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Cablegate: Scenesetter for President Bush's February 2008

VZCZCXRO5124
PP RUEHLMC
DE RUEHDR #0104/01 0421853
ZNR UUUUU ZZH
P 111853Z FEB 08
FM AMEMBASSY DAR ES SALAAM
TO RUEHC/SECSTATE WASHDC PRIORITY 7305
INFO RUEKJCS/SECDEF WASHDC PRIORITY
RUCPDOC/DEPT OF COMMERCE WASHDC PRIORITY
RHEHNSC/NSC WASHDC PRIORITY
RUEHLMC/MCC WASHINGTON DC PRIORITY

UNCLAS SECTION 01 OF 05 DAR ES SALAAM 000104

SIPDIS

SENSITIVE
SIPDIS

DEPT AF/E FOR JLIDDLE; AF/RSA FOR MBITTRICK
PASS TO NSC
PASS TO MCC WASHINGTON

E.O. 12958: N/A
TAGS: OVIP PREL PGOV EAID ECON TZ
SUBJECT: SCENESETTER FOR PRESIDENT BUSH'S FEBRUARY 2008
TRIP TO TANZANIA

REF: DAR ES SALAAM 098

SUMMARY
-------
1. (SBU) Over the past two years, the U.S.-Tanzanian
bilateral relationship has witnessed a sea change. With the
election of a charismatic, pro-Western President, and
increasing levels of U.S. assistance, cooperation has
expanded in areas ranging from health and education to
counterterrorism and military affairs. As a nascent
democracy with an impressive record of peaceful political
transition, Tanzania is an anchor of stability in a turbulent
region. Despite daunting challenges--HIV/AIDS, poor
infrastructure, corruption, and political stalemate in
Zanzibar--the Government of Tanzania (GOT) is clearly
committed to furthering both economic development and
democracy. Providing more than USD 400 million in direct
bilateral assistance to the GOT in FY 2008, the Mission aims
to advance several strategic priorities such as enhancing
Tanzania's counterterrorism capability and strengthening the
checks and balances of Tanzania's democracy. A USD 698
million MCC Compact, the largest Compact to date, is
scheduled to be signed during the POTUS' visit to Tanzania.

2. (SBU) On anti-corruption and transparency, President
Kikwete, well aware of the importance of government
accountability to 82 percent of the electorate who brought
him into office and to the donors, allowed press freedoms to
strengthen, particularly investigative reporting. During the
second year of his administration, one corruption case after
another was aired in the press. Some major donors even
threatened to reduce "medium term" assistance levels without
greater transparency and accountability. Although in early
2007, Kikwete appeared not to be taking decisive action to
ensure accountability, shortly after his party's (CCM) annual
convention in November 2007, his actions become more evident.
President Kikwete fired at least one high level government
official on allegations of corruption--the Governor of the
Bank of Tanzania. In addition, President Kikwete appointed a
multi-party committee to investigate mining contracts to
ascertain if any procurement rules had been breached.

3. (SBU) Things came to a head on February 7 when the
findings of a Parliamentary Committee formed to review a
certain government contract were released to the public. In
response to the report, the Prime Minister promptly tendered
his resignation and President Kikwete dissolved his entire
cabinet. On February 8 he appointed as the new PM an
official known for his hard work and integrity (reftel). In
the remainder of his cabinet nominations, he has an
opportunity to show whether he is serious to eliminate
corruption at the senior levels of his government. As of the
date of this scenesetter, there is tremendous hope and
anticipation in the press and with the people that President
Kikwete will keep on the reform path by appointing a
reform-minded cabinet and taking other public steps. End
Summary.

Political and Economic Background
---------------------------------
4. (SBU) In 1992, Tanzania opened the door to multi-party
democracy, transitioning from a single party, socialist
state. Under the stewardship of former President Mkapa,
fundamental macro-reforms were introduced and Tanzania began
its transition toward free-market capitalism. With the
landslide election of President Kikwete in 2005, Tanzania
underwent its third peaceful transition to a new President.
Taken together, political and economic reforms introduced
since 1992 have made Tanzania an example of peace and
stability in the region.

5. (SBU) Formidable challenges remain. Located in a
turbulent neighborhood, Tanzania has eight porous borders and
a 1,500 kilometer coastline. Infrastructure remains
rudimentary, red tape and corruption impede private sector
development, and HIV/AIDs prevalence hovers around seven
percent. While elections on the Mainland have been free and
fair, Tanzania is still a state dominated by the executive
branch and the ruling Chama Cha Mapinduzi (CCM) party. In
Zanzibar, serious irregularities and sporadic violence marred
elections in 1995, 2000, and 2005.

6. (SBU) While Tanzania has achieved major macro-economic
reform over the past decade, macro stability has yet to

DAR ES SAL 00000104 002 OF 005


translate into significant gains at the micro level. More
than one third of Tanzanians live in abject poverty and per
capita GDP is USD 340. In 2006, the Tanzanian government had
to revise its growth forecasts downward (from 7.2 to 5.8
percent) due to a food shortage and an ongoing power crisis.
The lack of electricity, coupled with rising oil and food
prices, caused inflation to increase from approximately 4 to
7 percent. Tanzania's oil import bill quadrupled and its
business climate suffered set backs. In 2007, with good
rains and new leadership in the energy sector, the economic
forecast rebounded to a growth rate of nearly 7.2 percent for
2007.

U.S.-Tanzanian Bilateral Relationship
-------------------------------------
7. (SBU) With the election of President Kikwete in December
2005, U.S.-Tanzanian bilateral relations have warmed
significantly. President Kikwete's pro-Western 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. President Kikwete has visited the U.S. four
times since taking office, meeting President Bush in
Washington D.C. (May 2006) and in New York (September 2006).
In September 2007, President Kikwete attended the UN General
Assembly in New York and met with the Secretary of State in
Washington D.C.; in December 2007 he traveled to Washington
to receive an award from the Leon Sullivan Foundation.

8. (SBU) As a member of the UN Security Council (January
2005-December 2006), Tanzania supported key resolutions
sanctioning North Korea and Iran. Tanzania did not fully
support the USG's effort to address Burma's human rights
situation in the Security Council, insisting the issue be
dealt with in the Human Rights Council instead. With respect
to country specific human rights resolutions in the Third
Committee, Tanzania was also not completely cooperative and
abstained from votes or voted to close the discussion on some
key human rights resolutions which the GOT believed should be
handled by the Human Rights Council.

9. (SBU) Tanzania has started to play an increasingly
prominent role in the region on issues ranging from Sudan to
Somalia. Standing up to Sudan, the Kikwete administration
was outspoken in its support of a UN peacekeeping mission to
take over the African Union (AU) mission in Darfur and
against Sudan assuming the AU Chairmanship in January 2007.
During the January 2008 AU Summit in Addis Ababa, President
Kikwete was elected AU Chairman for the next 12 months.
While still in Addis, he worked to garner Africa's support
for a strong Security Council statement against the
deteriorating situation in Chad. Over the next year, Kikwete
will be playing a pivotal role to resolve conflicts on the
Continent from Kenya, to Darfur and Chad, to Zimbabwe.

10. (SBU) President Kikwete pledged to the Secretary of State
in September 2007 to send three peacekeeping battalions to
Darfur; these troops are presently being trained under the
Department of State's ACOTA program. Tanzania has also been
supportive of our policy in Somalia and joined the Somalia
Contact Group. At the United States' behest, President
Kikwete swiftly voiced his support for Ethiopia, the need for
an African peacekeeping mission to be put in place, and
offered to train 1,000 Somali troops to help stabilize the
situation. Tanzania has long played a constructive role in
the Burundi peace process and a lead role within SADC on
Zimbabwe.

Strategic Priorities
--------------------
11. (SBU) The Mission's strategic priorities in Tanzania are:
(i) building the GOT's counterterrorism (CT) capacity, with
specific focus on establishing a national CT Center; (ii)
improving health and education by combating HIV/AIDS and
malaria, and increasing access to school for underserved
children such as Muslim girls; (iii) strengthening Tanzania's
nascent democracy and anti-corruption efforts; (iv) promoting
regional stability by developing Tanzania's peacekeeping
capability and deepening military-to-military ties; (v)
spurring economic growth through policy reform and improved
natural resource management; and (vi) influencing public
opinion especially among Tanzania's Muslims who tend to view
U.S. policy as anti-Islam


DAR ES SAL 00000104 003 OF 005


12. (SBU) We support these strategic priorities with active
diplomatic engagement and a generous foreign assistance
program. Although Tanzania enjoys the support of numerous
donor countries, the U.S. is one of the top donors in
Tanzania in dollar amounts. In FY08, the total USG bilateral
assistance will amount to nearly USD 400 million including
presidential initiatives such as PEPFAR and PMI. Taking into
account the U.S. share of contributions from multilateral
donors such as the World Bank and African Development Bank,
U.S. assistance will total USD 662 million in 2008. This
does not include major private U.S. benefactors such as the
Gates Foundation. Other major bilateral donors include the
U.K., Norway, Sweden, and the European Union.

13. (SBU) To ensure that corruption does not undermine
development efforts, the Mission is sharply focused on
supporting President Kikwete's anti-corruption campaign. The
Kikwete administration has taken steps to combat corruption,
appointing a new Director General of the Prevention and
Combating of Corruption Bureau (PCCB) and passing two new
pieces of legislation: the Anti-Money Laundering Bill and the
Anti-Corruption Bill. While pleased with passage of these
bills, we are disappointed that the Anti-Corruption Bill does
not adequately safeguard the independence of the PCCB. A
steady drum beat of corruption allegations featured in the
press over the past year have involved many of Tanzania's
senior leaders; until now, no one had been brought to justice
for their alleged actions. However, with respect to the Bank
of Tanzania, President Kikwete fired the Governor in January
2008, and announced an investigation of the central bank's
activities with the report due in six months. President
Kikwete's willingness to take actions, including criminal,
against alleged corrupt officials will go a long way in
determining how serious he is.

14. (SBU) In the wake of the 1998 Embassy bombing, the
Mission is actively engaged in furthering counterterrorism
(CT) cooperation with the Tanzanian government. The Mission
has an integrated strategy involving modernization of
Tanzania's law enforcement as well as winning the hearts and
minds of the Tanzanian people. Our work in Pemba--a Muslim
enclave along the Swahili coast--exemplifies this strategy.
We have knit together cultural preservation projects to
repair mosques, self-help projects to improve rural
livelihoods, and small USAID projects including the donation
of generators to provide electricity to two hospitals. In
addition, CDC is providing HIV prevention and treatment
services at the central hospital in Pemba. USAID and the
Combined Joint Task Force-Horn of Africa (CJTF-HOA) have
partnered to build and furnish a primary school and the
Mission has plans to inaugurate an American Corner in Pemba
to advance Islamic outreach efforts. Another key component
of the Mission's strategy is helping the government establish
its own national, interagency CT Center to collect, share and
analyze CT data.

Zanzibar's "Political Problem"
-----------------------------
15. (SBU) In his December 2005 inaugural address, President
Kikwete pledged to address Zanzibar's "political problem,"
which involves the bitter divide between two political
parties - CCM and the Civic United Front (CUF)- and between
Zanzibar's two islands--Unguja and Pemba. Like the 1995 and
2000 elections, Zanzibar's 2005 elections were marred by
irregularities. A National Democratic Institute observer
team reported "serious problems in Zanzibar's urban region
where 40 percent of the registered voters reside." However,
2005 did register important administrative improvements and
violence was contained. Nevertheless, the elections ended in
an impasse: CCM claimed victory (53 percent of the vote) and
CUF contested the elections and refused to recognize
President Karume's government.

16. (SBU) Throughout 2006, neither party made any formal
reconciliation attempt. Among CUF members, there appeared to
be disagreement between older members urging patience and
time for President Kikwete to address the problem, and the
CUF youth wing which was increasingly frustrated and
impatient. Within CCM there also appeared to be a divide
between moderates recognizing that there was a problem in
Zanzibar and more hard-line members, including President
Karume, denying that any real problem existed.

17. (SBU) In January 2007, following up on his inauguration

DAR ES SAL 00000104 004 OF 005


promise, President Kikwete obtained CCM Central Committee "go
ahead" to begin official reconciliation talks between the CCM
Secretary General, Yusuf Makamba, and CUF's Secretary General

SIPDIS
and three-time presidential candidate, Maalim Seif Hamad. In
December 2007 these negotiations reached a critical stage
after 12 months of discussions. The CUF is still stressing
their bottom line is the formation of a government of
national unity in advance of the 2010 elections. CCM, on the
other hand, appears unwilling to implement a power sharing
agreement prior to the 2010 elections. CUF leaders have
repeatedly emphasized that without a government of national
unity, the 2010 elections will be neither free nor fair and
have warned that their membership is becoming increasingly
restless and disillusioned with the democratic process.
President Kikwete is personally involved in monitoring the
final stages of these discussions. Particularly in light of
the ongoing political crisis in Kenya, we believe he realizes
keenly the necessity that the final agreement be fair and
equitable to both sides.

Military-to-Military Relations
------------------------------
18. (SBU) Under the Kikwete administration, the GOT has
expressed its intent to begin participating in international
peacekeeping operations. In 2006, Tanzania became our newest
partner in the African Contingency Training and Assistance
(ACOTA) program. With Kikwete's offer to deploy a
peacekeeping brigade to Darfur under UN auspices, the
Mission's goal is to train three Tanzanian battalions by
2009. These battalions will not only contribute to UN
deployments but constitute part of an AU regional standby
brigade. (Note: Demonstrating its intent to become more
active in peacekeeping, Tanzania deployed 75 military police
to Lebanon in January 2007 to help secure the UNAFIL mission.)

19. (SBU) The Tanzanian government has also signaled its
desire to deepen military-to-military ties with the U.S. more
broadly. In December 2006, the GOT gave approval to CJTF-HOA
to establish a Civil Affairs presence on the Swahili Coast.
The Civil Affairs team is carrying out humanitarian projects
and helping build civil military operations capacity within
the Tanzania People's Defence Forces (TPDF). Among some
members of TPDF's old guard, however, there remains a
residual resistance to developing deeper ties with the U.S.

20. (SBU) The Tanzanian government has repeatedly requested
military equipment from the U.S. but its failure to sign
Article 98 is an impediment. To respond to the GOT's
requests for increased training opportunities, the Mission
will use IMET funds to send promising officers from
Tanzania's army and navy to the U.S. for educational exchange
programs. We also used funds from a State Department source
(NADR-EXBS) to provide equipment to Tanzanian coastal
security forces to strengthen the country's maritime security
capacity. Finally, using DoD Section 1206 funding, we
provided nearly USD 1 million in FY07 to train Tanzania's
military in Special Forces Operations with an emphasis on
patrolling the country's borders.

Health Challenges: HIV/AIDS and Malaria
---------------------------------------
21. (SBU) Tanzania faces a mature generalized HIV epidemic,
with a prevalence rate of approximately 7 percent and 1.4
million people living with HIV/AIDS. In FY 2008, PEPFAR will
provide Tanzania with over USD 300 million to support
treatment, care, and prevention programs. The PEPFAR program
is on track to exceed its original targets: 150,000
individuals on anti-retroviral drugs; care for 750,000
individuals, including orphans and vulnerable children; and
prevention of 490,000 new HIV infections. Although the U.S.
has fostered positive relationships with the Tanzanian
government in the health sector, significant challenges
remain including: poor health infrastructure; a shortage of
health care workers; a weak procurement system; and
occasional allegations of corruption.

22. (SBU) 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 will receive up to USD 34 million
in FY08 to support the delivery of long-lasting, insecticide
treated bed-nets, the care and treatment of malaria, the
malaria in pregnancy program, and indoor residual insecticide
spraying. Since 2006, USAID has focused its efforts in

DAR ES SAL 00000104 005 OF 005


Zanzibar, successfully controlling malaria on both islands;
the program on the Mainland is on track to attain the PMI
goal of reducing malaria deaths by at least 50 percent by
2010.

Millennium Challenge Corporation (MCC)
--------------------------------------
23. (SBU) In September 2007, the MCC Board approved Tanzania
for the largest MCC Compact to date, USD 698 million. The
Compact will strengthen Tanzania's infrastructure network in
three key areas: roads, water, and energy. Tanzania's MCC
Compact is scheduled to be signed in Dar es Salaam by the two
presidents during the POTUS' visit. Even after the Compact
signing, our message will continue to be that a Compact is an
agreement of reciprocal responsibilities, and 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.

24. (SBU) Tanzania also received MCC Threshold funds ) USD
11.2 million from FY05-07. The Threshold program, which
focuses on good governance and anti-corruption projects,
consists of four components: (i) public procurement reform;
(ii) a rule of law initiative with focus on the Prevention of
Corruption Bureau; (iii) civil society strengthening; and
(iv) technical assistance to establish a Financial
Intelligence Unit.

Comment
-------
25. (SBU) The President's visit comes at a time when the U.S.
is providing unprecedented support to Tanzania and when there
is a great deal of positive momentum in the U.S.-Tanzanian
bilateral relationship. President Kikwete's new position as
the African Union Chairman is key to our regional and
Africa-wide objectives. While this visit will accentuate the
positive, we hope to underline the critical importance of
continuing to ask for transparency and accountability in
government. At this moment, Tanzania is clearly poised to be
a model of stability, enjoying peaceful transitions of power,
and promising economic growth. However, President Kikwete is
in the immediate wake of a major cabinet change precipitated
by the legislative branch taking a stronger role as the watch
dog of the executive branch. Because of recent events, there
is a great opportunity for President Kikwete to dramatically
take a stand against corruption in favor of transparency. In
our view, the signs are good, but the proof will be in the
steps he will take.
GREEN

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