The Republic of Guinea is in the early stages of developing a modern market economy after 26 years of a severe socialist economic and political regime under the First Republic of Sekou Toure 1958-1984. Since the establishment of the second republic in 1984, Guinea has opened to the Western world in search of capital, goods, and services with which to construct a modern, democratic state. While still relatively scarce in comparison to the large French and Middle Eastern presence, U.S. firms and American citizens enjoy considerable interest and respect from the government and the local business community. This relationship has been repeatedly emphasized by Guinean leadersand, despite difficulties, has managed to develop for over a decade now.
Endowed with considerable natural resources, Guinea has been evolving since 1984 from a centrally-planned to a market-based economy. Guinea enjoys abundant land with fertile soils, extensive water resources, and adequate annual rainfall. Guinea's extensive mineral resources include one third of the world's known bauxite reserves, high grade iron ore deposits, as well as untapped reserves of diamonds, gold, iron ore, and other precious metals. In 1993, the mining exports, primarily bauxite, accounted for 35 percent of government revenues and 80 percent of official export earnings. Minerals share of export earning declined to 60 percent in 1994 due to a stagnation in the volune and value of bauxite and alumina exports, a sharp decline in world aluminum prices, and the closure of two gold and diamond companies. Nonmineral exports amounted to $127.4 million in 1994 (20 percent of total exports): these exports include mainly coffee, fish, cotton, fruits (pineapples, mangoes, bananas) and vegetables.
Following French withdrawal at independence in 1958, Guinea languished from 1958 until 1984 under a feudalistic state socialist regime which collectivized agriculture and repressed private initiative in commerce and industry. Shortly after the death, in March 1984, of Head of State Ahmed Sekou Toure, a new regime led by General Lansana Contelaunched the Second Republic's market-oriented reform program. Compulsory marketing through state agencies was abolished. The system of collective farms was eliminated. Farmers and traders once again could market their products freely. The government liquidated a large number of state owned enterprises, and, initiated a privatization program for others. With the ansistance of Western nations and the International Monetary Fund (IMF), the government launched an economic reform program aimed at progressive liberalization and modernization of the economy led by private sector growth.
Initial reforms were highly successful, including:
Regulations favoring free enterprise have been issued in commerce, mining, petroleum, investment, and labor. Tariffs have been revised downward and trade regulations liberalized. The new laws support freer market activity and foreign participation in national economic development. In 1987, the government promulgated an Investment Code designed to offer advantages for private investment in strategic sectors, although modifications in the code and implementation difficulties have diminished its value.
In spite of these reforms, however, Guineats business climate is severely hampered by infrastructural and legal constraints.
Guinea lacks a well trained cadre of managerial and technical personnel and labor productivity is low. Transportation, communications, and industrial infrastructure are improving but do not yet meet demand. The commercial banking sector provides limited and expensive services, with restricted financing options. Expatriate business sources indicate that Guinea's court system does not guarantee fair and transparent administration of the law, and offers little protection to expatriate businesspersons. Finally, corruption is rampant, and has a negative impact on even the most straightforward business transactions.
In December 1993, Guinea held its first presidential election since gaining independence in 1958. While international observers were dissatisfied with transparency in administration, the balloting occurred relatively peacefully with large voter turnout, and culminated in the election of Lansana Conteto a five year term as president. Inauguration ceremonies in late January 1994 marked the outset of the Third Republic. In August 1994, an administrative restructuring and cabinet restructuring initiated the long awaited changes promised for the Third Republic. National legislative elections took place on June 11, 1995. A putsch led by dissident army elements occured on February 4-5, 1996 but wan suppressed by the government at a considerable cost in life and property in Conakry. A smaller-scale army mutiny occured in March I996 with no permanent results. Since these disturbances domestic tranquility has returned to Guinea. A new 22-member Cabinet led by technocrat Prime Minister Sidya Touretook office in July 1996.
|
|
|
Contact : info@webguine.site
webGuinée, Camp Boiro Memorial, webAfriqa © 1997-2014 Afriq Access & Tierno S. Bah. All rights reserved.