UNSC expressed concern 10 July over increase in organised crime, drug trafficking, proliferation of small arms. President Vieira announced 1-year postponement of 2008 legislative elections due to financial constraints.

UN called on international community to pay $20 million budgetary shortfall, or risk seeing reform efforts unravel. Civil servants threatened nationwide strike after 5 months without salary.

Planned demonstrations suspended early month as President Vieira began political consultations, dissolved government and appointed consensus candidate Martinho Ndafa Cabi of opposition PAIGC PM 9 April. Cabi promised to hold legislative elections next year, named new opposition-dominated government 17 April. Justice, foreign affairs, internal ministries assigned to close Vieira associates.

Situation increasingly fragile after government received no-confidence vote from parliament 19 March (54 to 28). President Vieira failed to meet constitutional requirement to dissolve government within 72 hours of vote. Mass demonstrations held in capital 30/31 March. PM Aristide Gomes offered resignation to Vieira 29 March. Presidency previously rejected calls from 3 main parliamentary parties to dissolve Gomes government in favour of national unity coalition that would introduce degree of parliamentary stability, and allow main opposition PAIGC to name consensus premier. Power struggle between government administration and parliament has previously led to violent clashes.

Guinea Bissau/Senegal: Guinea-Bissau troops ended offensive against Senegalese secessionist Movement for the Democratic Forces of Casamance 21 April.

Guinea-Bissau/Senegal: Fierce fighting between G-B army and Senegalese Casamance rebels near border killed at least 12 and displaced 5,000. Rebel group’s hardline wing rejects 2004 peace deal with Senegal. Rebels blamed for landmine that killed 12 in minibus outside G-B town of Sao Domingos 16 March.

Supreme Court approved PM Aristides Gomes, appointed by presidential decree in November 2005. PAIGC, main party in parliament that had challenged constitutionality of appointment, denounced court decision.

UN Security Council agreed to revise and renew mandate of UN Peacebuilding Support Office until 31 December 2006; urged all parties to respect forthcoming Supreme Court ruling on presidential nomination. Tensions continued between President Vieira and PAIGC, main party in parliament, over nomination of PM Aristides Gomes, which PAIGC insists requires parliamentary approval.

President Vieira named close ally Aristides Gomes as PM 2 November. PAIGC, main party in parliament, challenged move, citing constitutional provision for parliamentary approval of appointment. Army guarded government buildings after street protests against appointment. PM named new cabinet 9 November, ending fortnight of institutional paralysis, but exclusion of PAIGC raised fears of further instability. IMF delegation left Bissau, saying lack of interlocutor would block discussions on financial assistance.

President Joao Bernardo Vieira sworn in 1 October. Vieira dismissed PM Carlo Gomes Junior 28 October after PM reluctant to recognise Vieira’s presidency.