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### Viewing cable 09MALABO31, EQUATORIAL GUINEA RAW 5: HOW IT WORKS -- WHY IT SOMETIMES

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Reference ID | Created | Released | Classification | Origin
--- | --- | --- | --- | ---
09MALABO31 | 2009-03-30 12:12 | 2011-02-10 21:09 | UNCLASSIFIED//FOR OFFICIAL USE ONLY | Embassy Malabo

`

    VZCZCXRO3778
    OO RUEHMA
    DE RUEHMA #0031/01 0891241
    ZNR UUUUU ZZH
    O 301241Z MAR 09
    FM AMEMBASSY MALABO
    TO RUEHC/SECSTATE WASHDC IMMEDIATE 0482
    INFO RUEHUJA/AMEMBASSY ABUJA IMMEDIATE 0041
    RUEHYD/AMEMBASSY YAOUNDE IMMEDIATE 0278
    RUEHKH/AMEMBASSY KHARTOUM IMMEDIATE 0016
    RUEHSB/AMEMBASSY HARARE IMMEDIATE 0027
    RUEHMD/AMEMBASSY MADRID IMMEDIATE 0108
    RUEATRS/DEPT OF TREASURY WASHINGTON DC
    RUCPDOC/DEPT OF COMMERCE WASHINGTON DC
    RUEHLC/AMEMBASSY LIBREVILLE IMMEDIATE 0074
    RHEHAAA/NSC WASHINGTON DC
    RUEHMA/AMEMBASSY MALABO 0546

` `

    UNCLAS SECTION 01 OF 04 MALABO 000031

    SENSITIVE
    SIPDIS

    KHARTOUM FOR FERNANDEZ; HARARE FOR CHISHOLM; YAOUNDE FOR DATT

    E.O. 12958: N/A
    TAGS: PREL ECON PGOV EPET KCOR PINR SOCI EK
    SUBJECT: EQUATORIAL GUINEA RAW 5: HOW IT WORKS -- WHY IT SOMETIMES
    DOESN'T

    REF: A)MALABO 27  B)MALABO 18

    ¶1.  (U) Triggered by changes underway in Washington D.C.,
    upcoming personnel rotations in Embassy Malabo and animated by
    the recent attack on the capital, this is the fifth in a series
    of cables intended to update our perspective on Equatorial
    Guinea, and to provide a ground-level view of one of the world's
    most-isolated and least-understood countries to interested
    readers.

    ¶2.  (SBU) SUMMARY:  Equatorial Guinea (EG) is a place that is
    trying to do everything at once, and doing some of it poorly.
    The parts it does best it hires out to others, whether
    construction of roads and bridges, new ministry buildings, or
    professionalization of security forces.  When left to its own
    devices, it rarely succeeds, despite reasonably good intentions
    and mellowing, benign leadership, and because of huge capacity
    gaps.  EG is a country emerging from a dark past of extreme
    isolation and poverty, now flush with cash and oil reserves but
    little else.  Nonetheless, it is moving quickly, forging ahead
    without always completing the work of institutional development
    and legal reform (and shedding some resources to corruption and
    mismanagement), but also outstripping its retrospective critics.
     However, in leaving its Franco ghost behind, EG is unlikely to
    stumble upon the right path on its own.  Steering the country in
    the right direction will require hands-on engagement.  End
    SUMMARY.

    ¶3.  (SBU) Punished by History:  Equato-Guineans are, by nature
    and of experience, suspicious people.  The long-isolated
    population developed the conservative affect of most such
    nations.  Their early interactions with the outside, when they
    came, were almost always painful.  Whether suffering as the prey
    of slavers, under the whip of colonialist coffee and cocoa
    farmers, or more recently from the privations of foreign
    "Tropical Gangsters" opportunistically looking to cheat, steal
    or otherwise benefit from the once-impoverished country,
    visitors were believed to bring problems.  While the arrival of
    oil riches has only increased the flow of predators, it has also
    generated local sharks -- not to mention enhancing the country's
    profile as an attractive "takeover target."  The challenges
    confronting a country that has moved from being one of the
    world's poorest to one of its richest (in per capita income
    terms) in less than a single generation are myriad.

    ¶4.  (SBU) Of course, after starting with virtually nothing at
    independence and then going backwards for at least a decade,
    institutions that might help meet these recent challenges remain
    a work in progress.  With billions in oil revenue at stake, EG
    resorts to peculiar tactics to manage its assets.  The president
    proudly notes he is the paymaster general for even routine
    expenditures (Ref A).  This mechanism probably helps constrain
    corruption, but it also creates suspicion and an obvious
    bottleneck.  Nonetheless, a review of almost any state structure
    -- from the courts system, to the system of accounting and
    internal controls, to oversight mechanisms, to organization and
    constitution of the far-too-numerous ministries -- reveals
    project after project, all at early stages of establishment.
    Though institutional development is underway and new talent and
    better-trained staff beginning to surface, the country is still
    a long way from being prepared to efficiently serve the public
    interest.

    ¶5.  (SBU) The Strange Choices Made by Poor People with Money:
    EG's first 10-year economic development plan, generated in a
    1998 conference open to interested national and international
    groups, has just been completed.  The idea was to make good use
    of EG's then-newly found oil wealth before it ran out.  With
    EG's petroleum reserves growing and its revenue stream more
    durable than initially expected, the old plan has recently been
    replaced by a new one, "Horizon 2020," that seeks to deliver
    "developing country status" for EG by 2020.  Upon review, the
    infrastructure-intense first plan was remarkably well executed.
    Early indicators for "Horizon 2020" are likewise promising.
    While the first plan focused on the "hardware" of modern society
    -- i.e., roads, bridges, public buildings, ports and airports --
    the second recognizes the necessity of complementing structures
    with "software," focusing on the need to build institutional and
    human capacity to run and maintain the system.  In short, the
    strategy has been to put a poorly-prepared generation to work in
    low-skilled jobs building the infrastructure while the next

    MALABO 00000031  002 OF 004

    generation prepares to run a modern society.

    ¶6.  (SBU) Nonetheless, some of the expenditures are peculiar.
    For example, there seems to be a fixation -- perhaps issuing
    from a population long in the dark -- for street lights.
    Tens-of-thousands have been erected in anticipation of an
    electric grid that is not yet capable of delivering power to
    light them.  Construction of impressive soccer stadiums in the
    major cities of Malabo and Bata (towns really -- neither exceeds
    150,000 inhabitants) raced the building of the two model schools
    that lie in direct line of sight.  In Malabo, the stadium came
    first; in Bata, completion of the school edged out the sports
    complex.  There is also a focus on palaces, representational
    space to wine-and-dine frequently visiting dignitaries.  This
    phenomenon of "keeping up with the African Joneses" is partially
    explained by EG's intention to prove itself to
    once-condescending neighbors, all heading this way in 2011 for
    the African Union Summit.  The 53 delegations of the member
    states will be housed in a brand new "presidential village"
    housing complex currently being constructed in once-pristine
    jungle on the outskirts of Malabo.  The stadiums are similarly
    explained -- EG will co-host the Africa Cup soccer tournament
    the next year (along with neighboring Gabon).  Long looked down
    upon by its African brothers, EG is preparing to show out.  The
    Potemkin village has purpose -- and will eventually even work.

    ¶7.  (SBU) Internal Crooks:  The headlong pace of development has
    its problems.  Apart from being preyed upon by outsiders,
    Equatoguineans are experiencing a new phenomenon -- a growing
    crowd of local predators.  In the rush to put oil money back
    into the ground and develop the country, but without the
    constraints and controls of functioning institutions, the system
    clearly leaks.  On the downstream end (i.e., acquisitions and
    construction project implementation) the lack of transparency
    exacerbates concerns that rules are being broken.  Grey areas in
    the legal environment and a residue of regulatory gates and
    gatekeepers create ample opportunity for graft and corruption.
    Add to that an array of international contractors willing to
    start to work with only the sketchiest of plans and supporting
    documents, along with a nod from "el Jefe" the paymaster, and
    the boom economy fairly ripples with rumor of who's at the
    trough and who's on the take.

    ¶8.  (SBU) While the general population complains about trends
    and even bristles as the worst abuses, it remains relatively
    complacent in light of the stunning advances being made
    throughout the country. The quality of life for the average
    citizen in EG has seen a great leap forward in the past decade
    and, though surpassed by the gains of a greedy few, appears to
    promise enough to inspire continued patience.  Also, as is
    demonstrated to the delight of the average citizen, heads
    occasionally roll when the president catches (or perhaps finds
    reason to catch) someone red-handed.  For example, "el Jefe" has
    just changed a number of Justice system leaders while
    complaining that not enough is being done to constrain greed and
    corruption among officials (SEPTEL).

    ¶9.  (SBU) Lies, Damned Lies, and Statistics:  Many international
    agencies and institutions rate EG as among the worst of the
    worst in terms of almost any indicator selected.  Yet, from
    ground level the story appears much better than reported   One
    problem is noise.  The bias against EG is animated by a loud
    chorus of hostile critics from among the diaspora (many of whom
    left when things were much worse) and the once-colonial,
    now-disenfranchised Spanish.  A dedicated and vicious segment of
    the Spanish media now effectively filters out most of the good
    news about EG, and provides a distorted frame of reference for
    anyone casually seeking information about the only
    former-Spanish colonial holding in Africa.  Unfortunately, this
    creates a bias within the NGO community for those organizations
    that fail to undertake due diligence to confirm claims.  The
    problems of EG, already exaggerated by an active and efficient
    internal rumor mill, are thus often blown all out of proportion
    by the country's opponents.  The country's own extremely limited
    information culture is another of its problems.  The cultural
    instinct is to clamp down on news.  While the information
    environment is slowly improving, there are still essentially no
    reliable statistics upon which to base sophisticated
    assessments.  No one even really knows the actual size of the

    MALABO 00000031  003 OF 004

    country's population.

    ¶10.  (SBU) Nevertheless, anecdotal evidence suggests things are
    better than generally believed.  Numerous daily flights to and
    from international destinations, and the continent, are full --
    and not cheap.  Local representatives of the Coca Cola Company
    tell us EG has the highest level of consumption of its
    refreshments in Africa.  And this "luxury" competes with an
    extraordinary local thirst for beer -- little wonder authorities
    are moving quickly to construct municipal sewer plants.  The
    streets of Malabo and Bata, until recently mostly unpaved and
    all but devoid of traffic, now suffer daily traffic jambs and
    gridlock.  Today, taxis, charging minimum of the equivalent of
    one dollar, are ubiquitous -- ten years ago it was necessary to
    schedule an appointment to use one of the handful that existed.
    The local fuel supplier (Total) tells us that gasoline and
    diesel consumption is growing exponentially, forcing his company
    to repeatedly invest in new tanks and supply facilities --
    meanwhile EG's parastatal fuel company (GEPetrol) is gearing up
    to compete.  The ruling elite are clearly not the only ones
    driving cars or drinking Cokes.  Things are clearly looking up,
    and the idea that over half the population of EG lives on less
    than a dollar a day is implausible.  The obvious advances must
    be particularly galling for those who left when times were
    tough, and who now see things roaring ahead.  A good rule of
    thumb?  Beware of what you are told about EG -- ground truth is
    likely to differ.

    ¶11.  (SBU) Martial Law:  Since at least Forsythe's "The Dogs of
    War," EG has been a favorite takeover target for both outside
    and inside plotters.  Its newfound wealth increased both its
    target profile and internal concern over such threats.  The
    smoking gun of the 2004 Simon Mann-planned coup attempt
    stiffened the country's already-intimidating security
    structures.  The February 17 raid (Ref B) more recently
    increased the ops tempo.  President Obiang came to power himself
    in a coup likely assisted from the outside.  He and his team
    know how it works.  Though without official declaration, the
    country persistently operates under martial law-like conditions.
     This posture generates human rights concerns as documents are
    checked, guns are displayed and foreigners get the fish eye.
    The fact that EG employs poorly-educated, front-line cops and
    soldiers -- who in many other parts of Africa might be common
    street thugs (perhaps readily available for a pickup game of
    coup d'etat) -- contributes to the challenge of
    professionalization.  As a result, the responsible international
    community remains aloof to EG's security needs.  So, despite the
    reputation for toughness, the fact EG is widely denigrated (if
    not reviled) seems to attract regular attention of buccaneers
    and adventurers who seem to think they have cover of
    international opprobrium.  With no security allies and only
    nascent internal capacities, it is difficult for the country to
    relax or even improve the very mechanisms that get it into
    trouble on the human rights front.  It's hard to retool when
    you're in the middle of a fight.  This negative feedback loop
    needs to be broken.

    ¶12.  (SBU) Politics as Unusual:  EG is less a rogue state than
    it is a rudimentary one.  Its institutions, those stem cells of
    democracy, have been stunted by its short, troubled history.
    Upon assuming leadership Obiang forcefully consolidated power
    within his party, the "Partido Democratico de Guinea Ecuatorial"
    (PDGE).  As oil wealth arrived, and the party (cloaked as the
    government) made good on political promises, began to fulfill
    development plans and brought progress to much of the country's
    doorstep.  The need to maintain power by force has now largely
    dissipated -- the PDGE is a formidable, but no longer ruthless,
    political machine.  Between itself and a handful of pet
    coalition partners, it can now count on overwhelming popular
    support as far as the eye can see.  The remaining opposition is
    pitiful -- fractured, incompetent and disorganized -- and seems
    to think it can complain itself into office.  Elections here
    will continue to reflect lopsided results in favor of the ruling
    party.

    ¶13.  (SBU) Yet behind the curtain the party fairly seethes with
    intrigue.  There are left-right, North-South, East-West,
    young-old, ethnic-clan, male-female, and regional splits that
    are bridged only by an old-fashioned African devotion to the
    chief, and the self restraint of a recently traumatized

    MALABO 00000031  004 OF 004

    population.  Despite his reputation of omnipresence, much goes
    on under the nose of "el Jefe," and the players energetically
    vie for influence and position.  The art of governance is being
    practiced.  Nevertheless, democracy, as we know it, will only
    arrive in EG once the patriarch is gone and the party comes
    apart along its various fault lines.  In the meantime, practice
    at elections, improving processes and maturing institutions will
    help set the stage for real, public political discourse.  The
    generational shift currently underway is clearly contributing to
    this positive evolution -- and the system is adjusting.  To
    ensure the right outcome, that system will need time, direction
    and assistance.  President Obiang is both well positioned and
    intentioned to provide the space, and appears, despite his age,
    to have the stamina to see it through.  For the near term, it
    will be up to outsiders to span the capacity gaps that might
    help the country reach any goal of real democracy, governing a
    free market economy.  We are clearly best positioned to provide
    such help -- should we choose to accept that mission.  If we
    don't, others may take the country in a different direction.

    ¶14.  (SBU) Conclusion:  EG is a country poorly prepared for the
    future thrust upon it by oil riches.  While outsiders can be
    contracted to take care of some of the nuts and bolts issues of
    development, when it comes to the arch of governance, money
    alone is not enough to span the yawning capacity gaps.  Though
    much needs to be done to improve EG society, sometimes the
    country is simply not ready to undertake the necessary work on
    its own.  In the meantime, Obiang's "benevolent
    authoritarianism" provides an ample incubator for positive
    changes to occur, though there is competition for his attention
    among the international players.  In any case, at the moment he
    is unchallenged by any other political figure.  If we want to
    steer EG toward our own goals, we must gain trust of GREG power
    players and help them move our way.  Having proven fickle in the
    past, we will need to stay engaged to ensure we keep that trust.
     We have determined in small scale that engagement works --
    primarily via the MPRI security professionalization training
    project and the USAID-supported Social Development Fund, both of
    which are turning earth and having positive effects.  Our
    support of EITI is also showing results.  The door remains open.
     We have pending requests for help with reform of justice
    system, regional security cooperation, development of democracy
    programs and an upcoming request for assistance with improving
    public finance.  The view from here is that these opportunities
    should be seized.
    SMITH

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