By David Lewis
June 7, 2011 1:39 PM EDT
Angolan military aid and a truce between squabbling politicians have bought Guinea-Bissau some respite, although drug trafficking and tricky military reforms threaten its progress towards lasting peace and economic growth.
While Western and regional powers dither over how to help a country whose military has long meddled in politics and is heavily implicated in cocaine trafficking, Luanda has stumped up both money and men to help stabilise the tiny nation.
Official economic data points to healthy growth this year, external debt is being eased and firms, long owed money by a cash-strapped government, say they have been partly paid.
Consequently, business is ticking up, salaries are being met and even a few potholes are being filled, residents say.
"We are starting from a very low point but there has been progress," said Vincent Foucher, an analyst at the Brussels-based International Crisis Group think tank.
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"The situation had got so bad that all it took was to manage, and things got a bit better," he added.
In a move that should ease payments, the Paris Club of creditors in May agreed to cancel $256 million in debt.
The IMF says the economy will expand at 4.3 percent this year, up from 3.5 percent last year, due to a healthy harvest of, and better prices for, the country's main crop: cashew nuts.
Donors are helping build roads and boost power output from a paltry 4 megawatts, just one seventh of the country's needs.
Suspecting the IMF of painting an overly rosy outlook, not everyone believes the data tells the whole story. Others think drug money may be supporting the legitimate economy.
But the relative stability is undeniable. "It's good news we haven't been in the news," said a Bissau-based businessman. "The country has started to live again over the last six months."
"MAKING LESS NOISE"
Prime Minister Carlos Gomes Junior has been in his job for three years, a record for the former Portuguese colony that has experienced little but conflict and coups since independence.
The country saw its president and army chief assassinated in 2009, a trend that threatened to continue last year when a revolt in the military put factions accused of collaborating with Latin American drug cartels firmly in charge.
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