VZCZCXRO0632
PP RUEHLMC
DE RUEHDR #0573/01 1091353
ZNR UUUUU ZZH
P 191353Z APR 07
FM AMEMBASSY DAR ES SALAAM
TO RUEHC/SECSTATE WASHDC PRIORITY 5968
INFO RUEHKM/AMEMBASSY KAMPALA PRIORITY 2981
RUEHKH/AMEMBASSY KHARTOUM PRIORITY 0059
RUEHNR/AMEMBASSY NAIROBI PRIORITY 0608
RUEAIIA/CIA WASHINGTON DC PRIORITY
RUEATRS/DEPT OF TREASURY WASHINGTON DC PRIORITY
RUEHLMC/MILLENNIUM CHALLENGE CORP MCC PRIORITY
RHMFIUU/CJTF HOA//J3 PRIORITY

UNCLAS SECTION 01 OF 04 DAR ES SALAAM 000573 
 
SIPDIS 
 
SIPDIS 
 
PLEASE PASS TO F FOR M MCBREARTY 
ALSO TO AF/E FOR D MALAC,B YODER AND R MEYERS 
 
E.O. 12958: N/A 
TAGS: PREL EAID PGOV TZ
SUBJECT: TANZANIA: SCENESETTER FOR AMBASSADOR TOBIAS' MAY 
2-6 VISIT 
 
 
¶1.  (SBU) SUMMARY.  The U.S.-Tanzanian bilateral relationship 
has witnessed a sea change over the past two years.  With the 
election of a charismatic, pro-western President, and 
increasing levels of U.S. assistance, cooperation has 
expanded in areas ranging from health and education to 
counterterrorism and military affairs.  As a nascent 
democracy with an impressive record of peaceful political 
transition, Tanzania is an anchor of stability in a turbulent 
region.  Despite daunting challenges -- HIV/AIDS, poor 
infrastructure, corruption, and political stalemate in 
Zanzibar -- the Government of Tanzania (GOT) is clearly 
committed to furthering both economic development and 
democracy.  Providing more than USD 280 million in direct 
assistance to the GOT, the Mission aims to advance several 
strategic priorities such as enhancing Tanzania's 
counterterrorism capability and strengthening the checks and 
balances of Tanzania's democracy. END SUMMARY. 
 
Political and Economic Background 
--------------------------------- 
¶2.  (SBU) In 1992, Tanzania opened the door to multi-party 
democracy, transitioning from a single party, socialist 
state.  Under the stewardship of former President Mkapa, 
fundamental macro-reforms were introduced and Tanzania began 
its transition toward free-market capitalism.  With the 
landslide election of President Kikwete in 2005, Tanzania 
underwent its third peaceful transition to a new President. 
Taken together, political and economic reforms introduced 
since 1992 have made Tanzania an example of peace and 
stability in the region. 
 
¶3.  (SBU) Formidable challenges remain.  Located in a 
turbulent neighborhood, Tanzania has eight porous borders and 
a 1,500 kilometer coastline.  Infrastructure remains 
rudimentary, red tape and corruption impede private sector 
development, and HIV/AIDs prevalence hovers around seven 
percent.  While elections on the Mainland have been free and 
fair, Tanzania is still a state dominated by the executive 
branch and the ruling Chama Cha Mapinduzi (CCM) party.  In 
Zanzibar, serious irregularities and sporadic violence marred 
elections in 1995, 2000, and 2005. 
 
¶4.  (SBU) While Tanzania has achieved major macro-economic 
reform over the past decade, macro stability has yet to 
translate into significant gains at the micro level.  More 
than one third of Tanzanians live in abject poverty and per 
capita GDP is USD 340. In 2006, the Tanzanian government had 
to revise its growth forecasts downward (from 7.2 to 5.8 
percent) due to a food shortage and an ongoing power crisis. 
The lack of electricity, coupled with rising oil and food 
prices, caused inflation to increase from approximately 4 to 
7 percent. Tanzania's oil import bill quadrupled and its 
business climate suffered set backs.  In 2007, with good 
rains and new leadership in the energy sector, economic 
forecasts suggest a growth rate of 6-7 percent is achievable. 
 
U.S-Tanzanian Bilateral Relationship 
------------------------------------- 
¶5.  (SBU) With the election of President Kikwete in December 
2005, U.S.-Tanzanian bilateral relations have warmed 
significantly.  President Kikwete,s pro-western stance, 
coupled with an increasing level of U.S. assistance, has 
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