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Tuesday, 28 December, 1999, 07:18 GMT
Analysis: The economics of the Ivory Coast coup

A boy picks through the ruins of looting at Rank Xerox office building in cetral Abidjan

By Mark Doyle in Abidjan

The new military authorities in Ivory Coast say they have banned transfers of money abroad in an apparent attempt to stop the flight of capital belonging to members of the former government.

The coup is likely to exacerbate the problems of the Ivorian economy, at least in the short-term.

Ivory Coast, the world's leading cocoa producer, has a relatively stable and successful economy compared with other West African countries, but in recent years it has been badly affected by falls in cocoa prices and corruption.

We're trying to tell Ivorians to serve the country before serving themselves
General Guei
The new military leader, General Robert Guei, said his team was conducting a wide-ranging audit of the economy and already had indications that money had been misappropriated by officials of the former government.

The new military strongman said he would be asking those who have illicit wealth abroad to bring it back home.

"We're trying to tell Ivorians," the general said, "to serve the country before serving themselves."

Bankers worried

The order to stop the transfer of funds abroad has alarmed some bankers, who say their transactions are entirely above board and have nothing to do with capital flight.

Under the rules of the franc zone, which Ivory Coast is a member of, the transfer of money between franc-zone countries, including France, is supposed to be unrestricted.

The bankers said they hoped the new authorities would fine-tune their instructions in the coming days so that legitimate transactions would not be affected.

Aid and loans restricted

Western diplomats said the coup was likely to mean that aid flows to Ivory Coast would be further restricted.

Before the coup, corruption scandals had led to a partial freeze on loans to the government, and the generally hostile attitude of the West to military regimes may mean, in the words of one Western diplomat, that "they won't get a bean from us".

The historically low price of cocoa had already badly affected the Ivorian economy, with some farmers boycotting sales because of the low returns they were getting.

One of the stated aims of the coup leaders is to end corruption and if this is done, it would be very good for the Ivorian economy.

But in the short term the coup seems likely to disrupt economic affairs.

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See also:
25 Dec 99 |  Africa
Ivory Coast's new 'Le Boss'
25 Dec 99 |  Africa
Ivory Coast expats warned
24 Dec 99 |  Africa
Analysis: Ivory Coast's stability shattered
26 Dec 99 |  Africa
Ivory Coast rebels tighten grip
25 Dec 99 |  UK
Britons warned to avoid coup state
24 Dec 99 |  Media reports
Coup leader pledges democracy
25 Dec 99 |  Africa
Ivory Coast rebels in control

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