VZCZCXRO7547
RR RUEHBZ RUEHDU RUEHJO RUEHMR RUEHRN
DE RUEHLG #0017/01 0090805
ZNR UUUUU ZZH
R 090805Z JAN 08
FM AMEMBASSY LILONGWE
TO RUEHC/SECSTATE WASHDC 4947
INFO RUCNSAD/SOUTHERN AF DEVELOPMENT COMMUNITY COLLECTIVE
RUEHBJ/AMEMBASSY BEIJING 0069
RUEHCN/AMCONSUL CHENGDU CH 0005
RUEHGZ/AMCONSUL GUANGZHOU 0013
RUEHHK/AMCONSUL HONG KONG 0021
RUESLE/AMCONSUL SHANGHAI CH 0006
RUEHSH/AMCONSUL SHENYANG 0004
RUEHIN/AIT TAIPEI 0040

UNCLAS SECTION 01 OF 02 LILONGWE 000017 
 
SIPDIS 
 
SENSITIVE 
SIPDIS 
 
AF/S FOR ELIZABETH PELLETREAU 
 
E.O. 12958: N/A 
TAGS: PREL PGOV TW CH MI
SUBJECT: MALAWI: FOREIGN MINISTER SAYS CABINET HAS NOT 
CONSIDERED SWITCH FROM TAIPEI TO BEIJING YET 
 
REF: TAIPEI 17 
 
LILONGWE 00000017  001.2 OF 002 
 
 
¶1. (SBU) SUMMARY: On Jan. 7, Ambassador met with Foreign 
Minister Joyce Banda to discuss the much-reported impending 
switch of recognition from Taiwan to the People's Republic of 
China.  While confirming press reports that two ministers had 
made two exploratory trips to Beijing, she said the ministers 
had yet to brief her on the meetings and cabinet had not 
considered the topic.  The Foreign Minister believed 
published reports were all coming from Taiwan sources.  Banda 
said she would be meeting with President Mutharika on Jan. 8 
and perhaps he would bring her into the loop on the topic. 
Malawi has recognized the government in Taipei for 43 years 
and Taiwan is a major aid partner whose absence would leave 
holes in health, agriculture, and military assistance in 
Malawi.  Taiwanese mission contacts have already approached 
USG personnel about possibilities of continuing their aid 
projects if they are forced to leave the country.  While 
press reports tout a $6 billion USD enticement package from 
China as the temptation to switch, this mirrors development 
cost estimates of Mutharika's pet project, the Shire-Zambezi 
waterway.  The nervousness of the Taiwanese, both in Malawi 
and Taiwan, the refusal by Mutharika to see FM Huang, and the 
confirmation of two exploratory trips by ministers close to 
the President seem to confirm that Malawi is as close as it 
ever has been to switching to Beijing.  END SUMMARY. 
 
¶2.  (SBU) On Jan. 7, Ambassador Eastham met with Foreign 
Minister Joyce Banda to discuss the much-reported potential 
switch of recognition from Taipei to Beijing.  FM Banda 
confirmed that Mutharika gave permission for two ministers, 
Henry Chimunthu Banda and Davies Katsonga, to travel to 
Beijing to discuss strengthening relations with the PRC. 
Banda said the government of Malawi believed it was 
acceptable to talk to another member of the United Nations 
and assess the situation.  (Comment: Katsonga, the Minister 
of Presidential and Cabinet Affairs, and Chimunthu Banda, the 
Minister of Energy and Mines, are, in the Malawi context, 
heavy hitters.  Chimunthu Banda is leader of Government 
business in the National Assembly and Katsonga's stock at 
State House has risen sharply in recent months, after he 
chaired the organizing committee for the late Mrs. 
Mutharika's funeral in June.  Among the cabinet, only Finance 
Minister Gondwe has more influence with the President.  End 
Comment)  Foreign Minister Banda continued that the ministers 
had made a second follow-up trip to Beijing.  She commented 
that she had requested a briefing from Katsonga after both 
trips but had yet to receive it.  She said she would be 
meeting with Mutharika on January 8 in Blantyre and believed 
the topic would be on the agenda.  Banda said a decision such 
as switching to Beijing should also first be brought to 
cabinet and thus far the topic has not been discussed.  As 
far as press reports, some of which quote an anonymous source 
in the Ministry of Foreign Affairs, Banda believed that the 
Taiwanese were giving information to the press. 
 
¶3.  (SBU) Malawi has recognized Taiwan for 43 years and as 
recently as two years ago, President Mutharika was appealing 
for Taiwan's full entry into the United Nations during his 
address to the UN General Assembly.  Furthermore, Malawians 
have noted that Mutharika's political party, the Democratic 
Progressive Party, took the Taiwan ruling party's name and is 
rumored to receive funding as well from that source.  A 
pending anti-corruption case against former President Bakili 
Muluzi is founded on documentary evidence of payments into 
the seven-figure USD range to Muluzi from official Taiwan 
bank accounts. 
 
¶4.  (SBU) Taiwan's exact official aid levels to Malawi are 
not published and do not appear on the government Annual Debt 
and Aid Report, but according to our reckoning consists 
(recently) of at least: 
 
--  $2 million USD to the Malawi Defense Force for equipment 
to support the deployment to Darfur; 
--  $14 million USD grant and a loan of $25.3 million USD for 
the completion of a new Parliament building complex; 
--  an undefined sum for upgrading and paving (by a Taiwanese 
firm) the Karonga-Chitipa road in Northern Malawi; 
--  building, staffing, and operating the Mzuzu Central 
Hospital; 
 
LILONGWE 00000017  002.2 OF 002 
 
 
--  four used locomotives for the Central East Africa 
Railway; 
--  four ex-U.S. UH-1 helicopters (stalled due to sustainment 
issues); 
--  patrol boats for Malawi Defence Force activities on the 
lake (stalled due to difficulties with Mozambique 
    permission to move the boats across Mozambique to Malawi); 
--  numerous irrigation and agriculture projects; 
--  and frequent highly-publicized donations of vehicles and 
computers to various Malawi entities. 
 
Taiwanese Department of Health officials in Malawi have 
already approached the U.S. Center for Disease Control 
director to inquire if the USG could take over some of 
Taiwan's health care projects if they are forced to leave. 
 
¶5.  (SBU) COMMENT:  Press reports tout an offer of USD 6 
billion from China.  We doubt this is accurate, as it first 
appeared in an unreliable internet "news" site funded by 
Muluzi's party and amounts to something over four times 
Malawi's annual government budget.  From this side, it 
appears to be a number linked to the original stated cost for 
Mutharia's Shire-Zambezi waterway project to connect the 
Shire river in Malawi through the Zambezi to Indian Ocean 
ports in Mozambique.  It also is similar in magnitude to the 
recently-announced PRC fund for the Democratic Republlic of 
Congo.  More realistic press reports say the Chinese have 
promised to fund a mult-million dollar stadium, a youth 
center, a science and technology university, and take over 
funding of all of Taiwan's projects.  The first three of 
these are dear to the President's heart. 
 
¶6.  (SBU) COMMENT CONTINUED:  This has the air of truth to 
it.  We have noted in recent months that Malawians 
(government and private sector) have begun to debate the 
cost/benefit balance of sticking with Taiwan in the face of 
the PRC's rapid rise and its much higher profile in Africa. 
In summary, we believe that Katsonga and Chimunthu Banda are 
pushing in favor of the PRC.  The Foreign Minister is pushing 
back with her procedural insistence on a Cabinet decision. 
Mutharika's refusal to see Taiwan's Foreign Minister 
(explained inadequately with a statement about the short 
notice of the request and the fact Mutharika is on vacation 
at the moment) should be a very large red flag for the 
Taiwanese toward the direction this is likely to go.  Though 
the decision to switch or stay with Taiwan will be 
controversial, in the end, whatever number the PRC has put on 
the table will be the key factor in the eventual decision. 
END COMMENT. 
 
EASTHAM