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Viewing cable 06KINSHASA1850, Kabila Lists Ways Toward Economic Growth

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Reference ID Created Released Classification Origin
06KINSHASA1850 2006-12-12 10:27 2011-08-25 00:00 UNCLASSIFIED//FOR OFFICIAL USE ONLY Embassy Kinshasa
VZCZCXRO2540
RR RUEHBZ RUEHDU RUEHGI RUEHJO RUEHMR RUEHRN
DE RUEHKI #1850/01 3461027
ZNR UUUUU ZZH
R 121027Z DEC 06
FM AMEMBASSY KINSHASA
TO RUEHC/SECSTATE WASHDC 5296
INFO RUEHXR/RWANDA COLLECTIVE
RUCNSAD/SADCC
RHEFDIA/DIA WASHDC
RUEAIIA/CIA WASHDC
RUFOADA/JAC MOLESWORTH RAF MOLESWORTH UK
RHMFISS/HQ USEUCOM VAIHINGEN GE
RUEATRS/DEPT OF TREASURY WASHDC
UNCLAS SECTION 01 OF 02 KINSHASA 001850 
 
SIPDIS 
 
SENSITIVE 
SIPDIS 
 
TREASURY FOR OWHYCHE-SHAW 
 
E.O. 12958: N/A 
TAGS: ECON PGOV KCOR CG
SUBJECT: Kabila Lists Ways Toward Economic Growth 
 
1. (U) Summary.  In his inaugural address and in a list of "100 
Proposals for the Reconstruction of the DRC" released the following 
day, President Joseph Kabila made a call to action and gave some 
idea of his priorities for promoting Congolese economic growth.  End 
summary. 
 
--------------------- 
The Inaugural Address 
--------------------- 
 
2. (U) In his inaugural address, Kabila said his role is to support 
a profound change of mentality" in the country.  He said that repair 
work must start in the areas of infrastructure and communications, 
notably on roads, railroads, ports, airports, large-scale 
agricultural projects, educational reform, access to potable water 
and electricity, health care, and housing. 
 
3. (U) Kabila tied some of his inaugural speech themes together when 
he noted that "good governance...is absolutely essential to 
obtaining durable development, sustained economic growth, and the 
eradication of poverty."  He said that the fight against corruption 
would be one of his first priorities, along with reform of the 
Congolese judicial system. 
 
4. (U) He described as "incredible" the depths to which the 
Congolese socioeconomic situation had sunk, and said his government 
would work hard to correct the macroeconomic, monetary and financial 
frameworks.  He said the economic boost ("relance de l'economie") 
awaited by the Congolese people would be measurable not by 
government statistics, but by job creation and the contents of 
market baskets.  He pledged to partner with the international 
community to advance development priorities. 
 
5. (U) Kabila promised tough action a second time towards the end of 
his speech, when he reiterated that impunity would no longer be 
tolerated at any level in the DRC. 
 
--------------------------------------------- ------ 
Kabila's 100 Proposals for the Reconstruction of the Congo 
--------------------------------------------- ------ 
 
6. (U) Kabila's main themes during his inaugural speech were fleshed 
out with the December 7 publication in the media of his "100 
Proposals" for the reconstruction of the Congo, nearly half of them 
in the category of kick-starting the economy.  Some of his "big 
picture" proposals include: 
 
-- Stabilize the macroeconomic framework to improve economic 
activity, investment and growth. 
 
-- Re-establish a formal IMF program (PRGF). 
 
--Strictly control the budget through close attention to GDRC 
spending and increase state revenues through performance criteria 
for government collection agencies. 
 
--Develop and utilize the DRC's natural resources in a rational 
fashion. 
 
--Promote private initiatives (including support for local 
enterprises), protect private property and the physical and judicial 
security of businesses, reduce administrative 
procedures/bureaucracy, strictly apply the Investment Code to reduce 
business start-up costs, support the Office of Small and Medium 
Congolese Enterprises, restructure internal debt, put in place a 
Socio-Economic Council, and increase public investment in rural 
areas. 
 
----------------------------------- 
Sectoral Policy for Economic Growth 
----------------------------------- 
 
7. (U) In the section entitled "Sectoral Policy," Kabila outlined 
his approaches to: 
 
-- Infrastructure: repair national roads, bridges, and ferries; 
construct main roads between principal cities; rehabilitate river 
ports and channels; support ONATRA (national transportation office; 
mostly dealing with riverboat operation) and SNCC (national railroad 
company); repair public facilities such as hospitals and schools; 
improve the operations of the Congolese Office of Post and 
Telecommunications (OCPT); diversify domestic financing for public 
infrastructure, transport and communication; and modernize Ndjili 
 
KINSHASA 00001850  002 OF 002 
 
 
International Airport (Kinshasa) and the airports of Lubumbashi 
(Katanga), Kisangani (Orientale), Mbuji-Mayi (Kasai Oriental), 
Kananga (Western Kasai) and Goma (North Kivu). 
 
-- Energy and Water: diversify energy sources; increase energy 
production to supply the entire nation with power; promote and 
extend petroleum production onshore and offshore using private 
investment; rehabilitate Inga Dam turbines and other large 
hydroelectric projects; increase electricity service to rural areas; 
develop electricity distribution networks using public/private 
partnerships; increase access to potable water, especially in rural 
areas; improve the quality of service provision by state-run 
electricity and water companies; and encourage private investment in 
the water and electricity sectors. 
 
-- Mining: provide titles according to the Mining Code in a 
transparent manner while making sure that private companies adhere 
to agreements; intensify efforts to combat fraud and the plunder of 
DRC natural resources. 
 
-- Agriculture: provide assistance to farms destroyed during and 
after the war; provide access to agricultural credit and create 
agricultural cooperatives for production and marketing; promote 
local production of tools and of supplies such as improved seed; 
improve access to fertilizer and pesticides; improve animal 
husbandry and fish farming; modernize animal health services, 
agricultural research, and markets for agricultural production; 
increase investment in small agriculture and associated 
infrastructure and small and medium-sized enterprises; and develop 
agro-industries and integrated rural development projects. 
 
-- Industry: promote Congolese industry to transform local raw 
materials and produce construction materials, agricultural inputs, 
and chemicals; promulgate and implement a law on restructuring 
public enterprises. 
 
-- International Economic Relations and Trade: join international 
economic organizations and participate actively in regional and 
sub-regional economic initiatives; facilitate Congolese economic 
operators entry into international business. 
 
8. (SBU) Comment.  Kabila has laid out a very ambitious plan for the 
reconstruction of the DRC, especially considering that the outgoing 
transition government was unable to stay within its reduced budget 
for 2006, that there is no budget yet for 2007, and that the 
prospects for substantial short-term budget assistance to the DRC 
next year do not look good.  The Kabila government may have to 
content itself with the "big picture" items (such as getting the IMF 
economic program renegotiated and in place by end March 2007) before 
it can even begin to worry about providing assistance in some of the 
economic sectors noted above.  Kabila is, however, keenly aware of 
the political pressures of the very high expectations of the 
Congolese people to see post-election results quickly.  Although the 
Kabila proposals track closely with the DRC Poverty Reduction 
Strategy Paper (PRSP) filed nearly six months ago with the IMF and 
World Bank, the new government will be hard-pressed to accomplish 
all the PRSP objectives for 2007.  Kabila and his government will 
certainly have to prioritize those areas where they can show some 
concrete results by doing the most good with the least expense.  End 
comment. 
 
Meece