The following piece (pasted below) will be published in The Wall Street
Journal (Europe) either on Wednesday or Thursday (Dec 29 or 30). They
will of course edit it substantially.

Cheers,
         Madiba.
----------------


IVORIAN MIRACLE SHATTERED

 George B.N. Ayittey, Ph.D.
 Robert B. Myers, Ph.D.
 

Like Indonesia, Ivory Coast was for decades held up as an "economic
success story" and a bastion of stability by the World Bank, the IMF and
international donors. The December 24 coup has shattered not only the
myth of an Ivorian "miracle" but also Africa’s hopes for a new beginning
in the new millennium.

The impromptu coup began with a mutiny of soldiers from an
Abidjan-based unit over unpaid wages for their unit’s service in a U.N.
peacekeeping mission in the Central African Republic. [Similar grievances
of returning soldiers from peacekeeping duties in Liberia led to the
ouster of General Joseph Momoh of Sierra Leone in April 1992 and Sir
Dawda Jawara of The Gambia in May 1994.] Rampaging soldiers, looting
stores and seizing cars in Abidjain, discovered to their surprise much
deeper popular discontent with the ousted regime of Henri Konan Bedie.
Capitalizing upon this, they called upon former army chief of staff,
General Robert Guei, to take over the government.

The U.S., South Africa, Nigeria and other African countries condemned
the coup and requested speedy restoration of  what they considered to
have been a democracy. However, like the recent coup in Pakistan, most
analysts are caught between a rock and a hard place. The ousted civilian
government of Henri Konan Bedie, like that of Nawar Sharif of Pakistan,
was nobody’s angel - even in his own inner circle. Ivorians jubilated at
the news of his ouster but the real story lies elsewhere. Decades of
fawning World Bank patronage and eccentric French paternalism
transformed Ivory Coast into an accident waiting to happen.

Upon independence from France in 1960, the late Felix Houphouet-Boigny,
known as Le Vieux, assumed power and ruled for 30 years until November
1990. Like other Francophone African countries such as Cameroon, Senegal
and Togo, Ivory Coast has had only two heads of state in 39 years.
France tolerated high-level corruption and autocratic regimes in its
former African colonies. Ivory Coast was a one-party state and the
Partie Democratique de Cote d'Ivoire (PDCI), the sole legal party, which
has ruled since 1960.

Houphouet-Boigny proscribed opposition parties with the constant refrain
"that his life was under threat from opposition figures working in
collusion with juju-men and their gris-gris" (West Africa, July 13-19,
1992; p.1171). He took responsibility for all policy decisions, saying
"There is no number two, three or four . . . in Cote d'Ivoire there is
only a number one: that's me and I don't share my decisions" (West
Africa, Aug 8, 1988; p. 1428). The press was tightly controlled by the
government and faithfully reflected the party line. All civil servants
were party members.

Houphouet-Boigny once described this economic philosophy as "state
capitalism" but it transmogrified into "crony capitalism." Many of his
associates enriched themselves fabulously under his watchful patronage.
In the 1970s, Henri Bedie, the Minister for the Economy and Finance was
dismissed for embezzlement and fled the country, later to become the
Charges d’Affaires of the Ivorian Embassy in Washington, DC.
"Rehabilitated," he returned to become the Chairman of the National
Assembly. His name resurfaced in a number of financial scandals that
rocked the country in the 1980s, regarding his ill-fated plans to expand
the country’s sugar industry.

Another Houphouet-Boigny associate, Emmanuel Dioulo, the former mayor of
Abidjan, fled to Europe in March 1985 to avoid criminal charges of
embezzlement and fraud. His company, COGEXIM, "had failed to repay loans
worth $58 million to the Banque Nationale de Development" (West Africa,
May 1-7, 1989; p. 677). He received a Presidential pardon and indemnity
from prosecution upon his return to the country on March 3, 1986. In
April 1989 Dr. Theodore Kouba, another executive member of the ruling
Partie Democratique de Cote d'Ivoire (PDCI), was charged with extorting
CFA 6.8 billion ($21.8 million) from executives working for the
Abidjan-based Continental Bank, the African Development Bank, the World
Bank, and from some 800 Ivorian teachers under the pretext of building
estate houses for them.

In 1983 Houphouet-Boigny himself stunned the nation by declaring on
television that: "Yes, I do have assets abroad. But they are not assets
belonging to Cote d'Ivoire. What sensible man does not keep his assets
in Switzerland, the whole world's bank? I would be crazy to sacrifice my
children's future in this crazy country without thinking of their
future" (La Croix, Paris, March 13, 1990). In the Guardian Weekly
(London) Paul Webster claimed that Houphouet-Boigny "was siphoning off
French aid funds to amass a personal fortune as high as 6 billion pounds
sterling" (June 17, 1990; p. 9).

Ivory Coast’s economic development strategy, supported with massive
infusion of World Bank loans and French aid, was based the extraction of
large surpluses from small-holders (peasant farmers) - for example,
through 40% or higher taxes on cocoa -- for investment by the state. In
his 1988 New Year’s address to the nation, Houphouet-Boigny admitted
that the country's farmers had over the years parted with four-fifths of
the value of what they produced to enable the government to finance
economic development. But the sums were channeled into unwieldy and
unprofitable state corporations and the development that took place 
over 80 percent -- was concentrated in Abidjan and other urban areas,
bypassing the rural peasants. The president's proteges used the rest of
the peasants' money for self-enrichment and deposit overseas. In 1990,
the central bank calculated that some CFA 130 billion [or $456 million]
are spirited out of the country illegally each year" (Africa Report,
May-June, 1990; p. 14).

To be sure, in the 1960s and 1970s the Ivory Coast did enjoy robust
economic growth, averaging 6 percent annually -- one of the highest
growth rates in Africa - earning praise from the World Bank and other
international donors. However, the windfall earnings from cocoa and
coffee in 1976 and 1977 were splurged on imports and the country
borrowed recklessly to finance a consumption binge. Its foreign debt
soared from $1.66 billion in 1975 to $8.45 in 1987 and $14 billion in
1988 for a country of 16 million people. An economic crisis emerged in
1979, debts were rescheduled and a structural adjustment agreement
signed with the IMF and the World Bank in 1981. An initial success, with
GDP growth registering 5 percent in 1985, led the World Bank and the IMF
to throw all caution to the wind. A hasty 1985 IMF report, ignoring all
signs of social discontent, huge disparities in income and lack
institutional infrastructure, was effusive in its praise, declaring
Ivory Coast "a success story" - a model of free market success.

Imaginative World Bank lending entrepreneurs, including, among others,
Ismail Serageldin, a current director of the Bank, presented a carefully
contrived but glowing portrait of a country reaching a series of new
policy adjustment milestones. Each was accompanied by a new
multi-million dollar policy-based loan, totaling about $2 billion over a
four-year period. The loan was disbursed on "hard" IBRD terms so as to
avoid country lending limitations implicit in the much more concessional
IDA lending. But the collusion also permitted the Bank to be duped. In
point of fact, and as was widely known, little policy adjustment was
occurring. This, coupled with the rapid increase and onerous terms of
public sector external borrowing, caused an increasingly serious
external debt crisis. Thus, World Bank loans essentially supported a
socialist and interventionist government and an enormously over-valued
exchange rate, despite the rationalizations by Bank officials to
outsiders that the loans were to mitigate the effects of the exchange
rate and stimulate private enterprise.

Falling commodity prices and scandalous mismanagement brought the crisis
back in 1988. GDP growth turned negative (-6.4 percent) with an income
per capita of $830, down 36 percent from $1,290 in 1978.  Blaming the
declining market on Western commodity speculators, President
Houphouet-Boigny asked all public sector employees, students, and
teachers for a "solidarity tax" --cuts in wages and allowances, 40
percent for civil servants. The official price paid to cocoa and coffee
producers was reduced by 50 percent for the 1989 to 1990 growing season.
These measures provoked unrest and riots amid calls for political
reform.

Viewing the vast basilica Houphouet-Boigny was building for himself at
Yamassoukrou at the cost of $360 million and taking a cue from the
dramatic developments in Eastern Europe, the workers opposed the tax.
They took to the streets in February and March 1990 to vent their anger
at the government. They dismissed his argument that Western commodity
speculators were responsible for the collapse of the markets and
demanded his resignation, pointing to the basilica as a paramount
example of his failed leadership. Irate workers demanded the prosecution
of the grotos (the corrupt ruling elite) accusing Houphouet-Boigny
and some of his powerful government ministers of having hidden away in
Europe sums said to exceed the foreign aid that Western donors have
poured into Ivory Coast" (The Washington Post, March 26, 1990; p. A17).
When Houphouet-Boigny insisted that there were no billionaires in the
Ivory Coast, a tract revealed that Minister of Primary Education Odette
Kouame, appointed in 1985, owned a castle on Boulevard Latrille in
Cocody and another in her own village.

Houphouet-Boigny steadfastly rejected the protesters' demands for
multiparty democracy, claiming "tribalism was still the main obstacle to
the achievement of national unity--the prerequisite for a change in the
status quo" (Africa Report, May-June 1990; p. 16) and unleashed his
security forces on the protestors with tear gas, stun grenades, and
truncheons. Schools were closed and 120 teachers were arrested (West
Africa, April 2-8, 1990; p. 558).

By May 1990, the Ivorian "miracle" was over. The country’s 13 bishops
issued a pastoral letter, deriding it as the "Ivorian malaise" (West
Africa, Aug 6-12, 1990; p. 2251). Mounting pressure--through strikes and
demonstrations-- forced Houphouet-Boigny to legalize other political
parties and to hold multiparty elections in November 1990. But
Houphouet-Boigny handily won a seventh term in a presidential election
generally regarded to have been rigged.

Social discontent against the corrupt ruling oligarchs bubbled to the
surface again in 1992 when angry citizens took to the streets to protest
hopeless life in perpetual poverty. University students boycotted end of
year examinations to protest the government's new education policy,
which required them to pay higher bus fares. Unemployed youth also went
on the rampage, blocking mid-day rush hour traffic. Producers of the
country’s cash crops joined in. Years of neglect by the government had
left them bitter. Apart from good access roads, every other social
service is in short supply. At an October 1992 meeting at Anyama, on the
outskirts of Abidjan, the farmers demanded better prices for their
produce. Again this year, the farmers renewed their demands, refused to
sell their cocoa and burned several tons to protest low prices.

In 1993, Houphouet-Boigny passed away and immediately power-hungry
stalwarts within the ruling PDCI party could not even wait for his
burial before jostling ferociously to succeed him. Said a desperate
Philippe Yace, a challenger: "I would be happy to become president, even
if just for two weeks" (New African, May 1994, 41). Ordinarily, the
prime minister, Alassane Outtara, should have taken over but he was
outmaneuvered by Henri Konan Bedie, the Speaker of the parliament.
Bedie, who hails from the same ethnic group as Houphouet-Boigny
(Bauole), assumed full control but departed from Houphouet’s style of
governance: dialogue and consensus.

In 1994, Bedie launched a highly xenophobic and ethnically divisive
campaign of "Ivoirite" -- Ivorian-ness -- ostensibly to check the influx
of foreigners. But opposition leaders said the campaign was to promote
his Baoule ethnic group and Ouattara, a Muslim for the north, from ever
becoming president. "After 1994, after Ouattara left, all [Muslim]
northerners lost important jobs," said sociologist Abdou Toure. "I was
fired from UNESCO, Ali Coulibaly was fired as main television
broadcaster, General Abdoulaye Coulibaly was fired as air force
commander. We were replaced by Baoules," Mr. Toure said (The Washington
Times, October 10, 1996, A17). Many African immigrants, notably from
neighboring Burkina Faso and Ghana, were harassed and forced to leave.

For the presidential elections in 1995, Bedie rammed through parliament
an electoral code designed to ensure his victory and changed the
president’s term of office from 5 to 7 years to lengthen his stay in
office. Protests led to violent clashes with security personnel on 16
October 1995, and five lives were lost. "Only a politician like Bedie
could have made such a mess of things," said an irate World Bank
official. "Only he could have turned an economic success story into a
political nightmare that this is turning out to be" (The Washington
Times, 19 October 1995, A14).

Crony capitalism continued unabated. In May, the French Weekly published
the fortunes of African heads of state, placing that of the late
President Houphouet-Boigny’s fortune at  35 billion FF (or $6 billion)
and clocking President Henri Bedie’s at 2 billion FF (or $300 million).
[Reprinted in the Nigerian newspaper, The News (Aug 17, 1998). Companies
with links to President Konan Bedie's family grew fat in financial
services and commodity trading, while others gobbled up the most
profitable privatized state companies. In June, 1999, the EU suspended
aid to Ivory Coast after discovering that about $30m donated for health
programs had apparently been embezzled through dubious accounting,
over-billing, and failure to deliver goods. One example was baby
weighing scales, which would normally cost about $40 and was billed by
the health ministry as costing $2,445. Subsequently in July,
Communications Minister Daniele Boni Claverie revealed that four senior
government officials of the Health Ministry were held for questioning.

In August 1999 Ouattara was proclaimed leader and presidential candidate
of the Assembly of Republicans (RDR), a breakaway group from the ruling
party. Bedie grew nervous and panicky. On Nov 12th, 1999, 11 leading
members of RDR, including 4 members of parliament were jailed for two
years for allowing others to cause public disorder. Nine more were
charged with public order offenses. On Nov 26th, the police sealed whole
areas of Abidjan and arrested 8 more leaders of the RDR in a northern
town. The crackdown further widened ethnic and religious divisions,
leading to events that culminated in the coup. The jubilation was not
only a rebellion against appalling socio-economic conditions and the
tyrannical excesses of the Bedie regime but also a sharp rebuke of
French and World Bank policies in the Ivory Coast.

France did not equate decolonization with retreat. France left hundreds
of officials in Africa as advisers. Behind the doors of many key
ministries in the Ivory Coast and Senegal or Gabon, discreet but
powerful French officials kept a close eye on policy. France created a
sister franc CFA (Communaute Financiere Africain) for the former French
colonies in 1948 with its valued pegged at 50 CFA to 1 French franc
until 1994 when it was devalued to 100 CFA to I FF. A Department of
Cooperation was set up to provide them with financial aid, tariff
concessions, and support for their currencies. The department had an
African aid budget five times greater than that of Britain. In 1988, for
example, France spent $2,591 million in aid to Africa; Britain spent
$516 million. More than half of French foreign aid went to Africa,
making France the continent's foremost patron. In 1993, France's budget
for overseas aid was $7.9 billion.

The French also sent teachers to Africa and brought African students and
civil servants to France for training. In fact, in 1993, there were more
French citizens -- about 100,000 -- in post-colonial Africa than at
independence (The New York Times, Feb 23, 1994; p.A6). At the time of
the coup, there were more than 20,000 French citizens in the Ivory
Coast. A 1975 government survey found 80 percent of all secondary school
teachers in Ivory Coast to be French, who also formed 65 percent of the
top managerial personnel in all of Ivorian enterprises.

The real intention of the French was to protect their vast economic
interests and gain access to Africa's minerals. Twenty percent of
France's oil came from West Africa. The Ivory Coast, for example, buys
40 percent of its imports from France and the French own a third of the
country's manufacturing industries. Since 1960, France has intervened on
many occasions to prop up unpopular African regimes against internal
dissatisfaction. The most notorious such occasion was in Gabon in 1964,
when French troops were used to reinstate President Mba after a coup.
Noting that the French did not intervene to save President Youlou in
Congo-Brazzaville in 1963, critics charged that intervention was
predicated on mineral wealth. (Gabon is rich in oil.)

 Significantly, the French who have 550 troops stationed in the Ivory
Coast did not intervene in the Dec 24 coup but only sent in additional
40 men to protect its citizens. Gen. Guie warned France to abandon any
"hidden agenda" of restoring Bedie to power and to take him out of the
country. Nor has the IMF director, Michael Camdessus, flown to the Ivory
Coast to defuse the crisis, as he did on July 31, 1992 to save "its star
pupil" in the wake of mass demonstrations in Abidjan.

General Robert Guei has vowed "to create the necessary conditions for a
real democracy with a view to holding fair and transparent elections."
But West Africans have heard this many times before. Coup makers who
made such promises subsequently shed their uniforms and donned civilian
clothes to win presidential elections. Ten out of the fifteen West
African countries are ruled by military-despot-turned-civilian
president. Ivory Coast, the World Bank’s success story, may join this
club. No military regime has brought lasting prosperity to any African
nation.

The real solution to the Ivorian "malaise" lies not in the provision of
more World Bank loans but in the convocation of a "sovereign national
conference," where representatives of the political parties, the
Churches, trade unions and other sections of civil society hammer out
the country’s political future - as happened in Benin in 1991 and South
Africa in 1993. It is an indigenous African solution.
_______________________

Mr. Ayittey is an Associate Professor of Economics at American
University and President of The Free Africa Foundation, both in
Washington, DC. Mr. Myers is a former Principal Economist with the
World  Bank in Washington, DC.

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