IVORY COAST: LOOKING TOWARD THE POST-HOUPHOUET ERA

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP83B00225R000100280001-0
• Release Decision: RIPPUB
• Original Classification: S
• Document Page Count: 24
• Document Creation Date: December 21, 2016
• Document Release Date: July 15, 2008
• Sequence Number: 1
• Publication Date: June 1, 1982
• Content Type: REPORT

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Intelligence
Ivory Coast:
Looking Toward the
Post-Houphouet Era
An Intelligence Assessment
MASTER FILE C!,
OR MARK ON
State Dept. review completed
Secret
ALA 82-10086
June 1982
Copy 2 9 4
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Directorate of Secret
Intelligence
Ivory Coast:
Looking Toward the
Post-Houphouet Era
An Intelligence Assessment
Information available as of 14 April 1982
has been used in the preparation of this report.
This paper was prepared by
Office of African and Latin American
Analysis. Comments and queries are welcome and
may be addressed to the Chief, West-East Africa
Division, ALA,
This paper has been coordinated with the Directorate
of Operations and the National Intelligence
Council.
Secret
ALA 82-10086
June 1982
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Ivory Coast:
Looking Toward the
Post-Houphouet Era
Key Judgments Ivory Coast, long a "model" for pro-Western moderation and successful
development in West Africa, is facing the strains of a looming but
unresolved presidential succession. President Houphouet-Boigny has ruled
since independence in 1960, but has not yet designated a successor or
established constitutional provisions for selecting one should he die before
the newly created post of vice president is filled-most likely in the 1985
elections. Houphouet's delay in naming a successor worries politically
aware Ivorians, who want him to end the uncertainty as soon as possibleF_
Houphouet's passing without a designated successor would risk a power 25X1
vacuum and a leadership struggle. Although inevitable infighting and
jockeying for position would strain at least temporarily the unity of the
ruling elite, we believe this group would probably close ranks eventually
behind one of its members to ensure a successful transition. Should
Houphouet privately designate a successor to be named officially after the
President's death, we think key political leaders and groups probably would
honor his wishes in the interest of maintaining national unity. The selection
of a successor from Houphouet's own ethnic group located in the central
part of the country, however, would increase frustration among northern
groups that have been limited to a minority role in the government
If Houphouet survives through the elections in 1985 and names a vice-
presidential successor, he may still decide to retain power indefinitely. The
inevitable subsequent decline in his physical and mental abilities could
result in diminished government effectiveness and stir enough restiveness
among the elite, students labor, and other groups to test the cohesiveness
of the Ivorian system 25X1
The most likely candidate to replace Houphouet is National Assembly
President Henry Konan Bedie, who shares Houphouet's general outlook.
The 48-year-old former Finance Minister has widespread support and
Ivorians give him substantial credit for the country's successful economic
L5X I
Basic changes in Ivory Coast's economic fortunes make it more vulnerable
to turmoil in the succession than at any time since independence. After
some 20 years of rapid economic expansion, the country is now experienc-
ing a period of slower growth, rising unemployment, and inflation.
Secret
ALA 82-10086
June 1982
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A new leader presumably could manage the country's economic problems
more effectively if the succession occurs after Abidjan has developed what
it believes are sizable offshore oil deposits. The importance of this
watershed is the boost the oil exports would give to revenues, growth,
employment, and access to foreign borrowing. Production will not hit
projected capacity levels until mid-decade, however. Moreover, even then
increased revenues could spur corruption, urban migration, and inflation.
The country's current economic slowdown and political instability in the
region increase the danger of outside meddling in the event of a succession
crisis. Tripoli and Moscow now have very little influence and no diplomatic
representation in Abidjan. Nevertheless, their opportunities-which in the
past have been severely limited-are certain to increase during the post-
Houphouet era. A combination of turbulent succession and Libyan and
Soviet progress in neighboring Ghana would increase Ivory Coast's
vulnerability to radical influences. Unless some better opportunity present-
ed itself, Qadhafi's most likely tactic in these circumstances would be to
exploit any resurgence of tribal hostilities to gain influence among Ivory
Coast's minority Muslim population, which is centered in the north.
We believe that France, Ivory Coast's former colonial ruler, will work
judiciously behind the scenes to encourage the emergence of a qualified
and acceptable successor, to smooth the transfer of power, and to mute
other external influences. We feel Paris will do so to protect its economic
interests, ensure the security of French nationals in Ivory Coast, and
reassure other moderate francophone states in the area. Based on French 25X1
behavior elsewhere in West Africa, however, we believe that French troops
stationed outside Abidjan would intervene directly only as a last resort.
In our view, the traditionally apolitical Ivorian military would intercede
only if there were a prolonged succession struggle or if public unrest
threatened stability. Nevertheless, there is a worst-case possibility that
officers or enlisted men, motivated by ambition and opportunism, could
exploit a succession struggle to seize power. A coup would pose the greatest
potential risk for inroads by heretofore unknown domestic radicals or by
the Libyans and the Soviets.
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On balance, however, we believe that the post-Houphouet leadership will
prove generally moderate and pro-Western, although it probably will seek
to demonstrate the country's nationalist and African credentials by
assuming a more nonaligned orientation. Abidjan may support US posi-
tions in international forums less consistently, and, lacking Houphouet's
leadership, will have less influence on regional affairs. A successor regime
probably would be more willing to broaden ties gradually beyond France, a
development that could benefit US commercial interests.
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Old Age and Succession Politics 2
Potential for Libyan and Soviet Meddling 4
Role of the Military 5
Outlook: The Crucial Factor of Timing 7
Changing Conditions in the Ivorian Economy 11
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Liberia
Jpp
Volta
Agn(ilekrou
GOURO Tribe name
0 100
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Daloa Yamousso
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Ivory Coast:
Looking Toward the
Post-Houphouet Era
Introduction
Since independence from France in 1960, Ivory Coast
has maintained a level of political stability, economic
development, and cooperation with the West that is
almost without parallel in black Africa. This record is
due largely to the pragmatic and traditionally pro-
French policies and benevolently authoritarian rule of
Felix Houphouet-Boigny, the country's founding fa-
ther and only president. After two decades of success
under Houphouet, however, Ivory Coast is faced with
growing political challenges and its most difficult
economic slowdown since independence that, if mis-
handled, could result in instability and opportunities
for outside meddling.
Houphouet, 76, has not designated a successor or
established constitutional procedures for succession
should he die in office without naming a political heir.
Moreover, the US Embassy in Abidjan reports that
the Ivorian leader has given no public hint that he
intends to retire voluntarily any time soon. Under
these circumstances, we believe that Houphouet's
death-or a sharp decline in his physical or mental
condition-would pose a potentially serious political
test for the Ivorian system
The Houphouet Era
Domestic Politics. Ivory Coast's comparative political
harmony has depended on Houphouet's firm, pater-
nalistic control of political activity. A strong presiden-
tial form of government and a single party system that
he forged before Ivory Coast gained independence
have concentrated power firmly in his hands. The
Democratic Party of Ivory Coast (PDCI) includes all
important political interest groups and serves both as
a policymaking forum and as an instrument for
overseeing policy implementation.
Houphouet's reliance on direct personal dialogue and
conciliation of potentially restive elements has helped
deter open unrest and destructive political competi-
tion. Political opponents have generally been co-opted
into the ruling party; at present there is no evidence of
any significant opposition group within or outside the
25X1
country. Ethnic rivalries have been held in check by
the President's careful allocation of political patron-
age and key positions among the country's 60 tribal
groups.
Among Houphouet's political problems have been
public charges in recent years by disgruntled village
chiefs and local party officials that the entrenched 25X1
postindependence political leadership is overly cor-
rupt, arrogant, and unresponsive to local needs. In an
effort to clean house and to still such criticism,
Houphouet in 1980 gave the Ivorian public an oppor-
tunity to vote unpopular incumbents out of office in
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the country's first competitive elections. The elections
helped renew the legitimacy of local party leaders and
legislators, but also produced splits in the party that
remain unhealed
The Economy. Much of Houphouet's ability to con-
solidate and sustain his political position over such a
long period has depended on remarkable gains in the
economy and Ivorian living standards. The heart of
his strategy has been a combination of economic
liberalism and substantial French participation in the
development process. In addition to Paris's develop-
ment aid-more than $1.5 billion in net disburse-
ments over the 1975-80 period-and private invest-
ment flows, technical support by French expatriates
provides the expertise that has allowed Ivory Coast to
build a modern economy. More than 65,000 French
nationals still hold key management, technical, and
civil service positions. French support has facilitated
Ivory Coast's diversification of its economic base from
dependence on cocoa and coffee into other agricultur-
al commodities and light industry
Aided by strong demand for its exports, the country
became West Africa's economic star, averaging 7.5-
percent real growth per year until the mid-1970s.
Ivory Coast also had one of the region's best records
in employment, access to consumer goods, and provi-
sion of public services. Such performance attracted
unskilled workers from poorer neighboring states, who
now comprise about 30 percent of the population.
Although immigrant labor strained public services, it
helped limit inflation for many years according to the
US Embassy in Abidjan because these workers gener-
ally earned much lower wages than native Ivorians.
Economic conditions and prospects began to change
with the energy crisis, the slowdown of the global
economy, and the attendant decline in demand for
tropical products in the mid-1970s. By the early
1980s, the economic growth rate had been cut by
more than two-thirds and unemployment was on the
rise. Despite the discovery of oil adequate to provide
some relief from soaring import bills, Abidjan still
faces serious problems in the next few years as it tries
to cope with slower growth, heavy service on the debt
it accrued in the recent lean years, and continuing
global recession
Foreign Policy. In foreign policy, Houphouet has held
to a moderate, pro-Western stance based on a con-
tinuing close economic, military, and cultural rela-
tionship with France. Houphouet and senior members
of the political elite maintain close personal and
cultural ties to France and French leaders. Because of
extensive economic and financial assistance from
Paris-France is Ivory Coast's major trading partner
and aid donor-the French Government and business
community have considerable influence in the Ivory
Coast)
Houphouet is regarded throughout the region as the
elder statesman of West Africa. He is the oldest
surviving francophone leader and has considerable
influence among moderate African heads of state who
respect his advice and services as a conciliator.
Houphouet has actively encouraged regional coopera-
tion and economic development by supporting the 15-
member Economic Community of West African
States (ECOWAS) and the Council of the Entente, a
loose political and economic union of Abidjan's
French-speaking neighbors: Togo, Benin, Upper Vol-
ta, and Niger. Houphouet's stature has occasionally
allowed him to pursue unpopular policy initiatives,
such as his unsuccessful call in 1970 for a black
African dialogue with white-ruled South Africa.
Houphouet is ardently anti-Communist an~ suspi-
cious of Soviet, Cuban, and Libyan activities in
Africa. Abidjan does not have diplomatic relations
with Moscow, Havana, or Tripoli. According to the
US Embassy in Abidjan, Houphouet views Qadhafi as
a Soviet surrogate and looks to France and the United
States to stem Soviet expansionism and Libyan med-
dling in the region.
Old Age and Succession Politics
Houphouet claims to be 76, but he may be several
years older. According to the US Embassy he suffers
from occasional bouts with malaria, but has no known
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Last Year
The Ivorian economy grew only 2 to 3 percent in
1981, in part because of IMF-urged cuts in govern-
ment spending. Industrial output fell 5 percent below
the 1980 level, the first such decline since independ-
ence. Agriculture was the only bright spot, largely
because of increases in cocoa and coffee production.
Ivory Coast incurred a $1.8 billion current account
deficit last year. Lower prices for cocoa and coffee
combined to reduce export earnings nearly 15 percent
below 1980's depressed level. Expenditures continued
to rise, led by a surge in interest payments on foreign
debts that reached $6 billion.
Abidjan was able to pay its bills by obtaining sizable
overseas loans. In addition to allowing Ivory Coast
access to IMF money, Abidjan's strict adherence to
Fund guidelines also helped bolster sagging banker
confidence enough to help fund most of the remaining
payments gap. Banker optimism also improved in
response to growing evidence that Ivory Coast would
become an important oil exporter by the mid-1980s.
This Year
At best, we believe that the Ivorian economy will
grow only I to 2 percent in 1982 as the pinch of IMF-
imposed restrictions on domestic credit and foreign
borrowing spreads to all sectors. Preliminary figures
suggest that industrial output will fall for the second
year in a row, while agricultural production should
at least approximate, if not surpass, last year's levels.
We now believe that the country will run at least a $2
billion current account deficit. Sluggish world de-
mand will keep cocoa and coffee earnings depressed
and payments on $6.5 billion in external debt-the
largest in black Africa, save for Nigeria-will contin-
ue to mount.
We estimate that Abidjan should be able to cover its
payments gap, but not without difficulty. It has been
able to secure only some $300 million in new loans
this year, afar cry from meeting its financial needs.
Banker optimism has dropped off in recent months
because of discouraging reports about the size of the
country's oil potential. According to the US Embas-
sy, the government is looking to Paris to help bail
them out and has also approached US banks for
additional loans.
Houphouet has given no public indication to date of
plans to name a successor and retire voluntarily as did
his contemporary, former President Senghor of Sen-
egal who stepped down in 1980. Nor, according to US
mission reporting, has Houphouet ruled out running
for reelection in October 1985 when his current five-
year term of office expires.
In a partial response to public concern over the
succession issue, Houphouet in late 1980 pushed
through the National Assembly a constitutional
amendment creating the position of vice president.
The amendment provides for the vice president's auto-
matic succession to serve out the remainder of the
president's five-year term upon the latter's death,
incapacitation (to be certified by the Ivorian Supreme
Court), or resignation. 25X1
Houphouet proposed the succession amendment after
the last presidential election, when it was too late to
name a running mate, therefore the vice-presidency
remains vacant. Moreover,there is no legal procedure
for designating a successor should both the presidency
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and vice-presidency become vacant. The constitution-
al amendment stipulates that the vice president is to
be chosen by the president and elected with him.
Although this provision technically means that
Houphouet cannot install a vice president until the
1985 elections, the US mission believes he could
justify doing so as an interim measure and later push
through a constitutional amendment sanctioning the
move
Houphouet has ignored calls by political leaders to
name a vice president or to clarify succession proce-
dures. Reports from several US Government agencies
indicate that this seeming unwillingness to resolve the
issue is the subject of growing concern and debate
among politically aware Ivorians. US Embassy
sources report that Houphouet claims that any at-
tempt by him at this point to elaborate publicly on the
succession question would only exacerbate still un-
healed divisions caused by the country's first competi-
tive elections two years ago. Knowledgeable Ivorians,
who doubt Houphouet will leave the vice-presidency
vacant indefinitely, have speculated in discussions
with US officials that he is using the time until the
next presidential election to identify a candidate and
build a consensus of acceptance for him. These
sources believe such an approach would help guard
against the formation of political alliances outside
Houphouet's control and minimize the likelihood of a
challenge to his authority.
We believe the party's powerful 32-member Political
Bureau would be the most likely body to take charge
in the event of a succession crisis. In our view, the
Political Bureau probably would either choose a suc-
cessor extralegally or push through a constitutional
amendment that would provide for the selection of a
successor. The Bureau is composed of many longtime
party leaders who also hold key government positions.
Many have served as close personal advisers to
Houphouet and are responsible for the daily workings
of the government and the party.
Potential for Libyan and Soviet Meddling
Ivory Coast's moderate orientation and strong ties to
France make it an inviting target for Libyan and
Soviet efforts to undermine Western influence and
install radical regimes in the region. We believe that
Abidjan's vulnerabilities, which until now have been
limited, will increase if the Libyans and Soviets
succeed in establishing a stronghold in neighboring
Ghana and use it-as they have Benin-as a regional
staging base for subversion against pro-Western re-
gimes. Moreover, chronic economic problems and
political instability in neighboring Mali, Upper Volta,
Guinea, and Liberia may offer unforeseen opportuni-
ties for further Libyan inroads in other bordering
states. 25X1
Mission reporting indicates that the Libyans and
Soviets have made some attempts in recent years to
expand their influence and to weaken Ivory Coast's
traditionally strong Western ties, despite the handicap
posed by Abidjan's refusal to allow Moscow or Tripoli
to establish a local diplomatic, economic, and cultural
25X1
25X1
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Abidjan estimate that some 2UO Ivorians are studying
in Communist countries without the approval of their 25X1
government. They point out that Communist-trained
students upon their return home have had little
influence in the past on Ivorian domestic or foreign
policies and have generally been co-opted by the
system.
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We believe a new, less confident post-Houphouet
Ivorian Government might be tempted to establish
diplomatic relations with the USSR and Libya to
demonstrate greater nonalignment. Any political or
economic instability during the post-Houphouet peri-
od also would encourage greater Soviet and Libyan
machinations.
Nevertheless, we believe that the likely retention of
power by members of the present Western-oriented
Ivorian elite will continue to hamper attempts by
Moscow and Tripoli to gain stronger influence in
Ivory Coast. Members of the elite traditionally have
viewed Soviet expansionism and Libyan meddling as a
threat to their country's stability and relative econom-
ic success-from which they have profited. Thus we
believe they would take a cautious approach toward
expanding ties with Moscow and Tripoli beyond possi-
bly exchanging diplomatic missions
Libyan activities in neighboring West African states
suggest that Qadhafi would try to exploit a resurgence
of ethnic rivalries in the post-Houphouet era by
attempting to gain influence among Ivory Coast's
growing Muslim population. (This would be especially
likely if Tripoli consolidates a strong regional base of
operations in neighboring Ghana.) The Ivorian Gov-
ernment estimates that Muslims comprise at least 25
percent of the population. Islam is practiced primarily
in the country's northern and western regions and by
non-Ivorian Africans in the modern economic sector.
Em assy believes northern ern unhappiness over t a politi-
cal predominance of central and southern ethnic
groups could increase northern Muslim receptiveness
over the longer run to Qadhafi's proselytizing.
French Interests
France has a high stake in a successful transition of
power in Ivory Coast. French nationals and French
firms are more heavily represented there than in any
other West African state. Paris and Abidjan have
maintained a mutually profitable relationship since
independence, and the Ivorians look to Paris to ensure
their security. President Mitterrand, during a visit to
West Africa in May 1982, reaffirmed his govern-
ment's commitment to its economic, political, and
defense relationships with Ivory Coast and support for
Abidjan's aspirations in the North-South dialogue.
Statements by senior French officials make clear that
they believe, as we do, that the collapse of Ivory Coast
into instability would be viewed by other moderate 25X1
francophone states in West Africa as a failure by
A mutual defense treaty theoretically obligates
France to intervene at the Ivorian Government's
request if its security is threatened. But the Mitter-
rand regime, strongly critical of what it perceived as
former President Giscard's interventionist policies, is
reluctant to be seen directly interceding in internal
African affairs, according to the US Embassy in
Paris. Thus, we believe France would be unlikely to
intervene directly in the succession process unless its
vital interests or the security of its nationals are 25X1
threatened by the imminent collapse of a post-
Houphouet regime and the prospect of a radical
takeover. The Mitterrand government, with whom
Houphouet has very good relations, probably would
much prefer to use its considerable influence behind 25X1
the scenes to support a favored pro-French successor.
Role of the Military
Houphouet over the years has taken a variety of
measures to ensure that the relatively small Ivorian
armed forces-fewer than 10,000 in all services-
remain a weak and apolitical force. Indeed, he has
emphasized civilian economic development rather
than military expansion. To promote concord,
Houphouet, according to the US Embassy, has dis-
tributed promotions fairly among all ethnic groups in
the military. He also has limited the military's expo- 25X1
sure to leftist or radical ideologies by ensuring that 25X1
officers are trained in France or by French-trained
instructors. We believe that the presence of some 500
French troops stationed outside Abidjan also serves as
a psychological deterrent to coup plotting. No evi-
dence of military plotting has come to light since a
coup plot organized by junior officers was uncovered
in 1973.
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If and when Houphouet chooses a vice presidential
successor, the US Embassy believes the individual is
likely to come from the younger generation of Ivor-
ians that Houphouet brought into the leadership in
1980. Many within the Ivorian elite are concerned
that Houphouet will choose a successor from his own
minority ethnic rou , the Baoule of central Ivory
Coast. uspicions
among non-Baoule tribesmen were heightened after
Houphouet increased Baoule representation in the
party's Political Bureau at the 1980 Party Congress.
Jenne Afrique
National Assembly President
Henry Konan Bedie, 48, is
widely considered by politically
aware Ivorians contacted by the
US Embassy as the most likely
choice for vice president. The
former Finance Minister has
broad support among members
of the elite, who give him sub-
stantial credit for the country's
past economic success. He has
a reputation for intelligence,
competence, and hard work in
spite of losing his ministerial
post in 1977 during an anticor-
ruption campaign. Although
Bedie is a Baoule, his popular-
ity as an able leader transcends
A former Ambassador to
Washington and a US resident
for nine years, Bedie is consid-
ered by Ivorian officials to
know and understand the Unit-
ed States better than any other
vice presidential contender. The
US Embassy believes his presi-
dency might well increase op-
portunities for US trade and
investment, although Bedie
shares Houphouet's dim view
of US commodity policies.
Bedie advocates gradually re-
placing French expatriates
holding skilled positions with
trained Ivorians, but he appar-
ently maintains good relations
Careful balancing of ethnic sensitivities has been a
hallmark of Houphouet's rule; the US Embassy
believes that fears of a Baoule "dynasty" could
complicate efforts to ensure widespread acceptance of 25X1
his designated successor.
Three of the five leading candidates identified by the
US Embassy as being in the informal contention for
the vice presidency are Baoule tribesmen. The Em-
bassy maintains that any of the five would also stand
a good chance of being picked for the presidency
African Defense Journal
Politically attuned Ivorians
view Defense Minister and par-
ty Executive Committee mem-
ber Jean Konan Banny as more
independent and progressive
minded than other contenders,
and in the past he was regarded
as something of a radical.
These qualities have won him
support with Ivorian youth and
intellectuals and government
employees. According to the US
Embassy, the 53-year-old
Baoule tribesman is rumored to
be Houphouet's nephew and to
have been practically raised by
Justice Minister and ranking
member of the party's Execu-
tive Committee, 55-year-old
Camille Alliali, is reported by
the US Embassy to be a long-
time, loyal aide to the Presi-
dent, reflects Houphouet's
views on domestic and interna-
tional issues, and is friendly
toward the United States. He is
a Baoule and he married into a
family with close personal ties
to Houphouet. Politically
aware Ivorians indicate he is an
effective arbitrator of party dis-
putes, but may lack the neces-
sary forcefulness to be presi-
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under extraconstitutional procedures, were
Houphouet to die before naming a vice president.
None of the prominent candidates would be likely to
alter significantly Houphouet's policies based on our
review of their political record.
sidered
as one of the hardest wor king
and most competent members
of government. If Houphouet
choses a non-Baoule or some-
one of his own generation, the
US Embassy believes it prob-
ably would be Ekra. He is a
member of the Angi tribe,
which has close cultural, his-
torical, and linguistic ties to
the Baoule. Ekra has been on
the party's Political Bureau
since 1959 and has served in
successive cabinets for almost
20 years. US Embassy report-
ing indicates he does not have
widespread public support,
however, and is noted for an
austere and aloof manner.
Franz Furst
Some Ivorians speculate that
former National Assembly
President Phillipe Yace may
make a political comeback as
Houphouet's replacement, but
we view this as an unlikely
development. Before the vice
presidency was established,
Yace was the constitutional
successor by virtue of his posi-
tion as President of the Nation-
al Assembly. He fell from the
President's favor for becoming
too visible politically and as-
suming too much authority.
The 62-year-old Yace is from
the small southern Alladian
tribe, is not in good health, and
has made many enemies during
his career
Nevertheless, there will remain the possibility that
officers or enlisted men motivated by personal ambi-
tion and opportunism could exploit a succession strug-
gle to try to seize control. In our view, the coup
leaders probably would attempt to rally rank-and-file
support with promises to redress what they see as the
government's inattention and neglect of the military.
25X1 25X1
A takeover by the military would introduce a funda-
mental change to Ivory Coast's political history, one
whose inherent uncertainties we believe would in-
crease the potential for heightened instability or
foreign meddling in Ivorian domestic politics. The
risks of greater influence by heretofore unknown
domestic radicals or inroads by the Libyans or Soviets
would be highest if junior officers or enlisted person-
nel came to power. We believe these risks would be 25X1
much less if senior officers with long exposure to
French training and the Houphouet political era were
to take over. The senior officers would be more likely25X1
to act to promote their own conservative interests or
those of the military as an institution.
25X1
The military's limited involvement in political affairs
in the past suggests that it would be unlikely to
intervene in the transition process unless a prolonged
succession struggle or popular unrest jeopardized the
country's stability. There is a possibility that a mili-
tary takeover to restore political order might be 25X1
temporary if led by senior military officers who have
remained personally loyal to Houphouet and to the
Outlook: The Crucial Factor of Timing
We believe the question of when Houphouet passes
from the scene makes a great difference for the
country's prospects for stability and foreign meddling.
The likelihood of Ivory Coast enjoying continued
political and economic stability probably would be
greatest if Houphouet were not to die or retire until
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after the election in 1985 of a vice-presidential run-
ning mate and formally designated successor. In our
view a postelection transition would allow valuable
time for Houphouet to groom a successor and to
ensure his widespread acceptance. Houphouet's con-
tinuing presence also would allow time for economic
recovery efforts to bear fruit under his firm guidance
until projected oil revenues ease pressures-at least
temporarily-by mid-decade.
Houphouet's death before 1985, particularly in the
absence of a designated successor or a procedure for
picking one, could set the stage for a divisive power
struggle among the educated elite. Under these cir-
cumstances, the elite's ability to cooperate and to
preserve its internal cohesion will be the major factor
in ensuring a successful resolution to a succession
crisis. According to the US Embassy, the elite's unity
was strained by the elections in 1980 and will be
further tested by competition for leadership positions
in the new regime. Nevertheless, we and the US
mission believe there are strong forces that would act
to hold the elite together: a large material stake in the
present system; family ties, shared educational expe-
riences; ideological compatability; a tradition of nego-
tiating disputes; and a great fear of the risks of
political instability if they do not close ranks
Should Houphouet die after only privately designat-
ing a successor, we believe that his choice would
probably be honored by the political elite out of its
concern to maintain unity and that the selection
would be constitutionally or extralegally sanctioned.
If the successor were a Baoule tribesman, however, he
could become the target of complaints of tribal favor-
itism unless he quickly displayed evenhanded ethnic
policies.
In our view, Houphouet's early death could disrupt
economic management and thereby add to the coun-
try's economic difficulties. Strong leadership will be
necessary to guide the economy through the current
difficult period, and economic problems will be harder
for a new administration to control. Even if sanc-
tioned by Houphouet, no new leader is likely to enjoy
the same authority and public respect that have
enabled Houphouet to manage economic problems
relatively well in recent years. A power vacuum would
particularly threaten the government's ability to con-
tinue restrictions on public borrowing and spending.
Even if Houphouet survives through 1985 and names
a vice president, he might decide to retain office
indefinitely. Our assessment is that the inevitable
eventual decline in his physical and mental abilities
could diminish government effectiveness, arouse wide-
spread dissatisfaction with his rule, and significantly
increase the potential for a military coup. At the least,
competition and personal animosities probably would
intensify between an increasingly anxious younger
generation of Ivorian politicians and the fading old
guard, and we predict that students would be likely to
express their unhappiness with Houphouet's limita-
tions.
Ivory Coast could be back on a fast economic growth
track by mid-decade, according to our estimates, if
domestic oil development and production live up to
current expectations and the world oil market re-
bounds. Even so, the long-awaited oil revenues will
reduce only some pressures on the economy until
production hits projected capacity levels. In the mean-
time, hard-to-manage economic problems-including
large current account deficits, high debt servicing
requirements, and slowed growth-will persist.
The extent and duration of the upswing, when it
comes, will depend on how well the new government
manages the oil windfall. Without meticulous man-
agement, Ivory Coast runs a serious risk of repeating
the Nigerian experience-waste of financial re-
sources, pervasive corruption, unrealistic popular ex-
pectations, severe inflationary pressures, and neglect
of a once-thriving agricultural sector.
Implications for the United States
We believe that Houphouet's successor almost cer-
tainly will be less self-assured than Houphouet, at
least initially. To protect his nationalist credentials
and move closer to the African mainstream, such a
leader probably would take a less pro-Western stance
and would be likely to assume a more nonaligned
25X1
25X1
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orientation. Under such circumstances, we estimate
that Ivorian support in the United Nations on issues
of concern to Washington will be less assured, and
Abidjan will be less likely to take the lead with
moderate proposals in the OAU and other African
forums.
In our view, a new leader in Abidjan probably will
seek to ease his country's traditionally heavy econom-
ic dependence on France by diversifying foreign in-
vestment and trade away from the metropole to
demonstrate greater nonalignment. The US Embassy
reports that US businessmen are anxious to gain
entree into new Ivorian markets, and diminished
Franco-Ivorian economic ties may increase opportuni-
ties for US investment and trade. US firms already
are firmly entrenched in Ivory Coast's offshore oil
development, but other investment now totals only
about $160 million. The United States now purchases
less than 10 percent of Abidjan's major exports-
coffee, cocoa, and lumber.
Under any likely succession scenario, Ivory Coast's
role as a moderate regional leader is likely to be
diminished. Instability during the post-Houphouet era
would be a blow to other moderate, pro-Western
countries in West Africa that look to Abidjan as an
example of political stability and economic prosperity.
25X1
We believe that instability would also increase the
risk of Libyan and Soviet meddling in Ivory Coast and
in the region. Any expansion of Soviet or Libyan
influence-or even heightened fears of such influ-
ence-has the potential to raise doubts in the region
about the wisdom of relying too heavily on France or
the United States. The danger will remain that shaky
governments will seek security through greater ac-
commodation with Libya and the Soviet Union
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aecrei
Appendix
Changing Conditions in
the Ivorian Economy
Past Performance
For nearly two decades after independence in 1960,
Ivory Coast followed development policies that were
strongly influenced by a coalition of expatriate French
advisers and President Houphouet-Boigny. The coun-
try was West Africa's star economic performer, aver-
aging 7.5-percent real growth per year through the
mid-1970s. Investment over the period ran at 20
percent or more.
Agriculture was the initial underpinning of this rapid
growth. Ivory Coast became the world's leading ex-
porter of cocoa and ranked among the top five coffee
exporters. Unlike many developing countries, Ivory
Coast used these revenues to diversify its economy
through generous producer incentives. New tropical
plantings-such as pineapple, palm trees, rubber,
cotton, and sugar-flourished, and the country
achieved the highest per capita food production in
Sub-Saharan Africa.
Abidjan relied heavily on its former colonial ties to
develop the modern sector. Upward of 65,000 French
nationals held key management, technical, and civil
service positions. French capital and the government's
liberal investment policies encouraged light industries;
manufacturing output tripled during the 1970s alone.
Despite robust growth, inflation was held to manage-
able levels by a combination of cheap farm labor,
mainly from Guinea, Mali, and Upper Volta, and
freewheeling import policies that satisfied European
lifestyles in the cities.
For the most part, native-born Ivorians fared well
under Houphouet's leadership. Ivory Coast for years
boasted the second-highest per capita GDP in black
Africa. In addition, to the envy of its African neigh-
bors, the social security, educational, and health
systems were well developed and reached far into
rural areas
Emerging Problems
The tropical products boom in the mid-1970s that
helped Ivory Coast pull out of the world oil shock of
1973-75 encouraged domestic spending patterns that
could not be sustained. Counting on prolonged high
cocoa and coffee prices, the Houphouet government
took advantage of its strong financial position by 25X1
dipping into international capital markets to supple-
ment overdrafts against the French treasury account
for its former West African colonies. The resultant
surge in public spending pushed overall investment
from 22 percent of GDP in 1975 to a record 31
percent in 1978, while the external debt tripled to
$3.1 billion. 25X1
Like many developing countries, Ivory Coast was
affected by declining commodity prices, growing oil
import bills, and burgeoning financial obligations that
resulted in a $1.5 billion current account deficit in
1980 which, in turn, pushed external debt to $5 25X1
billion. To maintain a minimum 6-percent growth
rate in the face of its weak financial position, Abidjan
drew down its international reserves to less than one
week's import cover that year. At the same time, the
government reverted to such heavy domestic borrow-
ing to supplement lagging revenues that a liquidity
crisis developed. 25X1
Abidjan, with its domestic financial resources nearly
depleted and its international credit rating sagging,
was forced to turn in 1981 to the International 25X1
Monetary Fund (IMF). This was done to obtain
outside assistance to meet foreign obligations and to
demonstrate to international creditors that the coun-
try was addressing its economic problems. A $600
million, three-year, extended fund facility signed in
February 1981 curbed government spending and new
short-term loans. In line with IMF strictures, Abidjan
kept salaries for government employees at 1980 levels
in real terms and reduced subsidies on gasoline, public
transportation, and food. 25X1
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Ivory Coast: Selected Socioeconomic Indicators
Average for Sub-
Saharan Africa
Average for
Less Developed
Countries
Adult literacy, 1976 (percent)
20
27
47
Urbanization, 1980 (percent)
38
21
32
Life expectancy at birth, 1979 (years)
47
47
53
Population growth rate, 1970-80
(average annual percent)
4.0
2.8
2.4
Per capita income, 1981 (US $)
1,130
490
860
Labor force in agriculture, 1979
(percent)
79
71
58
International banker confidence was bolstered enough
by the country's adherence to IMF guidelines and
rumors of impending oil wealth that Ivory Coast was
able to fund most of its 1981 financial obligations,
over and above disbursements under the IMF pro-
gram, through international borrowing. Borrowing
against France's West African treasury account cov-
ered the remainder of Abidjan's payments gap. So far,
some measure of banker optimism has carried into
1982. Abidjan has already secured an oversubscribed
$80 million loan from a Citibank-led consortium and
$35 million from Arab banks in addition to the $200
million in balance-of-payments assistance scheduled
for disbursement under the IMF program
Even with this cash in hand, which will ease some-
what the country's payments pressures, the US Em-
bassy notes that Ivory Coast is far from covering its
projected $2 billion current account deficit and princi-
pal repayments on its $6.5 billion debt. As a result,
Abidjan has asked Paris to press French banks for a
$200 million loan and to guarantee several hundred
The Oil Card
We believe that Abidjan's prospects for obtaining
these funds will hinge primarily on news from its
offshore oil concessions. Banker optimism soared last
year over Ivory Coast's anticipated emergence as an
important oil exporter by 1985, but other reports are
not so optimistic. Oil company estimates of the off-
shore Espoir field presently are around 400 million
barrels of recoverable oil, a far cry from earlier claims
of as high as 4 billion barrels. The field has not been
fully delineated, however, and officials hope that
reserves could total as much as 1 billion barrels after
all exploration work is completed next year; this
figure would support production of 200,000 b/d for
almost 15 years. Exports, on the other hand, will run
about 100,000 to 150,000 b/d.'
Developing the Espoir field, however, could bog down
because of Abidjan's current financial difficulties.
The Ivorian Government has a 60-percent equity
share in the concession and must contribute $600
million as its portion of the $1 billion needed to
develop the field's full productive capacity.
' Ivory Coast currently produces about 10,000 b/d from another
offshore field, Grand Belier. Enhanced recovery techniques could
boost daily output from this field alone to nearly 15,000 b/d in the
next few years. The Espoir field should come on stream late this
year. Ivory Coast, as a result, should be self-sufficient in oil as early
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Ivory Coast: Financial Indicators, 1976-82
Cocoa
Coffee
Imports, f.o.b.
Trade balance
Net services and transfers
Current account balance
Foreign exchange reserves
External public debt
Debt service ratio (percent)
a Estimated.
b Projected.
441
609
653
955
-1,161
-1,597
574
815
-822
-990
-248
-175
76
185
1,277
2,132
1,108
686
945
845
850
762
814
712
600
600
-2,095
-2,203
-2,554
-2,709
-2,650
521
516
483
482
400
-1,357
-1,666
-2,028
-2,260
-2,400
-836
-1,150
-1,545
-1,778
-2,000
450
147
20
15
NA
3,100
4,001
5,000
6,000
6,500
10 12 16 22 30 33 35
Figure 2
Ivory Coast: Real GDP Growth and Inflation
Note change in scales
Real GDP Growth
Percent
a Estimated.
b Projected.
Inflation
Percent
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Figure 3
Ivory Coast: Petroleum Fields and Concession Areas
Esso-Shell-Petroci
Total
Phillips-Agip-Sedco-Petroci
Agip-Phillips-Sedco-Petroci
Agip-Union Texas
Concessions
Petroci
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Ivory Coast: Cocoa and Coffee Production and Prices
Production
Thousand Tons
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Looking Ahead
At best, our estimate is that the Ivorian economy will
grow only 1 to 2 percent in 1982 as the pinch of IMF-
imposed restrictions on domestic credit and foreign
borrowing spreads to all sectors. Agriculture remains
the only bright spot in the economy for 1982. Prelimi-
nary reports indicate that cocoa and coffee production
will be at least as high as last year's respective totals
of 400,000 tons and 360,000 tons. But depressed
prices point to another year of disappointing export
receipts
Government austerity measures will reduce industrial
output for the second year in a row, compared with 20
years of steady growth. The construction sector will
be hardest hit, with activity off nearly 50 percent.
High interest rates and government arrearages on
contracts will put a number of construction firms out
of business altogether.
Beyond 1982 we believe Ivory Coast could be back on
a fast economic growth track by mid-decade if domes-
tic oil development and production live up to current
expectations and the world oil market rebounds. Oil
production of 200,000 b/d would give Ivory Coast up
to $1.5 billion (in current prices) equal to this year's
projected earnings from cocoa and coffee sales. Equal-
ly important, substantial oil exports will probably
attract additional financing needed to cover essential
imports and a steadily rising external debt. Indeed,
our analysis suggests that Abidjan's outstanding for-
eign obligations could hit a record $11 billion by the
mid-1980s-the largest debt in Sub-Saharan Africa
after Nigeria. As a result, Ivory Coast's debt service 25X1
ratio could top 50 percent.
Ivory Coast's future economic health clearly depends
on oil, but managing the oil windfall could also pose
critical problems for the government. Inexperience in
handling surging oil revenues threatens to spur overly 25X1
ambitious development that, among other things,
would:
? Add to political corruption, not now a source of
major concern.
? Accelerate already high urban migration and spur 25X1
immigration from neighboring countries.
? Build strong inflationary pressures if the domestic
money supply rises too quickly.
? Create dependence on imported food, if revenues are
not used effectively to develop the agricultural
sector
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