IV.  POLITICAL ENVIRONMENT

BILATERAL RELATIONSHIP WITH THE U.S.

THE U.S. PROVIDES SUBSTANTIAL DEVELOPMENT ASSISTANCE TO GUINEA
IN THE PURSUIT OF LONG-TERM DEVELOPMENT OBJECTIVES.  THE U.S.
AGENCY FOR INTERNATIONAL DEVELOPMENT PROVIDED 40.3 MILLION,
35.1 MILLION, AND 37.1 MILLION IN 1991-1993 RESPECTIVELY, IN
ADDITION TO PARTICIPATION IN WORLD BANK, AFRICAN DEVELOPMENT
BANK, AND REFUGEE PROGRAMS.  DEVELOPMENT GOALS INCLUDE EFFORTS
TO IMPROVE RURAL ROAD AND TRANSPORT STRUCTURES, WHICH ARE
VITAL TO RURAL DEVELOPMENT AND MARKET NETWORKS.  IN ADDITION,
USAID WORKS WITH THE GOG TO SUPPORT ITS NATIONAL AGRICULTURAL
SUPPORT PROGRAM WHICH, WITH HEAVY DONOR INVOLVEMENT, AIMS TO
PROVIDE EXTENSION, CREDIT, AND ACCESS TO MARKETING SERVICES.
IN 1993, USAID COMMENCED FUNDING A PRIVATE SECTOR AGRICULTURAL
MARKETING AND EXPORT FOUNDATION.  OTHER USAID PROJECTS FOCUS
ON THE SMALL ENTERPRISE SECTOR, EDUCATION, AND THE HEALTH
SECTOR.

MAJOR POLITICAL ISSUES AFFECTING BUSINESS CLIMATE

POLITICAL SYSTEM AND SCHEDULE FOR ELECTIONS:  IN DECEMBER
1993, THE GOG HELD ITS FIRST PRESIDENTIAL ELECTION SINCE
GAINING INDEPENDENCE IN 1958.  WHILE NOT COMPLETELY
TRANSPARENT, THE BALLOTING OCCURRED RELATIVELY PEACEFULLY WITH
LARGE VOTER TURNOUT, AND CULMINATED IN THE ELECTION OF LANSANA
CONTE AS PRESIDENT.  INAUGURATION CEREMONIES IN LATE JANUARY
1994 MARKED THE OUTSET OF THE THIRD REPUBLIC, ALTHOUGH BY MID-
YEAR, THE CABINET AND ADMINISTRATIVE POSITIONS REMAINED
UNCHANGED.  LEGISLATIVE ELECTIONS ARE TENTATIVELY PLANNED FOR
THE FINAL QUARTER OF 1994.

THE TWO LARGEST ISSUES FACING THE GOG IN 1994 ARE THE
CONTINUATION OF THE DEMOCRATIZATION PROCESS AND THE
IMPLEMENTATION OF STRUCTURAL ADJUSTMENT.  POLITICALLY, THE
STRUCTURAL ADJUSTMENT INFLUENCES THE COMMERCIAL SECTOR IN
SEVERAL WAYS:  DIRECTLY, THE IMPOSITION OF HIGHER TAXES, IN
THE GOG'S EFFORT TO RAISE REVENUES, AND INCREASED PRESSURE ON
FOREIGN BUSINESS TO MAKE CONCESSIONS; INDIRECTLY, STRUCTURAL
ADJUSTMENT, AND THE ELIMINATION OF REDUNDANT LABOR IN THE
GOVERNMENT INCREASES ALREADY HIGH UNEMPLOYMENT WHICH AFFECTS
LABOR TENSION.  IN THE PAST EIGHTEEN MONTHS, FOR EXAMPLE,
WORKERS HAVE ORGANIZED STRIKES IN THE MINING, MANUFACTURING,
ENERGY, AND BANKING SECTORS.

THE 1993 PRESIDENTIAL ELECTION CAMPAIGN RAISED THE SPECTER OF
ETHNIC CONFLICT, AS CAMPAIGNS AND CANDIDATES WERE ORGANIZED
PRIMARILY ALONG ETHNIC AND REGIONAL LINES.  THE ELECTION WAS
PLAGUED WITH SPORADIC PERIODS OF VIOLENCE.  1994 WILL BE A KEY
TRANSITION PERIOD AS GUINEANS GO TO THE POLLS FOR THE
COUNTRY'S FIRST LEGISLATIVE ELECTIONS.