Why Ivory Coast's economic comeback could be brisk
Three economists interviewed by The Christian Science Monitor forecast Ivory Coast's annual economic growth to accelerate to an impressive 6 to 7 percent toward the end of 2011.
Ivory Coast, today’s giant emergency, may be tomorrow’s emerging giant.
Or, the most fertile economy in West Africa could continue to endure low-scale civil war for weeks, months, or even a second decade to come.
This past week, the market bet on hope. Both the nation’s cash crop – cocoa – and slips of paper representing its long overdue debt traded at their most optimistic prices in months on news that rebels backing the elected president had finally captured the defiant former president who plunged the county back into civil war with his refusal to step down after losing the Nov. 28 election.
Three economists interviewed by The Christian Science Monitor forecast annual economic growth in the utterly disarrayed economy, West Africa’s second largest, to accelerate to an impressive 6 to 7 percent toward the end of 2011, as shopkeepers rush to fill looted shelves, and workers reboot desktops in vacant offices.
That postwar boom would rank Ivory Coast among the top 15 fastest growing economies of 2012.
Indeed, if elected President Alassane Ouattara – effectively installed last week by rebel soldiers – can bring peace to his country, economists say this erstwhile star of Africa could be reborn.
“It certainly used to have the potential to [become a middle-income country], and it still could,” says economist Yvonne Mhango with the Renaissance Capital investment research group based Greenwich, Conn. “It’s definitely not difficult to conceptualize. It’s just that, at this point, things could go either way.”
The wilting of the 'African Miracle'
Until 1999, the nation of 21 million reigned as the exception to a region of war and stagflation. Pat Nixon, wife of former US President Richard Nixon, called it "a land of hope for people all over the world," when she made her 1973 second visit to the once-prosperous nation.
Before his capture Monday, outgoing President Laurent Gbagbo had been bunkering in an underground tunnel while an untold number of civilians – at least 1,500 – above ground died in Ivory Coast's second civil war in a decade.
That tunnel connects Ivory Coast’s Presidential Palace with the French ambassador’s home – a perfectly umbilical metaphor for the nation’s troubled relationship with its former colonizer. France lavished billions of francs to transmogrify this former colony into what was so nearly Africa’s first middle-income country. Even after a decade of sporadic war, Ivory Coast still boasts Africa’s second-biggest port, its second-best refinery, roads as wide as endangered whales, enough electricity to power a resplendent megacity, and the world’s largest church – all French-backed infrastructure that made this nation the “African Miracle.”
But when the millennium turned, simmering anti-France, anti-immigrant, and antinortherner sentiment boiled into 10 years of civil conflicts. The timing was tragic: West Africa’s most promising economy spent Africa’s most prosperous decade in recorded history recording its dead.
Now, though, economists say Ivory Coast can lead the emergence of West Africa – if it can hold a peace.
“If the country has political stability, [economic growth] could become quite rapid within a year and half, easy,” says a top Ivory Coast-watching economist with a major financial institution who spoke on condition of anonymity.
Ivory Coast's riches
The nation still enjoys all the soil necessary to reign as an agricultural powerhouse in a time of pricey food. Its fields produce more cocoa – 40 percent of the global supply – than any other nation. Less famously, the country is also the world’s top exporter of cashews.
More important, Ivory Coast has oil, which is needed for the 10 million cars bought in China annually; grows abundant rubber – needed for those 40 million tires; and grows coffee, ripe for China’s 20 percent increase in annual coffee consumption.
Then there’s Abidjan: Even after a decade of urban violence, the city of 6 million remains the de facto financial capital of the francophone tropics. Much of the city remains intact.
“The recovery in Ivory Coast will be far faster than it was in, say, Sierra Leone or Liberia, where war ruined the infrastructure,” says Ms. Mhango.
Recovery won't be easy, though
Yet the rot of 10 years spent in on-off war has left its mark. The nation’s cocoa trees are old, and many cocoa farmers haven’t planted new trees – which take five years to produce a pod – in a decade. The nation’s mighty power plants, which churned a prewar 1,200 megawatts, now produce just 850 megawatts thanks to poor upkeep, according to the International Monetary Fund.
Abidjan’s banks and stock market were looted throughout the civil war. It will take a staggering amount of bureaucracy to reopen them, Mhango says.
“Basically, 2011 will have been a lost year in terms of economic activity,” she says.
Security must come first
That, of course, is assuming Gbagbo's capture calms, not incites, his youth militias – still a bold assumption in a week when human rights researchers have reported hundreds of killings, particularly in the country’s volatile west.
“Even as Gbagbo leaves power, it will take a few weeks to bring a minimum of public order to Abidjan,” says Giles Yabi, West Africa director of the Brussels-based International Crisis Group. “Right now, you have no police, no gendarmerie. It will be extremely difficult to recover all the weapons that have been distributed to people who have been indoctrinated over the course of years with this nationalist rhetoric.”
“The situation in the West will probably remain precarious, not just for weeks, but for months,” he adds. “For the entire territory, especially the West, I’m afraid it will take more than six months to bring security. It might take the full year.”