ABIDJAN May 3 Ivory Coast can look forward to peace after a bloody four-month power struggle was resolved with the arrest of former president Laurent Gbagbo, who had refused to step down after losing an election.
The road to stability and economy recovery in the world's top cocoa grower will be long and littered with potential obstacles. Yet new President Alassane Ouattara can count on a large slice of international goodwill and the undoubted benefit of a country rich with natural resources which also include oil, coffee, gold, cotton, palm oil and rubber.
Here are the main factors to watch: SECURITY
Although he is now Ivory Coast's sole president, and no longer holed up in a U.N.-protected hotel, one of Ouattara's first priorities will be to convince Ivorians that he is able to fully restore law and order after weeks of violence and looting.
Fears of divisions within the anti-Gbagbo coalition proved to be well-founded as rows between factions swiftly broke out. But the killing of Ibrahim Coulibaly, who had led the initial attacks on Gbagbo's forces in Abidjan, may help stem the damage.
An unknown number of pro-Gbagbo militia are still holding out in the neighbourhood of Yopougon and there have been days of heavy fighting there despite some agreeing to lay down their arms.
Security is also a serious concern up-country, especially the west, where gunmen, including some from neighbouring Liberia, continue to operate amid an atmosphere of deep-rooted ethnic tension.
What to watch
- Whether any of Coulibaly's supporters, who have a fierce rivalry with prime minister Guillaume Soro, try and hold out, leaving pockets of instability in Abidjan.
- How successful Ouattara is at disarming the pro-Gbagbo militia and remaining mercenaries.
- Military reforms. Further down the line, Ouattara must deliver on military reform, the lack of which during the lead up to election contributed to the crisis. Success will hinge on his ability to break up fiefdoms, and incorporate former rebels and pro-Gbagbo forces into disciplined, organised military unit. Failure risks reigniting the conflict.
After running a parallel administration with no real power, Ouattara is due to be sworn in as president in the capital, Yamoussoukro, on May 21.
He is likely to have little or no grace period and will need to deliver concrete results in getting the country back on its feet in order to win over the 46 percent of the population that voted for Gbagbo, as well as the foreign powers that backed him in the power stuggle.
Delays or signs of a lack of leadership risk quickly stoking frustrations.
What to watch
- The government. Ouattara has promised some form of government of national unity so all eyes will be on the composition of the team he names after his swearing in.
Allies from the Nov. 28 run-off, especially Henri Konan Bedie's PDCI, who helped deliver the Baoule vote, will expect rewards. But Ouattara has said he will also offer posts to Gbagbo loyalists who recognise him as president.
- reconciliation. Ouattara is due to launch in weeks a "truth and reconciliation" process aimed at allowing the country to put the painful past months behind it. As ever with such processes, the dividing line between which crimes to punish and which lesser acts to forgive will be delicate.
- Pace of reforms. Once formed, Ouattara's government will be under intense pressure to swiftly push through a wide range of reforms, especially in the cocoa and security sectors.
- Parliamentary elections. Once the dust settles, another vote will be held to choose legislators. The timing is unclear.
The political crisis and international sanctions strangled the local economy. According to the IMF, Ivory Coast will see negative growth of 7.5 percent for 2011 versus its modest 2.6 percent expansion last year. Assuming Ouattara can maintain the peace, the question is how long will recovery take.
With the prospect of cocoa, oil and other receipts plus emergency funding from France due by early May, Ouattara says he has the necessary funds. Pointing to his experience as a senior IMF official involved in reconstruction across Africa and Asia, he says he also has the in-house expertise needed.
Banks whose operations were suspended during the conflict opened their doors on April 28 for manual cash and ATM transactions; full interbank and clearing operations were due to follow the week afterwards. Ouattara's government said nearly $400 million had been made available to pay public sector worker salary arrears -- a huge shot in the arm for the economy.
The key development will be the restart of cocoa exports which were halted by a de facto trade embargo during the crisis. A last-minute row between authorities and exporters over payment arrangements for customs duties appeared to have been settled on April 28, clearing the way for the first exports in early May.
What to watch:
- the cocoa. The resumption of exports will allow Ivory Coast to clear nearly half a million tonnes of cocoa held in warehouses since the crisis. At current market prices, that alone will be worth close to $1.5 billion. Weather patterns augur well for the rest of the 2010/11 crop [ID:nLDE73P1FU]
- reconstruction efforts. In an interview with France's La Croix, Ouattara gave himself three months to restore vital infrastructure such as water and electricity provision to workable levels with an emergency injection of $100 million.
- IMF help. The Fund is studying ways to help Ivory Coast, for example through soft loans from a Rapid Credit Facility designed for poorer countries hit by natural disaster or war. Longer-term, the idea would be to move towards relief for its $3 billion of external debt.
A smooth poll was due to give the green light to investors anxious to get back into the country that was once the economic miracle of West Africa. Instead, the conflict led many to put such plans on ice, while those on the ground had to evacuate many staff or mothball operations awaiting a return to calm.
Despite some damage to vital infrastructure, Ivory Coast offers investors what it always has done: access to resources ranging through cocoa, coffee, cotton and rubber to gold and oil, served by some of the best ports and roads in the region. The vital question, as covered in the politics and security sections here, is whether Ouattara can steer the country back to stability.
The wave of uprisings in North Africa and the Arab world are also giving food for food to investors further south in Africa: while for some it might dampen their appetite for risk, for others it casts countries such as Ivory Coast in a relatively more benign light.
What to watch:
-- Eurobond. Ivory Coast defaulted on a coupon payment on a $2.3 billion Eurobond CI049648839= in late January, sending its yield soaring and freezing itself out of debt markets. Analysts note, however, there was never any doubt over the country's ability to pay the modest $29 million coupon -- only its willingness. With Ouattara in charge, some are looking for a double payment come the next due date around end-June.
-- Bourse. The nation hosted West Africa's franc-zone BRVM bourse .BRVMCI, but it was forced to close after pro-Gbagbo soldiers invaded its offices. It reopened in the Malian capital Bamako in February but trading volumes have crashed to barely a tenth of their previous levels. The exchange covers just over $6 billion of stocks, with another $800 million of bonds. Bourse managers will assess in early May when it can be moved back to Abidjan.
(Writing by David Lewis and Mark John; editing by Giles Elgood)