VZCZCXRO7954
RR RUEHBZ RUEHDU RUEHJO RUEHMR RUEHRN
DE RUEHTO #1112/01 3291436
ZNR UUUUU ZZH
R 241436Z NOV 08
FM AMEMBASSY MAPUTO
TO RUEHC/SECSTATE WASHDC 9597
INFO RUCNSAD/SOUTHERN AFRICAN DEVELOPMENT COMMUNITY
RUEHLO/AMEMBASSY LONDON 0298

UNCLAS SECTION 01 OF 02 MAPUTO 001112 
 
SENSITIVE 
SIPDIS 
 
E.O. 12958: N/A 
TAGS: PGOV PREL OTRA OVIP ECON ETRD EINV KPKO EAID
SUBJECT: SCENESETTER FOR DCMA AMB YATES VISIT TO 
MOZAMBIQUE, DECEMBER 1-3, 2008 
 
 ¶1.  (SBU) The Embassy warmly welcomes you to Mozambique, 
widely considered to be an exemplary post-conflict democratic 
success story in Africa.  Following the 2008 visits of Major 
General Altshuler, Deputy Assistant Secretary of Defense for 
African Affairs Theresa Whalen, and Deputy Assistant 
Secretary of State for Africa Carol Thompson, your presence 
in Mozambique will further accentuate the upswing in 
bilateral relations.  Your participation in the inauguration 
ceremony of the U.S.-supported Military HIV/AIDS Hospital 
will again underscore that the U.S. is the largest bilateral 
donor to Mozambique, one of only two countries 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. 
 
----------------------------- 
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. 
 
¶5.  (SBU) Local elections will be held November 19, 2008 in 
all 43 municipalities; in 2009, the country will hold its 
fourth national elections.  Renamo failed to re-nominate 
popular Beira mayor Daviz Simango, allegedly due to his 
success and potential as a threat to wrest control of Renamo 
from Dhlakama.  Simango is running as an independent and is 
expected to win.  A successful independent candidate could 
pave the way for a renewed Renamo or a new political party. 
 
-------------------------------- 
Responsible Economic Stewardship 
-------------------------------- 
 
¶6.  (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 1994-2007, the highest 
in Africa over this time period.  The 2008 growth rate is 
lower, 6.5 percent due, in part, to the difficult world 
economic situation.  Economic growth is from a very low base 
however, as per capita GDP for 2008 registered around USD 
¶375.  Foreign direct investment, exports, and revenue 
collection all have increased significantly.  U.S. investment 
in Mozambique has grown steadily, and in 2007 the U.S. was 
 
MAPUTO 00001112  002 OF 002 
 
 
the largest foreign direct investor.  Most of the state 
companies have been privatized, with only about one dozen 
remaining in government hands. 
 
--------------------------------------------- ---- 
Aid Community Voicing Concerns; USG Largest Donor 
--------------------------------------------- ---- 
 
¶7.  (U) The government receives approximately 50% of its 
budget directly from foreign aid and this trend is expected 
to continue despite recent complaints by European donors 
about the state of democracy, particularly governance and 
corruption issues.  As the line between Frelimo and the 
government continues to blur, the group of donor nations 
expressed concern in 2008 that many democracy indicators have 
not been met.  As a result, Sweden, Switzerland, and Denmark 
recently announced a restructuring of their foreign 
assistance which appears to reduce the amount of aid provided 
to Mozambique.  The USG is the largest bilateral donor in the 
country with USD 325 million.  In particular, our USD 216 
million in PEPFAR funds in 2008 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: A Unique Mix 
------------------------------ 
 
¶8.  (SBU) Mozambique is one of only two countries in the 
world to receive combined PEPFAR, MCC and PMI support from 
the USG.  The MCC Compact signed in 2007 is on track for 
implementation.  The five-year, $507 million Compact 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.  Despite some frustration about the lengthy 
negotiation and implementation process, in July the MCC 
program began advertising tenders to bidders for several of 
its projects. 
 
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Zimbabwe 
-------- 
 
¶9.  (SBU) The GRM has been hesitant to criticize other 
African governments over human rights violations and 
historically has 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 is 
the vice-chair of the Political and Defense Organ of SADC and 
GRM officials have been very involved in the SADC mediation 
efforts in Zimbabwe.  Senior GRM officials explain that it is 
important for them to keep the channels of communication open 
with Mugabe, even though they too see the need for some kind 
of political solution to the ongoing crisis. 
 
----------------------- 
Peacekeeping Operations 
----------------------- 
 
¶10.  (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. 
Chapman