Ouattara’s Bid to Unite Ivory Coast Hindered by Outside Help to Finish War

Alassane Ouattara is on the verge of winning the military battle to control Ivory Coast. The challenge of healing ethnic and regional divisions in the world’s top cocoa producer may prove to be a more daunting task.

The incumbent leader, Laurent Gbagbo, began negotiating an exit after French and United Nations forces destroyed most of his army’s heavy weapons. While those bombing raids accelerated the end of a four-month crisis triggered by a Nov. 28 election that the international community says Ouattara won, they may also hinder his task of forming a unity government.

“The country is severely polarized,” said Anne Fruhauf, Africa analyst for Eurasia Group in London. “It looks like we’re going to have a quite a rough few months of transition.” The French and UN strikes “will make it harder to convince the southern population, which has been fed a decade of virulent propaganda, that Ouattara is not a crony of the western powers.”

Ouattara will assume power with the country’s cocoa industry, the source of more than a third of export earnings, largely intact. About a third of the country’s 2010-11 crop has been stockpiled near the port of Abidjan, the commercial capital. A.P. Moeller-Maersk A/S, the world’s largest container- shipping line, said it would be able to send vessels as soon as European Union lifted sanctions it imposed in January.

Cocoa Falls

Cocoa for July fell $4, or 0.1 percent, to $2,989 a metric ton at 8:39 a.m. on ICE Futures U.S. in New York. Prices for the chocolate ingredient have risen as much as 34 percent since the disputed election, advancing to a 32-year high of $3,775 a metric ton on March 4.

Ivory Coast’s defaulted dollar-denominated bond gained 7.7 percent to 55.44 cents on the dollar at 11:57 a.m. in Abidjan, according to data compiled by Bloomberg.

EU governments banned lending to Gbagbo’s “illegitimate” government and the purchase of bonds or other securities from it, according to an e-mailed statement in Brussels today.

Gbagbo remains in a bunker under his residence, which was surrounded by pro-Ouattara Republican Forces. Gunfire broke out in the neighborhood and near the Agban military camp in Deux- Plateaux district at about 6:30 a.m. today.

Battle Continues

“Fighting is ongoing,” Republican Forces spokesman Meite Sindou said by phone. “The talks last night didn’t bring any results.”

Residents stayed at home as the battle continued.

“Heavy artillery is being used near Agban,” resident Stephane Mondon said today. “It’s very loud and very violent. The cease-fire is not being respected by Gbagbo’s army.”

Gbagbo yesterday accused France of intervening in the crisis, saying it “entered directly into war against the Ivory Coast.”

While he would be willing to leave Ivory Coast “if my departure brings peace to my country,” Gbagbo said in an interview with the Paris-based LCI TV news channel, it’s “far from proven” that it would end the conflict. There’s “no agreement on the political front,” Gbabgo said, and he still believed Ouattara didn’t win the president election.

‘I Like Life’

Gbagbo said his actions weren’t those of a “kamikaze”. “I like life,” he told LCI. “This is not the voice of a martyr.”

French Foreign Minister Alain Juppe today accused Gbagbo of “absurd stubbornness” and urged him to quit.

“He’s alone, isolated in a bunker. He must face reality and leave,” Juppe said on the Paris-based France Info radio station. “The only thing left to negotiate are the conditions of Gbagbo’s departure.”

Gbagbo “doesn’t have a choice”, Admiral Edouard Guillaud, France’s Chief of Defense Staff, said in an interview with Paris-based Europe 1 television station today. “It’s a question of hours. Exile is probable.”

Ivory Coast’s broader economic rebound will depend on the return of political stability.

“Ouattara has a very big and difficult political task,” Rinaldo Depagne, a Dakar-based analyst for the International Crisis Group, said in a telephone interview yesterday. “He will have to deal with Gbagbo hardliners who may want to launch guerrilla attacks. He’s got to end the military phase of the crisis.”

Youth Militia

With thousands of heavily armed youth militia still at large on the streets of Abidjan, an immediate end to the violence is unlikely.

The UN put the death toll from post-election violence at 494 before the fight for Abidjan began. At least 800 more were also killed in the western town of Duekoue after it fell to Ouattara’s troops, according to the International Committee of the Red Cross.

Ouattara’s Justice Ministry denied the involvement of their forces in the massacre and called for an international investigation.

Duekoue was on the front-line of the civil war that was sparked when a law before 2000 elections disqualified Ouattara and other candidates if either of their parents weren’t born in Ivory Coast. Ouattara’s main supporters were workers on cocoa and coffee farms who had immigrated from Mali and Burkina Faso. In September 2002, mainly northern troops mutinied, dividing the country in two. A cease-fire was signed in 2004.

Ethnic Factions

“The conflict in Ivory Coast has never been between Ouattara and Laurent Gbagbo alone,” Sebastian Spio-Garbrah, Africa analyst at DaMina Advisors LLP in New York, said in a telephone interview yesterday. “The conflict is largely between political and ethnic factions. A strong faction of the Abidjan population and the southern population would remain intractably opposed to Ouattara.”

Banks including Societe Generale SA, Standard Chartered Plc (STAN) and Citigroup Inc. and oil companies such as OAO Lukoil and Anadarko Petroleum Corp. suspended their operations in Ivory Coast as the political crisis intensified this year. They will need assurances that violence has ceased before returning.

“We’re monitoring the situation in real time,” Societe Generale spokeswoman Laura Schalk said in telephone interview from Paris yesterday. “The safety of our staff and clients remains our primary concern.”

Normal Activity

Cluff Gold Plc (CLF), a U.K. developer of gold mines in West Africa whose operations in Ivory Coast were disrupted by the turmoil, also said it was too soon to say when the situation would normalize.

Randgold Resources Ltd., a Jersey, Channel Islands-based mining company, said its Tongon gold mine in the north of the country has continued to function throughout the turmoil.

“We have very strong relationships with the northern authorities,” Chief Executive Officer Mark Bristow said in a telephone interview yesterday. “We’ve operated as normally as you can in a difficult situation. We’re looking forward to the resumption of normal activity in Cote d’Ivoire.”

Melbourne-based Newcrest Mining Ltd., which suspended operations at its Bonikro gold mine, about 250 kilometers (155 miles) northwest of Abidjan on March 31, said they would resume “when it is safe and secure to do so.”

To contact the reporters on this story: Mike Cohen in Cape Town at mcohen21@bloomberg.net; Franz Wild in Johannesburg at fwild@bloomberg.net; Jason McLure in Accra at jmclure@bloomberg.net.

To contact the editor responsible for this story: Andrew Barden at barden@bloomberg.net.

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