World Bank cuts Ivorian financing as crisis deepens

By @ibtimes on

France asked its citizens to leave Ivory Coast and the World Bank froze funding to the West African state on Wednesday, as a violent power struggle deepened between incumbent Laurent Gbagbo and his rival presidential claimant Alassane Ouattara.

Gbagbo has refused to quit following a November 28 election that African countries and western powers say he lost to Ouattara, in a dispute that has already killed 50 people and threatens to restart a civil war.

A key Ouattara aide said the only solution to the crisis was for the international community to consider using force to oust Gbagbo.

We ask those who can to leave Ivory Coast temporarily until the situation normalizes, French government spokesman Francois Baroin told reporters in Paris. There are now about 13,000 French nationals in the former French colony.

Germany and Britain advised against travel to the country and urged their citizens there to leave, a day after Nigeria said it evacuated diplomatic staff from the country following an attack on its embassy.

World Bank head Robert Zoellick said funds for Ivory Coast had been cut off, in a move to squeeze Gbagbo financially. According to the World Bank website, the global lender has aid commitments to Ivory Coast of $842 million as of January 2010.

They have already been frozen, Zoellick said in Paris after a meeting with President Nicolas Sarkozy.

The European Union and the United States have imposed sanctions on Gbagbo and members of his inner circle in an attempt to force him to step down, and African countries have offered him a soft landing in exile.

But Gbagbo has shown no sign of caving in to the pressure and late on Tuesday invited an international committee to re-examine the results of the vote, a move that a Ouattara spokesman dismissed as a delaying tactic.

For the past five years he tried maneuvers to postpone the elections. Finally we got there, he lost, and he doesn't want to give up power, Patrick Achi, a spokesman for Ouattara's rival government, told Reuters by telephone on Wednesday.

The Prime Minister of Ouattara's rival government, Guillaume Soro, said on French news network i-Tele on Wednesday that the United Nations and other world bodies should consider toppling Gbagbo by force as diplomatic measures fail.

The turmoil in the world's top producer of cocoa has boosted cocoa prices to recent four-month highs, disrupting export registrations and raising the spectre that fighting could block transport and shipping.

HOTEL BLOCKADE

Provisional results from the poll showing Ouattara with an 8 point victory in the election were validated by the United Nations but overturned by Ivory Coast's top legal body, headed by a staunch Gbagbo ally, on grounds of alleged fraud.

The United Nations Security Council this week defied Gbagbo by extending the mandate of its 10,000 strong peacekeeping force, rejecting his request they leave.

Several hundred of the peacekeepers are protecting an Abidjan hotel where Ouattara set up his headquarters and rival government, and U.N. Secretary General Ban Ki-moon has accused Gbagbo's forces of trying to blockade it.

The election, delayed repeatedly since 2005, was meant to reunite the country following a 2002-03 civil war that split it into a rebel-held north and a government-controlled south. But it has instead deepened divisions.

Gun battles briefly broke out last week between government soldiers and the rebels who now back Ouattara and residents of pro-Ouattara neighborhoods have said masked gunmen are now breaking into homes by night and kidnapping people.

The crisis has sent food prices in Abidjan shooting higher as shops close and transport is choked off..

The yield on Ivory Coast's Eurobond rose to record highs on Tuesday over 14 percent -- a sign of investor concern over the country's ability to repay. By early Wednesday the yield had dipped back below 13 percent.

In addition to freezing financing, the World Bank had already tied the cancellation of $3 billion in Ivory Coast's external debt, estimated at $12.5 billion, to the elections and has said the entire Ivory Coast lending program was under review due to the dispute.

(Additional reporting by Yann Le Guernigou; Writing by Richard Valdmanis; Editing by Giles Elgood)

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