ZAIRE; ECONOMIC AND POLITICAL REFORMS

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP80T00634A000400010034-5
• Release Decision: RIPPUB
• Original Classification: S
• Document Page Count: 8
• Document Creation Date: December 20, 2016
• Document Release Date: October 31, 2006
• Sequence Number: 34
• Publication Date: October 16, 1978
• Content Type: IM

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CENTRAL INTELLIGENCE AGENCY
National Foreign Assessment Center
16 October 1978
INTELLIGENCE MEMORANDUM
ZAIRE: ECONOMIC AND POLITICAL REFORMS
The pace of President Mobutu's reform effort--launched last
June largely in response to Western pressure--is not as rapid or
as comprehensive as his Western supporters would like. Although
he has made significant progress in the financial, economic,
and diplomatic spheres, Mobutu has done little to achieve a
political reconciliation with the largely disaffected residents
of Shaba Region, the scene of two rebel incursions since 1977,
or to institute reforms and curtail excesses in the military--
important prerequisites for long-term stability. Continued
pressure by Zaire's Western supporters will be necessary if
Mobutu is to continue his reform efforts.
S
The US Embassy in Kinshasa reports that Mobutu, overall, has
kept his promise made last June to begin implementing reforms.
Although the gap between Mobutu's promises and accomplishments
remains great, he probably is aware that further steps are necessary.
The Zairian President is becoming increasingly resistant to
outside pressure for additional changes, however, and he has warned
that he would interpret continued pressure--such as demands for
reforms in specific areas--as an infringement on Zaire's sovereignty.
17
25X1
This memorandum was prepared in the Office of Regional and
Political Analysis and coordinated with Deputy Director for Operations,
Office of Strategic Research and Office of Economic Research. Questions
and comments ma be addressed to the authors,
State Dept. review completed
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ZAIRIAN PRESIDENT MOBUUTU AhIDRESSINC A RALLY IN KI_NSIIASA.
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In recent meetings with diplomatic representatives of his country's
major donors--Belgium, France, Britain, West Germany, and the US--
Zaire's "President-Founder" defended the pace of his reform efforts.
Although he had attempted to separate the reform issue from the question
of Western financial assistance, he also has said that the success of
reform efforts would ultimately depend on continued Western support for
his government. In several recent discussions concerning Zaire's
internal reforms, Mobutu and his senior officials have adopted a de-
fensive posture, arguing that the US--unlike Zaire's other supporters--
is expecting too much too soon.
The Economy--Some Positive Steps
The most notable of several economic reform measures taken since
June is the President's acceptance of expatriate supervision of govern-
ment budgetary and foreign exchange operations. The group of experts
attached to the Central Bank has already arrived in Kinshasa, and the
budget team is slated to arrive this month. In addition, final arrange-
ments are being made to send some 30 to 35 Belgians to the Department of
Customs by the end of the year. Finally, an intensive international
search is on to locate someone to oversee all government financial
activities.
Mobutu has also moved to conserve Zaire's foreign exchange re-
serves, which remain low despite unexpectedly high levels of copper and
cobalt output and record world cobalt prices. Kinshasa announced in
late July a series of restrictions that will sharply reduce consumer
imports and tighten control over foreign exchange flows. Private banks,
which finance a substantial share of the country's consumer imports, are
now prohibited from issuing letters of credit unless they have cash on
hand. Foreign exchange allocations are to be reorganized with out-
standing import bills to be paid off as quickly as possible and food-
stuffs, industrial raw materials, and essential manufactures to receive
the lion's share of the rest. Export revenues--except for copper--are to
be deposited in Zairian banks, rather than in overseas accounts, in
response to widespread adverse publicity over the disappearance of
several million dollars of coffee receipts.
Mobutu has also agreed to renew efforts to get stagnating agricultural
production on the move. The internal distribution network is to be
improved, and farmers are to be provided more seeds, tools, and other
inputs. A cotton stabilization program is planned that will guarantee
farmers both a ready market and a minimum income.
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Temporary US-IMF Impasse
The most nagging problem at present is the status of the Inter-
national Monetary Fund's stabilization program that Kinshasa's creditors--
particularly the US--are pushing as a prerequisite to further financial
assistance. Negotiations are stalled because of Washington's insistence
that the stabilization plan be implemented before making a firm aid
commitment for next year and because of US concern over the slow pace of
internal political reforms. Without pledges from the US and other
leading donor countries, the IMF is reluctant to commit any of its own
resources. The Fund has participated in stabilization programs in the
past only to have Zaire fall short of its obligations, and leading
donor countries to cut back on aid disbursements. Mobutu has expressed
anger and disappointment with the US position.
Potential Problems
Even if the IMF plan is implemented, other problems loom on the
horizon that could jeopardize the government's performance and sub-
sequent availability of foreign assistance. Insufficient manpower will
impair Kinshasa's ability to monitor the flow of Zaire's foreign ex-
change holdings or to crack down on improper pricing of exports that
reduces the volume of export receipts subject to taxes and other govern-
ment controls. Unless Mobutu reverses his stand against a major currency
devaluation, the severe trade restrictions will provide an unwanted
boost to black market activity that already siphons off a significant
amount of much-needed government revenues.
The sharp drop in consumer imports is also likely to generate
increased popular unrest that may temper the President's enthusiasm for
the latest economic moves. Nor is he likely to enjoy the limitations
placed on the availability of public funds for his personal use, including
his longstanding practice of paying off potential political opponents.
The biggest question mark, however, is the status of the Shaba mines.
Current production trends--copper output in August was around 90 percent
of the preinvasion monthly level and cobalt actually exceeded the pre-
May rate--are not expected to last much longer because of poor equipment
maintenance and inexperienced Zairian personnel.
Footdragging on Internal Reforms
In the political and diplomatic areas, Mobutu has made some
significant progress, particularly by improving relations with Angola
and declaring an amnesty for Zairians living abroad. Many problems--
such as the welfare of the returnees and mutual suspicions regarding
support to Insurgents--nevertheless remain to be resolved. Mobutu
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also has eased Zaire's strained bilateral relations with other African
states, including neighboring Tanzania and Zambia.
Mobutu seems less willing, however, to implement internal political
and social measures that are crucial to reestablishing his legitimacy
and assuaging widespread dissatisfaction with his government. He did
announce two weeks ago that military rule in Shaba would be terminated
at the end of the year and that the estimated 2,000-3,000 political de-
tainees held at the Lokandu detention camp in Kivu since the outbreak of
Shaba II would be released this month, but he has done little more.
With the exception of the release of the former foreign minister accused
of complicity in the first Shaba incursion and perhaps a few other
individuals, the amnesty has not been extended to include the political
and military prisoners held inside Zaire.
Mobutu continues to take a hard line on Shaba Region, repeatedly
stating that the problem there is an economic rather than a political
one. Already alienated as a result of past exploitation by the central
government, Shabans reportedly are now being excluded from new Zairian
Army units being formed by the French and Belgians. Although rumors
circulate that Shabans are to be appointed to high government positions
and that political institutions will be decentralized so that Shaba--and
other disaffected regions--can have a political voice, no such changes
have yet occurred. As long as Mobutu fails to make conciliatory gestures
toward Shaba--as has been suggested by his Western supporters and some
Zairian advisers--mutual distrust between that region and Kinshasa will
continue and the prospects for future dissidence will remain.
The Military--A Persistent Problem
Similarly, Mobutu has done little to restructure the Army, notorious
for its inability to fight and for its propensity to commit offenses
against civilians. The Army is plagued by serious organizational and
logistic problems that the President has only begun to address. Soldiers
often are neither paid nor regularly fed. Consequently, desertions and
acts of indiscipline are common. Poor leadership contributes to the
woeful lack of professionalism. The continued presence of the Inter-
African Force is for Shaba residents as much a protection against the
Zairian Army as it is assurance against another Katangan attack.
Corruption in the military--and civilian sectors--remains rife.
Mobutu is conscious of the US concern with human rights, but abuses,
generally attributed to governmental incompetence rather than malevolence,
continue. While there has been overall progress in recent months in the
area of human rights, the widening gap in the standard of living
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between Zaire's elite population and the masses refutes Mobutu's claim
that he is leader of all Zairians.
Mobutu--The Reluctant Reformer
Despite the glaring shortcomings, Mobutu believes that he has made
considerable progress in implementing reforms. Mobutu is probably
justified in calling for more time to accomplish many of his promised
changes, but continued pressure will apparently be necessary to prevent
him from abandoning his efforts. Although Mobutu has got the message
that the US is not satisfied with his progress in effecting internal
reform, Zaire's other Western donors are reluctant to put additional
pressure on him. Some of Zaire's supporters probably fear that too much
pressure could be counter-productive, possibly leading Mobutu to become
intransigent or to react irrationally.
If his Western supporters fail to press Mobutu on reforms with a
unified voice, he may attempt to play them against one another--a tactic
he has used with considerable success in the past--and allow his efforts
to lag. Although Mobutu eventually will probably undertake additional
reform measures, the US Embassy in Kinshasa believes that he will be
careful to avoid the appearance of knuckling under to US pressure. Nor
will he undertake any reforms--such as political decentralization--that
in his view may weaken his political position. In any event, Zaire's
social tumult will undoubtedly continue for the foreseeable future; the
only question is how severe it will be.
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