The Place of Cameroon in US Policy toward Central Africa after the Events of September 11 2001

5. The role of financial institutions such as the AfDB, IMF and World Bank. An interdependent reading

Financial institutions have come to play a more prominent role in Cameroon US relations than most people would realize. In this largely realist study in which states or state actors such as envoys, presidents and diplomatic missions play dominant roles, it is interesting to take up a transnational reading through multilateral institutions, focusing on financial international organizations such as the African Development Bank (AfDB), International Monetary Fund and the World Bank. Broadly speaking, US assistance finds its way to Africa through a variety of channels. Bilateral aid, also known as direct assistance, is given through non-governmental organizations (NGOs) or private and voluntary organizations (PVOs), contractors, and African government ministries and agencies. Multilateral aid, or indirect assistance, is given first to international financial institutions (IFIs) and U.N. agencies, which in turn channel it to Africa through their own programs.^228(*)

By definition, international organizations are none profit-making, none partisan, and not subject to the dictates of individual states. However, states defend their national interests within international governmental organizations. For this reason, it is possible that state A influences state B through an international organization. This is done because of the need for votes either in that institution or in another institution. These votes could either be in relation to specific projects, elective posts, sanctions or the adoption of a particular policy. In such cases, building coalitions becomes the task of diplomats. Here, the weight of an ally, its voting power (either in terms of points based on financial contributions as is the case of the three institutions mentioned above, or in veto powers as in the Security Council) and its capacity to rally other states to vote for its position are strong assets. Our point at this section of this paper is to examine the place the US has been giving to Cameroon within these institutions and how it exerts pressure on Cameroon through the former.

There have been sizeable changes since the turn of the century on how the US treats Cameroon within the African Development Bank (AfDB). Since its creation in 1963, and operational in 1964, the AfDB has been financing development and promoting self-sufficiency within the African Continent. In 1982, the bank was opened to non-regional members (exclusively for reasons of financing and consequently having voting powers) with the US holding 6,569 % of shares corresponding to voting powers while Cameroon holds less than 1%. The bank's present capital runs above $52billion, with two institutions: the AfDB itself and the African Development Fund (ADF). During the 2005 elections for the bank's chair, the US used its voting power to make decisive moves towards Cameroon^229(*). The US rallied its support for the Cameroonian candidate, alongside other Western nations such as Japan, Germany and Italy, and only gave the votes to the Rwandan candidate after it was clear that African voters did not support the Cameroonian candidate. Though we could understand the US choice of a Cameroonian candidate from the fact that the latter had studied and worked in the US, it is more likely to say that it was a geopolitical choice. As the Gabonese press put it, «The choice was assuredly more on states than on the individual»^230(*).

The actions of the World Bank in Cameroon's favor could be studied from the example of the Chad-Cameroon Pipeline. The project, we must remember, was financed entirely by the World Bank. How did the Bank come to decide in favor of the project with all the environmental, financial (cost # benefit) and political reports that stood in disfavor of the project? An international environmental organization representative explained to us that the American government insisted on having the project to consolidate their presence in Cameroon and the sub-region. Run by the American oil giant, Exxon-Mobil, the project is described as the biggest American investment in sub-Saharan Africa. US influence in the decision to finance the project lies in the former's influence in the Bank (headquarters, chair and contribution). What Leif Br ottem calls « The W orld Bank' s Great Gamble in Central Africa»^231(*) is not a gamble for the World Bank per se, but for the US, through the World Bank and Exxon-Mobil. The Pipeline started pumping oil in 2003, but that should not be only project the World Bank is/or has been funding in Cameroon thanks to US influence. We should also note the Bank's rating of Cameroon with data from rating agencies such as Standard and Poor's, Moody's, International Country Risk Guide and Business Environmental Risk Intelligence (mostly US). The perceived role Cameroon would play in US policies in the sub-region was certainly planned before 9/11 as this project reveals, but it is after the events that this perception was accelerated, enlarged and concretized. As Ted Dagne described, «The World Bank's International Development Association (IDA) is the principal multilateral channel for U.S. aid, but the United States also contributes to the African Development Bank and Fund and to United Nations activities in Africa.»^232(*)

The IMF has played even a more considerable role in the future of Cameroon-US relations. American influence in the IMF, which surpasses the influence of all other US rival powers in Cameroon has been adequately used as in the World Bank, to further US interests in the sub-region. From the Structural Adjustment Program to the Heavily Poor Indebted Countries initiative, the IMF has come to play roles appreciated by the Cameroonian government. In November 2002 the U.S. government placed good governance centre stage by spelling out plans for the allocation of funds from the $5 billion a year Millennium Challenge Account to countries that «justly govern,» «invest in people» and «promote economic freedom». Country assessment is done from data provided by the World Bank, national (US) sources, IMF, Freedom House and Institutional Investor Magazine. Cameroon's attainment of the Completion Point of the Heavily Indebted Poor Countries Initiative in April 2006 under IMF supervision has largely been attributed to Cameroon's partners such as France, but especially the US. This attainment has opened the way for Cameroon's creditworthiness with credit rating in relation to access to IMF funding and international capital markets, earning the grade of `good risk' by rating firms.

One would see the hand of the US in the American-run AES-SONEL's recent CFA 170 billion loan grab from international financial institutions. With concession agreements signed in 2001 between the government and AES, the company is one of the largest energy supplier in the Gulf of Guinea. According to a report published by THE POST newspaper, the electric power company obtained FCFA 170,548,820,000 following a 13-year loan agreement it sealed on December 21, 2006 with a number of continental and international financial institutions.^233(*) The funding, which will greatly expand AES activities to other countries in the sub-region while making national supplies better, came from a number of institutions. These are, African Development Bank (FCFA 40 billion), the Central African States Development Bank (FCFA 6.5 billion), the European Investment Bank (FCFA 42.6 billion), German's DEG (FCFA 9.8 billion), Emerging Africa Infrastructure Fund (FCFA 3.28 billion), International Finance Corporation (FCFA 45.9billion), PROPARCO (FCFA 19.6 billion), and Nederland's FMO (FCFA 3.2 billion). According to a press release issued by the company's Communications Service, the newspaper reports, the loan agreement is one of the largest financial packages ever provided to a sub-Saharan privatized utility. It is however, AES SONEL General Manager's comment, which enlightens the political strength of the loan, «AES SONEL intends to use this unprecedented agreement to improve the quality of energy supplied to the population, and consequently the perception of the image of Cameroon as a centre of attraction for international investment at the regional level.»^234(*)

In all, the US Government continues to provide substantial funding for these international financial institutions, (World Bank, IMF, and African Development Bank), that provide financial and other assistance to Cameroon. Interdependence is here proven in the fact that both countries benefit from these institutions, Cameroon gets funding while the US gets influence, votes and acclamation.

* ²²⁸ The distinctions about the different channels of US assistance are detailed by Ted Dagne, «Africa: U.S. Foreign Assistance Issues», Congressional Research Service The Library of Congress, July 28, 2006

* ²²⁹ For details on the stakes of the election for Cameroon as well as Cameroon's lobby for votes, see Ndzesop, I., «Cameroon's Battle for Posts in International Organizations; the Cases of Mme Elisabeth Tankeu and Theodore Nkodo», Internship paper, Yaoundé: IRIC, 2005.

* ²³⁰ La Nation No. 48, 06/06/2005, p. 04.

* ²³¹ See B rottem's report at Foreign Policy in Focus, A Think Tank Without Borders, July 2, 2004 at the webpage http://ww w .fpi f .org/commentary/2004/0407gamble.html

* ²³² Ted Dagne, «Africa: U.S. Foreign Assistance Issues», op, cit.

* ²³³ Joe Dinga Pefok, «AES Sonel Lands FCFA 170-Billion Loan», The Post (Buea) January 30, 2007, Posted to the web January 30, 2007, at http://www.allAfrica.com/cameroon/energy.htlm

* ²³⁴ The Post, idem.