By Katrina Manson
KINSHASA, Aug 2 (Reuters) - Democratic Republic of Congo has
just celebrated 50 years of independence from Belgium but
attention is already turning to elections due next year.
The polls will be the second since the end of the war of
1998-2003 which drew in six foreign armies and resulted in the
deaths of five million. But the country is still seeking
political stability, battling economic woes and must decide on
the future role of United Nations peacekeepers in ending
Here are some factors to watch.
President Joseph Kabila came to power when his father was
assassinated in 2001, winning presidential elections in 2006.
But he still relies on the support of other parties such as
PALU, a veteran opposition party, for a parliamentary majority.
Factions within the coalition have complained about Prime
Minister Adolphe Muzito, from PALU, while opposition parties in
parliament have repeatedly tried to topple the government by
seeking votes of no confidence.
Rather than pushing through steps towards decentralisation
as set out in the constitution, analysts say Kabila's rule has
seen a concentration of power around him and a rising culture of
This perception was exacerbated in June when leading human
rights activist Floribert Chebeya was mysteriously found dead in
his car. An international autopsy team said this month could not
confirm the cause of death, but noted heart problems and signs
of physical stress on his arms and legs.
What to watch:
-- Growing political instability. With politicians looking
to 2011 elections, factions within and outside the coalition
have already started jockeying for positions. Vital Kamerhe, a
key Kabila ally in 2006 and a popular leader of the lower house
of parliament, has spoken of the need to change the old order.
-- Provinces seek more power. Congo missed a May 15 deadline
for decentralisation, which would see its 11 provinces divided
into 26 and receive more local funding. The failure to do so has
led to several districts, including oil-rich Ituri, to declare
themselves as provinces. Further moves by other districts would
worsen instability and deepen the discontent between them and
their distant capital.
-- Political crackdown. Should the coalition waver or face
serious internal opposition, it could trigger unrest given the
the government's track record of cracking down on dissent.
As part of efforts to secure $8 billion debt relief,
achieved at the start of July, and keep in step with conditions
for a three-year $550 million IMF loan, Congo has taken steps to
stabilise the economy.
Interest rates have come down to 29 percent, from 42 percent
at the start of July. Congo is on target to reduce annualised
inflation to 15 percent by the end of the year, from 69 percent
in January. The Congolese franc has stabilised against the
dollar in the past months, hovering just above 900 Congolese
francs to the dollar after falling 40 percent in 2009. Mining is
forecast to contribute $88 million in government revenues in
2010, triple the 2009 amount.
The central bank forecasts growth of 5 percent in 2010. But
80 percent of the country's 67 million people live on less than
$2 a day.
What to watch:
-- Impact of debt relief. Congo won its debt relief this
month, despite G8 member Canada raising concerns over a row with
Canadian mining firm First Quantum. All eyes will be on how
Congo uses funds no longer needed for its debt-service burden,
which was totalling about $200-300 million a year. --
Macroeconomic policy. The central bank and ministry of finance
have kept spending down this year, but a looming election year
may prompt a spending hike.
The World Bank ranks Congo as the second worst place to do
business after Central African Republic in a list of 183
nations. President Kabila wants the country to rise 20 places.
Model contracts in accordance with the new mining and oil
codes have been drafted, but they are yet to be decreed by
government. And in a series of disputes, several investors are
seeking international arbitration and complaining about how
contracts are awarded.
What to watch:
-- First Quantum's case. The Canadian firm is seeking
international arbitration after its $700 million KMT project was
closed. Rights to two other projects have also been disputed.
-- Vodacom dispute. A shareholder dispute between Vodacom
Congo's minority shareholder CWN and Vodacom, which holds 51
percent, is also to go to international arbitration. Both cases
will be closely watched by other investors.
-- Congo has overridden a deal for prospective oil blocks,
both claimed by Tullow Oil and South Africa consortium Divine
Inspiratiion Group, handing exploration rights to two new
entrants claimed by South Africa President's nephew Khulubuse
The intervention of Rwanda in 2009 helped end fighting by
Rwandan Tutsi-led CNDP rebels, whose leader Laurent Nkunda was
arrested and is awaiting trial in Kigali.
CNDP have since officially been integrated into the army,
but rights groups say they maintain control of swathes of land
and are extracting taxes and mining cassiterite and coltan.
Congo's army continues to try to oust Rwandan Hutu FDLR
rebels, who are said to derive 75 percent of their funding from
minerals and gold smuggling. It has also launched an offensive
against Ugandan ADF rebels, prompting more than 60,000 to flee.
Former government militias, known as the Mai Mai, have
splintered and mount random attacks.
A rebel assault in western Equateur province in April has
prompted an exodus of 100,000 refugees to neighbouring Congo
Republic, while attacks from Uganda's separate rebel LRA in the
north underscore wider instability.
While busy backing the army, U.N. peacekeepers are under
pressure from Kabila to pull out of Congo by the end of 2011.
What to watch:
-- U.N. peacekeepers. The U.N. acquiesced to Congolese
demands and withdrew 1,700 in June, leaving 20,000 others still
in country. The U.N. says further withdrawals will depend on the
security threat, but Congo insists on all blue helmets leaving
by the end of next year.
-- Land and ethnicity. These two issues remain at the heart
of Congo's simmering conflicts, especially in the eastern Kivu
provinces. Land rights, the movement of people and political
manipulation of these issues risk leading to further violence.
-- CNDP ex-rebels. Current leader Bosco Ntaganda is wanted
by the International Criminal Court for war crimes, and he could
face a challenge from General Gad, a rising CNDP figure.
-- ADF-NALU rebels. Supported from abroad, around 600 rebels
are well-trained and want an Islamic state. Uganda reinforced
its border and Congo is pursuing the rebels in North Kivu.
-- Intervention from neighbours. Once hostile due to support
for local rebel groups, relations with neighbouring Uganda and
Rwanda have warmed. But both countries face a testing year and
any trouble in either country could have repercussions in Congo.
(Writing by David Lewis; Editing by Giles Elgood)