AFRICA REVIEW

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP88T00792R000300020007-8
• Release Decision: RIPPUB
• Original Classification: S
• Document Page Count: 22
• Document Creation Date: December 27, 2016
• Document Release Date: July 10, 2012
• Sequence Number: 7
• Publication Date: December 26, 1986
• Content Type: REPORT

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Africa Review
26 December 1986
Sect-a
ALA AR 86-025
26 December 1986
Copy
393
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Africa Review
26 December 1986
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Page
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Articles
Zambia: Implications of Food Riots
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Recent riots over food shortages and
increases in food prices reflect
widespread popular dissatisfaction over declining living standards
and government austerity measures
that have eroded
President
Kaunda's personal popularity.
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Benin-Libya: Closer
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Ties
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By using financial support, bribes to key officials,
and implicit
threats, Tripoli increasingly has used Benin to support Libyan
efforts to undermine
influence in the region.
moderate African governments
and French
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Ghana: A Look at Cuban Influence
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Havana is providing training for Ghana's
intelligence and security
service and Accra supports Cuba's foreign policy at international
forums, but Ghanaian
Head of State Rawlings is privately
wary of
Cuban President
Castro.
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Malawi: The RENAMO Connection
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Despite his public denials and the threat of retaliation
from the
Frontline States, President Banda
support to the Mozambican insurgents.
is continuing to provide limited
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Eastern and Southern Africa: Slow Progress in Regional
Economic 13
Cooperation
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The Eastern and Southern Africa Preferential Trade Area
is
making little progress toward economic cooperation among member
countries because
from other members
most are reluctant to reduce tariffs
on imports
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Liberia: Prospects for the Trade Unions
Increasing labor unrest led by union leaders could lead President
Doe to resort to armed force to restore law and order.
17
Briefs Madagascar: Economic Discontent
19
Togo: Reversal on Israeli Relations
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Articles have been coordinated as appropriate with other offices within CIA.
Comments and queries regarding this publication may be directed to the Chief,
Production Ste, Office of African and Latin American Analysis,
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Africa Review
Articles
Zambia: Implications
of Food Riots
Violent demonstrations against food shortages and
sizable increases in food prices earlier this month
created one of the gravest domestic crises in Zambia
since independence in 1964. More generally, in our
judgment, widespread popular dissatisfaction with
declining living standards and with government
austerity measures imposed at the urging of the
International Monetary Fund (IMF) and Western
creditors has eroded President Kaunda's personal
popularity. Although Kaunda's decision to cancel
price hikes has enabled his government to restore
order, the disturbances will make it more difficult for
Lusaka to proceed with its economic reform program.
The Disorders
US Embassy and press sources indicate that the
rioting began in the northern town of Kitwe on
9 December, five days after the government
announced it was more than doubling the price of a
popular grade of cornmeal, the Zambian food staple.
Protesters in Kitwe looted stores, seized trucks
carrying food, and attacked the headquarters of the
ruling party,
Over the next several days, disturbances spread to
other mining centers in the country's economically
important copper belt, and minor rioting and looting
were reported in Lusaka, according to the Embassy.
Official accounts reported at least 15 protesters were
killed and dozens injured. Embassy observers
have indicated that the demonstrations
were spontaneous for the most part, and that many
participants were unemployed youths. Although
leaders of Zambia's powerful trade unions publicly
opposed the price hikes, they do not appear to have
directly incited the unrest
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The Kaunda government attempted first to quell the
disturbances by using police and paramilitary forces,
but it was quickly forced to take the unprecedented
step of calling out the Army to restore order. 25X1
the 25X1
troops did little to deter looting, and in some cases
appeared to sympathize with the rioters. Several days
after the rioting began Kaunda publicly rescinded the
price increases, nationalized the milling industry?
which he blamed for food shortages?and announced
that food subsidies would be financed in the future by
cutting social programs.' 25X1
Origins of the Unrest 25X1
There is little question that the government's decision
to more than double the price of one variety of
cornmeal and the shortages of substitutes triggered
the riots. The disturbances, however, also came
against a backdrop of longstanding frustration with
deteriorating living conditions and a decade-long
decline in Zambia's mineral-based economy. The
country's mining industry, which accounts for
approximately 90 percent of Zambia's foreign
exchange earnings and slightly more than 30 percent 25X1
of GDP, has been hard hit by the prolonged slump in
world prices of copper and cobalt. At the same time,
production costs have risen, as have fees that
landlocked Zambia must pay to transport
commodities to and from international markets. As a 25X1
result of these and other factors, the US Embassy
' Ironically, the riots occurred at a time when the Embassy has
reported that Zambia is having good harvests and is close to being
self-sufficient in corn production.
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reports that copper production fell from a high of
629,000 metric tons in 1975 to 480,000 metric tons in
1985.
In an attempt to arrest the country's economic
decline, the Kaunda government in recent years has
adopted ambitious economic reforms. Many, such as
the government's recent attempt to reduce cornmeal
subsidies, have been the result of pressures by the
IMF, World Bank, and other international creditors
to pare the budget deficit as a condition for assistance
needed to stabilize and restructure the economy.
Earlier this year, for example, the IMF granted
Zambia a $275 million standby loan
Economic Impact of the Riots
The government was badly shaken, but, we believe, it
is unlikely to totally abandon its efforts to restructure
and reform the economy. In our judgment, Lusaka
probably will slow the pace of reform. We expect
Kaunda may postpone reform measures he has
already agreed to, such as eliminating all food and
fertilizer subsidies by the end of 1987, in an effort to
bolster his political credibility. The government may
also bow to growing pressure to modify Zambia's
foreign auction system, which is under fire because it
has resulted in a sharp devaluation of the Zambian
kwacha.
Although such delays may be politically popular, any
slackening in the reform effort will make it more
difficult for Lusaka to meet its economic performance
targets. The IMF, for example, had urged Lusaka to
reduce its fiscal deficit as a ratio of GDP from about
30 percent this year to 10 percent in 1987. Such a
target, which was to have been accomplished largely
through cuts in subsidies and better control over
expenditures, no longer appears feasible. We also do
not believe Kaunda will be able to compensate for
higher-than-expected consumer subsidies by cutting
other social spending
At the same time, US Embassy reporting indicates
that Zambia's creditors now recognize that the
Kaunda government is dealing with a politically
explosive situation that may require some leniency on
their part. Before the riots, Zambia had been under
considerable pressure to clear its arrears with the
Secret
Major Accomplishments of Zambia's Economic
Reform Program
? Decontrol of prices except for corn and fertilizer.
? Adoption of an auction system allowing market
forces to determine exchange rates and allocate
foreign exchange.
? Liberalization of trade system, making tariffs less
discriminatory.
? Restructuring of several government-owned firms.
? Substantial upward adjustment in agricultural
prices and overhaul of the agricultural marketing
system.
? Freeing of interest rates.
? Pruning of the civil service.
? Improvements in the planning and budget system.
? Implementation of new tax measures.
IMF, World Bank, London and Paris Clubs, and a
petroleum funding consortium. At a meeting in Paris
in mid-December of the so-called Consultative Group
for Zambia attended by 21 multilateral and bilateral
creditors and donors, there was considerable
sympathy for Zambia's plight, according to US
diplomatic observers. These sources report that
international lenders may now be prepared to reduce
their demands on Lusaka and that they may be
willing to help raise a substantial portion of the
estimated $400-500 million in external assistance
Zambia will require annually between now and the
end of the decade if it is to meet its debt payments
and other obligations
Political Significance
Although we do not believe the Kaunda government
faces an immiment threat, the rioting suggests that
Zambia's longstanding political stability can no
longer be taken for granted. According to Embassy
reports, recent events indicate that Kaunda's
popularity has declined and his authority has been
undermined by his handling of the affair. In
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Ov?..1 VI
particular, Kaunda's decision to reverse course and
repeal the price increases has created the impression
that he capitulated to mob pressure, increasing the
likelihood that Zambians may take to the streets
again if the government seeks to reduce consumer
subsidies or to make other politically unpopular
moves. At the very least, the government's actions
suggest that it seriously misgauged public attitudes
and failed to anticipate the furor that the price
increases would elicit. As recently as late November,
Kaunda had informed a visiting Japanese delegation
that his government would not permit conditions to
deteriorate to the point where food riots might erupt,
even while noting that people were approaching the
limits of what they would endure.
The turmoil Zambia has experienced may also
indirectly affect its foreign policy. Kaunda, who is
chairman of the six-nation group of Frontline States,
is likely to devote somewhat more of his time in the
future to dealing with domestic difficulties. In view of
the fragility of the Zambian economy, he will also
probably redouble his efforts to avoid a confrontation
with South Africa at this time. Kaunda almost
certainly is aware that approximately 70 percent of
Zambia's imports and about 40 percent of exports
move along South African trade routes. Disruption of
such traffic could reduce government revenues, lead
to shortages of consumer goods, and prompt
Zambians once again to take to the streets.
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Benin-Libya:
Closer Ties
Ties between Libya and Benin remain strong and the
14-year-old leftist regime of President Mathieu
Kerekou shows no signs of being willing or able to
curb Libyan influence. By using a combination of
financial support, bribes to key officials, and implicit
threats, Tripoli has increasingly used Benin to support
regional destabilization.
In addition to pursuing its broader objective
of undermining moderate African governments and
French influence in the region,
Libya continues to rely on Kerekou's cooperation
to strengthen rebel forces in Chad and to provide a
conduit for covert trade. For his part, we believe
Kerekou, who must contend with mounting criticism
from radicals within the ruling People's Revolutionary
Party, the military, and students, as well as a failing
economy, may become even more dependent on
Libyan financial largess.
Libyan Economic Leverage
The US Embassy reports this financial dependence
gives Mustafa Abusetta, the head of the Libyan
People's Bureau in Cotonou, ready access to the
President and other party officials. Although Benin's
Foreign Minister told US Embassy officials late last
year that Kerekou would like to distance himself from
the Libyans, he was afraid that refusing to cooperate
in Libya's regional endeavors could cause Tripoli to
cut economic aid and work to undermine the Kerekou
government
5
Libyan Presence
Libyan People's Bureau. In line with Tripoli's
decision to cut diplomatic staffs worldwide, it has
reduced its personnel in Contonou from about 40
earlier this year to four. In his six years in Benin,
Bureau Chief Abusetta?now the Dean of the
Diplomatic Corps?has developed extensive
relationships with goverment officials. The US
Embassy reports that Bureau sue members have not
ingratiated themselves with the local population by
running up over $200,000 in debts.
Libyan Military Group. The military group is
directed from Tripoli by Col. Masud `Abd Al-Hafiz
and operates independently of the People's Bureau. It
is responsible for planning Chadian rebel terrorist
operations against the Habre government and
coordinating the transfer of Chadian refugees from
Nigeria to Benin for onward travel to Libya via
weekly flights.
Other Libyan Representation. Another 50 Libyans
are assigned to various Libyan organizations in
Benin, including the Libyan Arab Investment
Company, which has provided almost $7 million to
various agriculture, mining, and fishing projects, and
three joint Benin-Libyan companies that apparently
manage the projects. A Libyan front company
operating out of West Germany reportedly purchased
the two US L-100s that were diverted to Libya last
year. Although only about 12 percent of Beninese are
Muslims, Tripoli has established a local Islamic Call
Society and Islamic school, but neither is very active
according to the US Embassy. The Libyans currently
are negotiating for an Institute of Arab Languages to
be located on the campus of the University of Benin.
Secret
ALA AR 86-025
26 December 1986
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Base for Regional Subversion
In return for Libya's financial assistance
Kerekou has allowe
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to use Benin as a base of subversion against other
governments in the region.
has actively recruited and
trained exiled dissidents living in Benin for use
against unfriendly regimes. Reports of such activities
include:
? A report that a Togolese terrorist, caught in Togo in
August carrying bombs to Lome from Benin,
claimed that the Libyan Ambassador supplied him
with explosives to be used against the US Embassy
and other targets, according to the US Embassy.
Support for Libya in Chad
Tripoli has also used
otters of economic assistance to secure Benin's help in
buildin us Lib an-backed rebel forces in Chad
Secret
Tripoli also relies on Benin as a transit point for
Chadian recruits. US Embassy reporting indicates
that the Libyan military group in Cotonou is
responsible for the infiltration of men and arms from
Benin through Nigeria into southern Chad for
terrorist actions, and that there are few checks, if any,
on the group's activity. Cotonou also permits a weekly
Libyan flight that ferries Chadian combatants from
Benin to Tripoli, many of whom were recruited in
Nigeria or at PK-18?a holding camp for Chadian
refugees run by the Kerekou government. The US
Embassy reports that some 1,100 Chadians transited
Benin during 1986 en route to Libya for military
training and eventual deployment to rebel units in
Chad
Conduit for US Aircraft and Spare Parts
Over the past two years, Libya also has repeatedl
used Benin to circumvent US export controls.
Kerekou's recent
agreement with Libya to organize a new airline?
Benin Airways?was intended in part to help Tripoli
evade the US embargo against sales of aircraft spare
parts. Cotonou reportedly will buy three Boeing 707s
and three smaller aircraft that will be maintained and
flown by the Libyans. In an earlier arrangement,
Libya last year purchased two Lockheed L-100s using
a front company in Benin and arranged for the planes
to transit Benin en route to Libya. The Kerekou
regime later denied involvement, however, and
cooperated with US officials investigating the
incident, according to the US Embassy
Outlook
We see little prospect that the Kerekou regime will
abandon its close relations with Libya. In our
judgment, the increased cooperation over the last year
suggests that the longer term trend is likely to be
toward greater Libyan activity, particularly if, as we
expect, Cotonou's financial condition continues to
deteriorate. Given Kerekou's refusal to implement
austerity measures needed to secure an IMF accord,
we see little likelihood that Western countries or
international agencies will respond with adequate
economic assistance
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In the unlikely event that Kerekou attempts to cut ties
to Tripoli, we believe Libyan interests in Benin are
such that Qadhafi could move to install a more
compliant regime. Kerekou's fear of Tripoli's
supporters in the government or the military
subverting his beleaguered regime, however, probably
mitigates against a dramatic lessening of Libyan
influence soon even if Libya reduces its financial help.
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ecrer
Ghana: A Look
at Cuban Influence
Head of State Rawlings has forged fairly good but
limited ties to Cuba since he seized power in 1981 and
launched Ghana on a populist course.
and Accra is a strong supporter of Cuba's
foreign policy at international forums, according to
the US Embassy
Nevertheless, Rawlings remains privately wary of
Castro, and realizes that Cuba?itself financially
strapped?cannot provide the substantial economic
assistance necessary for his country's economic
recovery.
Political Ties
Publicly, Rawlings praises Cuba for its leadership in
the Third World, but privately he is thought to dislike
Castro. US Embassy reporting indicates that under
Rawlings's rule, Accra has strongly backed Havana in
the United Nations, and in 1984 the two countries
signed a joint communique attacking the US
intervention in Grenada and voiced solidarity with the
Nicaraguan revolution and guerrillas in El Salvador,
accordin to US Embass re rtin
The Cubans exert most of their influence through
Ghana's Marxist security and intelligence adviser,
Kojo Tsikata, who sits on the ruling nine-man
Provisional National Defense Council. Tsikata has
long sought to strengthen Cuba's role in Ghana.
According to US Embassy
reporting, Tsikata claims "there is much for us to
learn from Cuba." Since 1982 Havana has provided
9
trainin for Tsikata's intelli ence
Influence in the Military
Cuba has not been able to establish a permanent link
to Ghana's military, according to the US Embassy.
There are no Cuban military advisers in Ghana,
US Embassy and
has long opposed the establishment of military ties to
the Communist Bloc.
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Nonetheless, pro-Cuban sentiment has been expressed 25X1
by some of the predominantly pro-Western officer
corps. For example, Major Quashigah?who
commands the key Force Reserve Unit, a 500-man
quick reaction force designed to respond to any coup
attempts?visited Cuba in 1983. According to US
Embassy reporting, he found the country to be "very 25X1
African," and praised Cuba's "relatively free and
easy lifestyle." The commander of the Air Force, 25X1
Commodore Kotei, also toured Cuba in 1983 and
reportedly was impressed with the country's youth
movement, animal husbandry program, and
educational achievements. 25X1
Economic Ties
Financially strapped Havana relies on low-cost, high- 25X1
profile aid projects to enhance its reputation as an
ally. The US Embassy reports that Cuba privately
regrets it cannot provide the level of economic
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assistance Accra seeks, but it offers limited help in the
health and construction fields. According to the
Embassy, Cuban medical teams visited Ghana in
1984 and 1985 in an effort to build good will among
the populace
Havana is studying a project to build a cement plant
in Ghana, and has already sent two prefabricated
housing plants to Accra
Havana's longstanding efforts to promote stronger
ties and spread its Marxist ideology through student
scholarships have had mixed results. According to US
Embassy and press reports, some 600 Ghanaians are
currently studying in Cuba. While a small core return
to Ghana as committed revolutionaries, many may
return disillusioned or disappointed by their
experiences. The US Embassy in Accra reports that
extensive rumors of death, ill health, and student
unrest at Cuba's Isle of Youth circulate in Accra, and
that the educated public remains skeptical of the
value of Cuban schooling.
Outlook
In our view, Cuban influence will be largely limited to
Tsikata's security apparatus and to successful
indoctrination of some Ghanaian students. We believe
that even though Rawlings is obsessed with security
matters, he almost certainly will never allow a Cuban
military presence that would undermine his
nationalist image, weaken public support, alienate
Western-leaning military officers, and endanger
Western economic assistance. Nonetheless, Rawlings
will remain vulnerable to the pressures of the
manipulative Tsikata, who no doubt will attempt to
press Rawlings to forge closer links to Havana.
Moreover, Rawlings almost certainly will strongly
support Cuba in international forums to demonstrate
his leftist credentials and placate critics who believe
he is betraying the regime's original revolutionary
goals.
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eeret
Malawi: The RENAMO
Connection
Malawian President Banda, despite vehement denials
and the possibility of retaliation from the Frontline
States, is continuing to provide limited support to
South African?backed Mozambican rebels. In our
view, Banda backs the National Resistance of
Mozambique (RENAMO) rebels because of his
ardent anti-Communism and his hope that an
ideologically compatible regime in Maputo would
reduce Malawi's political isolation in the region.
Aid to RENAMO
Malawi's aid to the rebels takes various forms:
? Malawi is the only African country that allows
RENAMO to have a resident representative. The
Banda government places no restrictions on the
activities of the representative, Jimo Phiri, who has
a Malawian passport and is military commander of
RENAMO forces in neighboring Zambezia
Province in Mozambique.
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? Malawi may permit Pretoria to use its territory for
transshipping supplies to RENAMO.
cargo planes?possibly from
South Africa?have made night landings at rural
Malawian airports conveniently located to resupply
rebels operating near the Malawi-Mozambique
border.
RENAMO does not
have bases in Malawi although we believe areas of
safehaven and caches of food and other nonmilitary
supplies exist. It is unclear whether Malawi would
welcome bases or if bases in Malawi would be
inconvenient for RENAMO's operations.
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Ngwata appears to have unlimited access to Banda
and almost certainly is carrying out the President's
wishes by aiding RENAMO. Given Banda's
longstanding and well documented authoritarian style
of government, we believe a policy of assistance for
the rebels could not be carried out unless he ordered
and supported it
The Many Talents of Charles Ngwata
Ngwata was appointed Deputy Inspector of Police?
the position was created especially for him?in July
1985 and quickly consolidated power with his
takeover of the notorious Special Branch. Clearly
Banda's man, Ngwata has the authority to bypass his
superior, Police Inspector Kamwana, many of whose
duties have been assigned to Ngwata. We believe that
he is a skillful political player who has built a network
of loyal police officials. His loyalists include the chief
of the important Criminal Investigation Division,
Ngwata also may
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Charles Ngwata: A Little-Known Figure
Chief of Malawi's Police Special Branch and Deputy
Inspector General of Police since July 1985 . . .
newest member of select group of advisers with access
to President Banda . . . widely expected to replace
current Inspector General. . . well respected by peers
but does not get along with superiors. . . formerly
junior assistant commissioner of police and deputy of
special branch under ousted predecessor. . . once
headed police training school . . . member of Banda 's
Chewa tribe. . . probably in his mid-40's.
have some links to John Tembo, Banda's ruthless
adviser, who is rumored to be the octogenarian
President's preferred successor and the hand behind
the police shakeup last year that brought Ngwata to
power.
In the past year, Ngwata has established several
external contacts, probably including intelligence
liaison relationships with South Africa. These
relationships,
keep him well informed on activities
and decisions made at the most senior levels of the
Government of Mozambique,
As a result of these contacts,
Ngwata probably has an accurate picture of
Mozambique's counteroffensive capabilities and
intentions toward Malawi and RENAMO.
Concealing the Facts
To maintain plausible deniability, the scope and
nature of Malawi's support to the rebels remain
limited, with probably fewer than 100 Special Branch
personnel involved. Malawi's aid to the Mozambican
rebels probably is relatively easy to conceal because it
is a small operation directed largely by Ngwata
himself.
Malawi publicly denies supporting the rebels and has
taken cosmetic steps to improve its image and ease
tensions in the region, including participating in a
joint Mozambique-Malawi security commission. In
addition, Ngwata personally escorted a group of
Secret
Zambian intelligence officers on a tour of the country
last November to prove Malawi was not supporting
RENAMO, In a
good position to steer his guests away from supply
operations or safehaven areas, Ngwata reportedly
convinced them that Malawi was not cooperating with
the insurgents.
Ngwata reportedly has also denied charges made by
the Frontline States that Malawi supplies passports to
RENAMO personnel. He contends that cases of
passport fraud are extremely difficult to control
because the artificial border between Mozambique
and Malawi cuts across family and tribal lines.
Malawi has continued to stress this theme, even after
the late Mozambican President Machel had presented
the Malawians with a photostatic copy of Phiri's
passport.
Outlook
Ngwata will probably take further steps to conceal
Special Branch activities in the face of Frontline
States' pressure and accusations, but limited support
for the rebels will continue. Banda probably feels he
can depend on South Africa to protect him from
Frontline States' punitive measures and would
genuinely like to see RENAMO come to power in
Maputo. He may reason that the recent death of
Machel increases RENAMO's chances of gaining
power
Should Frontline States' pressure cause Banda to
reconsider or withdraw support to the rebels, however,
RENAMO in effect could blackmail Lilongwe by
threatening Malawi's vital interests. The rebels
exercise some control over regional transport routes
used by landlocked Malawi. Moreover, RENAMO
could also threaten to set up large troop installations
or training bases in Malawi?an action the small
Malawi Army would be unable to prevent. Banda
would probably go far to prevent this because it could
entice Mozambican Government troops into hot
pursuit actions in Malawian territory
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Eastern and Southern Africa:
Slow Progress in Regional
Economic Cooperation
Initial reporting from the summit meeting of the
Eastern and Southern Africa Preferential Trade Area
(PTA) held in Addis Ababa in early December
suggests that little progress was made toward
developing economic cooperation among member
countries. In particular, most states remain reluctant
to reduce tariffs on imports from other PTA
countries. Moreover, the growing politicization of the
PTA may divert its energies from its main purpose of
promoting intraregional trade
Early Initiatives
The PTA began operations in 1984 with a focus on
reducing tariff and nontariff barriers among its
members. According to US Embassy reporting, the
PTA was able to agree relatively quickly on a number
of economic issues. In 1984, for example, the group
agreed on a list of 212 items traded between member
countries and programed tariff reductions in
increments of 25 percent on these items to take place
every two years, starting in 1986. In addition, they
agreed that goods shipped between two member states
could transit a third PTA country unhindered. The
group also established a clearinghouse for PTA
transactions, run by the Zimbabwe Reserve Bank,
that would allow transactions to be set off against
each other, thereby reducing the need for hard
currency expenditures on PTA imports by member
countries.
Despite the initial agreements, the PTA made little
progress in 1985. Member states failed to agree on a
proposal to reduce the minimum level of local
ownership for firms to benefit from preferential tariffs
ranging from 51 percent to 30 percent. The
51-percent requirement had the practical effect of
curtailing PTA trade benefits because major
businesses with export capability in key PTA
countries?such as Kenya and Zimbabwe?were, and
remain, under majority foreign ownership or are
subsidiaries of foreign firms. The PTA members,
however, did agree in December 1985 to establish a
Trade and Development Bank for promoting
development projects and trade
13
Background of the Preferential Trade Area
The PTA is an organization of 15 countries with
headquarters in Lusaka, Zambia, that was formed in
1981 and became operational in 1984. Its main goal
is to promote trade among its members in a regional
market of roughly 160 million people. The principal
declared means of promoting intraregional trade are
preferential treatment and tariff reduction for
members, a clearing facility for trade that reduces
the need for foreign exchange expenditures for
imports, and a regional development bank for
financing PTA projects.
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Recent Developments
At its Extraordinary Meeting in Burundi last May,
according to US Embassy reporting, PTA members
were able to reach a compromise on the issue of
preferential tariff treatment within the PTA based on
local ownership of firms. Under the new arrangement,
goods produced by firms with at least 51-percent
ownership by nationals are eligible for a 100-percent
preferential tariff treatment, while firms that are
41- to 50-percent domestically owned qualify for a
60-percent preference, and those that are 30- to 25X1
40-percent locally owned are due a 30-percent
preference. In addition, participants at the meeting
agreed to review the common list of preferential trade
items over the next five years, to settle all PTA
transactions through the,PTA clearinghouse, and to
eliminate all tariff and nontariff barriers by 1992.
Finally, the PTA put in place the charter of the PTA
Trade and Development Bank and the rules for
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In our judgment, the recent summit in Addis Ababa
did little, if anything, to promote further intraregional
trade. Faced with reluctance by PTA countries to
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PTA Membership
Current PTA
Burundi
Comoros
Djibouti
Ethiopia
Kenya
Lesotho
Malawi
Nonmembers
Angola
Botswana
Madagascar
Members
Mauritius a
Rwanda
Somalia
Swaziland
Tanzania
Uganda
Zambia
Zimbabwe
Eligible To Join
Mozambique
Seychelles
a Has given notice of withdrawal.
reduce their tariffs within the framework of the 1984
tariff program, the summit rejected the scheduled
across-the-board tariff reduction of 25 percent that
was to have taken effect on 1 October 1986. Ethiopia
and Somalia were prominent among the opponents of
the scheduled tariff cut, according to US Embassy
reporting. Moreover, the summit, in effect,
backtracked on the May 1986 agreement to eliminate
tariff and nontariff barriers by 1992 by deciding
instead to undertake a study of the feasibility of
eliminating such barriers within that time frame.
Although the summit's final communique included
agreements on plans for the PTA, it provided little
substantive action on their implementation. For
example, in the communique member states agreed to
expedite the implementation of projects in the
transport and communications sectors, launch new
fertilizer projects, and establish expanded agricultural
programs and projects
Obstacles to Progress
In our judgment, the PTA will continue to face major
structural obstacles to progress in regional
cooperation. PTA countries still have largely
Secret
agricultural economies with little demand for each
other's agricultural exports. Moreover, disparate
levels of industrial development in member countries
have produced differing degrees of support for the
PTA. We believe that the more highly industrialized
countries in the group, such as Kenya and Zimbabwe,
see the PTA as a means of promoting their industrial
expansion and are its strongest supporters. Other less
industrialized PTA members see fewer immediate
advantages to membership. For these reasons the
PTA has failed to convince any of the five eligible
nonmembers?Angola, Botswana, Madagascar,
Mozambique, and Seychelles?to join.
Mauritius formally gave
a one-year notice in March 1986 that it planned to
leave the PTA because it had received so few benefits.
Emerging Politicization
In our judgment, the PTA's already limited economic
impact may be further undercut by the growing
tendency to use the organization to further political
aims. Although they have no constituency for regional
trade matters, the African National Congress and the
South West African People's Organization were
present as observers at the May 1986 Extraordinary
Meeting in Burundi. Both groups, along with the Pan-
Africanist Congress, attended the summit in Addis
Ababa, and the summit communique approved
unspecified measures by member states for
strengthening economic sanctions against South
Africa. The US Embassy also reports that John
Garang, chairman of the rebel Sudanese People's
Liberation Movement, was in Addis Ababa
throughout the PTA meeting, presumably to meet
with representatives of the PTA countries. Garang
seized the opportunity presented by the presence of
foreign journalists covering the PTA summit to call a
news conference, where he publicized his insurgency.
Outlook
We do not attach much political significance to the
election at the summit of Ethiopian Chairman
Mengistu Haile Mariam as PTA chairman for the
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,
next year. The post is rotated on an annual basis.
Because of Ethiopia's opposition to the intraregional
tariff reductions that are the rationale for a
preferential trade area, however, we do not expect any
major effort in this direction during Mengistu's
chairmanship. We also do not foresee substantial
progress in economic cooperation in the region over
the next few years. Domestic economic pressures will
continue to make most states reluctant to implement
the intraregional tariff cuts out of fear of revenue
losses. Furthermore, the poor state of the regional
transportation network will continue to be a major
barrier to trade development
Reverse Blank
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I
Liberia: Prospects
for the Trade Unions
Organized labor?representing some 20 percent of
Liberia's work force?enjoys a limited degree of
independence, despite the government's six-year-old
ban on strikes. President Doe is concerned that low-
level labor unrest may spread because his government
is unable to ease the country's mounting economic
problems. We believe that Liberia is likely to face
increasing labor unrest in the coming year,
particularly if rank-and-file workers in key unions
carry out plans to oust their proregime leadership.
Doe would almost certainly resort to armed force to
put down widespread public demonstrations and
restore law and order.
The Uneasy Relationship
After he came to power in 1980, Doe initially took a
hard line against the trade unions and outlawed
strikes. According to press reports, he claimed Liberia
could not afford labor unrest at a time of economic
hardship, and he called on his countrymen to
cooperate in the rebuilding of Liberia. Doe showed
little patience with disgruntled workers. During 1981
some 400 dockworkers were fired for failing to obey a
government decree to return to work and 240 workers
at Liberia's largest iron ore mining company were
dismissed on Doe's orders following a short-lived
strike for back pay, according to press reporting
Doe, however, has been less forceful with professional
and semiskilled workers because they cannot be
replaced easily. Despite his threats of dismissal,
doctors and nurses at a hospital in Monrovia struck
several times over backpay between 1981 and 1983.
During 1986, strike actions have included the hospital
nurses again, university professors and staff, airport
employees, port workers, and transportation workers
and drivers, but no layoffs occurred as a result of the
strikes, according to the US Embassy.
The government has occasionally harassed allegedly
hostile unions, but has openly cooperated with
proregime labor leaders. In 1982, for example, the
20,000-member National Agriculture and Allied
17
Workers Union of Liberia was suspended for two
years for allegedly instigating work stoppages at the
Firestone rubber plantation, according to the US
Embassy and press reporting. The Embassy reports
that earlier this year the government recognized the
Firestone Agricultural Workers Union as the sole
representative of workers at the plantation, prompting
other unions to charge the regime with "blatant
political interference." On the other hand, the
Embassy also reports that last September, when the
Shipworkers Union threatened to strike over low
wages, Doe responded by recognizing the union's
more moderate faction and claiming the union rank
and file had been subverted by a minority
The Liberian Federation of Labor Unions
The largest trade union organization, the Liberian
Federation of Labor Unions (LUFU), has not directly
challenged the Doe regime, partly because of internal
problems. According to the US Embassy, LUFU has
some 30,000 members, including 15,000 dock and
port workers, mine workers, and workers at the
Firestone plantation, all of whom joined during the
past two years. The Embassy reports, however, that
only about 14,000 members pay their dues regularly,
and the union lacks the money to expand its
recruitment activities. Although it has not yet
organized a strike, the US Embassy reports that it
provided limited support for short-lived strikes by
dock and airport workers last May.
The union's hierarchy may find it increasingly
difficult to control the rank and file.
a coalition of more radical
members is attempting to remove the president,
Ismael Sheriff. Elected in 1983, Sheriff is regarded as
a strong supporter of Doe, and according to US
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Teacher Unrest
US Embassy reporting indicates the teachers union
has been at the forefront of labor activities in recent
years. The six-year-old National Union of Liberian
Teachers (NULT) has staged frequent protests since
1984, including two in 1986. In February, nearly
1,000 teachers struck for several days, demanding a
travel allowance, better working conditions, and the
restoration of a 25-percent salary cut, according to
press reports. In November teachers struck again over
similar demands, but went back to the classroom
when the government agreed to pay their salaries for
September.
Despite the union's willingness to challenge the
government, some NULT members believe their
leadership is not sufficiently confrontational.
some members of
MOJA'?an outlawed Marxist-oriented
organization?are orchestrating a campaign to
remove union president Saa Philip Joe, and replace
him with their own candidate, Momulu Lavela.
Lavela would almost
certainly use his position to press for more frequent
strikes and a less conciliatory tone in negotiations
with the government
Outlook
Most of the unions are unwilling to challenge the
government by launching indefinite strikes, but
further worker unrest is all but certain in 1987. Doe
will probably continue his policy of trying to meet
some union demands with threats of crackdowns. We
agree with the US Embassy that, for the moment,
both sides see the need for compromise. However, the
culmulative effects of salary arrears and pressures
from the rank and file may force the trade union
leadership to press their demands more aggressively.
Rumblings at Firestone
Since October, management-union relations at the
Firestone plantation have been strained over a wage
dispute. According to press reports, the union, the
Firestone Agricultural Workers of Liberia, is pressing
for a 40-percent wage increase, better working
conditions, and the retention of free social services.
For its part, the management claims it cannot afford a
wage increase of more than 10 percent and will
probably have to make further cuts in its work force,
according to press reports. The US Embassy reports
that tensions are high at the plantation, and the
workers could turn to violence
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Africa
Briefs
Madagascar Economic Disconten
Civil unrest triggered by educational reforms and rice shortages has heightened
government security concerns, but, in our judgment, has not reduced President
Ratsiraka's commitment to economic reform. University students recently took to
the streets in Antananarivo to protest money-saving reforms that would affect
about 5,000 long-term students living at state expense. In an effort to reduce
tensions, the government postponed the new measures for one academic year and
promised to restudy them, according to US Embassy reporting. The student unrest
follows serious rioting in the port city of Tamatave, where residents stormed
warehouses containing government rice supplies and burned and looted several
buildings. residents were responding to perceived
inequities and corruption in the government's distribution of rice, Madagascar's
main dietary staple. Security forces were brought in quickly and helped to contain
the violence, according to US Embassy reporting
In our judgment, public disturbances are likely to continue.
civil service leaders are planning work stoppages in
January unless the government addresses grievances over low pay and rice
distribution. Moreover, student leaders reportedly are hoping to instigate
demonstrations in several cities. Though less threatening to the regime, a severe
drought in the south has caused people to migrate northward in search of scarce
jobs and food, according to press reporting
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We believe Ratsiraka is unlikely to reverse his IMF-backed economic reforms
because his security forces are loyal and capable of quashing isolated strikes and
demonstrations. Nonetheless, he is well aware that violent popular reaction has
flared twice since independence when Malagasy governments failed to alleviate
intolerable economic conditions. As a result, he probably will continue using
political persuasion and timely concessions to keep discontented groups from
coalescing and fomenting widespread violence that could overwhelm the Army and
police. Working in favor of stability, the new US and World Bank rice aid
programs already have brought rice prices down, according to US Embassy
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Togo
Reversal on Israeli Relations
A congress of Togo's ruling party earlier this month failed to consider a resolution
prepared at President Eyadema's direction to reestablish diplomatic relations with
Israel.
The proposal had been overwhelmingly approved at the party precongress
in November, and the US Embassy commented
that most observers believed its adoption by the full congress to be a sure thing. An
Israeli diplomat in Lome for the party congress believed that new ties would be
announced, according to the Embassy. Although some delegates at the pre-
congress were concerned that Arab aid money would be lost if ties to Israel were
reestablished others criticized the Libyans for
their ineffectual aid and their meddling.
Togolese officials have given conflicting reasons for the sudden reversal, but we
believe Eyadema may have come under pressure from several Arab sources.
a Saudi Arabian banking delegation, reportedly
concerned about rumors of renewed Togolese-Israeli ties, visited Lome last month,
and the PLO "ambassador" also met with Eyadema. Furthermore, a Togolese
government assessment prepared last month showed that Arab aid for
development projects totaled over $100 million. Eyadema probably would like to
renew ties to Israel to please the United States and his moderate African peers, in
our judgment, but probably is unwilling to risk losing Arab aid.
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