VZCZCXRO1919
RR RUEHBZ RUEHDU RUEHJO RUEHMR RUEHRN
DE RUEHTO #0969/01 2281118
ZNR UUUUU ZZH
R 161118Z AUG 07
FM AMEMBASSY MAPUTO
TO RUEAUSA/DEPT OF HHS WASHDC
RUEHC/SECSTATE WASHDC 7763
INFO RUCNSAD/SOUTHERN AF DEVELOPMENT COMMUNITY COLLECTIVE

UNCLAS SECTION 01 OF 02 MAPUTO 000969 
 
SIPDIS 
 
SENSITIVE 
SIPDIS 
 
HHS FOR CHIEF OF STAFF LINDA HOFFMAN 
AF FOR DAS CAROL THOMPSON 
 
E.O. 12958: N/A 
TAGS: OVIP PGOV ECON KHIV PREL EAID MZ
SUBJECT: SCENESETTER FOR SECRETARY LEAVITT'S VISIT TO 
MOZAMBIQUE 
 
Summary and Introduction 
------------------------ 
 
¶1.  (SBU) The Embassy warmly welcomes Secretary Leavitt and 
his accompanying delegation to Mozambique, widely considered 
to be an exemplary post-conflict democratic success story in 
Africa.  Following the June visit of First Lady Laura Bush 
and the July MCC compact signing in Washington with President 
Armando Guebuza, Secretary Leavitt's presence in Mozambique 
will further accentuate the upswing in bilateral relations. 
He will be the highest ranking USG official to Mozambique 
since the 2002 visit by former HHS Secretary Thompson.  This 
trip will raise awareness of USG investments in health and 
our role as the largest bilateral donor to Mozambique, the 
only country in the world benefiting from President Bush's 
three major initiatives--the Millennium Challenge Corporation 
(MCC), the President's Emergency Plan for AIDS Relief 
(PEPFAR), and the President's Malaria Initiative (PMI).  The 
visit will also provide the opportunity to further USG 
interest in encouraging Mozambique to participate in regional 
peacekeeping operations and to address regional challenges, 
including Zimbabwe. 
 
A Post-Conflict Success Story 
----------------------------- 
 
¶2.  (U) Since the signing of the 1992 Rome Peace Accord, 
which ended sixteen years of civil war, Mozambique has made 
significant progress as a young democracy and is rightfully 
considered a post-conflict success story.  The Frelimo party 
led the independence struggle and has maintained political 
power since Portuguese colonial rule ended in 1975. Frelimo's 
military opponent during the subsequent civil war, Renamo, 
has been the main opposition party since the first elections 
in 1994.  In December 2004 Mozambique held its third 
presidential and legislative elections.  Armando Guebuza won 
the presidency by a wide margin, defeating Renamo leader 
Afonso Dhlakama (who also ran unsuccessfully in 1994 and 
1999). 
 
A Democratic Example, But Still Fragile 
--------------------------------------- 
 
¶3.  (SBU) Voter turnout in the December 2004 presidential and 
legislative elections was approximately 45 percent, down 
substantially from the 75 percent turnout in 1999.  Although 
slightly fewer Frelimo voters cast their ballots than did so 
in 1999, about half of the Renamo supporters did not vote. 
Some analysts suggest Renamo supporters may have felt cheated 
in the very close 1999 election and cynically saw little 
point in participating.  International observer groups 
monitored the elections and indicated that the elections were 
carried out in a generally successful and peaceful manner but 
noted there were irregularities in the administration of the 
elections.  All agreed, nonetheless, that final results 
broadly reflected the will of voters. 
 
¶4.  (SBU) In the December 2004 legislative election, Frelimo 
won 160 out of 250 seats in the National Assembly - just 
seven short of a two-thirds majority.  Renamo won 84 seats 
and an allied coalition of small parties took the remaining 
six.  Since 2005 several of these small parties have 
distanced themselves from Renamo.  Renamo's unexpectedly poor 
showing has led to disarray within the party and Dhlakama's 
leadership has been called into question.  This has weakened 
any organized opposition to Frelimo, now in power for more 
than thirty years. 
 
Responsible Economic Stewardship 
-------------------------------- 
 
¶5.  (U) Since the mid 1980s, the government has broadly 
followed IMF and World Bank guidelines on economic issues. 
Mozambique's macroeconomic reforms and success in attracting 
large investment projects have resulted in an average annual 
GDP growth rate of eight percent from 1994-2006, the highest 
in Africa over this time period.  This growth is from a very 
low base however, as per capita GDP for 2006 registered 
around USD 320.  Foreign direct investment, exports, and 
revenue collection all have increased significantly.  Since 
the late 1990s most of the state companies have been 
privatized, with only about one dozen remaining in government 
hands. 
 
Darling of the Aid Community; USG Largest Donor 
--------------------------------------------- -- 
 
 
MAPUTO 00000969  002 OF 002 
 
 
¶6.  (U) In large part because of successful implementation of 
projects and compliance with international donor 
requirements, the government receives almost 60% of its 
budget directly from foreign aid.  The USG is the largest 
single donor to the GRM.  In particular, our USD 160 million 
in PEPFAR funds in 2007 total more than the HIV/AIDS funds 
committed by all other donors and the Mozambican government 
combined.  Although the USG does not provide direct budget 
support, we have forgiven all of Mozambique's USD 151 million 
debt as part of Mozambique's Highly Indebted Poor Countries 
relief initiative. 
 
PEPFAR, MCC, PMI: Unique in the World 
------------------------------------- 
 
¶7.  (SBU) Mozambique is the only country in the world to 
receive combined PEPFAR, MCC and PMI support from the USG. 
PEPFAR will provide approximately USD 160 million in 2007 for 
Mozambique, up from USD 82 million in 2006.  All agencies at 
post, including State, USAID, CDC, the Peace Corps, and 
Defense, participate in the Interagency PEPFAR team. 
 
¶8.  (U) On July 13, Millennium Challenge Corporation CEO John 
Danilovich and Mozambican President Guebuza signed a 
five-year, $507 million Compact that will reduce poverty 
through increased incomes and employment by improving water 
systems, sanitation, roads, land tenure, and agriculture, 
with a focus on the country's four northern provinces.  The 
MCC program in Mozambique is entering a 9-month planning 
phase prior to implementation, and some Mozambicans have 
expressed frustration with the lengthy MCC negotiation and 
implementation processes. 
 
Peacekeeping Operations 
----------------------- 
 
¶9.  (SBU) Mozambique's armed forces (FADM) have benefited 
from substantial USG military training and assistance, 
especially through the African Contingency Operations and 
Training Assistance (ACOTA) program.  The FADM successfully 
participated in the African Union's 2005 peacekeeping 
operations in Burundi, and has publicly recognized its 
interest in a higher-profile contribution to peacekeeping 
operations in Sudan. The Embassy is working to assist FADM in 
further developing its peacekeeping capacity, and we look 
forward to supporting the GRM's eventual contribution to 
regional operations. 
 
Zimbabwe 
-------- 
 
¶10.  (SBU) The GRM has been hesitant to criticize other 
African governments over human rights violations and has 
historically abstained from voting on any such resolutions. 
GRM officials have stated publicly that Mozambique, instead 
of criticizing actions, prefers to focus on what can be done 
to address such issues within the regional institutions 
(e.g., the AU and SADC).  Mozambique has also been hesitant 
to engage on Zimbabwe, due to the close historical ties 
between the countries. 
 
Conclusion: Bilateral Relations on the Upswing 
--------------------------------------------- - 
 
¶11.  (U) This is the first cabinet-level visit to Mozambique 
in more than five years, and comes soon after First Lady 
Laura Bush,s visit in June and the MCC signing in July.  In 
September, a U.S. Navy ship will make the first port call to 
Mozambique since the country's independence in 1975. 
Together these events highlight our ever stronger bilateral 
relationship and emphasize the United States' leading role in 
Mozambique's development in democracy, health, and prosperity. 
Chapman