By Jonny Hogg
KINSHASA, Dec 12 (Reuters) - The stability of the Democratic Republic of Congo is in question after a disputed presidential election marred by violence and allegations of fraud.
Official results on Friday gave incumbent leader Joseph Kabila victory in the Nov. 28 poll, but observers from the U.S. Carter Center said the results "lack credibility" and opposition challenger Etienne Tshisekedi has declared himself president.
Gunfire erupted in parts of Congo over the weekend and the opposition has announced plans for protests. The European Union and the United States have urged calm as Congo waits for its Supreme Court to decide whether to validate results from the vote, Congo's second since the country's 1998-2003 war.
Here are some factors to watch:
POLITICS
President Joseph Kabila won the last poll in 2006 having come to power after his father was assassinated in 2001.
Rather than pushing through steps towards decentralisation set out in the constitution, Kabila has concentrated power and analysts say political oppression is on the rise.
The country's performance by other measures has been lacklustre: it lies on the bottom of the U.N. human development index and investors say it is one of the world's most challenging in which to do business.
Kabila's chances of re-election were boosted when parliament approved constitutional changes that scrapped the need for a run-off if no candidate secures an absolute majority.
Kabila secured 49 percent of the vote according to provisional results, to Tshisekedi's 32 percent
What to watch
- Violence. The main question is whether the disputed result will trigger serious unrest, particularly in Kinshasa, where Tshisekedi has strong support.
In the aftermath of the results, there were reports of civilians with arms in the streets of the capital. Gunfire broke out in several parts of the country and there were reports of looting in some areas.
No clear death toll has emerged.
Since then, much of Congo has turned quiet, with reports of only sporadic gunfire.
Kabila has admitted that some "mistakes" were made in the election process, but said the results must not be put in doubt.
- Legal dispute to results. Congo's opposition must file any challenges by Dec. 13, and the Supreme Court has until Dec. 17 to ratify the results.
Some of the figures posted by the election commission appear suspicious, according to the Carter Center, including some in Katanga Province showing turnout around 100 percent, with nearly all votes going to Kabila. In one voting district, turnout was reported at just over 100 percent.
- Mediation. Tshisekedi's rejection of results remains firm and he has sizeable support.
Former Zambian President Rupiah Banda has said he was approached to mediate and is ready to fly to Congo when needed.
But such an effort could only happen with Kabila's blessing and he has said it is not needed. He told reporters on Dec. 12 that there was "no crisis" in Congo.
THE ECONOMY
Despite concerns over governance, Congo secured debt relief from most lenders last year, including $7.53 billion from the Paris Club in November, leaving loans of $2.9 billion. It has taken measures to stabilise its economy and keep in step with conditions for a three-year $550 million IMF loan, but has faced questions over undeclared asset sales in the mining sector which could block the latest payment from the IMF.
The official interest rate has risen 7.7 points to 29.5 percent since the beginning of 2011, but is still down from a high of 70 percent in early 2010. Inflation - targetted at 13 percent - stands at more than 19 percent.
Sustained economic growth is vital to a country where 80 percent of Congo's 67 million people live on less than $2 a day and 75 percent of the working population is unemployed according to the World Bank.
Corruption and bad governance are hurting an economy that is expected to grow 6.5 percent this year, and preventing the emergence of small businesses, seen as critical to bringing down joblessness.
What to watch:
- The impact of the election. Further external support for the economy is likely to be dependent on an acceptable election process.
INVESTMENT CLIMATE
Congo is the sixth worst place to do business out of 183 countries ranked by the World Bank, raising questions over the government's commitment to improving the business climate. Ministers agreed in May to publish all contracts for extractive industries after pressure for greater transparency.
The government recently sold a requisitioned mining concession, but failed to publish the contract, breaching its own transparency rules. Some money for the sale seems to have been used to fund election campaigning.
What to watch:
- The election. Investors are unlikely to make any big moves until there is greater clarity on the election aftermath.
- First Quantum case. The Canadian firm is seeking international arbitration after its $750 million KMT project was closed and the rights handed to mining group ENRC. The Kazakh company said it would pay $175 million for five Congo projects acquired through listed and offshore entities. A court hearing ENRC's bid to strike out the First Quantum claim has so far not ruled.
- Audit of Gecamines contracts. State-run mining firm Gecamines has said it plans to fund a near-$1 billion expansion in part by auditing its joint-venture partners to ensure it is "getting all its dues". The plan could put Gecamines, a former mining heavyweight created by authoritarian leader Mobutu Sese Seko after independence in 1960, on a collision course with joint-venture partners like Freeport McMoRan and Glencore-owned Katanga Mining.
- Efforts to trace "conflict minerals". New industry standards to tackle "conflict minerals" came into force in April. The new rules have already hit mineral exports in the east by 90 percent and may have increased smuggling, while further U.S. legislation is due to come into effect later in the year.
- Congo's nascent oil sector. Following a tussle with the government over two oil blocks, London-listed Tullow Oil has said it is pulling out of Congo. French Oil giant Total has taken a share in another eastern oil block near Virunga. After buying into a block in the west, Italian major Eni would also like oil blocks in the east.
SIMMERING CONFLICTS
Open conflict with Congolese Tutsi-led CNDP rebels has ended and the rebels have been integrated into the army, although there have been recent clashes between various factions of the army in eastern Congo.
Congo's army continues to fight against Rwandan Hutu FDLR rebels, whose numbers are down to 2,500 according to the U.N.. Several other rebel groups, including the former pro-government Mai Mai militia, LRA and Islamic ADF-NALU fighters still roam in Congo's eastern provinces.
Mass rapes and murders continue in the vast and lawless eastern regions, underlining precarious security and raising questions over the effectiveness of Congese and U.N. forces. However some high profile convictions this year have been welcomed as a sign that impunity is being tackled.
What to watch:
- Restructuring of regiments in the east of the country has led to desertions and insecurity, with some complaining that former rebels with links to Rwanda have received most key posts.
- U.N. peacekeepers. The world body renewed its mandate in June, but Kabila's calls for a full withdrawal of the 17,000-strong force could grow louder if he is confirmed the winner.
- Fragile truce. The army's truce with the CNDP hinges on current leader General Bosco Ntaganda's position within the army. But he is wanted by the ICC for war crimes, and the alliance with the army is under strain.
- LRA threat.
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