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Cablegate: India Hoping to "Checkmate China" in Mozambique

VZCZCXRO3601
RR RUEHBZ RUEHDU RUEHJO RUEHMR RUEHRN
DE RUEHTO #1471 3511412
ZNR UUUUU ZZH
R 171412Z DEC 07
FM AMEMBASSY MAPUTO
TO RUEHC/SECSTATE WASHDC 8367
INFO RUCNSAD/SOUTHERN AFRICAN DEVELOPMENT COMMUNITY
RUEHBJ/AMEMBASSY BEIJING 0222
RUEHLO/AMEMBASSY LONDON 0101
RUEHNE/AMEMBASSY NEW DELHI 0028

UNCLAS MAPUTO 001471

SIPDIS

SENSITIVE
SIPDIS

E.O. 12958: N/A
TAGS: ECON EMIN KDEM PGOV PREL IN MZ CN
SUBJECT: INDIA HOPING TO "CHECKMATE CHINA" IN MOZAMBIQUE

1. (SBU) SUMMARY: The Charge recently paid a courtesy call on
the India's High Commissioner to Mozambique, Rajinder Bhagat.
The High Commissioner related his country's primary
interests in Mozambique, focusing on commercial sector
development, agricultural development, and coal mining, while
recognizing the growing competition with China for
Mozambique's market and natural resources. The Charge and
Bhagat identified several areas of potential cooperation in
Mozambique between the USG and India, including fighting
HIV/AIDS and implementing water/sanitation projects. END
SUMMARY.

2. (U) According to the High Commisioner, India contributed
$40 million for aid projects in Mozambique in 2007. These
projects include installation of 600 water pumps in Zambezia
and Nampula and rural electrification in Gaza. He said India
also provided a $25 million line-of-credit to build a
technological park in Moamba in 2008. Noting the increase in
Indian investment in the coal sector, Bhagat would like to
encourage Indian companies to invest in the Nacala Corridor
and in hydroelectric power. He said that several Indian
ministers visited Mozambique in 2007 to promote commercial
relations.

3. (SBU) The High Commissioner repeatedly noted the expanding
presence of the Chinese in Mozambique, adding "they are
everywhere you turn." He predicted an inevitable competition
for markets and resources between India and China, but was
confident that in Mozambique, India will be able to
"checkmate China" given the strong and historical presence of
Indians in Mozambique, the positive relations with several
influential Mozambican Ministers (including the Minister of
Defense), and the fact that in contrast to Chinese
contractors, Indians hire local workers. Bhagat acknowledged
that the competition was natural considering the two
country's large, growing populations and need for additional
natural resources, particularly sources of energy, such as
oil and coal.

4. (U) The Charge related USG priorities in and financial
contributions to Mozambique highlighting two areas where
India and the USG share interests: HIV/AIDS and
water/sanitation projects. Bhagat responded that India is
very interested in building a pharmaceutical plant to produce
anti-retroviral drugs either in Mozambique or Swaziland.
Concerning water/sanitation, India has already installed some
600 water pumps in northern Mozambique and has plans to
install more in 2008. The Charge noted that water/sanitation
in the northern provinces was a major component of the MCC
and that India and the USG could work together to ensure
there was no overlap in towns receiving pumps.

5. (SBU) COMMENT: Though India receives little attention as
a donor nation in Mozambique, India's involvement here is
growing rapidly. India and Mozambique are due to soon sign a
cooperation agreement to increase commercial and political
ties. Tata Steel recently announced an US$88 million
investment in an Australian-owned coal venture in Mozambique.
According to India,s Economic Times, several other major
Indian companies are also concluding major investments in
Mozambique. While China continues to trumpet infrastructure
projects, look for India to continue a more quiet diplomacy
in its quest to, in the High Commissioner's words, "checkmate
China" in Mozambique. END COMMENT.
Chapman

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