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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