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RR RUEHBZ RUEHDU RUEHJO RUEHMR RUEHRN
DE RUEHLG #0342/01 1650925
ZNR UUUUU ZZH
R 130925Z JUN 08
FM AMEMBASSY LILONGWE
TO RUEHC/SECSTATE WASHDC 5303
INFO RUCNSAD/SOUTHERN AF DEVELOPMENT COMMUNITY COLLECTIVE
RUEHLMC/MILLENNIUM CHALLENGE CORPORATION WASHINGTON DC
RHMFISS/HQ USAFRICOM STUTTGART GE

UNCLAS SECTION 01 OF 05 LILONGWE 000342 
 
SENSITIVE 
SIPDIS 
 
DEPT FOR AF/S - E. PELLETREAU AND H - ANDREW MACDERMOTT 
 
E.O. 12958: N/A 
TAGS: PREL EAID OREP SOCI MI
SUBJECT: MALAWI: SCENESETTER FOR CODEL PRICE 
 
REF: STATE 63005 
 
LILONGWE 00000342  001.2 OF 005 
 
 
¶1. (SBU) Summary: The U.S. Mission in Lilongwe warmly 
welcomes the July 5-6 congressional delegation led by 
Representative David Price. 
 
¶2. (SBU)  Located at the southern end of Africa's Great Rift 
Valley, Malawi is one of the poorest countries in the world. 
A heavy chronic disease burden (malaria, tuberculosis, and 
HIV, for example), a rapidly-growing population, 
weather-dependent agricultural production, undeveloped 
mineral resources, and a cash-starved economy have relegated 
Malawi historically to obscurity and underdevelopment, 
despite its abundant freshwater and arable land.  Malawi is 
rated critical for crime, and malaria and HIV/AIDS are 
significant health risks.  Rain is unlikely in July and 
temperatures should be comfortable in the daytime, but cool 
at night. 
 
¶3. (SBU) Malawi,s politics in the present era is 
characterized by rancorous and personalized gridlock that has 
stymied parliamentary activity for many months.  President 
Bingu wa Mutharika, who ran and was elected in 2004 as a 
member of the former ruling party, broke with his sponsors in 
2005, forming his own party in the process and splitting his 
erstwhile allies.  His party continues to confront a hostile 
two-party opposition majority in Parliament that has led to 
numerous long impasses in the legislature, provoked by an 
opposition effort to impeach him in 2006 and continuing with 
an opposition-led effort now under way to remove most of the 
members of his party from the National Assembly by forcing 
the Speaker of Parliament to invoke a constitutional 
prohibition against members switching parties during their 
terms.  Elections, currently scheduled for May 2009, will 
provide Mutharika an opportunity to gain reelection and 
potentially a majority in Parliament based on his recent 
macroeconomic successes.  The election preliminaries are well 
under way, with funding assured for the process from both the 
Malawi government and external donors. 
 
¶4.  (SBU) Inflation and interest rates have fallen and Malawi 
has had over $2 billion in foreign debt canceled in the past 
three years. However, Malawi still faces the reality that its 
economy is based on rain-fed agriculture, and there continue 
to be major constraints to growth such as poor transportation 
links and limited access to reliable energy.  Malawi's 
December 2007 selection as Compact-eligible by the Millennium 
Challenge Corporation compact provides an opportunity for an 
additional U.S. contribution to address some of these 
constraints.  Malawi is seeking to expand its role in 
international peacekeeping operations and has volunteered to 
send an infantry battalion to the United Nations Mission in 
Darfur.  With assistance from the President's Emergency Plan 
for AIDS Relief (PEPFAR), the Global Fund, and the 
President's Malaria Initiative, the Government of Malawi is 
attempting to strengthen its health care system and combat 
HIV/AIDS, malaria, and tuberculosis.  Significant challenges 
remain in the delivery of health services to rural and 
vulnerable groups due to a severe shortage of qualified 
medical personnel and drug stock-outs. End Summary. 
 
¶5. (SBU) The U.S. Mission in Lilongwe warmly welcomes the 
July 5-6 congressional delegation led by Representative 
David Price.  This visit will provide an excellent 
opportunity to discuss Malawi's young democratic institutions 
and witness firsthand some of the American response, both 
public and private, to the HIV/AIDS epidemic and health care 
crisis in Malawi through PEPFAR, the Global Fund, and other 
U.S. assistance programs. 
 
Overview 
-------- 
 
¶6. (SBU) Located at the southern end of Africa's Great Rift 
Valley, Malawi is one of the poorest countries in the 
world.  Landlocked and inward-looking, with rapid population 
growth and a heavy disease burden, and still suffering the 
political weight of thirty years of dictatorship, Malawi has 
historically been relegated to obscurity and 
underdevelopment, despite its hard-working people, abundant 
freshwater and arable land.  Malawi spent the first thirty 
years of its independence from colonial rule under the 
idiosyncratic dictatorship of Hastings Kamuzu Banda (1964 - 
1994).  Having established multi-party rule only 14 years 
ago, the country continues to wrestle with the challenges of 
both genuine democracy and a true market economy.  Low 
education levels among the country's 13 million people, 
periodic droughts, weak governance, and the effects of the 
 
LILONGWE 00000342  002.2 OF 005 
 
 
HIV/AIDS pandemic have made progress slow. 
 
Politics - A Minority Government Plays Rough 
-------------------------------------------- 
 
¶7. (SBU) Much of Malawi's ongoing political tension stems 
from President Mutharika's decision to break with his 
political godfather, former president Bakili Muluzi.  After 
failing in attempts to amend the Constitution to permit a 
third term in office, Muluzi personally selected Mutharika as 
his successor in 2004 in the expectation that he could 
continue to rule from behind the curtain.  Mutharika, who had 
little following of his own, confounded Muluzi by 
spurning the former president after winning the election, 
eventually breaking from Muluzi's United Democratic Front 
(UDF).  Trumpeting his campaign against the corruption of his 
erstwhile associates and wielding the power of the 
Presidency, Mutharika established the Democratic Progressive 
Party (DPP) and began wooing former legislators from the UDF 
and other parties to his new political vehicle.  The DPP bloc 
eventually grew by defection to over 70 seats in 
the 193-seat Parliament (only five elected on DPP tickets), 
but failed to achieve a majority. 
 
¶8. (SBU) Muluzi and the opposition coalition's other leader, 
John Tembo of the Malawi Congress Party (MCP), fought back by 
unsuccessfully pursuing Mutharika's impeachment.  When that 
strategy failed, largely because the MCP and the UDF could 
not agree on an endgame if Mutharika were removed, opposition 
leaders sought and won a court judgment, based on the 
Constitution's Section 65, to force new elections in 
districts where Members of Parliament had crossed the aisle 
to join Mutharika's DPP.  An ongoing impasse has resulted, 
with the opposition threatening to withhold action on the 
national budget until the Section 65 controversy is resolved. 
 Last year -- and the pattern is currently repeating itself 
-- the President used his "bully pulpit" to convince 
Parliament to pass his budget, which is directly tied to 
government services desperately needed by the public, by 
claiming the Speaker of Parliament could make the necessary 
ruling after the budget vote on whether the defectors to DPP 
had lost their seats. The President then violated at least 
the spirit of the agreement with the opposition by adjourning 
Parliament in September, 2007, before Section 65 could be 
taken up.  The President legally had to reconvene Parliament 
in April to discuss the next national budget, but the 
opposition so far remains resolute that this time they will 
not be fooled and they continue to insist that Section 65 
must be implemented before any other business can be 
conducted. 
 
¶9. (SBU) The current bitter impasse has been compounded by 
recent allegations of a coup attempt by police, military, 
and UDF supporters.  In addition to nine suspects, including 
three active-duty brigadier generals, former president Muluzi 
was also detained when he returned from London on May 25. 
While all suspects including Muluzi have been granted bail 
due to a lack of proper evidence, the charges and 
counter-charges have created a hostile environment both 
within the Parliament and in the countryside where partisan 
campaigning for May 2009 presidential and parliamentary 
elections have begun in earnest.  Amidst this backdrop, a 
clergy-led mediation team has been negotiating with both the 
DPP and the major opposition parties to arrive at a 
compromise that would allow the Parliament to proceed. 
Neither side appears to have budged.  Clouding mediation 
attempts, President Mutharika recently threatened Parliament 
with a June 20 deadline to pass the budget or risk being 
dismissed again, threats similar to those he made last year 
during the same impasse. 
 
Elections Scheduled for 2009 
---------------------------- 
 
¶10. (SBU) The next presidential and parliamentary elections 
have been scheduled for May 19, 2009.  The United States has 
worked closely with other development partners and the Malawi 
Electoral Commission (MEC) to provide support for the 
elections.  The MEC is currently procuring new information 
technology equipment, preparing to create new voter rolls, 
and developing voter education materials in preparation for 
next May.  The USG has focused its democracy and governance 
aid toward the promotion of peaceful political competition 
and strengthening democratic institutions.  To meet this 
goal, a USG-supported civic education program will reach more 
than 750,000 voters to help them better understand their 
voting rights and responsibilities in the 2009 elections. 
This activity will build on past civic education efforts and 
 
LILONGWE 00000342  003.2 OF 005 
 
 
training of election officials in 2008. 
 
Macroeconomic Improvements, but Many Constraints to Growth 
--------------------------------------------- ------------- 
 
¶11. (SBU) Malawi has an agricultural-based economy dominated 
by subsistence maize farming.  Agriculture makes up over 38% 
of GDP, and employs over 85% of the labor force.  Malawi 
agriculture is largely rain-fed, making it vulnerable to 
periodic droughts.  Major exports are tobacco (over half of 
total export value), tea, sugar, garments, and coffee.  Local 
subsidiaries of two U.S. companies, Universal Leaf of 
Richmond and Alliance One, headquartered in Raleigh, buy 
around three-quarters of Malawi,s entire crop of burley 
tobacco.  A promising new element in the economy is the 
development of the mining sector, with a large uranium mine 
under development in the north and additional projects 
planned in the center and south.  Fiscal management under the 
Mutharika administration has been good and the macroeconomic 
environment has improved significantly in the past three 
years.  Inflation and interest rates have fallen to about 7% 
and 20% respectively.  In recent years, Malawi has had over 
$2 billion in foreign debt canceled under the Highly Indebted 
Poor Countries (HIPC) program, and in June Malawi is expected 
to complete its first full IMF Poverty Reduction Growth 
Facility (PRGF) program.  Recent government moves to set 
prices for maize, tobacco, and cotton, however, may signal a 
retreat in the market liberalization introduced with the IMF 
structural adjustment program. 
 
¶12. (SBU) Major constraints to Malawi's development include 
poor transportation links and limited access to energy.  The 
country's landlocked position and limited access routes 
result in some of the highest transportation costs in the 
world, amounting to as much as 30% of the total import/export 
bill.  Malawi must import all of its fuel products and though 
100% of Malawi,s electric power is generated by 
hydroelectric stations, only 7% of the country's population 
has access to electricity.  There is essentially no excess 
power generation capacity and anticipated new developments 
will at best keep pace with the increasing demand.  Paucity 
of skilled labor, bureaucratic red tape, corruption, and 
inadequate and deteriorating road, water, and 
telecommunications infrastructure further hinder economic 
development.  U.S. efforts to promote sustainable economic 
growth have shown promise and there are many opportunities to 
1) support agricultural diversification, 2) promote access to 
credit and input markets for small farmers, 3) strengthen 
natural resource and wildlife management, 4) expand 
successful micro-enterprise programs, and 5) further 
encourage collaboration between the private and public 
sectors. 
 
 
MCA Compact Development Underway 
-------------------------------- 
 
¶13. (SBU) In 2007, Malawi was the only new country to qualify 
for compact-eligible status under the Millennium Challenge 
Account (MCA), and it has begun the process of compact 
development.  While the MCA compact is not guaranteed - 
Malawi must maintain its recent improvements on the MCC 
scorecard, with categories covering Ruling Justly, Investing 
in People, and Economic Freedom - the MCA compact has the 
potential to help address some of the country's most 
significant constraints to development.  Although it is too 
early to say what will be included in a compact proposal, or 
how much money will be made available, the Government's core 
team has been assembled and is already performing an economic 
constraints analysis. 
 
¶14. (SBU) The MCA compact development process follows a 
successful Millennium Challenge Corporation (MCC) Threshold 
Country Plan for Malawi to strengthen the institutional 
capacity of the government of Malawi to combat corruption and 
to improve fiscal management.  The two-year, USD21 million 
program was multi-sectoral and cross-institutional in its 
approach to improving prevention, oversight, enforcement, and 
deterrence of corruption and fiscal mismanagement.  Among the 
notable achievements of the MCC Threshold Program were: 
enactment of an anti-money laundering and combating financing 
of terrorism law and the establishment of a financial 
intelligence unit to investigate these crimes; strengthening 
Parliament through empowerment of the committee system; 
establishment of a media council to improve press freedom, 
promote journalistic ethics, and address complaints on press 
conduct; establishing of an internal affairs unit at the 
Malawi Police Service; and strengthening the Department of 
 
LILONGWE 00000342  004.2 OF 005 
 
 
Public Prosecutions, the Anti-Corruption Bureau, and the 
Malawi Police Service. 
 
Military Cooperation - Peacekeeping as a Priority 
--------------------------------------------- ---- 
 
¶15. (SBU) The Malawi Defense Force (MDF), is relatively 
well-trained and has a long history of respect for civilian 
control.  After a long period of limited contributions to 
peacekeeping, Malawi and the MDF took an important step in 
2007 by volunteering to contribute a battalion to Darfur. 
Resource constraints have been and remain the largest 
obstacle to the MDF's increased participation in peacekeeping 
operations.  The U.S. has supported the MDF's efforts through 
the African Contingency Operations and Training Assistance 
(ACOTA), International Military Education Training (IMET), 
and Foreign Military Funds (FMF) programs.  Additional 
assistance expected as part of President Bush's announced 
$100 million funding of equipment support for troop 
contributing countries to the United Nations Mission in 
Darfur should enable the MDF to deploy in 2009. 
 
Strengthening Health - Beyond Disease Control 
--------------------------------------------- 
 
¶16. (SBU)  Malawi's major health challenges are high HIV/AIDS 
prevalence (12%); high fertility (6.0 children per women of 
childbearing age); high infant, child, and maternal mortality 
rates (76/1000, 133/1000, 984/100,000 respectively); and high 
mortality in the general population due to infectious 
diseases.  Lack of knowledge about healthy behaviors, chronic 
malnutrition, and communicable disease outbreaks, as well as 
disparities in access to quality health services, exacerbate 
the situation.  The public health services are inadequate to 
provide rural communities with essential health care, 
especially for the most vulnerable groups - women and 
children.  The single biggest constraint on services delivery 
is the severe shortage of trained people, especially those 
willing to serve  in rural areas.  Despite substantial 
support from development partners and a significant portion 
of GDP devoted to the healthcare delivery, the system still 
fails to deliver services and essential drugs are frequently 
not available at facilities. 
 
¶17. (SBU)  The U.S. supports the Malawi government's goal of 
an integrated health, population, and nutrition program, as 
stated in the Malawi Growth and Development Strategy.  The 
U.S. works in collaboration with the Government of Malawi, 
other bilateral and multilateral institutions, and civil 
society to increase access to essential health care through 
technical interventions that support HIV/AIDS, tuberculosis, 
malaria, maternal and child health, family planning and 
reproductive health, and nutrition support for households 
caring for orphans and vulnerable children and chronically 
ill members.  Under PEPFAR, despite the fact that Malawi is 
not a "focus country," Malawi receives significant support to 
scale up integrated prevention, care, and treatment programs. 
 PEPFAR, in partnership with the Global Fund, plays a 
significant role in supporting over 130,000 people on 
antiretroviral treatment.  Under the President's Malaria 
Initiative (PMI), the United States has developed a 
three-year strategy outlining the approaches 
and principles to reduce the current malaria-related 
mortality by 50%. 
 
 
Precautions and Climate 
----------------------- 
 
¶18. (SBU) Malawi is rated critical for crime.  Porous 
borders, easily-acquired small arms, and an under-resourced 
police force present an easy environment for criminals. 
Petty theft, car-jackings, and burglaries are common.  All 
visitors should use caution and exercise the same security 
precautions you would use in any urban area of the developing 
world.  Visitors should not carry personal valuables or large 
amounts of currency when visiting downtown areas.  Given the 
high rate of traffic accidents and the lack of trauma care, 
the mission strongly discourages individuals from driving 
outside of urban areas after dark.  Malaria is a significant 
health risk in Malawi and malaria prophylaxis is essential. 
Although tap water is treated in cities, it is not always 
safe for drinking.  Bottled water is readily available in 
stores and restaurants.  HIV/AIDS is prevalent in Malawi and 
visitors should exercise extreme caution at all times to 
avoid contact that could result in HIV/AIDS transmission. 
Malawi's climate is generally subtropical and there is little 
to no rainfall throughout most of the country from May to 
 
LILONGWE 00000342  005.2 OF 005 
 
 
October.  From June through 
August, the lake areas and far south are comfortably warm, 
but the rest of Malawi including Lilongwe can be chilly at 
night with temperatures ranging from 5-14C (41-57F). 
EASTHAM