US embassy cable - 05KINSHASA172

C O N F I D E N T I A L SECTION 01 OF 02 KINSHASA 000172 
 
SIPDIS 
 
PARIS FOR AFRICA WATCHER 
FROM BRAZZAVILLE EMBASSY OFFICE 
 
E.O. 12958: DECL: 02/01/2010 
TAGS: PGOV, PREL, ECON, CFED, IMF 
SUBJECT: CONGO/B: MEETING WITH NEW FINANCE MINISTER, PLANS 
TO HOLD LINE ON IMF MEASURES DESPITE POLITICAL PRESSURE 
 
REF: KINSHASA 089 
 
Classified By: Ambassador Robin R. Sanders for Reasons 1.4 (b) and (d) 
 
(C) 1.  Summary:  Ambassador met with Congo/B,s new Finance 
Minister, Pacifique Issoibeka, January 24, to assess his 
commitment to keeping the country on track regarding arrears 
payments, bilateral debt payments, and the IMF PRGF program. 
Issoibeka had just come from a grueling session with the 
National Assembly (televised), and was tired and a bit 
overwhelmed.  He began by seeking continued support from the 
U.S. for Congo,s economic reform.  He lauded the previous 
Finance Minister,s very hard work (he also said this before 
Parliament), and admitted that he was unsure how the country 
was going to manage the arrears payments, but emphasized that 
he was committed to finding a way and moving the country 
forward in this regard.  The new Finance Minister added that 
he has only been able to absorb roughly a quarter of the 
portfolio, and is trying to take on the hardest parts 
piecemeal in order not to get overwhelmed given the enormous 
task at hand.  Issoibeka added that he is in regular contact 
with outgoing Finance Minister Andely and is receiving 
continual briefings on each aspect of the country,s 
problematic economic portfolio one section at a time until he 
has the entire dossier under better control.  End Summary 
 
(C) 2.  The Ambassador began by again congratulating 
Issoibeka on his new post.  She reviewed issues previously 
discussed (reftel) such as not letting any of the PRGF balls 
drop and that the onus to regain credibility lost by changing 
Finance Ministers at the beginning of the PRGF program rests 
squarely on his and the President,s shoulders.  Issoibeka 
said he understood this and would travel to Washington in 
late February or early March 2005 to reassure the IFIs that 
he will push his country to remain committed to promises made 
to the IMF, international donors, and bilateral partners.  He 
said that there is still resistance to IMF measures in some 
quarters of government as he had to tell Parliamentarians 
that they could not arbitrarily increase their budget (which 
they tried to do).  (Note: During the televised session with 
the National Assembly and Senate, Issoibeka likened the IMF 
program to a doctor,s prescription, and said that Congo was 
an ill patient that could only improve its economic health by 
adhering to the doctor,s prescription. End Note) 
 
(C) 3.  Ambassador then asked if Congo would be able to meet 
payments due in January 2005 to Paris Club and others.  The 
Finance Minister said he did not know.  He said that Congo 
had about USD 20 million of the USD 34 million due (as of 
January 24), and that they were short about USD 14 million. 
Ambassador stressed that paying late would send additional 
jitters through the IFIs partners and among other creditors 
since there was already disquiet after the change in Finance 
Minister.  Issoibeka said he was doing his best to ensure 
timely payments, but could not promise that he would meet all 
the deadlines. However, even if he did not, he would continue 
to work to find the money that was owed even if the payments 
came late. Ambassador noted again that late payments would 
again put Congo in a bad light and roll back the few gains on 
its image that were a result of getting on a PRGF.  We 
discussed briefly the "learning curve" of ensuring that all 
members of Government recognized that the PRGF is a fluid, 
not static program and that measures, oil and forestry sector 
audits, and deadlines must still be met in order to remain on 
the program.  (Note:   During the televised Parliamentary 
sessions, Issoibeka gave the Cameroon example of having to 
start over after falling off its PRGF program.  There was an 
audible gasp in the room. End Note) 
 
(C) 4.  Issoibeka said that President Sassou was still 
strongly committed to the IMF program and that his 
instructions were to ensure that Congo progressed on IMF 
measures and remained on the program.  In a related 
conversation with Sassou,s daughter and close advisor, 
Claudia Lemoumba Sassou-Nguesso January 20, she noted her 
father,s continued strong commitment to seeing economic 
reforms through.  She added that she hoped the IFIs would 
"give Issoibeka a chance and Congo the benefit of the doubt 
during this transition period between Finance Ministers."  In 
response to that, Ambassador said that Congo was given the 
"benefit of the doubt in December 2004, and it will be 
difficult for the international financial community to do so 
again - so arrearages, audits, and payments will need to be 
met on time.  The ball is in Congo,s court to prove that it 
can measure up."  Although Madame Lemoumba did not like the 
comment and thought the reaction by the donor community to 
the removal of Andely unfair, she took it on board, and in 
her usual style,  Post is sure she will pass this back to her 
father. 
(C) 5.  Comment:  The first IMF review is scheduled for early 
March, and we will need to see how Congo performs to 
determine not only whether things are on course, but if there 
have been any tangible roll backs on the gains achieved 
leading up to the December 2004 IMF Board vote.  As for 
Issoibeka, he seems more than technically capable of doing 
the job, clearly sees how severe the country,s economic 
problems are, and wants the PRGF program to be successful. 
What appears to be lacking is the energy level for the task 
at hand, and the capacity to manage the political battles 
that are surely ahead.  In comparing notes between the 
Ambassador,s meeting and the World Bank Rep,s meeting that 
followed two days later, there was a similarity of thought 
and concern about Issoibeka,s ability to have the stamina 
(he nodded off in both meetings), not only for the enormity 
of the technical portfolio, but the ability to stand up to 
and block the hardliners (reftel) who may see this is an 
opportunity to get their hands back in the till.  Former 
Finance Minister Andely,s had made all the hardliners tow 
the economic transparency line, which in the end cost him his 
job. 
 
*U) 6.  Brazzaville Embassy Office - Sanders 
MEECE