Cablegate: Malawi - Indifference and Jealousy Color Attitudes Toward

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1. (SBU) Summary: Malawi's relationship with South Africa is colored
largely by indifference, due to South Africa's lack of an aid
program and jealousy of South Africa's economic and political
position in the region. While Malawi once enjoyed close relations
with -- and derived many economic benefits from -- the apartheid-era
government of South Africa, the relationship grew chillier from 1994
until 2002. In the past five years, Malawi and South Africa have
returned to more cordial relations, although most in Malawi view
South Africa as a growing regional hegemon. Despite these
attitudes, many in the government are content to follow the lead of
South Africa on international issues and use regional bodies such as
SADC to shield Malawi from external bilateral pressure.
Economically, South Africa dominates trade with Malawi, accounting
for almost 50% of imports and over 30% of exports. Although trade
agreements are in Malawi's favor, imports from South Africa are
three times larger than exports and many in Malawi feel South Africa
still must do more to level the playing field. End summary.

Apartheid-Era Relationship Shapes Recent History
--------------------------------------------- ---

2. (U) Malawi was the only country in Africa to recognize the
apartheid-era government of South Africa when Banda established
bilateral ties in 1967. Malawi extracted many economic benefits
from the relationship. Much as was done in the colonial days when
Malawi was a source of labor for Zambian mines and Zimbabwean
plantations, thousands of Malawians went to South Africa to work in
the mines in the 1960s and 70s. Remittances from South Africa were
one of the largest sources of foreign exchange for Malawi and
extensive commercial enterprises existed to recruit, train, and
transport workers to the mines.

3. (SBU) South Africa also contributed to Malawi, through
large-scale public works projects such as the Capital Hill complex
of government buildings, completed in 1974, that enabled the
relocation of the national capital from Zomba to Lilongwe in 1975.
Additionally, the National Food Reserve silos, still dominating the
Kanengo area outside Lilongwe, were built by South Africa in the
late 1970s. Foreign aid from South Africa peaked at over 30% of
total aid to Malawi, making the country Malawi's biggest donor
throughout much of the 1970s. South Africa's influence diminished
beginning in 1976 when then Life President Hastings Kamuzu Banda
suspected South African involvement in a coup attempt against him.
In 1980, Malawi joined the Southern African Development Community
(SADC) and completed its move away from apartheid South Africa as
Dr. Banda's influence on day-to-day politics diminished and senior
civil servants exercised more power.

4. (SBU) 1994 marked the end of apartheid in South Africa and the
beginning of multi-party democracy in Malawi. By this time, labor
migration to the mines had dwindled as closer labor sources such as
Botswana and Mozambique became better options. Due to Malawi's past
recognition of the apartheid-era government, the new South African
government, while maintaining formal relations, did little economic
or political business with Malawi. During this period, Malawi
turned inward to concentrate on its own new democracy and
increasingly sought foreign assistance from Western Europe and the
United States. It was not until 2002 that the relationship began to
improve, with the arrival of the first High Commissioner and
diplomatic staff representing the "new" South Africa. The present
High Commissioner is a senior ANC member. In 2006 Malawi and South
Africa began to explore ways to strengthen their relationship,
signing a strategic cooperation agreement that identified several
potential areas of mutual benefit. This agreement has paved the way
for a likely Ministerial visit by the Minister of Foreign Affairs in
2008 and a possible State visit to Malawi in 2009.

Politicians Indifferent about Current Relationship
--------------------------------------------- -----

5. (U) Despite the moves to improve relations, South Africa is
currently viewed by most politicians and government staff with
ambivalence. Relations with the donor nations and organizations of
Europe and North America are elevated in priority above South Africa
despite the latter's proximity and regional importance. Relations
with the border countries of Mozambique and Zambia are usually
viewed as more important as well. Some officials also cite colonial
links to Zimbabwe (including the large number of Zimbabweans of
Malawian origin) to describe that relationship as more crucial to
Malawi despite Zimbabwe's current situation.

Interacting with the Reluctant Regional Hegemon
--------------------------------------------- --

6. (SBU) Many Malawian officials describe South Africa as a
reluctant regional hegemon. They say South Africa is usually
deferential during SADC and other multi-lateral meetings, often
offering up its positions but then framing them as the ideas of a
young democracy that could learn from its neighbors' experiences.
South African diplomats admit that when dealing with its neighbors

LILONGWE 00000109 002 OF 002

they often bring up the fact that South Africa has only a 14-year
history of democracy. Ministry of Foreign Affairs contacts say that
despite this approach, with few exceptions, the South African
position usually becomes that which is adopted by SADC.

Why Won't South Africa Become a Donor?

7. (U) Members of Parliament express a desire for South Africa to
step up to the levels of foreign assistance that Europe and the U.S.
do, and hope as well for preferential trade agreements and massive
foreign investment. At the same time they do not want South Africa
to meddle with Malawi's internal politics nor displace Malawians
from jobs here. Jealousy-tinged complaints about the influx of
South African retailers like Shop-Rite and Game are common, even as
government officials enjoy the broader range of products and reduced
prices these outlets offer. Most officials insist South Africa must
do more to level the playing field with Malawi, but offer no
concrete methods to do so other than through financial infusions
resembling those of other donors.

8. (SBU) According to South African political officer Zwai Jiphetu,
South Africa still considers itself a developing nation with limited
capacity to provide foreign aid. The South African aid strategy is
to fund development through multi-lateral organizations such as the
UN and not give direct bilateral assistance so that the nation does
not anger any of its many needier neighbors. This, of course, is in
sharp contrast to the Malawian perception that South Africa is rich
and should share what it has.

South Africa, a Military Afterthought

9. (SBU) Discussions with top Malawi Defense Force (MDF) officials
reveal that South Africa is a military afterthought. In its current
search for equipment assistance donations for a proposed UN
deployment to Darfur the military has canvassed the United States,
Taiwan, European nations, and even approached sparsely-represented
Japan and Canada, but have not sought assistance from South Africa,
though much of Malawi's hardware is purchased from South Africa,
reflecting relationships going back to the 1970s. MDF officials
describe South Africa as a regional military power but interactions
between the two are limited to annual SADC training exercises and
regional defense cooperation conferences usually sponsored on by the
United States, Canada, or the United Kingdom.

Dominating the Economic Landscape

10. (U) South Africa is Malawi's dominant trading partner,
accounting for 48.5% of all imports and 30.2% of all exports in
2006. Despite trade agreements with South Africa that favor Malawi,
Malawi still imported 59,118.48 million MK (439.2 million USD) while
exporting only 20,104.95 million MK (149.4 million USD) to South
Africa in 2006. While most exports to South Africa are commodities
and basic apparel, imports from South Africa consist of a wide range
of consumer and capital goods. While ports in Mozambique are
closer, much of Malawi's trade is still moved by truck to the port
of Durban because of South Africa's better infrastructure.

11. (SBU) Comment: As with much of Southern Africa, Malawi cannot
escape the pull of South Africa's growing economic and political
importance. South Africa's manufacturing base feeds an increasingly
large portion of Malawi's import-dependent economy. Even South
Africa's internal problems can adversely affect Malawi, as in the
case of South Africa's power shortages, which will likely affect
Malawi's ability import power from Mozambique through a planned
interconnection with its grid. Despite Malawi's concerns about
South Africa's growing regional influence, the government of Malawi
is often happy to use SADC, and thereby South Africa, as a shield
from international pressure on multilateral issues. As South Africa
continues to grow in regional and international stature, Malawi's
relationship with South Africa will only grow in importance.
However, most Malawians will still eye South Africa with a bit of
wariness until it joins the ranks of donor nations, and even then
will maintain a jealousy-tinged attitude toward their neighbor to
the south.


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