US embassy cable - 04KINSHASA1553

C O N F I D E N T I A L SECTION 01 OF 02 KINSHASA 001553 
 
SIPDIS 
 
E.O. 12958: DECL: 08/17/2014 
TAGS: EAID, ECON, EFIN, EINV, EMIN, ETRD, PGOV, PREL, CG, HIPC, OPIC 
SUBJECT: PRIDE AND PREJUDICE BY VP BEMBA 
 
 
Classified By: Econoff Peter Newman for reasons 1.5 b/d 
 
1. (C) Summary. On Aug 12, Ambassador Meece paid a courtesy 
call on DRC Vice President for Economic and Financial 
Affairs, Jean-Pierre Bemba. Bemba made clear his pride in the 
economic achievements of the past year and his extreme 
prejudice toward Rwandan President Kagame as the primary 
culprit behind the Kivus insecurity. The two also discussed 
potential investments, OPIC and HIPC, elections planning, 
regional confidence building and Bemba's interest in making 
an offical visit to Washington (septel). End Summary. 
 
ECONOMIC CREDENTIALS AND INVESTMENT 
 
2. (C) Ambassador Meece opened by commending the economic 
progress the DRC has made over the past two years, 
specifically citing the impressive IMF report in Washington. 
Bemba accepted credit for the DRC's macro progress citing 
forecasts for CY2004 of inflation at 5 percent and GDP growth 
of 6 percent. He also made a point to note that the exchange 
rate has remained stable and that the GDRC is operating on a 
balanced budget. Increased trade (traffic at Matadi has 
doubled and exports have increased 26 percent) and general 
commerce was also of importance as Bemba claims that economic 
activity has increased twofold in the past six months. 
However, he offered the caveat that the common Congolese are 
increasing purchases of staple goods, for example bread, 
demonstrating increasing purchasing power. (Comment. To his 
credit, this shows that Bemba is looking at the local 
population rather than just the big services, industries and 
import-export firms. End Comment.) 
 
3. (C) Bemba highlighted three main economic challenges: 
bringing the informal sector into the formal economy, 
improving the tax ethic, and deepening the fight against 
corruption and fraud - particularly in the Eastern DRC. 
Ambassador agreed with Bemba's estimate and expressed U.S. 
support for reinforcing reforms and improving the private 
sector through foreign direct investment. Bemba took this 
opportunity to raise his desire to travel to the U.S. to meet 
with potential investors and USG officials (septel). 
Ambassador noted that the Overseas Private Investment 
Corporation (OPIC) is currently considering enlarging its 
program in the DRC, which will help potential investors 
explore opportunities and manage risk in the DRC. (Comment. 
Bemba appeared not to have any knowledge of OPIC or its role 
in investment promotion, but quickly recognized the potential 
benefits to actively working with the USG in supporting 
OPIC's program. End Comment.) 
 
4. (C) Ambassador also brought up the case of Phelps-Dodge, 
which is currently in negotiations with Gecamines for a 
several hundred million dollar investment project, as a test 
case for large-scale investment in the DRC. Bemba assured the 
Ambassador that his people are trying to finalize the 
dossier. He stated that the Phelps-Dodge file in now securely 
in the hands of the Minister of Plan Alexis Thambwe (MLC 
affiliated) and that the legal questions will now be resolved 
since the lead lawyer has returned from foreign travel. 
(Comment. Bemba appeared poorly informed on the details of 
the case, even though his economic advisor Yves Kisombe and 
Minister Thambwe are both directly involved in evaluating the 
file. Phelps-Dodge and Gecamines reps have told Econoff that 
the legal issue was resolved on July 29. The question is now 
the financial aspects of the joint-venture, particularly 
Gecamines' equity stake. End Comment.) 
 
5. (C) Ambassador assured Bemba that the Department is 
working closely with Congress to secure funding for HIPC debt 
relief based on U.S. obligations to the Paris Club. Bemba 
commented that the deadline for the HIPC completion point was 
2006 and he would like to reach completion before then. The 
DRC arrived at a decision point in July 2003 and continues to 
pay its debts to the U.S. in a timely manner despite its 
fiscal difficulties. He hopes that Congress will take that 
into consideration when deciding on appropriations. (Comment. 
Post believes that he intended to both demonstrate the good 
progress made by the DRC as well as maintain pressure on the 
USG to fulfill its Paris Club obligations. End Comment.) 
Ambassador reassured Bemba that for the coming fiscal year, 
top level officials in the government are working hard to 
convince Congress to appropriate the necessary funds for HIPC 
debt relief. 
 
A POLITICAL TOUR D'HORIZON 
 
6. (C) Bemba focused on two issues: elections/integration and 
Rwanda. Both Bemba and Ambassador commented that the 
integration of the military and the DDR(RR) programs must 
accelerate before elections can occur. Ambassador assured 
Bemba that DDR(RR) is a high priority issue in Washington and 
that he will take up the issue with SRSG Swing as well as the 
World Bank and IMF resident representatives to make sure 
there is enough institutional support and financing. Bemba 
clearly believed that unless the intergration issues were 
resolved, elections would not occur in a serene and secure 
environment. 
 
7. (C) However, Bemba stated that he was not convinced that 
all actors (i.e. some in the Eastern DRC) wanted the DRC to 
arrive at free and transparent elections. He opined that 
Rwanda was obviously at fault for the continuing instability 
in the Kivus. He stated that the Congolese people hold no 
prejudices against the Rwandan people; however, Kagame must 
halt his actions because the Congolese people do not deserve 
to be mistreated by Kigali. Ambassador reiterated that the 
U.S. position in support of Congolese sovereignty and 
territorial integrity. Bemba said that he believes that the 
U.S. needs to play the principle role in confidence building 
between the Great Lakes states. He is looking for U.S. moral 
if not material support to organize the CPGL and the Great 
Lakes Conference as well as for follow through on the 
tripartite border verification mechanism. He fears that the 
U.S. and the international community have forgotten the DRC 
in the rush to deal with the Darfur crisis. Ambassador 
reassured Bemba that the U.S. has not forgotten the DRC and 
was working to arrange not only the next tripartite meeting 
but also supports efforts to have effective mechanisms to 
secure Congo's borders. Bemba was keen on Monuc having a 
central role in the proposed Joint Verification Mechanism 
(JVM). However, he was cool on AU participation beyond 
observer status. 
 
COMMENT 
 
8. (C) Bemba was engaged and said most of the right things 
during the one hour conversation. He appears to have a good 
handle on the macro aspects of the economic and financial 
portfolio. However, his knowledge of ongoing investment cases 
and investment incentives seems somewhat lacking considering 
the stress he laid on improving the formal sector. Bemba's 
political commentary reflected his susceptibility to feeling 
stilted and ignored. He stated that he would like to see the 
U.S. take a more activist role in the Congolese peace process 
and is afraid that Darfur is distracting the U.S. and the 
rest of the international community. His commentary on Kagame 
and the situation in the East was typical and expected. 
Noticably absent was any mention of Ugandan involvement in 
the arms or the minerals trade in the Kivus and Ituri. End 
Comment. 
MEECE