Geert Bekaert and Campbell R. Harvey's


Chronology of Economic, Political and Financial Events in Emerging Markets


Cote d'lvoire


Major Political and Economic Events


Banking crises (1988-1991): 4 big banks were involved, 3 definitely and 1 perhaps insolvent, accounting for 90% of banking system loans or 65%-70% of banking system assets. Causes: ToT deterioration of 40%, excessive and distorted taxation, real appreciation of foreign exchange rate, inadequate banking supervision, high operation costs, politically motivated loans and inadequate loan monitoring. Overall change in macro policy: the government pursue tight fiscal and monetary policy and devalued the currency.a2


The National Assembly approved a new Ivoirian Investment Code. For all practical purposes, there are no significant limits on foreign investment -- or difference in the treatment of foreign and national investors -- either in terms of levels of foreign ownership or sector of investment.pp(capital account liberalization) (equity market liberalization)


The transfer abroad of the proceeds of liquidation of foreign direct investments no longer requires prior government approval.pp(capital account liberalization)


The opening of the new West African regional exchange was delayed.


A new, three-year IMF-World Bank loan package worth nearly $2.2 billion was signed.


The chief executive of the regional exchange resigned.


(Controls on capital and money market instruments) The WAEMU regional stock exchange began operation. a3 The new Bourse Regionale des Valeurs Mobilieres, or BRVM, finally opened.


The government announced to sell its stake in nine companies already listed on the BRVM. BRVM revised the rule to allow operators to conduct transactions through accredited brokers without going through the computerized order matching system. Previously, block trading needed to be approved by the BRVM and could only be conducted at the price fixed by the previous day's closing session.


CFA franc's anchor smoothly transferred from the French currency to the euro.


(Controls on capital and money market instruments) Transfers related to the sale of foreign securities by residents and to proceeds of disinvestments by nonresidents were allowed. Foreign investment in WAEMU countries became unrestricted. Such operations are subject to reporting for statistical purpose. The prior authorization of the Public Saving and Financial Market Regional Council is required for the issuance and marketing of securities and capital assets of foreign entities, as well as for publicity and advertising of investment abroad. Any investment by residents abroad requires the prior approval of the MEF. (Controls on derivatives and other instruments) Transfers relating to option purchases were allowed. (Controls on direct investment) MEF authorization is no longer needed for investments abroad by residents in the form of securities, if the issue or sale by nonresidents was authorized by the Public Savings and Financial Market Regional Council. (Controls on liquidation of direct investment) MEF approval is no longer needed for nonresidents to transfer the proceeds from the liquidation of direct investments. (Provisions specific to commercial banks and other credit institutions) The prior approval of the BCEAO is also needed to grant loans or financial credits to nonresidents or to purchase securities abroad. (Provisions specific to institutional investors) Restrictions are imposed by the Insurance Code of the Inter-African Conference on Insurance Markets.a3(first entry)


Bourse officials launched a promotional campaign in West Africa aimed at bolstering regional interest in the market. A new satellite-based trading system was introduced, allowing brokers in all seven-member states of the regional bourse to see trading orders and participate in the market on a real-time basis.


West Africa's Francophone regional bourse ended lower as investors looked to sell off stocks to finance school expenses for the upcoming academic year.


Since the installation of millennium compliant systems earlier in the year, bank SGBCI and BICICI continued to experience major operational difficulties.


A Christmas Eve military coup, the first coup since the country became independent in 1960, put General Robert Guei into power.


Cote d'Ivoire announced it would default on its Brady Bonds, worth US$33 million.


A tentative coup led to a three-day halt in business nation wide. The international community pressured the government to organize democratic elections to ensure long-term political and economic stability.


The government announced it would raise the fixed taxes on cocoa and coffee bean exports to raise government revenue. The IMF reported a current account deficit of 5.5% of GDP. The last phase of the privatization of the cotton company CIDT was reached, with 80% stakes given to SIFINECO.


Presidential palace was attacked with an assassination attempt on President Guei. West African cocoa producers agreed to burn 250,000 tons of their crop after cocoa prices hit a 27-year low. Renewed clashes between fractions in the cocoa-growing southwest region of the country caused heavy fatalities. Member countries of the Economic Community of West African States (ECOWAS) announced an ambitious plan to launch a common currency by 2004.


The most prominent candidate, Alassane Dramane Ouattara, was banned from contesting in the election. General Guei was first declared to win the election, and the following clashes killed at least 100 people. Finally the election commission proclaimed Laurent Gbagbo the official president. The World Bank suspended funds to the country because of unpaid arrears, and the EU threatened sanctions against electoral fraud. Cote d'Ivoire considered pulling out of the CFA Franc Zone, given a 20% devaluation against the U.S. dollar since the introduction of the euro.


A new tender was issued for the delayed privatization of the oil refinery, Societe Ivoirienne de Raffinage. Air France and Air Afrique announced they would take up 51% in the national carrier.


A coup attempt by dissident soldiers failed. Affi N'Guessan was reappointed Prime Minister and formed a new government. International aid flows fell during the political uncertainty.


A multimillion-dollar dispute between the government and industrial chocolates major manufacturer Barry Callebaut over its tax evasion and fraud charges weighed on the market.


The BCC was created, lifting the market.


Disruptive strikes and falling coffee bean prices affected investor's confidence. Authorities suspended BCC's marketing powers after tension grew between the government and BCC over control of export taxes.


IMF offered a US$120 million aid package and a three-year Poverty Reduction and Growth Facility program. Former President H.K. Bedie was the only major political figure to attend national reconciliation talks, jeopardizing international funding.


The Paris Club of creditor nations has agreed to a restructuring of US$2.3bn of Côte d'Ivoirian debt, which it is allowing under its Lyon terms.


The World Bank has announced that it will make available a US$200m loan for the development of the private sector. The loan matures in 40 years and comes with a 10-year grace period.


The African Development Bank has approved a loan of US$20.4m to finance a rural development project in eastern Côte D'Ivoire.


President Laurent Gbagbo named a new 'national unity' government, containing a number of opposition figures.


The rebel resurgence broke out. The 15-member regional grouping, the Economic Community of West African States (ECOWAS), has entered the current crisis in Côte d'Ivoire by backing the government.


The country's main opposition - the Rally of Republicans (RDR) party - announced yesterday that all of its four ministers are quitting the broad-based 'national unity' government with immediate effect.


African Development Bank Pulls Out of Côte d'Ivoire.


the government, the political opposition and the rebel Patriotic Movement of Ivory Coast (MPCI) reached an agreement on the formation of a government of national unity.


Côte d'Ivoire's unity cabinet has met in the rebel-held city of Bouaké, capitalizing on recent progress to end the country's eight-month civil conflict.


Military Committee Established to Oversee Formation of New Ivorian Army.


New Opposition Alliance Formed to Defend Ivorian Peace Accord.


Côte D'Ivoire's 'consensus' prime minister, Seydou Diarra, set up a committee to oversee the disarmament of warring factions in the country.


Around 300 Ivorian civilians and soldiers fought with French peacekeepers in the de-militarized zone between government and rebel-held areas, leaving several Ivorian troops injured and an armored car destroyed.


Following the violent suppression of an opposition demonstration in Abidjan yesterday, several of the key parties participating in the government of national reconciliation (GRN) announced their withdrawal from the power-sharing administration, plunging Côte d'Ivoire into its most significant crisis since the signing of the Marcoussis peace agreement more than 14 months ago.


The World Bank has announced the suspension of loan payments of around US$335m to Côte d'Ivoire, following the government's breach of a requirement to service its existing debt at least once every 60 days.


Regulations on Foreign Investors


Restrictions: The country maintains an open policy toward foreign investment. Custodial arrangements can be made through the two largest banks.

Taxation: No capital-gains tax and funds can be repatriated without difficulty.a6


Restrictions: Investments from outside the Franc Zone must be approved by the external
finance and credit office of the Ministry of Economy and Finance, but this is
essentially a foreign exchange control/monitoring measure.b7

Taxation: VAT was reduced from 20% to 18% for all sectors. Corporate tax rate is 35%. Foreign investment is protected against expropriation and nationalization by national legislation. b1