* Risk of conflict before 2011 election - report
* Instability a threat to resource investment
* International community should demand reforms - report
By Richard Valdmanis
ABIDJAN, May 26 (Reuters) - Cameroon faces the risk of growing unrest before elections in 2011 due to public disenchantment with President Paul Biya and the slow pace of reforms, International Crisis Group said in a report on Tuesday.
Internal conflict in the oil producing nation, which is viewed as one of central Africa's most stable countries, would be a setback for regional democracy and unsettle billions of dollars' worth of energy and mining investments.
"The failure of reform and continued poor governance mean people no longer believe in the rule of law or peaceful political change," warned ICG, an independent thinktank. "Multiple risks of conflict exist in the build-up to presidential elections in 2011 and beyond."
Biya, 77, came to power in Cameroon in 1982 and has held sway since, often thanks to elections the opposition says were unfair. In 2008, he orchestrated a constitutional re-jig removing term limits that set off violent street protests but allowed him to stand for the elections expected next year.
Opposition leaders have already accused Biya of attempting to take control of the electoral commission to increase his chances of winning in 2011.
Once-healthy oil production is declining. Figures released on Tuesday showed Cameroon produced 6.09 million barrels of crude oil in the first quarter, down 13 percent from the same period in 2009 and little more than 50,000 barrels per day.
While Biya's government has announced plans to triple electricity generation by 2020, power shortages are holding back mining projects vital to diversifying the economy.
"The economy is weighed down by corruption and inertia, and the population sees very little from what economic growth there has been, mainly through exploitation of natural resources," ICG said in the report.
The Communications Ministry said it had no immediate comment on the report.
Neighbours and other international players should apply financial and political pressure on Biya's government to push reforms and prevent internal conflicts like those seen in West Africa's Guinea and Ivory Coast, ICG said.
"The problems are of legitimate wider concern and present a classic case of possible early conflict prevention," it said.
ICG added that the succession is a worry. "The end of Paul Biya's presidency, only the second the country has known, is likely to be fraught with risk. But it could also be an opportunity to initiate the reforms needed to ensure the country's longer-term stability," it said.
For a FACTBOX on Cameroon's energy and mining projects, click here: [ID:nGEE5B60IZ] [ID:nLDE6040NI] (Reporting by Richard Valdmanis; editing by David Stamp)