Thursday, February 28, 2008

Dateline Ouagadougou: From "dead ville" to riot central

Update: Please see updates on the ongoing riots below

The military is out on the street. The government has closed the schools. Ouagadougou is under orders to be a “dead ville,” meaning all shops will be closed, except, oddly enough, the boutique across the street from our house. “If I see a crowd coming, I’ll close up,” the proprietor said.

Traffic is out, but not its normal chaotic flavor. At 10 am, the markets were mostly shuttered, and I’ve been told that downtown is completely dead. This is all in anticipation of a large demonstration called for today regarding the skyrocketing prices that have afflicted the country during the first two months of 2008.

Last week, demonstrations against high prices turned ugly as demonstrators burned tires, ransacked offices and looted gas stations in Bobo-Dioulasso, Ouahigouya, and Banfora. (In Banfora, vandals also destroyed a statue dedicated to the work and wealth of women.)

One political party, in an attempt to keep pressure on the government, called a “dead ville” for Ouagadougou today, one week after the violent demonstrations in secondary cities. The press is full of accounts of people complaining the government has done nothing but watch prices skyrocket – by as much as 30 percent for some items – since the beginning of the year. Yesterday, February 27, multiple government ministers met the press in an attempt to diffuse the anger around the country and head-off a massive demonstration in Ouagadougou today. They pointed out that food prices around the world have increased, and claimed that Burkina Faso was the first country to offer solutions. With their hands firmly planted on their backs, the ministers announced a three-month suspension of customs duties on powdered milk, rice, sugar, salt and pastas. Also, Made in Burkina products like oil and sugar will also have its taxes repealed. The government admitted the whole program will cost the state 3 billion CFA (roughly $6.6 million).

As I pointed out before, one of the reasons for the sharp increase in prices is government program to crack down on the allegedly wholesale corruption of customs officers who take bribes from large food distributors instead of charging import taxes on their goods. Once that racket was halted, the government claimed, merchants had no choice but paying the import duties, and thus, passing the new higher prices onto their customers. The press, salivating for the names of merchants caught red-handed avoiding bribing customs officers, were greeted with the semi-lame excuse that 155 people had been questioned by police but nothing else was presently forthcoming. (One observer claimed that he would be surprised if even one commercant, much less a crooked customs agent, would see the inside of a prison cell for their flagrant rejection of the law.)

As last week’s demonstrations slowly faded from view, a different debate swept through the press: How the government’s new tax structure has amplified the already peoples’ worsening economic situation. It must be said that the World Bank and International Monetary Fund have long complained about the sloppy tax structure in Burkina, which foists much burden on the country’s few formal businesses while largely ignoring personal income taxes.

In 2006, the World Bank Private Sector Unit investigated the (many) complaints of Burkina’s business class and came away with this:

Tax rates as well as tax regulations are among the important concerns for formal companies’ managers (for about 76 percent of formal firms). The tax system is indeed focused on the collection of tax revenues from a limited tax base; in practice, a small number of formal firms and remains cumbersome.

For a poor government like Burkina Faso, which runs heavy spending deficits (and hopes to make up the differences through loans and grants) and heavy trade deficits, the IMF has long argued the state needs to reform the tax structure and begin bringing in more revenue.

This is from the IMF’s consultation with the country in January, which took place January 15.

Ongoing structural reforms include steps to improve revenue performance. Domestic revenues are still low by regional standards, and measures focus on improving tax compliance and broadening the tax base. Reforms to improve tax administration include the computerization of the large taxpayer office, the removal of exemptions, and the streamlining of the tax code. The strengthening of public financial management is another focus of the authorities' reform program. In other areas, structural reforms are aimed at reducing constraints to the business environment, reduce corruption and improve international competitiveness…

…In this connection, timely implementation of revenue administration and comprehensive tax policy measures will be crucial. Directors therefore welcomed the focus on revenue-raising reforms in 2008 and encouraged early adoption of the planned tax policy reform. Directors also recommended against contracting new non-concessional borrowing, and stressed that the authorities should seek new assistance in the form of grants wherever possible.

The details of this new tax structure, at least by reading the media, still remains fuzzy to me. There are those who are complaining the new taxes are inherently regressive and intentionally set to benefit the country’s nouveau riche, a group firmly in President Blaise Compaore’s camp. From a list provided through an anti-tax letter published in a local daily, street vendors must now pay taxes and bars have seen their fees increased; electricity taxes have also gone up; and license and license plate taxes, apparently shelved since the mid-1980s, are now back on the table.

What all this does only complicates matters, says the detractors, as new taxes, mixed in with already high prices and government neglect only hurts the common person.

Check out the map, which is the best I could find.

Update:Demonstrators started gathering at the Stade du 4 Aout (Sector 9 on the map) around 11 am and began making their way downtown. A friend told me he saw a few foreigners’ cars totaled. Another witness claims that demonstrators were seen in Patte-d’Oie (Sector 30), basically on the other end of town.

Another source claims that once the demonstrators hit Cité Ans III (Sector 11), the police responded with teargas, calming the situation. (I think I have confirmation of tear gas.)

Update: U.S. government has closed its offices effective 11:15 or so. (They were probably the only people opened.

Just heard from friend that downtown is now quite hot. I guess I won’t be going to the airport.

Took a short tour around the neighborhood – no amount of violence will affect my daughter’s playdates – and things are very quiet. Barely any traffic on the street. The boutique in front remains open, as does the carpenters next door.

Update: A friend said one can see parts of the city on fire from the roof of a four-storey building in our neighborhood. I can't confirm this.

Also, friend called another friend from downtown, where things are now pretty hot.

Update: A friend in Dapoya (Sector 12) says things are calm. He, however, was speaking from a closed bar. It says something that this bar is closed.

Someone I know just returned from Kwame N'Krumah, the heart of the downtown restaurant and upscale business district and said things are quite hot. People are throwing rocks and burning tires. It's home to many restaurants, some of them foreign-owned. Let's hope everyone has protection for their windows.

Update: It's eerily calm on this end of town, even more so than your regular lunch-time siesta. My friend’s plane has just arrived and being a true coward, sent a Burkinabé to pick her up. With the targeting of foreigners, I didn’t want to take any chances. That being said, he’s driving our car, which has IT plates, basically telling everyone a foreigner owns the car. Let’s hope he’s fine. My friend, on the other hand, may be in for quite a shock on her first trip to Ouagadougou.

Update: Report from someone in the know: “We don’t know anything other than it is pretty hot around the city.” Chauffe, basically French for hot, is what people use here to describe (in this case) violent actions.

No news is good news: There have been no confirmed reports of rioting in other parts of the country.

Update: Downtown has been clear of demonstrators. Only the security services can be seen right now as everyone else has gone home.

Bookkeeping update: The U.S. embassy claims that disturbances were reported in Dapoya and Baskuy, Tampouy and Goungin Nord. These, most likely, have calmed down. A friend reported that he saw people burning tires in faraway Somgande where one of the city's mayors has a house. Those people have also dispersed.

Update: A different friend in the know said that rioters still at Patte d'Oie area and Goughin. Downtown and Kwame N'Krumah area seem to be calm. A different person said there is a lot of debris around.

Update: Things appear to be considerably calmer this afternoon. Demonstrators were still going at it in Gounghin, but I've heard that they have dispersed. I've also learned that roving bands of bandits are still being seen around town, ready to wreak havoc. I don't know how true this is or how many bands we are talking about. Traffic is very light.

Update: Call this anecdote “Escape into Ouagadougou.” A story just came in from someone who was attempting to return to town around noon or 12 :30 pm. The group came in on the Ouahigouya road – between Sector 20 and 21– but immediately after passing the toll booth, saw “a mass of black smoke in front of us…and ahead of us was a bunch of tires people were burning.” The group decided to turn around and circumvent the city to the north and attempt to enter from a different direction. However, they were also stopped by burning tires in the middle of road. They finally entered on a dirt road where tires were burning, but gingerly drove through them. “There were lots of people standing around, but I didn’t see any violence or anything.” Near one of the barrages – due north of Dapoya – there was a large post blocking the road. The group also passed a group of soldiers protecting an office of a neighborhood mayors from any violence. After dropping the group off, the driver attempted to circumvent town on the beltway called “route circulaire” past Dassasgo and Wemtenga, but was eventually blocked by rioters. Eventually, and this is third-hand, he made his way to Gounghin where he ran into other demonstrators.

Update: Lost somewhere in this coverage is how the riot’s affect on local businesses. For those with a “formal” business, one worries about property and stock damage, of course. More than a few people this week expressed fears that if demonstrations were to hit Ouagadougou, bandits and thieves could enter stores and houses during the day. That’s certainly a problem, but we won’t know about for a few days. Secondly, business owners of all stripes have to worry about sales lost due to being closed. I just spoke to a friend in small business and he told me everyone was going back to work tomorrow, Friday. Think of it as demonstration etiquette: we’ll give people one day to vent frustrations, but then we’ve got to get back to work. This is especially true for those others in the informal sector – the phone card vendors, the water pushers, the manual laborers – who don’t get paid if they don’t work.

Update: Check out this story from BurkinaMom also has a post up.

Update: Some final thoughts. Watched Burkina's nightly news program and was rewarded with 30 seconds or so of footage of violence downtown. It consisted mostly of CRS police in full gear walking slowly and waving guns and a few bystanders trying to figure out how they were going to cross the road. We also were rewarded with a lecture from the Minister of Security. He harangued the more than 200 who were arrested and scolded the others who spent the day causing so much damage and ignoring police orders. For the police services, he had nothing but good words and thanked them for a job well done. A member or two of the opposition made an appearance, also. They were shown sitting down and discussing a solution to the problem of high prices. One idea from the opposition: Price ceilings on staple goods. I wonder how the World Bank will go for that. Finally, people who left their houses tonight reported the city appeared normal, at least in our pretty quiet neighborhood. Bars were full. Roads were busy. After a day stuck at home, it was time to spend some quality time with friends. Just like the holidays.

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