West worried about cobalt from Zaire

Press, 15 August 1980, Page 12

West worried about cobalt from Zaire

By

LYN OWEN

in Kinshasa

If, as. Angolan officials have announced, copper trains are now steaming regularly out of the Zairean mining capital of .Kolwezi to cross Angola to the port of Lobito on the Atlantic coast, Zaire will have finally been let off an agonising financial hook.

Zaire is heavily in-debt to Western countries, and foreign credit has been virtually cut off for five

years. But for the West, for which Zaire is important as a source, of strategically crucial cobalt, as well ,as copper — Zaire commands 60 per cent of the world supply — the new event may be a mixed blessing. Recently, the Benguela railway, officially reopened after negotiations between Zaire and Angola in November, 1978, was still

being sabotaged by what observers variously describe as “Maquis activity” and “a full shooting war” involving Shaban rebels from Zaire as well as U.N.I.T.A. opponents of the Angolan Government. Reports of a dramatic improvement coincided with the new and unusual accord between Zaire and Angola symbolised by President Mobutu Sese Seko’s visit last week to his' Marxist neighbour, with whom relations have been difficult since Ang-

olan involvement in the 1978 Shaba revolt. - Rapprochment with Angola has riot been the only sign of realignment on the part of Zaire’s otherwise capitalistically inclined leader. Earlier this year President Mobutu made his peace with his other Marxist neigh-

bour, Congo-Brazzaville. It was from there, according to the Zairean Government, that prepara-

tions were being made last February under Cuban aegis for an assault on Kinshasa by Congo-backed Zairean rebels. The raid did not materialise. More significantly, Mobutu has already begun shipping cobalt ■ — by air, in the absence of a reliable railway route — to Eastern Europe, which is less in need of the Zairean supplv than the West.

These moves do not necessarily signal a radical change of alignment by Mobutu’s Government. Benguela is a desperatelyneeded lifeline for a nation its Information Minister recently described as moribund. For the last five years Zaire has been paralysed by economic crisis, leading to 100 per cent annual inflation, crippled communications, petrol shortages and lost production; the uncertainties of Benguela

have by no means been the only factor in this. Coffee, gold, ivory and diamonds have all continued to be exported from Zaire, though in

much reduced quantities. But the Government says scarcity of foreign exchange credit and investment, leading to rapid deterioration of road, rail

and ferry stock, and a fuel shortage have counteracted the beneficial effects of this trade. The credit and foreign exchange shortage began, says the Government, in 1975, when Zaire’s roreign creditors refused to renegotiate debts which Zaire maintained had largely been inherited from ' the Belgians, and President Mobutu took the decision to cease servicing foreign debts. The International Monetary Fund, which is- trying to restore Zaire’s shattered economy (less than 1 per cent of circulating currency,' it reports, is under the control of the banks), tells a different tale, as do the various United States agencies whose short-term aid has been keeping Zaire afloat in the last 18 months.

“The main problem of Zaire continues to be corruption and fraud in Government circles,” an I.M.F. spokesman said. “As a result, the foreign exchange from Zaire’s export earnings does .not return to the country, and tax from them does not become available" either to pay foreign debts or to be expended on the country itself, in spite of Government control of exports.” Recently the fund enforced a reorganisation of Zaire’s leading coffee company — coffee is a crop

in which President Mobutu himself holds a strong interest.— after- the discovery that artificial losses had been created on coffee exports. Some $l2O million had gone astray, i; is alleged, in this fashion in 1976 alone. An implausible loss of S7OM in one year had. also been discovered in diamond production. I.M.F. sources in Zaire sav they have been- unable to'halt this type of deal and the I.M.F. has shown extreme reluctance _ -to recommend international credit, which President Mobutu had hoped for again this month. A United States diplomat Mr Robert Remqle, has told a congressional committee that “further aid to Zaire would merely help to support one of the world’s richest men in the manner to which he had become accustomed.” President Mobutu’s new understanding with his Russian-inclined neighbours may mean he is carrying his cobalt to a more sympathetic market. Alternatively,, since this supply is militarily so critical to the West, along with Zaire’s potential usefulness as a uranium source, President Mobutu may simply be the screw to persuade his Western creditors to give way against their better judgment. — 9.F.N.5.