in closer cooperation with the United States and
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Portugal. Most recently, according to the Embassy, a
senior official privately praised aid cooperation be-
tween the United States and Portugal; the two coun-
tries are jointly helping to revitalize Guinea-Bissau's
private sector and to build up credit facilities for
steadfast rejection of Soviet blandishments for in-
creased access to port and air facilities.
Soviet racism, heavyhandedness,
and other interpersonal frictions between Soviets and
Bissauans have further soured the relationship. Ac-
cording to the Embassy, some local observers believe
the government's reluctance to proceed with a Soviet-
proposed bauxite mining facility reflects Bissau's fear
that Moscow would use the project to introduce more
agriculture and industry.
Relations with the United States are good, according
to the Embassy, despite a falloff in US bilateral aid
from $8.4 million in 1983 to $2.6 million in the
current 1985 program.
Trade with
the US has been modest, as imports from the United
States increased from $300,000 in 1977 to $3.9
million in 1981, but Bissauan exports to the US are
negligible. According to the US Embassy, President
Vieira is seeking an official invitation to visit the
United States.
Relations with Portugal, Bissau's principal bilateral
source of assistance and its main trading partner, have
improved considerably in recent years, according to
the US Embassy. Portugal publicly claims to have
provided $53 million in development aid since 1975,
and its most recent aid program includes a $3 million
line of credit and generous repayment terms on
Bissau's $17 million debt to Lisbon. Imports from
Portugal grew from $10.2 million in 1978 to $29.5
million in 1982. Warmer bilateral relations are re-
flected in Vieira's visit to Lisbon last year, which
reciprocated Portuguese President Eanes' 1982 visit to
Bissau. In 1984,
The Vieira
government also has accredited a Portuguese military
attache and has received some military training from
Lisbon.
In addition to the United States and Portugal,
Guinea-Bissau has improved ties to France. Most
recently, according to the US Embassy, France has
sent a military attache, and provided some military
training and a grant of a French Alouette II helicop-
Less Intimate Soviet Ties. Although the Soviets still
enjoy a privileged position in Bissau, the US Embassy
reports that irritations in the relationship have led to
personnel into the country.
Bissau may revoke its deepwater
fishing agreement with Moscow because of Soviet
poaching, and grant these rights to the Chinese
instead. The US Embassy reports that China will
construct five to six fishing vessels for Bissau.
International Stance. The US Embassy believes that
the regime is beginning to understand that it must
reciprocate the West's gestures if it hopes to retain
Western aid and confidence. In recent meetings with
US diplomats, for example, Bissauan officials have
expressed greater willingness to take account of US
sensitivities in international forums. During the 1984
UN General Assembly, for example, Bissau refused to
criticize the United States by name every time an
appropriate issue came to a vote. The local press also
has begun to carry fewer items supplied by Soviet bloc
press agencies and now uses some Western wire
service material as well.
How Far Will Guinea-Bissau Go?
Bissau's Western movement has been neither swift
nor certain, despite clear evidence of change. Over the
next several years, the pace and duration of Guinea-
Bissau's turn to the West probably will be determined
by radical-moderate struggles within the government,
the West's response to the turn, and possible Soviet
efforts to reverse the trend.
Political Considerations. In our view, the balance of
power between moderates and hardliners within the
government and ruling party will be crucial to the
continuation of Bissau's pragmatic trend. We agree
with the US Embassy that Vieira has outmaneuvered
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his rivals and appears to be in control, at least for
now. The US Ambassador believes that leftists have
not recovered from recent purges and that Finance
Minister Montero and other key moderates will con-
tinue to work to improve ties to the West.
According to the US Embassy, Vieira believes that
good economic relations with the West can be
achieved at no expense to close military relations with
the East. Nonetheless, he has hedged his bets by
incrementally moving hardline radicals out of posi-
tions of influence in the party and government. Peri-
odic purges of officials-usually based on personality
conflicts and suspected presidential ambitions of ri-
vals rather than ideological disputes-have rarely
caused grumbling because most are rehabilitated and
return to the government. Moreover, because Vieira
has consulted and cooperated with a wide selection of
advisers on virtually every issue, no one has built an
independent base to challenge Vieira's policies or
authority.
We believe Vieira and his fellow moderates will have
to contend with continued maneuvering and foot-
dragging by hardliners who have maintained their
traditional contacts with the Soviet bloc. In our
judgment, leftist ideologues probably are reluctant to
jeopardize their revolutionary credentials, have a vest-
ed interest in the existing state economic system, and
may fear that reforms could prove too painful over the
short run for the regime and populace to bear. For
example, Bissauan delegates to Soviet bloc functions
have at times embarrassed Vieira with their blasts at
the United States, according to the US Embassy.
Western Response. We believe that the willingness
and ability of the West to provide additional aid will
influence the extent of Bissau's moderation. The
Vieira government told Western representatives at a
donors' conference in 1984 that it needed at least
$648 million if the economic stabilization and devel-
opment program was to work. So far, according to the
US Embassy, Western donors have earmarked only
about $60 million in economic aid over the next four
years.
Although Portugal is the preeminent Western aid
donor, we believe Portugal's own underdeveloped and
depressed economy, along with competing demands of
other former Portuguese African colonies, restrict
Lisbon's ability to increase its economic and military
aid. Joint Portuguese and US aid projects are de-
signed to end in a few years and will not give Lisbon
and Washington a long-term position of influence in
Bissau. In addition, we believe the limited market
potential for Portuguese and US companies probably
will work against a significant increase in trade and
investment.
The Soviets. We believe Vieira is mindful of Soviet
sensitivities and probably calculates that he cannot
move toward the West too quickly for fear of jeopar-
dizing Bissau's major arms supply, which could spark
grumbling within the armed forces. By all accounts,
Western military aid only supplements, and is a long
way from replacing, Soviet commitments.
We believe Moscow will tolerate a certain amount of
reorientation by Bissau provided it stays within limits
that do not jeopardize Soviet interests. In our view,
the Soviets probably are resigned to Bissau's accep-
tance of Western aid, realizing the limits of their own
ability to provide sufficient assistance. Some Soviet
writers recently have suggested in Soviet journals that
acceptance of Western aid does not interfere with the
developing countries ultimately choosing to strive for
Communism. These writers also suggest that such
countries inevitably will look to the USSR as a
counterweight to the "forces of imperialism" and that
the Soviets should exploit such opportunities as they
arise.
At a minimum, we expect the Soviets to maneuver
behind the scenes, using financial support, subversive
tactics, and offers of new military aid to improve the
fortunes of the regime's leftists. For example, 25X1
the Soviets 25X1
may have delivered four MIG-21 fighter aircraft to
replace MIG-17s that were lost earlier in the year
during a maritime border dispute with Senegal. In our
view, Portuguese Communist party members attached
to various government ministries as technical advisers
could assist the Soviets in frustrating further move-
ment toward the West.
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Outlook
Vieira and his fellow moderates are likely to continue
to pursue cautious economic reforms designed to
increase government efficiency, stimulate the private
sector, and improve ties to the West. Even so, we
believe that Bissau's turn toward the West under
Vieira or any successor regime probably will be
limited in scope and pace, involving only as much
change as the regime believes necessary to encourage
Western donors. Bissau's leftist heritage and the need
to keep the country's various factions in check will
forestall the complete abandonment of socialist ideol-
ogy or the elimination of Soviet influence. Although
Bissau probably will soften its stance on some issues in
the United Nations to avoid antagonizing the United
States directly, we suspect the country's voting pat-
tern will continue to be driven more by its desire to
maintain solidarity with the Nonaligned Movement
and African "progressive" states and avoid direct
involvement in East-West controversies.
Alternative Scenarios. Vieira's handling of the reac-
tion to economic reform by both the people and the
ruling elite will pose risks for him over the short and
medium term. Instability could rise if Vieira misreads
his ability to guide the country through a period of
austerity until the IMF program improves living
standards. Moreover, Vieira's leftist critics would
have ample ammunition if the level of Western aid
fails to meet Bissau's expectations. Should he suc-
cumb to potentially increased leftist influence while
managing to cling to power, we believe the regime
probably would begin to reevaluate its flirtation with
the West.
Should Vieira be ousted by the military, we believe
that the policies of a successor regime would depend
on the rank, ideology, and political maturity of the
coup leaders. In our view, a chaotic period would
ensue regardless of who takes over, affording the
Soviets an opportunity to use their military relation-
ship to try to obtain naval and air access rights. We
would expect, however, that Bissau's new rulers would
face much the same economic quagmire as their
predecessors. After gaining a clearer understanding of
the depth of the country's economic problems and of
the limited prospects for obtaining meaningful non-
Western sources of aid, we believe the new leadership
would feel pressure to come to terms with the West in
search of needed economic assistance.
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Appendix D
Congo: Limited Move Toward
the West
Shortly after independence from France in 1960,
Congo turned sharply to the left and established close
ties to the Soviet Union. In the late 1970s, however,
growing economic problems and irritation at the lack
of Soviet development aid caused Brazzaville to look
for more assistance from the West, particularly
France. In recent years, under President Sassou-
Nguesso, Congo has quickened the pace of its move
toward the West. Nevertheless, Sassou's commitment
to Third World ideology, the importance of Marxist
controls to political stability, fears of fostering serious
opposition from leftists, and need to maintain access
to Soviet arms work against more fundamental
change.
Background
At independence, Congo was governed by an elite
drawn from the majority Kongo tribe in the south. It
was headed by President Youlou, whose corruption
and blatantly pro-French policies led to antigovern-
ment demonstrations and his resignation three years
later. Youlou was succeeded by another southern-led
government under President Massamba-Debat, who,
the US Embassy reports, fell under the influence of a
powerful leftist clique. Massamba-Debat established
a ruling Marxist party, a nascent state-run economic
sector, and a pro-Soviet foreign policy. His efforts to
consolidate power sharpened ethnic and regional dif-
ferences and led to an extended power struggle culmi-
nating in the installation in 1968 of a northerner,
President Ngouabi.
Ngouabi, in what the US Embassy viewed as an
attempt to centralize control, proclaimed Congo Afri-
ca's first "peoples republic" in 1970. Ngouabi kept
Congo in the African franc zone, however, and contin-
ued to gradually improve relations with the West in
search of more investment and aid. His assassination
in 1977 led to two years of rule by President Yhomby-
Opango who was replaced by current President Denis
Sassou-Nguesso in the first nonviolent change of
government since independence. Although Sassou
came to power with the support of hardline leftists in
the military and has spouted standard Marxist rheto-
ric, he has generally followed a more moderate course
than Congo's other military presidents.
In our view, ethnic loyalties, regionalism, and ideolog-
ical differences are the major divisive elements in
Congolese politics. Tribes have traditionally vied both
among themselves and between north and south for
control of the central government. We agree with the
US Embassy that northern military leaders' skillful
use of Marxist political controls has played a critical
role in allowing the northern elite to consolidate power
and reduce the traditional influence of the country's
better educated and more numerous southerners.
Northern military leaders have also used Marxism to
bridge ethnic rivalries, mobilize the population, and
maintain public order.
Soviet Influence
In our view, the USSR has both political and military
aims in Congo, one of the few African states to have a
formal treaty of friendship and cooperation with
Moscow. We believe the Soviets' principal objectives
are to limit Western and Chinese influence, to keep
Brazzaville on a socialist path, and to garner its
support in international forums. In addition, Embassy
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o Region capital
Road
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reporting indicates that, despite repeated refusals by
several Congolese presidents, Moscow still hopes to
acquire naval base rights at Pointe Noire and con-
clude a mutual defense treaty under which it could
intervene at Congo's request. We believe the Soviets
seek base rights as a contingency should Moscow lose
access to neighboring Angola, where Luanda serves as
the primary support site for Moscow's small West
African naval patrol and periodic Soviet TU-95 naval
reconnaissance in the south Atlantic.
From the Soviet perspective, Congo also serves to
support Cuban military operations in Angola, accord-
inu to the
Moreover, Pointe
Noire's airfield is used to support logistics operations
for Cuban units in Cabinda as well as to support
routine movement of Cubans to and from Angola.
Cuba, according to the US Embassy.
Moscow's influence in Congo, as in other African
countries, rests on its military assistance program.
After establishing diplomatic relations in 1964, Mos-
cow quickly displaced France as Congo's principal
arms supplier. We estimate that, since the mid-1960s,
Moscow has delivered $200 million in military equip-
ment, including at least 23 MIG-21 fighters and eight
MI-8 helicopters. We estimate that the Soviets have
340 advisers assigned to Congo's military and security
organizations. The USSR also provides military train-
ing for the Conogolese in the Soviet Union and in
In addition to military assistance, the Soviets have an
active political and cultural exchange program that
includes the frequent exchange of party delegations.
According to the US Embassy, the Soviets provided
approximately 80 scholarships last year, down from a
high of 150 in 1983. Over 1,200 Congolese are
studying in the Soviet Union and some 800 in Cuba.
Communist economic aid and trade with Congo is
minimal. The US Embassy estimates there are about
300 Soviet civilian technicians in Congo, mostly in the
health and education sectors. Cuba, East Germany,
and Bulgaria also provide some civilian technicians.
We estimate that the Soviet Union has provided some
$12 million in economic aid over the past five years.
Bilateral trade over the past five years has been fairly
stable at $5-8 million annually.
Trend Toward Moderation
In a search for Western aid and investment, Sassou
has made some efforts to liberalize the economy,
reduce Congo's dependence on the Soviet Union, and
occasionally to adopt more nonaligned positions. In
our view, these trends have become especially notice-
able in the past year as Sassou's political position has
become stronger and the economic situation has wors-
ened. Brazzaville's pragmatism, in our judgment, is
motivated by its belief that increased Western invest-
ment and aid are critical to economic development,
particularly after its modest oil resources are deplet-
ed-which could occur as early as the 1990s.
long delays in the delivery of spare
parts, and Moscow's recent insistence on advance
payments for services. The Congolese have told US
Embassy officials that they are unhappy with the
quality of Soviet military training, which they said
emphasizes political indoctrination at the expense of
practical skills.
Among the signs of Sassou's moderating course,
according to the US Embassy, is the appointment of
political moderates in the last several years to several
influential government positions in an effort to en-
courage greater Western aid and to diversify the
country's sources of military supply. As a result,
diplomatic and economic ties to France and the
United States have improved significantly in the last
three years, according to the Embassy.
Ascendancy of Moderates. Sassou has engineered
personnel moves in recent years that have significant-
ly strengthened the moderate faction at the expense of
pro-Soviet ideologues. Sassou finally succeeded in
establishing his political dominance during the last
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Congo: The Economy at a Glance
Although Congo calls itself socialist, the US Embas-
sy reports that private-sector trade and manufactur-
ing-mostly French owned-constitute about 80 per-
cent of all economic activity. The rest of the economy
is closely tied to numerous inefficient and overstaffed
state enterprises that are a serious drain on the
treasury. Most of the country's population, however,
still engages in subsistence agriculture. The economy
is based predominantly on the production of petro-
leum, which provides about 90 percent of Congo's
exports and about two-thirds of government revenues,
with exports of timber and cash crops making a small
contribution to GDP. Congo, with estimated reserves
of 1.6 billion barrels, is black Africa's fifth-ranking
oil producer, averaging about 4.5 million metric tons
in 1984. The economy also benefits from Congo's
location at the crossroads of transit trade to and
from Zaire, Central African Republic, Chad, and
Gabon. Customs receipts provide government reve-
nues while service and transport industries provide
extensive employment.
Congo has suffered a significant economic downturn
in the past two years, according to US Embassy
reporting, because of lower-than-expected oil reve-
nues, poor performance of state enterprises, and
excessive short-term borrowing to finance develop-
ment. Led by the petroleum sector, real GDP growth
averaged nearly 18percent annuallyfrom 1979 to 1982,
and the Sassou government embarked in 1982 on a
party congress in July 1984, when he was unanimous-
ly elected to another five-year term as President and
party chairman. He also maintained control of the
Army, and gained authority to control the security
apparatus, to personally appoint the party's political
bureau, and to supervise cabinet ministers.
Sassou's cabinet now is composed primarily of prag-
matic technocrats who appear to support his efforts to
improve relations with the West. The US Embassy
indicates that Sassou's boldest move during the party
congress was the ouster of Thystere Tchicaya, the
party's leading leftist ideologue who was widely
viewed as the second most powerful figure in Congo
$3 billion five-year development plan, heralding it as
the blueprint for economic development against the
day when oil runs out, possibly as early as the 1990s.
Problems began in early 1983, the US Embassy
reported, when the soft world oil market, oil produc-
tion problems, and increased production costs caused
oil earnings to fall 20 percent below expectations.
Meanwhile, the growth rate of the nonoil sector also
fell substantially as state enterprises incurred major
payment arrears. Real GDP growth declined sharply
to 3.6 percent in 1983, and outstanding external debt
has tripled since 1979 to $1.7 billion-equivalent to
three fourths of Congo's GDP. In addition, according
to the Embassy, for the first time in recent years oil
revenues in 1984 were not sufficient to cover all of
Congo's public debt payments, and oil receipts due in
early 1985 probably will only cover arrears through
last November. According to the US Embassy, debt
service and salaries during the next two years are
likely to absorb all oil revenues, leaving investment
under the five-year plan totally dependent on external
financing. The Embassy reports that Sassou has
begun to take steps to rein in Congo's ambitious
development plan in recognition that the government
will have to follow austere policies for at least the
next two years. As a result, urban unemployment and
business failures have increased.
after the President.
Tchicaya was removed on charges of coup plotting,
but many supporters believe he was framed so that
Sassou could remove a key leftist. After the party
congress, the Embassy reports, several ideologues-
some with close Soviet ties-were demoted or re-
moved from senior government positions, including
the prime minister, foreign minister, minister of inte-
rior, and a senior military officer.
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Table 5
Congo: Selected Economic Indicators
Million US $
(except where noted)
Imports (f.o.b.)
363
545
805
715
651
575
Current account balance
-99
-166
-498
-443
-393
-219
130
42
12
External debt
1,086
1,218
1,272
1,515
1,689
NA
Real GDP growth (percent)
NA
17.7
24.0
13.0
3.6
3.1
Inflation (GDP deflator)
(percent)
NA
20.3
21.2
16.3
9.1
4.4
most important state firms by reducing the number of 25X1
managers and emphasizing the need to show a profit.
The government also lifted its monopoly on marketing
agricultural crops and increased producer prices to
Moves To Liberalize the Economy. The US Embassy
reports that, despite opposition from ideologues, Sas-
sou has undertaken a number of moves to encourage
private enterprise. He created a Ministry of Small
and Medium Size Enterprises last year, which ap-
pears to be playing a central role in efforts to increase
Western trade, aid, and investment. During a recent
trip to the United States, Alphonse Poaty, head of the
new ministry, stressed Congo's desire to liberalize its
economy to a number of private bankers, IMF offi-
cials, and the World Bank. The Embassy also indi-
cates that Brazzaville plans to establish regional
chambers of commerce to cut redtape, to improve
communication between small businessmen and the
government, and to encourage foreign and domestic
venture capitalism. Moreover, the investment code-
already one of the most liberal in black Africa-will
be revised to make it even more attractive.
The US Embassy reports that Sassou has expended
large sums to restructure and improve management of
state enterprises. For the past two years, the govern-
ment has sought to improve the performance of the 10
boost low production.
Diversifying Military Suppliers. Unhappiness with
the quality of Soviet military equipment and training
has led the Congolese armed forces to seek Western
equipment and training, according to the US Embas-
sy. Two years ago, Congo purchased 60 trucks and six
coastal craft from France and three patrol boats from
Spain. The Embassy also reports that in the next few
years Congo plans to purchase additional French-
made transport equipment, including a C- 130 air-
craft. Moreover, last year more military personnel
received training in France than in the Soviet Union,
a trend that Brazzaville hopes to continue, according
to the Embassy.
Growing French Economic Role. In recent years,
Congo has further strengthened commercial ties to
France, traditionally its chief economic partner and
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benefactor. We believe the election in 1980 of a
Socialist government in France facilitated closer col-
laboration between the two countries, and Sassou has
met with President Mitterrand four times since the
latter's election. France and other European Commu-
nity states supply over two-thirds of Congo's imports
and purchase 20 percent of its exports as well as
providing almost all of Brazzaville's development
assistance.
The Embassy reports that since 1981 France alone
has accounted for slightly more than half of Congo's
total annual imports. There are some 500 French
technicians in positions throughout the Congolese
Government, in addition to the 7,000, private French
citizens who, as expatriates and employees of French
multinational corporations, dominate the private sec-
tor. The French-owned ELF-Congo is the major
petroleum producer and is responsible for marketing
most of the country's crude oil.
Improved Relations With the United States. Congo's
commercial dealings with the United States have
increased significantly during Sassou's tenure. Total
Congolese-US trade grew in 1984-to a record $1
billion, making the United States one of Brazzaville's
leading trading partners and Congo the third largest
US trading partner in black Africa, according to the
Embassy. Over 95 percent of this trade consists of
Congolese crude and refined petroleum products pur-
chased on the spot-market by American oil compa-
nies, which bought four-fifths of Congo's total oil
exports in 1984. Congo recently agreed to accept
modest food assistance and military educational train-
ing for Congolese officers that supplement US devel-
opment aid, which the US Embassy reports, has
averaged $2 million a year since 1981. American
investment in Congo totals approximately $4 million,
and Brazzaville decided last year to award two con-
tracts-one in agriculture and one in energy-worth
$70 million to American companies.
According to the US Embassy, diplomatic ties to
Congo have improved. US officials now have greater
access to the media and to senior officials, leading to a
greater exchange of views on mutually important
issues such as Chad. In addition, Sassou has appoint-
ed a resident Ambassador to Washington for the first
time, and senior Congolese officials visited Washing-
Brazzaville also has assumed a more balanced posi-
tion on some foreign policy issues. For example, the
Congolese press printed a US response to Soviet
disinformation over responsibility for the Korean air-
line shootdown incident and a positive article on
President Reagan's recent criticism of South Africa's
policy of apartheid. Other examples include Congo's
participation in the Los Angeles Olympics despite
Soviet pressure, hosting of a reconciliation conference
in Brazzaville between the pro-Western Chadian Gov-
ernment and Libyan-backed dissidents, recent efforts
to cooperate with Kinshasa to curb Zairian exiles
allowed safehaven in Congo, and offering to serve as a
channel of communication between the United States
and Angola.
Nevertheless, Congo's actions in international forums
have shown no decisive move away from its longstand-
ing alignment with the Soviet bloc and radical Afri-
can countries. According to the US Embassy, Congo
voted against or abstained on every issue of impor-
tance to the United States at the United Nations in
1984. In addition, Congo's new foreign minister in his
speech before the last UN General Assembly used
traditional harsh anti-imperialist rhetoric and indi-
rectly attacked the United States on issues relating to
apartheid, Israel, and Nicaragua.
Limits to Westward Trend
Although Congo clearly wants to remove some social-
ist impediments to development and foster closer
economic relations with the West, we believe future
movement is likely to be slow and incremental and
will not entail any fundamental abandonment of
Congo's self-styled "revolutionary" ideology. In the
near term, the pace and direction of the country's
trend toward moderation will be influenced by Sas-
sou's need to placate domestic leftists, the Soviets, and
the Libyans. Moreover, Western reponsiveness to
Congo's economic needs will also be important as the
economy adjusts to more austere times ahead.
Domestic. Sassou is facing increased opposition from
hardline leftist party officials who feel threatened by
his recent moves to consolidate power and improve
ties to the West. Sassou created numerous enemies at
last year's party congress when he removed or demot-
ed a number of influential hardline officials opposed
ton several times last year.
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party on important decisions.
to improving relations with the West. Sassou also has
alienated senior party members by bypassing the
leading hardline opposition to Sassou.
In Tchicaya's absence, Pierre Nze, a senior party
member with close ties to the Soviets, probably is
In our view, Nze has support in the
power.
politburo-the party's principal decisionmaking
body-among other party officials whose vested inter-
ests have been hurt by Sassou's efforts to consolidate
lese.
We believe Sassou's opponents almost certainly would
try to rally wider backing if the economic benefits of
his policies do not measure up to popular expectations.
Congo's economic recession already has resulted in
increased urban unemployment and business failures,
which could hurt Sassou politically. In our view,
Sassou recognizes that further Western assistance and
investment could help limit the economic and political
fallout of the austerity that he is likely to try to
implement over at least the next two years. The
recession, however, probably will constrain significant
reform of the state enterprise system because it
provides employment for a large number of Congo-
Western Aid Levels. In our judgment, disappointment
with Western aid levels could sour Sassou on the
benefits of closer relations with the West. France
appears unprepared to provide additional aid because
of its own budgetary constraints and other more
important commitments in Africa. In fact, the US
Embassy reports that France recently has pressed
Brazzaville to negotiate an IMF program and to
reschedule its debt through the Paris Club as a
condition for future French aid. According to the
Embassy, Paris has threatened to refuse to reschedule
bilateral debts, demanded cash payments on military
deliveries, and cut off some economic assistance. F
seriously threatened by Western inroads.
The Soviets. In our view, Sassou's need to stay on
reasonably good terms with the Soviets is another
important factor that will bear on Congo's tentative
moves toward the West. Western reluctance to pro-
vide major military hardware and to offer terms
competitive with the USSR leaves Brazzaville little
choice but to preserve ties to Moscow and access to
Soviet arms, a critical element in ensuring Army
support for Sassou's regime. Moreover, we believe
Sassou is wary of provoking the many Soviet and
Cuban-trained Congolese holding government and
security positions. In addition, Sassou almost certain-
ly is concerned that Moscow could exploit Congo's
regional and tribal tensions should Soviet interests be
Although the Soviets probably are confident that
internal political constraints will limit Sassou's initia-
tives toward the West, they recently have been more
active in the Congo. The US Embassy reports that the
USSR gave exceptionally positive coverage to Congo's
last party congress and shortly thereafter delivered
previously ordered military equipment, including at
least four MIG-21 fighter aircraft and a dozen ZSU-
23/4 antiaircraft guns and associated systems. Ac-
cording to the Embassy, the Soviet Union and Congo
also have signed a number of minor new economic
agreements.
The Libyans. We believe that the Congolese, who are
well aware of Libyan leader Qadhafi's proclivity for
subverting his opponents in black Africa, will continue
to try to avoid offending Tripoli.
Qadhafi has used Con-
go as a base of operations against Chad, Zaire, and
other moderate central African regimes ever since
Libya opened a diplomatic mission in Brazzaville in
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1982. The US Embassy estimates the Libyan pres-
ence to be at least 50, substantially more than needed
to administer its small bilateral aid program.
In addition, Qadhafi apparently has sought recently
to increase his leverage with Brazzaville by offering
military and economic aid.
The US Embassy reports that Libya and
Nonetheless, we believe Sassou will continue recent
efforts to attract more Western economic aid and
investment needed both to help weather the current
recession and for future oil exploration and develop-
ment. Consequently, we expect to see continued em-
phasis on private-sector initiatives to promote develop-
ment, some limited reforms of the state enterprise
system, and further efforts to reduce the influence of
ideologues who seek to block Western investment
proposals. Less likely, although also possible in our
judgment, would be Congo's negotiation of an IMF
agreement and adoption of a more nonaligned stance
in international forums. At the same time, we believe
Sassou will continue to appease ideologues by venting
"anti-imperalist" diatribes in the media and interna-
tional forums, continuing the military supply relation-
ship with Moscow, and tolerating a Libyan presence.
Congo are developing a joint forestry project, and nine
Libyans were assigned to security and military posi-
tions as of October 1983,
Outlook
In our view, Congo's recent moves toward the West do
not reflect fundamental political change or signal
significant economic reform. We believe that the
Soviets and Libyans are prepared to tolerate a certain
amount of Western involvement in Congo, even as
they enhance their influence in the military and the
security apparatus. We believe that Moscow's attitude
could change, however, if events in Angola were to
result in the loss of Soviet access to Luanda. Congo's
importance almost certainly would increase signifi-
cantly, and we would expect Moscow to expend
substantial resources to encourage the emergence of a
more radical regime in hopes of gaining military
access.
Limited Westward Trend Continues. In our judg-
ment, Sassou genuinely wants good relations with the
West but probably cannot move significantly closer to
the United States. We believe Sassou's strong nation-
alist beliefs, his commitment to Third World ideology,
and his recognition that Marxist ideology constrains
regional and ethnic rivalries work against any funda-
mental change in Congo's leftist political orientation.
Moreover, in our view, the need to maintain Soviet
and Libyan goodwill, the memory of four successful
coups since independence, and fears of fostering seri-
ous opposition from leftists-particularly in the mili-
tary-limit the President's ability to move closer to
the West and to pursue economic reform.
Other Outcomes. If Sassou does not defuse growing
leftist criticism of his actions, Brazzaville could soon
undergo one of its periodic power struggles, and, given
its turbulent political past and the military's penchant
for removing leaders, a coup could occur with little
warning. Although we believe that, on balance, key
military and security leaders still support Sassou, this
support could erode rapidly if living standards contin-
ue to fall or if the President shows signs of losing
control. Should Sassou's political position deteriorate,
he probably would attempt to reach a compromise
with hardliners, perhaps by offering to slow Congo's
move Westward. An increase in hardline influence
probably would result in improved relations with the
Soviets, diminish US access to senior Congolese offi-
cials, and lead to increased anti-Western rhetoric.
In our judgment, Sassou's ouster likely would be
followed by an initial period of heightened anti-
Western rhetoric and actions. Sassou probably would
be excoriated for betraying revolutionary goals
through his moderate policies. Although Congo's
moves toward the West might be slowed or even
reversed, we believe whoever rules in Brazzaville
would still have to deal with the United States and
Western Europe to preserve essential trade, aid, and
investment links.
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Appendix E
Cape Verde: A Slight Tilt
Toward the West
ment are crucial to staving off economic ruin.
Despite Cape Verde's self-styled socialism and mili-
tary dependence on the Soviets since independence in
1975, the country's leaders in the early 1980s have
proved pragmatic in their foreign policies. The US
Embassy reports that, even though Cape Verde main-
tains close ties to Communist countries and tends to
vote against the West in international forums, rela-
tions with Portugal, its former colonial master, and
the United States have warmed considerably in recent
years. We believe Cape Verde's modest Westward
movement reflects an increasing awareness by govern-
ment and party officials that Western aid and invest-
Verde (PAICV).
Political and Economic Legacy of Colonialism
The dry and resource-poor Cape Verde islands, locat-
ed 640 kilometers off the west coast of Africa,
achieved independence peacefully in 1975 under Pres-
ident Aristides Pereira following the 1974 military
coup in Portugal that led to the end of 500 years of
Portuguese colonialism in Africa. Pereira was a co-
founder of the Soviet-backed anti-Portuguese move-
ment (the African Party for the Independence of
Guinea-Bissau and Cape Verde-PAIGC) that fought
a successful guerrilla war in mainland Guinea-Bissau;
this success was one of the causes of the Portuguese
military's resolve to install a government in Lisbon
that would sanction decolonialization. Pereira's goal
after independence, according to US Embassy report-
ing from that period, was to see Cape Verde federated
with Guinea-Bissau as one state. The legal question of
unification went unresolved, however, and after a
mainland coup in 1980, Guinea-Bissau rejected a
federal union. Subsequently, the Cape Verdean wing
of the former independence movement was reborn as
the African Party for the Independence of Cape
Pereira came to power committed to a socialist ideolo-
gy and to governing through a Soviet-style political
system. Soon after independence, the Soviets became
the new government's principal military supplier.
Although nominally nonaligned, Cape Verde associat-
ed itself with Africa's pro-Soviet "progressive camp,"
Figure 14. President of Cape Verde, Aristides M.
Pereira, with President Reagan in Washington,
which included countries such as Angola and Mozam-
bique. Nonetheless, Cape Verde continued to receive
almost all its economic assistance and humanitarian
aid from the West, according to the Embassy.
The Economic Backdrop
Cape Verde is, for all practical purposes, a ward of its
aid donors, and, according to World Bank data, per
capita income is less than $400. The islands are
overpopulated, have no significant resources, and
some 40 percent of the labor force is unemployed.
About one-third of the 315,000 population depends on
subsistence agriculture for a living despite persistent
drought that has devastated farming. In addition to
agriculture, the government is the largest employer of
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Cape Verde's foreign trade is in chronic imbalance.
According to a recent academic study, earnings from
its principal exports of seafood, salt, and bananas
typically cover only 5 percent of the cost of imports,
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Figure 15
RIBEIRA
GRANDE
Santo Antao a Ribeira Grande