Assessment of the Impact of the African Debt Crisis on the Republic of Congo

Received by NSD/FARA Registration Unit 12/29/2019 4:31:46 PM

ASSESSMENT OF THE IMPACT OF THE AFRICAN DEBT CRISIS ON THE REPUBLIC OF CONGO

Ambassador Cindy Courville

COURVILLE CONSULTANTS, LLC Received by NSD/FARA Registration Unit 12/29/2019

REPUBLIC OF CONGO: THE AFRICAN DEBT CRISIS IMF: AFRICA Republic of Congo: “economy is suffering from the effects of low oil prices, unsustainable debt, and significant governance PUBLIC DEBT weaknesses.” U.S. Assessment of Republic of Congo Debt Crisis: Sub-Saharan Africa Public Debt • Singular Reliance on Bad Chinese Commercial Interquartile —Average Loans. • Concession Rates. £ 100 • Exclusive Use of Chinese Companies. 8. 80 • Opaque Loan and Material Terms. oiU 60 • Lack of International Competition. • Lack of Access to Financial Investment Grants. • Relatively low level of Chinese Foreign Direct 5. 20 Investment (FDI) just over 5 percent of total 1976 1981 1986 1991 1996 2001 2006 2011 2016

FDI inflows into the region. Source: IMF, World Economic Outlook database. • Struggling to manage debt servicing that exceeds over 100% of GDP. Output Loss in Oil Exporters • 2001 Chinese Deputy Economy Minister Zhang Xiang (Real GDP, 2012 forecast vs. latest)

signed an agreement cancelling $75 million maturing 160 2012 debt owed by the Republic of Congo. 150 / • 2007 China signed a protocol agreement on the 8 140 / 7 /

cancellation of 30.6 billion CFA francs of debt owed to ° 130 / 8 China ($64 million) I 120 c 110

Republic of Congo Possible Next Steps: 100 • Request that China Reschedule Interest and Principal 2010 2012 2014 2016 2018 2020 2022 Source: IMF, World Economic Outlook database. of Debt. • Refinance domestic debt at cheaper rate. • Secure IMF bailout. Fiscal Imbalances in Non-Resource Countries 160 • Mortgage future oil wealth to pay for its financial 140 irresponsibility. 120

• Default on Chinese Debt. 100 c to • Work with the African Development Bank to 1 80

renegotiate Chinese Debt. 2 60 —Real revenue relative to 2010 real expenditure • Launch an economic strategy that immediately 40 —Real primary expenditure implements government trade and investment 20 (index 2010 = 100) reforms. 0 • Promote diversification of the economy from oil-driven 2010 2012 2014 2016 to IT technology and agriculture driven enterprises. Source: IMF. World Economic Outlook database.

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• Congo will have to choose the U.S. over China and Russia.

African Development Bank & the African Debt Crisis • Critical that ADB maintain a technical advisory role outside the Congo and does not take on the role

of supervisor based inside the Congo. Bilateral goods trade United States - Congo (Brazzaville) • The U.S. may be reluctant to increase its contribution to ADB despite the potential for economic growth in Africa because of the huge African Debt Crisis.

U.S. Likely to Assess that: • China’s behavior as a creditor must be subject to / f / / / / / /. s V V V V V V

the disciplines and standards that other major ► Imports from USA Exports to USA Trade Balance sovereign and multilateral creditors have adopted. • China must transition toward a blended financing Congo - United States Bilateral model, based on Western and Chinese sources of Investment Treaty (BIT) financing, for its support of Africa’s much-needed Bilateral Investment Treaty between infrastructure projects. Congo (Brazzaville) and the United • China must more actively open tenders to States. Signed February 12, 1990; Entered into Force August 13, 1994. international competition as opposed to tying commercial loans to the exclusive use of Chinese Millennium Challenge Corporation companies and materials on terms. (MCC) • China must offer a larger portion of grants, as Congo has not utilized the opposed to a singular reliance on commercial loans opportunity to compete for a at concessional rates. Work closely with the IMF Millennium Challenge Corporation and the African Development Bank (MCC) compact designed to drive investment into projects deemed too Key U.S. Decision-Makers: risky for the private sector, promote economic growth, and enhance regional integration. • The U.S. House of Representatives in particular the Subcommittee on Africa is highly likely to play a AGOA major role in shaping how the U.S. supports or does U.S. trade policy cannot fix waning not support the debt crisis in the Republic of Congo. demand. Congo has not fully • USAID will have a lead role in the implementation exploited the benefits of AGOA. of the Private Sector Engagement Policy and has declared that “the purpose of foreign assistance is coming to an end” and foreign assistance was not “designed to address man-made regime driven crisis.”

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Republic of Congo Needs to Request IMF to Provide: • Technical assistance in partnership with the African Development The Trump Administration’s analysis of the Bank on how best to response to the Republic of Congo debt crisis balance borrowing to will be shaped by analytical input from a cross- finance development section of U.S. Government agencies, spending and managing international institutions and think tanks: U.S. debt-related risks Millennium Challenge Corporation (MCC), USTR, • Debt sustainability the U.S. Treasury Department, the World Bank, framework and analysis the International Monetary Fund, the of data to better inform International Finance Corporation, the Heritage development of next Foundation, and Freedom House. steps • Technical assistance in critical areas such as public debt reporting and Key U.S. Decision-Makers: management.

• U.S. Agency for International Development (USAID) THE TRUMP AFRICA Administrator Ambassador Mark Green rolled out STRATEGY: the development agency’s first-ever “Private Sector Engagement Policy.” At its center is Green’s belief • No Public-Private that the “future of international development is Partnerships. enterprise-driven.” • Enterprise driven model, • The focal point of the strategy is countering China’s tapping into markets. commercial, security, and political influence in • Country-specific, Africa. bilateral approach. • The Trump Administration will likely require Congo to • Bilateral policy of establish an independent anti-corruption body with collaboration, co-design, full investigation powers and an asset declaration co-creation, co system for high-level officials. financing. • The Trump Administration will likely require Congo to • Private sector and enhance transparency in the oil sector as well as to reinforce oversight over large investment projects private enterprise as true and state-owned enterprises, notably the public oil collaborators. company. THE AFRICAN UNION • The Trump Administration will likely require Congo to promote a strong participation of civil society to • The Trump Strategy does ensure the success of the governance reforms. not reflect the preference • The Trump Administration will likely require Congo to by most African develop capacity to systematically reconcile all countries and the African government transactions backed by natural Union for a regional resources. approach through the newly created African Continental Free Trade Area. CONFIDENTIAL NOT FOR DISTRIBUTION

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SOURCES

• IMF, World Economic Outlook Database. • Brookings: The Trump Administration’s Africa Strategy: Primacy or Partnership. Witney Schneidman and Landry Signe._ 20December2018 • Africa Report. “Africa New Debt Crisis”. 26September2018. • WEBSITES & DATABASES: Millennium Challenge Corporation (MCC), USTR, the U.S. Treasury Department, the World Bank, the International Monetary Fund, the International Finance Corporation, the Heritage Foundation, and Freedom House.

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The Secretary of State presents his compliments to Their Excellencies,

Messieurs and Mesdames the Chiefs of Mission, and has the honor to extend an

invitation to the Chiefs of Mission from the President of the Senate and the

Speaker of the House of Representatives to attend an address by the President of the

United States before a joint session of the First Session of the One Hundred

Sixteenth Congress of the United States on Tuesday, February 5, 2019, at 9:00 p.m.

The Chiefs of Mission are invited to assemble at the Department of State,

2201 C Street, Northwest, at 5:30 p.m., for a buffet dinner prior to departing for the

Capitol. Vehicles with diplomatic plates should enter at 21st and C Streets,

Northwest. Drivers must remain with their vehicles at all times. As on previous occasions, in order to facilitate entrance into the Capitol, the Chiefs of Mission will be required to pass through a magnetometer upon departure from the Department.

The Chiefs of Mission will be escorted by the Chief of Protocol and staff to

waiting buses at 6:30 p.m. and travel to the Capitol and proceed to the Rayburn

Room. At approximately 8:10 p.m., the Chiefs of Mission will be escorted from the

Rayburn Room to the Chamber of the House of Representatives to be seated in

precedence order.

DIPLOMATIC NOTE Received by NSD/FARA Registration Unit 12/29/2019 4:31:46 PM Received by NSD/FARA Registration Unit 12/29/2019 4:31:46 PM

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The Department regrets to inform that because of limited accommodations for

this event only the Ambassador or Charge d’Affaires ad interim may attend.

Spouses and other embassy representatives may not be included. Although all those

in attendance will be invited to view the proceedings from the House Chamber, the

Department has been advised that seats may not be available for all of the Chiefs of

Mission.

Following the address of the President of the United States, the Chiefs of

Mission will return by bus to the Department at approximately 10:30 p.m. Chiefs of

Mission are requested to inform the Office of the Chief of Protocol by emailing

[email protected] no later than Friday, February 1, 2019, if they plan to attend. JU Department of State,

Washington, January 28, 2019.

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To: Honorable Congresswoman Nita Lowey House Appropriations Committee Chairwoman Of the US House of Representatives 2365 Rayburn HOB Washington, DC 20515

Honorable Chairwoman Nita Lowey,

On behalf of the Government of the Republic of Congo, it gives me immense pleasure to extend my congratulations on your appointment to serve as Chairwoman of the House Appropriations Committee and Chairwoman of the State and Foreign Operations Appropriations Subcommittee of the U.S. House of Representatives.

As the Ambassador Extraordinary and Plenipotentiary of the Republic of Congo to the United States of America and as the Dean of the African Diplomatic Corps, I want to take this opportunity to renew with the highest considerations the strategic importance of the United States engagement with the Republic of Congo and the African Diplomatic Corps. You understand firsthand the language of diplomacy and the strategic importance of a stable and secure Africa to the national security of the United States. What is most evident is your continuing support for a clear and concise U.S. Africa policy that promotes development and security in Africa.

As Chairwoman of the Appropriations Committee and Chairwoman of the State and Foreign Operations Appropriations Subcommittee of the U.S. House of Representatives, it is our hope that you will further strengthen U.S. - Africa diplomatic engagement by maintaining the high level of funding support for U.S. foreign assistance programs that strengthen U.S. - Africa shared strategic interests: the Africa Growth and Opportunity Act (AGOA), the U.S. Africa Command (AFRICOM), the Millennium Challenge Corporation (MCC), the President’s Emergency Plan for Aids Relief (PEPFAR), and the Africa Contingency Operations Training Assistance (ACOTA) program and the African Development Bank. To ensure the political and economic security of the African region, it is critical that the United States and the nations of Africa maintain multilateral strategic and diplomatic engagement.

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I welcome the opportunity to meet with you at your earliest convenience to work together to facilitate opportunities for American and African partnership. The Embassy will work with your office to confirm a meeting date and time.

The Government of the Republic Congo takes this opportunity to renew to the Government of the United States of America the assurances of the highest consideration.

Highest Regards

Serge Mombouli Ambassador Extraordinary & Plenipotentiary of the Republic of Congo Dean of the African Diplomatic Corps

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Honorable Dr. Akinwunmi A, Adesina President African Development Bank Group Avenue Joseph Anoma 01 BP 1387 Abidjan OlCote d'Ivoire

Honorable President Akinwunmi A. Adesina,

As Ambassador Extraordinary and Plenipotentiary of the Republic of Congo to the United States of America and the Dean of the African Diplomatic Corp in the USAs, I want to take this opportunity to renew with the highest considerations the strategic importance of the African Development Bank Group engagement with the Republic of Congo and all African countries.

We were very honored and pleased with the opportunity to meet with you on February 26, 2019 in Abidjan. I take this opportunity to thank you for your generosity, availability, and kindness in hosting and giving us the opportunity to better understand your vision for the Development of the African Continent. We can assure you that we share your aims.

My government welcomes the opportunity to strengthen the level of diplomatic engagement with the government of the United States of America and the African Development Bank through mutual respect and trust. I will avail myself to work closely with you to make the African Development Bank’s mission successful to promote regional integration and sustainable development.

I want to take this opportunity to renew to you my expression of my highest consideration and the assurances of the highest consideration to work together in mutual interests and benefit of Africa and the African Development Bank.

Highest Regards

Serge Mombouli Ambassador Extraordinary and Plenipotentiary Dean of The African Diplomatic Corps to The United States

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To: Honorable Eric Meyer Deputy Assistant Secretary of African Nation Office of International Affairs At United States Department of Treasury 1500 Pennsylvania Ave NW Washington, DC 20220

Honorable Deputy Assistant Secretary Eric Meyer,

On behalf of the Government of the Republic of Congo, as the Ambassador Extraordinary

and Plenipotentiary of the Republic of Congo to the United States of America and the Dean of the

African Diplomatic Corps, I want to take this opportunity to renew with the highest considerations the strategic importance of the United States engagement with the Republic of Congo and the

African Diplomatic Corps.

In early March, I would welcome the opportunity to meet with you at your earliest

convenience to discuss U.S. support for the African Development Bank and your availability to

meet with African Development Bank President Akinwunmi Adesina. Prior to the African Development Bank 53rd Annual Meeting on May 23, 2019, President Akinwunmi Adesina,

formerly Nigeria’s Minister of Agriculture and Rural Development will be in Washington for the

World Bank and International Monetary Fund Spring meetings held from April 12-14. The

Embassy will work with your office to confirm a meeting date and time.

The Government of the Republic Congo takes this opportunity to renew to the Government

of the United States of America the assurances of the highest consideration.

Highest Regards

Serge Mombouli

Ambassador Extraordinary

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& Plenipotentiary of the Republic of Congo & Dean of the African Diplomatic Corps

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To:

Honorable Congressman Richard Neal Ways and Means Committee Chairman Of the US House of Representatives

Honorable Chairman Richard Neal,

On behalf of the Government of the Republic of Congo, it gives me immense pleasure to extend my congratulations on your appointment to serve as Chairman of the Ways and Means Committee of the U.S. House of Representatives.

As Chairman of the Ways and Means Committee of the U.S. House of Representatives, it is our hope that you will further strengthen U.S. - Africa diplomatic engagement by maintaining the high level of funding support for U.S. foreign assistance programs that strengthen U.S. - Africa shared strategic interests: the Africa Growth and Opportunity Act (AGOA), the U.S. Africa Command (AFRICOM), the Millennium Challenge Corporation (MCC), the President’s Emergency Plan for Aids Relief (PEPFAR), the Africa Contingency Operations Training Assistance (ACOTA) program, and the African Development Bank. To ensure the political and economic security of the African region, it is critical that the United States and the nations of Africa maintain multilateral and bilateral strategic and diplomatic trade engagement with the U.S. International Trade Commission (ITC) and the U.S. Trade Representative (USTR). I welcome the opportunity to meet with you at your earliest convenience to work together

Received by NSD/FARA Registration Unit 12/29/2019 4:31:46 PM Received by NSD/FARA Registration Unit 12/29/2019 4:31:46 PM

to facilitate opportunities for American and African partnership. The Embassy will work with your office to confirm a meeting date and time.

The Government of the Republic Congo takes this opportunity to renew to the Government of the United States of America the assurances of the highest consideration.

Highest Regards

Serge Mombouli Ambassador Extraordinary & Plenipotentiary of the Republic of Congo Dean of the African Diplomatic Corps

Received by NSD/FARA Registration Unit 12/29/2019 4:31:46 PM