Guinea -- private enterprise is alive and well

It's not the broken-down state-run factories or their rusting machinery or the insipid-tasting orange drink churned out by Guinea's socialist economy that offer this country much of a sunny economic future.

No -- the state-controlled economy is a dismal failure.

But a parallel economy, chock full of merchandise and ever in transaction, is alive and well and running way out in front of the state machinery.

Most of the goods for sale are smuggled into the country or "leaked" from various duty-free commissaries.

All over the city kids sell pungent, ginger-flavored drink produced by local market women. On street corners you can quench your thirst by buying peeled oranges. Vendors sell canned milk, oranges, bananas, and cigarettes. Women also prepare cooked foods on the street -- fried bananas, sandwiches, little brochettes. Rundown taxis are occupied at all hours of the day.

And preparing for next day's enterprise is a marketing network, much of which is controlled by women. Women go out into rural areas to buy produce for city markets. They distribute smoked fish all over the country. At night they prepare and chill soft drinks.

The government has not harassed the commercial sector since a demonstration by market women in 1977.

What makes this petty private enterprise work? There is money in Guinea. The dollar is king. The quest for dollars and other hard currencies is intense because the economy cannot meet the demand for consumer goods. While the civil service is poorly paid, petty enterprise is not.

Guinea is also a diamond producer, much of whose production is sold for hard currencies or consumer goods in neighboring Mali or Sierra Leone. Similarly, there has been strong resistance to government efforts to organize the peasant economy. Rice, coffee, and tea flow into countries where the price is better and consumer goods are available. Those who have nothing to sell often migrate. As much as a fifth of Guinea's population is in Senegal and the Ivory Coast.

But the biggest source of revenue is bauxite. Guinea sits on the world's biggest bauxite reserves. There are three big mining enterprises, all developed since independence. One is run by the Soviets, but its revenues go largely to paying Guinea's debts to the Soviet Union. The other two provide most of Guinea's foreign exchange. An Alcan-Alcoa consortium has built a port at Kampsar, up the coast from Conakry, and exports bauxite. At Fria, closer to Conakry, a consortium managed by the French firm Pechiney transforms bauxite into alumina.

The irony of a socialist economy underwritten by capitalist enterprise has not been lost on the Guineans. Since the liberation of Guinea-Bissau in 1974, Guinea has been gradually trying to reopen its links to the West. Relations with France were reestablished in 1976 and former French President Valery Giscard d'Estaing visited in 1977.

Guinea is now getting a limited amount of aid from Japan, France, and from the European Community -- though not as much as comes from the communist countries. The World Bank has a small operation, mostly research and training, and the UN Development Program is active.

Aid projects have been discussed with the United States and Canada, but Guinea is more interested in private investment. The largest project being discussed is an iron ore project involving companies from Japan, Algeria, Nigeria, Yugoslavia, Spain, and the US. Uranium mining, an oil refinery, and an explosives factory are also likely projects.

Most foreign firms, however, remain cautious. Guinea's track record is poor. Guinean planners are often unsophisticated about the operations of capitalist firms. Many of the failures are traced to lack of trained personnel. In 1958, when Sekou Toure's Democratic Party of Guinea turned down De Gaulle's Fifth Republic constitution, the French cut Guinea adrift. Personnel were withdrawn instantly.

To prevent the flight of capital, Guinea moved rapidly to set up a separate currency and a system of tight economic controls. These controls have never worked efficiently, but they prevented Guinea's collapse.

Guineans of all social classes have learned to live with an inefficient state-run economy. Increasingly, however, there is likely to be pressure from below for change.