On January 27, 2007, unions, employers associations, and the government entered a tripartite agreement to suspend the strike. President Conté agreed to name a new "consensus" prime minister, with delegated executive powers. For the first time, the new prime minister of Guinea would carry the title of "head of government" and exercise certain powers previously held by the president of the republic. The government also agreed to new price controls for rice and fuel, as well a one-year ban on the exportation of food and fuel. However, President Conté's February 9 appointment of a longtime associate, Eugène Camara, as Guinea's new prime minister sparked another wave of violence and protests. In an attempt to quell the violence, on February 12 President Conté declared a "state of siege," which conferred broad powers on the military, and implemented a strict curfew. According to media reports, the following days saw military and police forces scour Conakry and towns in the hinterlands where they committed serious human rights abuses.
When Guinea's National Assembly rejected Conté's effort to extend the "state of siege," it became clear that the popular protests had widespread support, even among leaders of Conté's own ruling party. Soon after, an ECOWAS delegation led by former Nigerian President Babangida announced that President Conté had agreed to name a new "consensus" prime minister in consultations with the unions and civil society. Lansana Kouyaté arrived in Conakry on February 27, 2007, just hours after being announced as the new Prime Minister and head of the government. During his premiership, Kouyaté faced constant speculation that the president and his associates opposed his reform efforts. After 15 months in office, President Conté replaced Kouyaté with Ahmed Tidiane Souaré, a former minister of mines from a previous cabinet.
ECONOMY
Richly endowed with minerals, Guinea possesses over 25 billion metric tons (MT) of bauxite--and perhaps up to one half of the world's reserves. In addition, Guinea's mineral wealth includes more than 4 billion tons of high-grade iron ore, significant diamond and gold deposits, and undetermined quantities of uranium. Guinea has considerable potential for growth in the agricultural and fishing sectors. Soil, water, and climatic conditions provide opportunities for large-scale irrigated farming and agro industry. Possibilities for investment and commercial activities exist in all these areas, but Guinea's poorly developed infrastructure and rampant corruption continue to present obstacles to large-scale investment projects.
Joint venture bauxite mining and alumina operations in northwest Guinea historically provide about 80% of Guinea's foreign exchange. The Compagnie des Bauxites de Guinea (CBG) is the main player in the bauxite industry. CBG is a joint venture, in which 49% of the shares are owned by the Guinean Government and 51% by an international consortium led by Alcoa and Alcan. CBG exports about 14 million metric tons of high-grade bauxite every year. The Compagnie des Bauxites de Kindia (CBK), a joint venture between the Government of Guinea and Russki Alumina, produces some 2.5 million MT annually, nearly all of which is exported to Russia and Eastern Europe. Dian Dian, a Guinean/Ukrainian joint bauxite venture, has a projected production rate of 1 million MT per year, but is not expected to begin operations for several years. The Alumina Compagnie de Guinée (ACG), which took over the former Friguia Consortium, produced about 2.4 million tons of bauxite in 2004, which is used as raw material for its alumina refinery. The refinery supplies about 750,000 MT of alumina for export to world markets. Both Global Alumina and Alcoa-Alcan have signed conventions with the Government of Guinea to build large alumina refineries with a combined capacity of about 4 million MT per year.
Diamonds and gold also are mined and exported on a large scale. AREDOR, a joint diamond-mining venture between the Guinean Government (50%) and an Australian, British, and Swiss consortium, began production in 1984 and mined diamonds that are 90% gem quality. Production stopped from 1993 until 1996, when First City Mining of Canada purchased the international portion of the consortium. By far, most diamonds are mined artisanally. The largest gold mining operation in Guinea is a joint venture between the government and Ashanti Gold Fields of Ghana. SMD also has a large gold mining facility in Lero near the Malian border. Other concession agreements have been signed for iron ore, but these projects are still awaiting preliminary exploration and financing results.
The Guinean Government adopted policies in the 1990s to return commercial activity to the private sector, promote investment, reduce the role of the state in the economy, and improve the administrative and judicial framework. Guinea has the potential to develop, if the government carries out its announced policy reforms, and if the private sector responds appropriately. So far, corruption and favoritism, lack of long-term political stability, and lack of a transparent budgeting process continue to dampen foreign investor interest in major projects in Guinea.
Reforms since 1985 include eliminating restrictions on agriculture and foreign trade, liquidation of some parastatals, the creation of a realistic exchange rate, increased spending on education, and cutting the government bureaucracy. In July 1996, President Lansana Conté appointed a new government, which promised major economic reforms, including financial and judicial reform, rationalization of public expenditures, and improved government revenue collection. Under 1996 and 1998 International Monetary Fund (IMF)/World Bank agreements, Guinea continued fiscal reforms and privatizations, and shifted governmental expenditures and internal reforms to the education, health, infrastructure, banking, and justice sectors. Cabinet changes in 1999 as well increasing corruption, economic mismanagement, and excessive government spending combined to slow the momentum for economic reform. The informal sector continues to be a major contributor to the economy.
The government revised the private investment code in 1998 to stimulate economic activity in the spirit of free enterprise. The code does not discriminate between foreigners and nationals and provides for repatriation of profits. While the code restricts development of Guinea's hydraulic resources to projects in which Guineans have majority shareholdings and management control, it does contain a clause permitting negotiations of more favorable conditions for investors in specific agreements. Foreign investments outside Conakry are entitled to more favorable benefits. A national investment commission has been formed to review all investment proposals. The United States and Guinea have signed an investment guarantee agreement that offers political risk insurance to American investors through the Overseas Private Investment Corporation (OPIC). In addition, Guinea has inaugurated an arbitration court system, which allows for the quick resolution of commercial disputes.
Until June 2001, private operators managed the production, distribution, and fee-collection operations of water and electricity under performance-based contracts with the Government of Guinea. However, both utilities are plagued by inefficiency and corruption. Foreign private investors in these operations departed the country in frustration.
In 2002, the IMF suspended Guinea's Poverty Reduction and Growth Facility (PRGF) because the government failed to meet key performance criteria. In reviews of the PRGF, the World Bank noted that Guinea had met its spending goals in targeted social priority sectors. However, spending in other areas, primarily defense, contributed to a significant fiscal deficit. The loss of IMF funds forced the government to finance its debts through Central Bank advances. The pursuit of unsound economic policies has resulted in imbalances that are proving hard to correct.
Under then-Prime Minister Diallo, the government began a rigorous reform agenda in December 2004 designed to return Guinea to a PRGF with the IMF. Exchange rates have been allowed to float, price controls on gasoline have been loosened, and government spending has been reduced while tax collection has been improved. These reforms have not slowed down inflation, which hit 27% in 2004 and 30% in 2005. Depreciation is also a concern. The Guinea franc was trading at 2,550 to the dollar in January 2005. It hit 5,554 to the dollar by October 2006.
Despite the opening in 2005 of a new road connecting Guinea and Mali, most major roadways connecting the country's trade centers remain in poor repair, slowing the delivery of goods to local markets. Electricity and water shortages are frequent and sustained, and many businesses are forced to use expensive power generators and fuel to stay open.
Even though there are many problems plaguing Guinea's economy, not all foreign investors are reluctant to come to Guinea. Global Alumina's proposed alumina refinery has a price tag above $2 billion. Alcoa and Alcan are proposing a slightly smaller refinery worth about $1.5 billion. Taken together, they represent the largest private investment in sub-Saharan Africa since the Chad-Cameroun oil pipeline.
DEFENSE
Guinea's armed forces are divided into four branches--army, navy, air force, and gendarmerie--whose chiefs report to the Chairman of the Joint Chiefs of Staff. The 10,000-member army is the largest of the four services. The navy has about 900 personnel and operates several small patrol craft and barges. Air force personnel total about 700; its equipment includes several Russian-supplied fighter planes and transport planes. Several thousand gendarmes are responsible for internal security.
FOREIGN RELATIONS
Guinea's relations with other countries, including with her West African neighbors, have improved steadily since 1985. Guinea reestablished relations with France and Germany in 1975, and with neighboring Côte d'Ivoire and Senegal in 1978. Guinea has been active in efforts toward regional integration and cooperation, especially regarding the Organization of African Unity (now the African Union) and the Economic Organization of West African States (ECOWAS). Guinea takes its role in a variety of international organizations seriously and participates actively in their deliberations and decisions. Guinea has participated in both diplomatic and military efforts to resolve conflicts in Liberia, Sierra Leone, and Guinea-Bissau, and contributed contingents of troops to peacekeeping operations in all three countries as part of ECOMOG, the Military Observer Group of ECOWAS. Guinea has offered asylum to more than 700,000 Liberian, Sierra Leonean, and Bissauan refugees since 1990, despite the economic and environmental costs involved.
The civil wars that engulfed Liberia and then Sierra Leone during the 1990s negatively affected relations between Guinea and these two fellow Mano River Union member countries. Guinea and Liberia accused each other of supporting opposition dissidents, and in late 2000 and early 2001, Guinean dissidents backed by the Liberian government and RUF rebels from Sierra Leone brutally attacked Guinea. These attacks caused over 1,000 Guinean deaths and displaced more than 100,000 Guineans. The attacks led to Guinea's support for the LURD (Liberians United For Reconciliation and Democracy) rebels in their attacks against the Liberian government of Charles Taylor. Taylor's departure for exile in August 2003 and the establishment of a new government in Liberia have led to a much improved relationship between the two countries.
Guinea belongs to the UN and most of its specialized related agencies, the African Union, the International Bank for Reconstruction and Development (IBRD), African Development Bank (AFDB), Niger River Basin (NRB), Economic Community of West African States (ECOWAS), Organization of the Islamic Conference (OIC), the Mano River Union (MRU), Gambia River Basin Organization (OMVG), and the Nonaligned Movement (NAM).
U.S.-GUINEAN RELATIONS
The United States maintains close relations with Guinea. U.S. policy seeks to encourage Guinea's democratic reforms, its positive contribution to regional stability, and sustainable economic and social development. The U.S. also seeks to promote increased U.S. private investment in Guinea's emerging economy.
The U.S. Mission in Guinea is composed of five agencies--Department of State, U.S. Agency for International Development (USAID), Peace Corps, the Treasury Department, and the Department of Defense. In addition to providing the full range of diplomatic functions, the U.S. Mission also manages a military assistance program that provided nearly $331,000 for military education, professionalization, and language training programs.
USAID Guinea is now one of only five sustainable development missions in West Africa, with current core program areas in primary education, family health, democracy and governance, and natural resources management.
After a temporary suspension due to nationwide political unrest in early 2007, the Peace Corps program in Guinea resumed operations at the end of July 2007. Prior to the suspension, Peace Corps had more than 100 volunteers throughout the country, and the program is gradually increasing its numbers again. Volunteers work in four project areas: secondary education, environment/agro-forestry, public health and HIV/AIDS prevention, and small enterprise development. Guinea has also had a strong Crisis Corps program through the last few years.
TRAVEL AND BUSINESS INFORMATION
The U.S. Department of State's Consular Information Program advises Americans traveling and residing abroad through Country Specific Information, Travel Alerts, and Travel Warnings. Country Specific Information exists for all countries and includes information on entry and exit requirements, currency regulations, health conditions, safety and security, crime, political disturbances, and the addresses of the U.S. embassies and consulates abroad. Travel Alerts are issued to disseminate information quickly about terrorist threats and other relatively short-term conditions overseas that pose significant risks to the security of American travelers. Travel Warnings are issued when the State Department recommends that Americans avoid travel to a certain country because the situation is dangerous or unstable.
http://www.state.gov/r/pa/ei/bgn/2824.htm