VZCZCXYZ0002
PP RUEHWEB

DE RUEHDR #0061/01 0280404
ZNR UUUUU ZZH
P 280404Z JAN 10
FM AMEMBASSY DAR ES SALAAM
TO RUEHC/SECSTATE WASHDC PRIORITY 9257
INFO RUEHDS/AMEMBASSY ADDIS ABABA 3362

UNCLAS DAR ES SALAAM 000061 
 
SIPDIS 
 
DEPT AF/E FOR JTREADWELL 
DEPT H FOR LYNNEA SHANE 
 
E.O. 12958: N/A 
TAGS: OREP TZ
SUBJECT: SCENESETTER FOR CODEL DURBIN VISIT TO TANZANIA 
 
¶1. Your visit to Tanzania comes at a time when our bilateral 
relationship with Tanzania is at an historic highpoint, in part 
because of our expansive assistance efforts in multiple sectors. 
Tanzania's unbroken record of political stability, sound 
macroeconomic management and enormous development needs have made it 
a favored recipient of donor funds, although the recent slow pace of 
reform and of efforts to fight corruption are increasingly of 
concern to donors.  Roughly one third of the government's budget is 
financed by direct budget support.  The U.S. has its largest 
Millennium Challenge compact with Tanzania, significant PEPFAR and 
PMI programs, and a range of other foreign assistance activities. 
For specific information on the Mwanza region, which you will visit, 
please see paragraphs 18-22. 
 
Political Background 
-------------------- 
¶2. Tanzania's long record of peace and stability sets a positive 
example for the region.  Tanzanians have a well-deserved reputation 
for having a strong national identity which takes precedence over 
ethnic identity, distinguishing Tanzania from many other African 
nations.  President Kikwete's landslide election in 2005 marked the 
country's third peaceful presidential transition; he is expected to 
stand again and is heavily favored for the elections due in October 
¶2010.  Multi-party democracy, reintroduced in the early 1990s, has 
not shaken the dominance of the Chama Cha Mapinduzi (CCM - 
Revolutionary Party), the ruling party since independence.  However, 
the long dormant parliament is increasingly exercising its oversight 
function on an executive branch accustomed to governing unchecked. 
While elections on the mainland have generally been free and fair, 
serious irregularities and violence have marred elections in the 
semi-autonomous islands of Zanzibar, where support is evenly divided 
between CCM and the main opposition party.  The start of voter 
registration for 2010 was disrupted by clashes between opposition 
supporters and security forces and the opposition is maintaining a 
boycott.  However, the opposition's recent recognition of the 2005 
results as legitimate has raised hopes of reconciliation and 
possible power-sharing between the two main parties. 
 
Regional Leadership 
-------------------- 
¶3. Under the leadership of President Kikwete, a former Foreign 
Minister, Tanzania has played an increasingly prominent role in 
regional issues.  Kikwete finished a one-year term as Chairman of 
the African Union (AU) in January 2009.  In that role, he spoke out 
against military coups in Mauritania and Guinea and the 
unconstitutional change in power in Madagascar.  Within the Southern 
Africa Development Community (SADC), Tanzania has played a 
relatively quiet but positive role with respect to Zimbabwe. 
 
East African Community 
---------------------- 
¶4. The 2005 establishment of a customs union in the East African 
Community (EAC) has increased Tanzania's regional trade, especially 
with Kenya.  The EAC leaders concluded an agreement on a common 
market protocol in November.  However, Tanzania's concerns about 
economic competition, particularly from Kenya, and the designs of 
its neighbors on Tanzania's abundant land, have led it to resist 
more rapid and more comprehensive integration within the East 
African Community.  Tanzania has balked at provisions that would 
permit other EAC citizens to buy land, establish residence, or enter 
without a passport.  Kenyans have a reputation for being more market 
savvy, commercially aggressive and better educated than most 
Tanzanians.  For that reason, many Tanzanians also fear labor 
mobility liberalization within the EAC. 
 
Refugees 
--------- 
¶5. Tanzania has long hosted refugees from the region's conflict 
areas.  The number has declined from more than a million in the late 
1990s to about 100,000 currently (the U.S. has provided significant 
support for UN operations in the refugee camps and is one of the 
main resettlement destinations), mainly from Burundi and the 
Democratic Republic of Congo.  Tanzania has offered naturalization 
to more than 100,000 Burundi who came as refugees in 1972, an 
unprecedented act.  Tanzania is also host to the International 
Criminal Tribunal for Rwanda. 
 
Economic Background 
------------------- 
¶6. Tanzania began an incomplete transition from socialism towards a 
free-market system with macroeconomic reforms in the mid-1980s, 
which have provided a basis for sustained moderately high economic 
growth.  However, even with growth averaging 7 percent over the last 
decade, the percentage of people living in poverty has declined only 
slightly, to one-third of the population, while continued rapid 
population growth has increased the absolute numbers of the poor by 
more than a million since 2001 and threatens to overwhelm an already 
fragile social service system.  Roughly 80 percent of the population 
is engaged in mostly small-scale agriculture, while per capita GDP 
is about USD 415.  Although the global financial crisis 
significantly affected the tourism industry, one of Tanzania's top 
foreign-exchange earners, 2009 saw economic growth of nearly 5 
percent.  High food prices since a spike in 2008 have contributed to 
a rise in inflation to over ten percent, a substantial increase from 
more moderate inflation earlier in the decade. 
 
Business and Investment Climate 
------------------------------- 
¶7. Two years after the World Bank Doing Business Index called 
Tanzania a "top reformer," the pace of reform has stalled.  In 
addition to bureaucratic obstacles, investors face poor 
infrastructure, a population with a limited skills base, and 
widespread corruption.  Strained capacity at the port of Dar es 
Salaam delays cargo twice as long as at the competing port of 
Mombasa (which itself is inefficient by international standards). 
Power generation, heavily reliant on hydropower, has run far behind 
rising demand, leading to frequent blackouts.  On Zanzibar's main 
island, damage to the cable connecting with the mainland has left 
the island reliant on inadequate and expensive diesel generation 
since December 10, 2009.  The Kikwete government's efforts to fight 
corruption have been fitful.  Late 2008 saw the first major court 
cases on grand corruption, with the arrests of individuals whose 
companies allegedly siphoned funds from the Bank of Tanzania, along 
with several Bank employees, and the separate arrests of two 
long-serving former ministers on corruption-related changes.  Since 
then, the cases have progressed slowly and several other 
well-publicized scandals have yet to result in prosecutions. 
 
U.S. - Tanzanian Bilateral Relationship 
---------------------------------------- 
¶8. Since the election of President Kikwete in December 2005, 
U.S.-Tanzanian bilateral relations have deepened and broadened 
significantly.  President Kikwete's pro-American stance, coupled 
with an increasing level of U.S. assistance, has been the catalyst 
for this change, enhancing cooperation in sectors from health and 
education to counterterrorism and military affairs.  Over the 45 
years between Tanzania's independence and the Kikwete 
Administration, American-Tanzanian cooperation in the security 
sector was extremely limited or nil.  It is now robust and growing. 
President Kikwete has visited the U.S. several times since taking 
office, including an official visit in August 2008 and a meeting 
with President Obama in May 2009 (the first African Head of State 
received in the White House by President Obama).  The public signing 
of the MCC compact during President Bush's February 2008 visit to 
Tanzania, and the favorable public reaction to the visit, had 
earlier deepened the relationship. 
 
USG Assistance 
--------------- 
¶9. The U.S. is one of the top donors in Tanzania, with total FY 2009 
bilateral assistance of over USD 400 million.  Taking into account 
the U.S. share of contributions from multilateral donors such as the 
World Bank and African Development Bank, U.S. assistance totaled 
over USD 630 million in 2009.  This does not include major private 
U.S. benefactors such as the Gates Foundation.  Other major 
bilateral donors include the U.K., Sweden, Netherlands, Denmark, 
Norway, and the European Commission; for several of the other 
donors, Tanzania is among the top recipients of assistance. 
 
Health Challenges 
----------------- 
¶10. HIV/AIDS: Tanzania faces a mature generalized HIV epidemic, with 
a prevalence rate of approximately 5.8 percent and 1.4 million 
people living with HIV/AIDS.  An estimated 440,000 individuals are 
clinically eligible for antiretroviral treatment; however, available 
services can support less than half of those in need.  In FY 2008, 
PEPFAR provided Tanzania with over USD 313 million to support 
treatment, care, and prevention programs.  In FY 2009, the PEPFAR 
budget was USD 313 million with a planning budget of 308 for FY 
¶2010.  We will have access to an additional USD 50 million under an 
approved Partnership Framework.  The PEPFAR program has exceeded its 
original PEPFAR targets of providing anti-retroviral treatment for 
150,000 individuals and care for 750,000 individuals, including 
orphans and vulnerable children.  Although the U.S. has fostered 
positive relationships with the Tanzanian government in the health 
sector, significant challenges remain, including: the need for 
stronger leadership in line ministries; poor health infrastructure; 
a shortage of health care workers; a weak government procurement 
system; and allegations of corruption in the public and private 
sectors.  Productive negotiations with the GOT on a PEPFAR 
Partnership Framework Agreement, which would deepen our relationship 
over the coming five years, are nearing completion. We are also 
working to increase our coordination with - and the effectiveness of 
- Global Fund grants to Tanzania for HIV/AIDS, HIV/TB and malaria. 
 
¶11. Malaria: Malaria is the number one killer of children in 
Tanzania and continues to be a major cause of maternal mortality. 
As a focus country under the President's Malaria Initiative (PMI), 
Tanzania received USD 35 million in FY 2009 to support the delivery 
of long-lasting, insecticide treated bed-nets (LLINs), the care and 
treatment of malaria, the malaria in pregnancy program, and indoor 
residual insecticide spraying (IRS).  The 2007-2008 Malaria 
Indicator Survey (MIS) shows malaria prevalence at less than 1 
percent on the islands, advancing Zanzibar to a pre-elimination 
phase in malaria control.  While support to the Zanzibar Malaria 
Control Program continues focusing on capacity building and systems 
strengthening for sustainability, PMI interventions in mainland 
Tanzania are rapidly scaling up through IRS and partnership with GOT 
on a multi-donor campaign to distribute LLINs to children under five 
and pregnant women with the goal of achieving universal bednet 
coverage in the near term. 
 
¶12.  Maternal and Child Health and Family Planning: USG assistance 
through USAID has played a role in reducing infant mortality by 32 
percent since 1999, but the rate is still unacceptably high (112 per 
1000 lives births; 2004 DHS).  Maternal mortality and fertility 
rates remain unacceptably high (578 per 100,000 and 5.7 per woman 
respectively; 2004 DHS) and have not changed appreciably for the 
past 15 years.  USAID will continue to use Child Survival and Health 
funds (USD 26 million in FY 2009) to reduce infant mortality by 25 
percent over the next five years by controlling malaria, provili~'-sk\'`mHvAership with the 
Government of Tanzania and NGOs to upgrade health care systems, 
norms and standards at the national and local levels. 
 
Education 
---------- 
¶13. Like other countries undergoing a rapid expansion of their 
education system, Tanzania is faced with challenges of capacity and 
education quality.  Schools lack sufficient teaching and learning 
materials at all levels.  Classrooms are overcrowded despite double 
or triple shifts.  There is an acute shortage of teachers and the 
majority of teachers lack adequate qualifications, particularly in 
English, science and mathematics.  USAID and Tanzania recently 
approved a new Education Assistance Objective with USD 11 million in 
FY 2009 funds focused on: improved quality in lower primary 
education (reading, math and science); teacher training; learning 
materials such as provision of textbooks; and improved educational 
quality through capacity building for educational management 
systems. 
 
Millennium Challenge Corporation 
-------------------------------- 
¶14. In September 2008, the MCC Compact signed by Presidents Kikwete 
and Bush entered into full force and effect.  It is the largest 
Compact signed to date (USD 698.136 million) and is targeted to 
address significant weaknesses in Tanzania's long-neglected 
transport (roads and an airport), energy, and water infrastructure. 
A significant amount of required preparatory work (environmental 
studies, finalization of technical designs, and planning for 
resettlement and compensation) has been completed.  Construction 
supervision contracts for all main roads have been competed and 
awarded, and the first construction works contract was awarded in 
December.  Several other contracts for energy activities are 
currently being tendered.  On the strategic political front, our 
message continues to be that a Compact is an agreement of reciprocal 
responsibilities; to sustain it over five years, Tanzania must pay 
heed to its corruption index and be vigilant at all levels to ensure 
transparency and accountability in governance.  A planned hydropower 
plant in Kigoma was recently stalled due to the discovery of three 
newly identified endemic species (two fish and a snail) whose 
habitat would be destroyed or critically altered by the plant as 
designed.  However we are working closely with the government to 
develop a substitute activity that could be completed by MCC's 
September 2013 deadline and help bring power to Kigoma. 
 
Food Security 
-------------- 
¶15. While Tanzania performs relatively better than its neighbors in 
food self-sufficiency, regional and seasonal imbalances exist and 
malnutrition is rampant among children under five.  USAID's proposed 
food security program is designed to increase food production and 
availability (staples), and strengthen secondary value chains 
(horticulture and livestock), in order to improve household income 
diversification and nutrition, particularly for women and 
smallholder farmers.  The plan is aligned with Tanzania's 
Agricultural Sector Development Plan (through 2015) and the 2009 
"Agriculture First" initiative. The USD 37.7 million Financial 
Crisis Initiative (FCI) for Tanzania, announced in November, is 
targeted at enhancing food security in the short-term (18 months) 
through school feeding and employment programs in areas most 
affected by the global economic slowdown.  FCI funds will also 
contribute to improved access to credit for agri-businesses and 
strengthening of economic forecasting and budget processes at the 
central level to cushion the effects of future economic shocks. 
 
Democratic Governance 
--------------------- 
¶16. With USD 4.2 million in FY 2009 funding, USAID is supporting 
ongoing programs to build civil society capacity and accountability 
and transparency in local government spending through Public 
Expenditure Tracking at the community level.  Governance funds will 
also be used for election monitoring and civic education in the 
run-up to the October 2010 elections. 
 
Military-to-Military Relations 
------------------------------ 
¶17. Under the Kikwete administration, the GOT has begun 
participating in international peacekeeping operations.  Most 
significantly, Tanzania is in the process of deploying a battalion 
to Darfur as part of the UN peacekeeping mission.  The U.S. provided 
training to that battalion and plans to train others through the 
African Contingency Training and Assistance (ACOTA) program. 
Evidence of deepening military-to-military ties between the USG and 
GOT include the establishment of a Civil Affairs Team, which is 
carrying out humanitarian projects and helping build civil military 
operations capacity within the Tanzania Peoples Defense Forces 
(TPDF), increasingly routine U.S. naval ship visits (the one in 2007 
was the first since Tanzania's independence), and an expanding DOD 
PEPFAR program. 
 
Mwanza Region and U.S. Programs 
------------------------------- 
¶18. Mwanza is a relatively small region in Northwest Tanzania with a 
rapidly growing population of approximately three million. The 
northern part of Mwanza is bounded by Lake Victoria, which Tanzania 
shares with Uganda and Kenya.  The economy in Mwanza Region is 
dominated by smallholder agriculture, employing about 85 per cent of 
the region's population, and complemented by an expanding fisheries 
sector.  Leading foreign exchange earners for the region are 
fishing, agriculture and mining, which has expanded rapidly in the 
past decade.  In agriculture, the main food crops are corn, cassava 
and sweet potato, with cotton and rice as the main cash crops.  The 
region is generally not self-sufficient for food. 
 
¶19. The city of Mwanza, with an estimated population of one million, 
is Tanzania's second largest town after Dar es Salaam and the 
economic heart of the Lake Region.  Mwanza is an important transport 
hub, with a rail line connecting to Dar es Salaam (although recent 
flooding in central Tanzania has cut the rail line) a busy 
freshwater port, and an airport.  Mwanza is a central area for the 
Sukuma ethnic group, Tanzania's largest at roughly 12% of the 
population. 
 
¶20. Health issues: HIV prevalence in Mwanza (5.6% 15-49, 3.8% 15-24) 
is near the national average, but is higher than average for youth. 
The region has one of the highest prevalence rates for malaria: 
31.4% of children six months to five years test positive for 
falciparum malaria.  Over one-half of households in Mwanza travel 
more than 2 km to their nearest improved water source, while 
residents live an average of 4 km from primary care facilities and 
21 km from hospitals.  As elsewhere in the country, facilities often 
lack skilled workers, water, power, access to communication, and 
emergency transportation. 
 
¶21. The USG Response in Mwanza Region:  Through PEPFAR, the USG 
supports HIV prevention, treatment, care and system strengthening 
activities.  In addition to supporting HIV treatment services at 
public, private and faith-based sites, the USG supports numerous 
local organizations that provide home- and community based services, 
including services targeted to vulnerable children and their 
caregivers.  In partnership with the Government of Tanzania and the 
Baylor International Pediatric AIDS Initiative, PEPFAR Tanzania is 
building the skills of pediatric providers at Bugando Medical 
Center.   Similarly, working in collaboration with the Touch 
Foundation, PEPFAR is supporting medical training scholarships at 
the Bugando University of Health Sciences.  Because of the 
complexity of the Mwanza region population, PEPFAR has brought 
voluntary HIV counseling and testing to mobile, mining and Lake 
Victoria island populations through several innovative programs. 
Finally, PEPFAR-funded operational research on the prevention of 
mother-to-child transmission is being undertaken by Tanzania's 
National Institute for Medical Research facility in Mwanza. 
 
¶22. Under the President's Malaria Initiative, the USG partnered with 
the Government of Tanzania and other donors including the Global 
Fund and the World Bank to provide free long-lasting insecticide 
treated nets (LLIN) to every child under five years old in the Lake 
Zone (July 2008)as part of Tanzania's Under-Five Catch Up Campaign. 
Indoor Residual Spraying will target every house in the Mwanza 
region beginning in late summer 2010.  The USG also supports a 
voucher program for pregnant women and infants to receive subsidized 
LLINs.  As part of national programs, the USG also supports the 
Ministry of Health in efforts to provide contraceptive choice to 
residents in Mwanza region through training, rehabilitating 
facilities, supporting the provision of quality voluntary 
contraceptive methods, and social marketing. The USG also supports 
quality improvement in antenatal care focusing on reducing maternal 
mortality through improved basic emergency obstetrical care, 
supporting vitamin A distribution twice a year for under-fives, and 
supporting oral rehydration therapy and zinc therapy, which reduces 
mortality due to diarrheal diseases. 
 
LENHARDT 
SENSITIVE BUT UNCLASSIFIED