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Renegade Ivory Coast leader Gbagbo won't pay off debts, say opponents

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Emanuel Ekra/AP

(Read caption) Ivory Coast strongman Laurent Gbagbo (l.) shakes hands with Kenyan Prime Minister Raila Odinga, an African Union envoy sent to mediate the ongoing Ivorian political standoff, at the presidential palace in Abidjan, Ivory Coast, Monday, Jan. 17. Ivory Coast President-elect Alassane Ouattara accuses renegade President Laurent Gbagbo, who refuses to concede defeat in the country's Nov. 28 election, of not pay off debts.

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Alassane Ouattara, the former International Monetary Fund economist that just about every world leader recognizes as Ivory Coast's president-elect, doesn't think his opponent will ever pay his bills.

Specifically, he doesn't think renegade President Laurent Gbagbo, who refuses to concede defeat in the country's Nov. 28 election, will honor the $29 million dollar payment that Ivory Coast owes its debtors by Jan. 29.

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“If they wanted to pay, they would have done so,” Mr. Ouattara told Bloomberg yesterday. He also said Mr. Gbagbo’s administration has recently withdrawn millions of dollars “to pay salaries, to pay mercenaries, and to take money out of the country instead of paying what they have to pay to the London Club, so clearly they have no intention of paying,” referring to the group of creditors who hold Ivory Coast bonds.

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Paying off Ivory Coast's government debt might be a way for Gbagbo to kindle some shred of legitimacy in the eyes of the West. But Gbagbo, an ex-history professor fluent in neo-colonial rhetoric, seems less and less concerned with such intercontinental statecraft.

After all, this is a guy who has twice refused to take a call from President Obama – once "because he was resting."

Gbagbo's funds: frozen or not?

Like most world nations, Gbagbo's government has a long paper trail of treasury bonds – IOUs, essentially – that it has sold to faraway investors as a way of financing itself over this past chaotic decade.

But unlike most world nations, Gbagbo's government is blocked (or supposed to be blocked) from accessing its own cash reserves, which are stored in the Dakar-based Central Bank where half of West Africa's nations do their banking – meaning Gbagbo supposedly can't scrounge up the cash he needs to pay bond traders back.

The financial war in Ivory Coast: Five key questions answered

And at this point, it almost doesn't matter if he does.

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"It's hard to see how they will make the payments in practical terms," financial analyst Samir Gadio told Bloomberg earlier this month, during a brief spell when Gbagbo's government seemed peculiarly interested in forking out millions from its dwindling coffers to assuage creditors.

Even then, Mr. Gadio doubted Gbagbo's commitment to Wall Street types during the geopolitical hurricane that is the Ivory Coast crisis.

Indeed, the embattled president, who retains the support of his Army, is likely to pay his soldiers first, his militias second, civil servants third, and the international community – that seemingly would love to see him in a straight jacket – last.

Perhaps the best treasury bond buy around

That said – if you're the gambling type – today might be the day to purchase Ivorian treasury bonds.

Right now, the slips of paper are fetching dismal prices in whatever weird nooks of the financial universe such instruments are sold. In 10 days, when the country misses that $29 million payment, they could be next to worthless. Yet Standard Bank and the Economist Intelligence Unit are both recommending that traders take a second glance.

If and when Ouattara finally unpacks into the country's presidential palace, those bonds "would go to levels above where they were before" the election, a Standard Bank economist told Bloomberg.

It's a sign that outside of Ivory Coast, those who have the most to gain or lose from its crisis – the people who own its debt – see Gbagbo as a marked man; a former history professor carving his way into the subject he used to teach.

IN PICTURES: Ivory Coast's unrest