VZCZCXRO0765
RR RUEHBZ RUEHDU RUEHGI RUEHJO RUEHMA RUEHMR RUEHPA RUEHRN RUEHTRO
DE RUEHLG #0707/01 3580920
ZNR UUUUU ZZH
R 240920Z DEC 09 ZDK
FM AMEMBASSY LILONGWE
TO RUEHSD/SECSTATE WASHDC 0143
INFO RUEHZO/AFRICAN UNION COLLECTIVE
RUEHLO/AMEMBASSY LONDON 0437
RUEHLMC/MILLENNIUM CHALLENGE CORPORATION WASHINGTON DC
RHMFISS/HQ USAFRICOM STUTTGART GE
RUEAIIA/CIA WASHDC
RUCPDOC/DEPT OF COMMERCE WASHDC
RUEATRS/DEPT OF TREASURY WASHDC 0560

UNCLAS SECTION 01 OF 02 LILONGWE 000707 
 
SENSITIVE 
SIPDIS 
 
LONDON FOR AF WATCHER PETER LORD 
 
E.O. 12958: N/A 
TAGS: PGOV PREL ECON EINV AU MI
SUBJECT: MALAWI HIGHLIGHTS 
 
REF: A. LILONGWE 696 
     ¶B. LILONGWE 650 
 
LILONGWE 00000707  001.6 OF 002 
 
 
¶1. (U) The following is a compilation of recent highlights in 
Malawi. 
 
MULUZI RETIRES - JUMBE TO LEAD UDF 
---------------------------------- 
 
¶2. (SBU) Former Malawian President and United Democratic 
Front (UDF) leader Bakili Muluzu has announced his retirement 
from politics.  Famous for defeating "President for Life" 
Kamuzu Hastings Banda in the first Malawi multi-party 
elections in 1994, serving two terms, and then being denied a 
much desired third term in 2004, Muluzi cited the need to 
spend more time with his family as the reason for his 
departure.  Recently returned from the UK where he was 
undergoing treatment for back problems, Muluzi still faces 
corruption charges in Malawi.  Friday Jumbe, a UDF stalwart 
and former finance minister, will lead the UDF as National 
Chairman until the party holds a national convention slated 
for 2010.  The new Chairman's first task will be to find 
money to run the party, as Muluzi made it clear that, "It is 
up to Jumbe and his friends in the party to look for funding. 
 They will not depend on me for funding." 
 
MALAWI'S SPEAKER OF THE HOUSE SPEAKS 
------------------------------------ 
 
¶3. (SBU) In a wide ranging conversation with the Ambassador 
on December 23, Speaker of the General Assembly Chimunthu 
Banda (protect) spoke candidly about criticisms being leveled 
at the ruling Democratic Progressive Party (DPP), and the 
future of local government elections (ref A).  Banda was 
adamant that the DPP's actions in the recently concluded 
Parliament session, viewed by many as riding roughshod over 
the opposition, must be viewed "in a historical context." 
Characterizing the DPP's methods of control as a "natural 
reaction," to the way the opposition "abused" power when they 
controlled Parliament, Banda insisted that worries regarding 
the strength of the DPP were exaggerated and that, "...the 
nation is quiet about this."  When asked by the Ambassador if 
long promised legislation on local government elections would 
be forthcoming, the Speaker confided he expected government 
to table a bill in January 2010.  The bill will contain a 
provision outlining a system for tripartite elections with 
presidential, parliamentary, and local government elections 
to be held on the same day.  Banda stated that the bill will 
also cause a major overhaul of the structure of local 
government in Malawi.  Rounding out the meeting, the Speaker 
enthusiastically accepted the Ambassador's offer to host a 
"constituent services" seminar for MPs.  Post's Poloff, a 
former congressional staffer, will chair the seminar. 
 
HOME AFFAIRS MINISTER - DON'T WORRY ABOUT SEARCHES 
--------------------------------------------- ----- 
 
¶4. (SBU) In a recent meeting with GOM Minister of Home 
Affairs and Internal Security Aaron Sangala, the Ambassador 
reiterated Post's willingness to assist with training to help 
better secure Malawi's borders.  Noting the special 
importance of Malawi's northern frontier with Tanzania, 
Sangala stated that he would gratefully accept USG training 
assistance.  Regarding the recent passage of a new Police 
Bill that authorized warrantless searches in Malawi, the 
Ambassador stressed the need for strong administrative review 
of the implementation of this new power in order to avoid its 
misuse.  Minister Sangala assured the Ambassador that, "...a 
senior officer will always be present during searches," and 
that controls at the Ministry level were being developed.  To 
end the meeting, the Ambassador asked about problems U.S. 
missionaries and aid workers had encountered in Malawi 
obtaining employment permits.  Admitting that the work being 
done by these U.S. citizens in Malawi was critical, Sangala 
readily agreed to the suggestion that he meet with them and 
smooth the issuance of permits. 
 
BINGU SEEKS TO CHANGE MALAWI'S FLAG 
----------------------------------- 
 
¶5. (SBU) President Bingu wa Mutharika's government has called 
for replacing the rising sun on Malawi's flag with a fully 
risen sun to, "...align it with the current political and 
 
LILONGWE 00000707  002.6 OF 002 
 
 
democratic realities (and) social and economic development 
achievements and aspirations that Malawians are experiencing 
and cherishing."  Despite a government press release that 
states its "intention to change the flag," the Government has 
sought public input on the question.  Pointing to the recent 
forex and fuel shortages in Malawi (ref B), as well as 
concerns over the current direction of government, some 
observers have belittled the idea as a distraction and a 
waste of scarce resources.  One prominent opposition party 
member was quoted as saying, "They need to focus on things 
that can improve lives.  It should be the last thing on our 
agenda as a country." 
 
LABOR UNREST ADDS TO ESCOM'S WOES 
--------------------------------- 
 
¶6. (SBU) Malawi's Anti-Corruption Bureau (ACB) has stepped in 
to halt a strike by workers for the Electricity Supply 
Company of Malawi (ESCOM), the country's parastatal 
electrical utility.  Since early December, ESCOM workers have 
been staging sit-ins in protest of the cancellation of 
Christmas bonuses.  Reinstatement of 50 workers fired in 
connection with the industrial action has become an 
additional demand for the strikers.  Although negotiations 
between ESCOM management and the workers' union had been 
underway to seek a resolution to the dispute, on December 14 
the ACB intervened to suspend all negotiations or 
settlements, pending the outcome of its investigations and 
any subsequent prosecutions.  The ACB has been investigating 
alleged financial mismanagement at the cash-strapped utility, 
following reports that it spent USD 560,000 on a Christmas 
party and gifts last December. 
 
MALAWI INVESTMENT DOWN 23 PER CENT 
---------------------------------- 
 
¶7. (SBU) Figures from the Malawi Investment Promotion Agency 
(MIPA) show 2009 investment totaling USD 109 million, down 
from 2008's record high of USD 143 million.  Much of the 
decline has been attributed to the global financial and 
economic crisis.  With 51 percent of the year's investment 
pledges recorded between July and September, some 
commentators have also argued that national elections in May 
adversely affected investment plans, as potential investors 
took a wait-and-see approach until after the polls.  Business 
surveys have identified unreliable power, water shortages, 
poor telecommunications infrastructures and high costs of 
services as barriers to investment.  Government's failure to 
address these issues has left many investors cool on Malawi, 
despite the GOM's expressed interest in attracting more 
investment.  The annual Investment Climate report (septel) 
will provide a complete overview of the opportunities and 
obstacles for investors in Malawi. 
 
"MADE IN MALAWI" CIGARETTE BEGINS PRODUCTION 
-------------------------------------------- 
 
¶8. Nyasa Manufacturing Company (NMC), a new greenfield 
venture, has announced the launch of Malawi's first 
domestically produced cigarette, branded as "2010."  Until 
now, 100 percent of Malawi's tobacco crop has been exported, 
generating over 60 percent of the country's total foreign 
exchange earnings.  The mantra of the Mutharika 
administration, however, has been to transform Malawi from "a 
predominantly importing and consuming country to a producing 
and exporting country," and the current budget included 
explicit tax breaks for domestic cigarettes as an incentive 
to invest in value-added processing.  Established with an 
investment of USD 1.7 million, NMC is expected to employ 120 
people at full production.  In addition to supplying the 
local market, NMC hopes to export regionally, and has already 
registered the "2010" brand in Mozambique and it has sent 
samples to Tanzania and Zambia.  While the market reception 
for "2010" cigarettes remains to be seen, NMC has already fun 
afoul of the Ministry of Health and the Consumers Association 
of Malawi, which have taken the company to task for an 
advertising campaign described as illegal. 
BODDE