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Cablegate: North Darfur's Economy - Unamid Gives a Boost to A

VZCZCXRO8399
PP RUEHGI RUEHMA RUEHROV
DE RUEHKH #0464/01 0901356
ZNR UUUUU ZZH
P 301356Z MAR 08
FM AMEMBASSY KHARTOUM
TO RUEHC/SECSTATE WASHDC PRIORITY 0336
INFO RUCNFUR/DARFUR COLLECTIVE
RUCNDT/USMISSION USUN NEW YORK 0123
RHMFISS/CJTF HOA

UNCLAS SECTION 01 OF 02 KHARTOUM 000464

SIPDIS

SENSITIVE
SIPDIS

DEPT FOR AF/SPG, S/CRS
DEPT PLS PASS USAID FOR AFR/SUDAN

E.O. 12958: N/A
TAGS: PGOV PREL PHUM KPKO ECON AU EFIN SU
SUBJECT: NORTH DARFUR'S ECONOMY - UNAMID GIVES A BOOST TO A
BELEAGURED REGION


1. (SBU) SUMMARY: The Secretary General of North Darfur's Chamber
of Commerce, Rashid Mekki, told econoff on March 26 that the
presence of UNAMID has given a small boost to the region's
struggling economy, particularly the construction, real-estate (with
land prices increasing twenty times in four years), and service
sectors. Mekki stated that UNAMID should award more contracts to
local businessmen, warning that Sudanese citizens will evaluate it
not only on its ability to bring security, but its overall affect on
Sudan's economy. Mekki also strongly criticized the Government of
Sudan's economic policies. END SUMMARY.

HARD TIMES
- - - - - -
2. (U) Mekki emphasized that since the start of the Darfur
crisis, the region's economy has been in shambles. "We are just
consumers in Darfur. We don't produce anything anymore," said
Mekki. Mekki noted that Darfur's agriculture sector has been
particularly hit by the conflict with record lows of livestock and
agricultural exports. He added that almost everything in Darfur
costs more than it does elsewhere in the country, from electricity
to transportation. Mekki stated that taxes and permit fees in
Darfur are just as high as they are elsewhere in Sudan, but that the
citizens of Darfur do not see any of these funds coming back into
the region through government development and infrastructure
projects. Mekki also noted that many of Darfur's prominent
businessmen and business families left the region at the start of
the conflict, and will likely never come back to Darfur.

"UNAMID'S PRESENCE IS POSITIVE...
- - - - - - - - - - - - - - - -
3. (U) Mekki stated that he welcomes UNAMID's presence, and that
it delivered new jobs and investment to El-Fasher. He stated that
the city has never witnessed this level of construction and its
corresponding increase in service jobs. Mekki stated that, in
particular, El-Fasher's land owners have profited from this small
boom. According to Mekki (and verified by other Sudanese contacts,)
in 2003-2004, the price of land was 5,000 Sudanese pounds for 400
square meters of land, and today, only four years later, it is close
to 100,000 pounds. "This price increase of twenty times in only a
few short years is making a lot of people rich," stated Mekki. He
noted that rent prices have risen in a proportionate fashion to the
price of land.

... BUT IT HAS DOWN SIDE TOO."
- - - - - - - - - - - - - -
4. (SBU) Mekki said that El-Fasher's poor and working class lament
this real estate boom. He also noted that many small Sudanese
business people have become frustrated that UNAMID has awarded more
contracts to non-Sudanese companies. "If the people of Darfur do
not see a benefit from UNAMID, including an economic one, they will
reject the force and hatred for UNAMID will build," stated Mekki.
For example, stated Mekki, a Lebanese contractor recently won a bid
to provide bread to UNAMID forces and this contractor plans on
expanding his business into the local market, which may drive out
small local bakers. Mekki called this "a significant problem" that
could result in thousands of unemployed Sudanese.

5. (SBU) (Note: In a separate meeting on March 23 with Sudan
Program's Group Jason Small, Nicolas Von Ruben, the Acting Chief of
UNAMID's Integrated Support Services, stated that delays in the
arrival and work of engineering units may force UNAMID to hire the
local "pick and shovel" brigade. He stated that this Sudanese
manpower could start the work needed to get UNAMID up and running
until the engineering units and their equipment are ready for
action. End note)

GoS HURTS US MORE THAN U.S. SANCTIONS
- - - - - - - - - - - - - - - - - - -
5. (SBU) Mekki stated that U.S. sanctions have a very minimal
effect on Darfur's economy, as "we suffer more from our own
government than the United States." He noted that there is a slight
effect from U.S. sanctions on things such as the price of wheat.
Mekki stated, however, that even in the case of wheat GoS policies
are as much to blame for the high prices. He called the Minister of
Finance Awad Al-Jaz's latest effort to keep the price of wheat down
"a big show that was just propaganda with few tangible results."
Mekki was equally critical of the Sudanese oil industry, alleging
that all of Sudan's oil revenues are used to buy weapons and fight
wars. "The government can take their oil and go to hell," said
Mekki.

COMMENT
- - - -
6. (SBU) Mekki is right to highlight the economic impact of
UNAMID's deployment and the potential for Sudanese citizen's to feel
economically left-behind. Although UNAMID cannot lower its

KHARTOUM 00000464 002 OF 002


standards to use local contractors, it should use them as frequently
as is possible. The idea of employing "the pick and shovel brigade"
to jump start the construction of new UNAMID camps is a good one for
the local economy and should improve the perception of UNAMID as an
employer of local labor. Although the Chief of UNAMID's Integrated
Support Services was likely not thinking of the Sudanese economy
when he proposed the idea, this could be a win-win economic
arrangement for UNAMID and the Sudanese people it intends to
protect.

FERNANDEZ

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