VZCZCXRO1038
PP RUEHBZ RUEHDU RUEHJO RUEHRN
DE RUEHMR #0412/01 1931833
ZNR UUUUU ZZH
P 121833Z JUL 07
FM AMEMBASSY MASERU
TO RUEHC/SECSTATE WASHDC PRIORITY 3156
INFO RUCNSAD/SADC COLLECTIVE
RHEHAAA/NSC WASHINGTON DC
RUEHMR/AMEMBASSY MASERU 3540

UNCLAS SECTION 01 OF 04 MASERU 000412 
 
SIPDIS 
 
SENSITIVE 
SIPDIS 
 
DEPT ALSO FOR AF/S; 
PASS TO MILLENNIUM CHALLENGE CORPORATION 
 
E.O. 12958: N/A 
TAGS: ECON EAID PGOV PREL PHUM KMCA LT
SUBJECT: SCENESETTER FOR PRIME MINISTER MOSISILI'S VISIT TO 
WASHINGTON 
 
 
MASERU 00000412  001.2 OF 004 
 
 
¶1. (SBU) SUMMARY:  Prime Minister Mosisili's imminent visit to 
Washington to sign a $362.5 million MCA Compact on July 23 with 
the Millennium Challenge Corporation (MCC) comes at a high point 
in the U.S.-Lesotho bilateral relationship, reflecting many 
shared values, mutual cooperation, successful foreign assistance 
programs, and Lesotho's substantial progress in a number of 
important political, economic, and cultural areas.  The young 
Mountain Kingdom's democratization growing pains are evident at 
the moment, however:  the country is in the throes of what has 
regrettably become a traditional, and potentially worrisome, 
post-election political impasse--reflecting a historical 
aversion among Basotho to power sharing.  Prior to the election 
season, Lesotho received the highest scores of any African 
nation on the MCC's rigorous cross-sectoral indicators, and the 
country's fiscal responsibility and strong exports under the 
African Growth and Opportunity Act (AGOA) serve as a model for 
other nations in the least developed category.  The PM's 
first-ever bilateral visit to the United States offers an 
opportunity to congratulate Lesotho on its achievements 
vis-`-vis the Millennium Challenge Corporation and its 
progressive efforts as a developing nation.  The visit is also 
an opportunity for senior USG officials to underscore the 
importance to the bilateral relationship, and to Lesotho's 
international standing, of dialogue, tolerance, inclusiveness, 
and respect for the rule of law and human rights.  The MCC 
Compact signing will be a moment of triumph for the Basotho 
people, and will also be a personal victory for the man who has 
led this nation for almost a decade.  END SUMMARY. 
 
-------------------------------- 
Introducing the Mountain Kingdom 
-------------------------------- 
 
¶2. (U) Lesotho is a highly mountainous nation, slightly smaller 
than the state of Maryland, which is completely landlocked by 
South Africa.  A nearly mono-ethnic state (although strife and 
rivalries among family-based clans create tensions not unlike 
ethnic conflict elsewhere on the continent), Lesotho became a 
unified British protectorate in 1868 and gained its independence 
in 1966.  Following its tumultuous birth as an independent 
nation, Lesotho was governed by a string of military rulers from 
1970 until 1993, when a new constitution established a 
constitutional monarchy.  In 1998, violent post-election 
protests and an army mutiny were quelled by a Southern African 
Development Community (SADC) military invasion, causing 
considerable damage to the country's economy, infrastructure, 
and national psyche. 
 
¶3. (U) Lesotho's Prime Minister Pakalitha Mosisili is head of 
government and has executive authority, while King Motlotlehi 
Letsie III serves a largely ceremonial function and wields 
minimal constitutional powers.  Lesotho's February 2007 national 
assembly elections reaffirmed the leadership of the Lesotho 
Congress for Democracy (LCD), which has governed since 1998. 
Local and international observers declared the elections free 
and peaceful, but persistent disagreements concerning the 
application and potential manipulation of the country's 
generally well regarded Mixed Member Proportional (MMP) model 
marred the post-election political environment.  A turbulent 
period followed the election which has included a vitriolic 
political impasse between governing and opposition parties, 
attacks on residences and property of senior political figures, 
a short-lived but restrictive curfew that led to additional 
security implications, and opposition-led mass demonstrations 
and work stoppages.  In June, the GOL launched a controversial 
round of arrests and detentions of military personnel and 
individuals associated with the opposition and alleged coup 
plotting. 
 
¶4. (U) Lesotho is ranked by the World Bank among the world's 
least developed nations, and its primary industries are 
subsistence agriculture, textile and apparel manufacturing, 
mining, and water utilities.  While Lesotho's growth rate 
remains at a troublingly low 2.9%, the GOL's fiscal discipline 
has allowed the country to keep inflation just under double 
digits, maintain sizable foreign currency reserves, and run a 
public sector budget which is strongly in the black.  The GOL's 
revenues are based largely on transfer payments from the South 
African Customs Union (SACU), which account for more than 60% of 
all government financing. 
 
¶5. (U) Food insecurity has been a perpetual problem in Lesotho. 
Currently, persistent drought and failed crops since December 
2006 and subsequent hikes in commodity prices have created an 
increasingly acute food crisis.  On average, Lesotho's total 
agricultural production declined over 40% this season, 
increasing food insecurity for upward of 500,000 people (roughly 
 
MASERU 00000412  002.2 OF 004 
 
 
25% of the population).  The situation is worsened by Lesotho's 
high prevalence of HIV/AIDS, creating groups highly vulnerable 
to fluctuations in food availability and cost.  Embassy Maseru 
declared a disaster on July 10, following the Prime Minister's 
declaration of a food crisis on July 9. 
 
¶6. (SBU) Until August 2007, Lesotho retains chairmanship of the 
Southern African Development Community (SADC).  This position 
currently allows the nation to punch beyond its weight class 
politically, as it did at the recent African Union (AU) Summit 
in Ghana when Prime Minister Mosisili called on the AU to 
demonstrate its fiscal accountability before the organization 
takes further steps towards political integration.  The 
importance of SADC is likely to grow as regional integration 
continues and the block seeks greater consensus on policy issues 
in multilateral forums.  Lesotho has used its current leadership 
role to achieve gains on regional trade and economic integration 
and to press, quietly at least, for more effective SADC 
influence in dealing with the deterioration in Zimbabwe. 
 
--------------------------------------- 
The U.S.-Lesotho Bilateral Relationship 
--------------------------------------- 
 
¶7. (U) The United States and Lesotho have had a long-standing 
relationship, beginning when the U.S. established one of the 
first foreign diplomatic missions in Lesotho in 1966 immediately 
after independence.  The United States is the single largest 
donor of humanitarian food assistance to Lesotho, contributing 
an estimated $58 million in food aid since 2002 (including 
nearly $8 million in supplemental contributions this year). 
 
¶8. (U) Lesotho is poised to sign a $362.5 million Millennium 
Challenge Corporation (MCC) compact to reduce poverty and 
increase economic growth.  Lesotho produced an innovative 
compact, and has taken ownership of a program that focuses on 
increasing the provision of water supplies for industrial and 
domestic use ($164 million), improving health outcomes and 
productivity ($122.4 million, the MCC's first ever support for 
the health sector), and removing barriers to foreign and local 
private sector investment ($36.1 million).  During the five-year 
scope of the compact, MCC projects will impact the majority of 
Lesotho's 1.8 million people due to their broad geographic scope 
and focus on sectors that reach most Basotho, such as health 
care and the provision of potable water. 
 
¶9. (U) Lesotho is one of the greatest success stories of the 
United States' African Growth and Opportunity Act (AGOA), which 
helped create over 40,000 jobs and facilitates exports valued at 
nearly half a billion dollars annually.  NGOs estimate that 
Lesotho's textile and garment mills, exclusively owned by 
Taiwanese and PRC controlled companies, indirectly support over 
350,000 individuals in the Mountain Kingdom.  Embassy Maseru is 
now working with the USAID Trade Hub to expand the benefits of 
AGOA beyond textiles. 
 
¶10. (U) Lesotho's Peace Corps program has operated continuously 
for 40 years, during which some 2,000 American volunteers have 
worked in education, health, and community development in all 
ten of Lesotho's districts, including some of the most remote 
villages and communities.  Eighty volunteers serve in the 
Kingdom currently. 
 
¶11. (U) Through PEPFAR funding totaling over $11 million this 
year and U.S. contributions to the Global Fund, the United 
States has partnered with the GOL, other donors, and dozens of 
NGOs and universities to help the Mountain Kingdom cope with, 
prevent, and eliminate HIV/AIDS.  Lesotho has the world's third 
highest prevalence rate of HIV/AIDS, infecting approximately 23% 
of the country, considerably higher among high-risk populations, 
including the nation's youth.  The disease impacts all spheres 
of life in Lesotho, including lost productivity, constant and 
expensive by-elections to replace deceased politicians, a 
population that has essentially declined over the past ten years 
despite high fertility rates, the creation of nearly 200,000 
orphans, and the unofficial designation of every Saturday as 
"funeral day."  HIV/AIDS efforts are among Embassy Maseru's most 
visible and rapidly growing areas of operation. 
 
------------------------------------- 
Political Turbulence and Human Rights 
------------------------------------- 
 
¶12. (SBU) Following Lesotho's February 2007 national assembly 
election, a political impasse developed between the governing 
LCD and opposition parties regarding the distribution of 
parliamentary seats and other issues.  While international and 
 
MASERU 00000412  003.2 OF 004 
 
 
domestic monitors observed Lesotho's polling process to be fair 
and peaceful, opposition parties allege that the LCD manipulated 
Lesotho's complex Mixed Member Proportional (MMP) parliamentary 
system through the use of dubious political alliances. 
Opposition parties, however, used the same tactic in efforts to 
gain more seats and influence in Parliament.  SADC appointed 
former President of Botswana Masire to mediate ongoing talks 
between governing and opposition parties aimed at resolving the 
impasse.  The dialogue process succeeded in bringing the two 
side together, although progress has been limited to a small 
number of process modalities and tightly referenced issues. 
 
¶13. (SBU) In June, unknown gunmen attacked several ministerial 
residences over a series of evenings, disarming military 
bodyguards.  In response, the Lesotho Mounted Police Service 
(LMPS), backed by the Lesotho Defense Forces (LDF), declared a 
curfew to reclaim weapons stolen from military bodyguards and to 
arrest the perpetrators.  Troubling accusations emerged that 
unidentified security forces took former and current military 
personnel and several civilians into secret custody and 
mistreated them.  The GOL/LDF's heavy handed tactics in dealing 
with recent events, and dismissal of abuse allegations, have 
drawn criticism from local civil society and human rights 
groups.  Lesotho has a history of politically related violence, 
but the true motives for the recent spate of attacks, like those 
in the past, may remain a mystery.  The GOL has not 
substantiated its claims that the political opposition is behind 
the violence and alleged coup plotting. 
 
¶14. (SBU) Some criticism of the GOL and its MCC compact has 
surfaced regarding the consultative process, projected rates of 
return, and alleged disregard for human rights issues.  The 
criticism may reflect an opposition tactic to use the compact as 
political leverage in getting the GOL to address recent 
allegations of human rights abuses and other opposition 
grievances, although several local NGOs and human rights groups 
have also raised similar concerns. 
 
------------- 
Our Message 
------------- 
 
¶15. (SBU) The PM's first-ever bilateral visit to the United 
States offers an opportunity to congratulate Lesotho on its 
achievements vis-a-vis the Millennium Challenge Account and its 
progressive efforts as a developing nation.  The visit is also 
an opportunity for senior USG officials to underscore the 
importance to the bilateral relationship, and to Lesotho's 
international standing, of dialogue, tolerance, inclusiveness, 
and respect for the rule of law and human rights.  We recommend 
raising the following points: 
 
-- Congratulate Lesotho for gaining MCC eligibility, achieving 
in 2006 the highest score of an African nation on MCC's 
indicators and making specific progress in key criteria areas 
such as gender equality; and for creating an innovative compact 
that stands to alleviate poverty, spur economic growth, and 
benefit generations of Basotho to come; 
 
-- Thank the GOL for signing an "Article 98 Agreement" with the 
United States in 2006, supporting counterterrorism efforts, and 
for playing a leading role in regional and global trade 
liberalization; 
 
-- Applaud Lesotho's efforts on HIV/AIDS, including strong 
support by His Majesty the King and senior GOL officials to 
fight the disease, the Kingdom's model "Know Your Status" 
national campaign, and a recent statement of commitment by the 
country's influential church leaders; 
 
-- Give assurances of continued USG cooperation in fighting 
HIV/AIDS, but noting that a successful response to this 
historical challenge requires burying stigma, implementing 
efforts that may intrude upon cultural assumptions, and 
effectively using resources; 
 
-- Express support for Lesotho's leadership within SADC and the 
African Union (AU), including modest but important contributions 
to the international peacekeeping force in Darfur; and encourage 
greater leadership efforts to address the Zimbabwe crisis; 
 
-- Encourage the GOL to ensure that all political voices, 
including those of the opposition, are heard in the policy 
formulation and are invited to participate in the governing 
process; 
 
-- Observe that disputes and differences among political 
 
MASERU 00000412  004.2 OF 004 
 
 
stakeholders can only be resolved through dialogue and adherence 
to the rule of law. 
 
-- Suggest that the GOL should not dismiss broad accusations of 
human rights abuses, but rather address such matters directly 
and transparently; 
 
-- Reiterate that review of Lesotho's MCC eligibility does not 
end with compact signing, but that Lesotho must maintain its 
annual eligibility across the board, including in key areas such 
as civil liberties, human rights, and the rule of law. 
MURPHY