Scoop has an Ethical Paywall
License needed for work use Register



Cablegate: Mcc Ceo Danilovich Sees Capacity Challenges

DE RUEHTO #1451/01 3450631
R 110631Z DEC 07




E.O. 12958: N/A

MAPUTO 00001451 001.2 OF 002

1. SUMMARY: Ambassador John Danilovich, CEO of the
Millennium Challenge Corporation (MCC), met with Mozambican
President Armando Guebuza, international donors and private
sector representatives, gave a speech on U.S. development
assistance at a local university, and visited MCC project
sites on November 17-20. Indicative of the challenges of
assistance programs in Mozambique, a recurring theme in
meetings was the challenge of developing local capacity to
implement and participate in the MCC Compact. END SUMMARY.

2. From November 17-19, Ambassador Danilovich visited
Mozambique's Northern provinces. Stops included proposed MCC
roads, agriculture and water sanitation projects in Pemba,
Nampula, and Nacala. The Ambassador also met with key
counterparts including provincial governors, city mayors, and
local business and religious leaders.

--------------------------------------------- ----
Guebueza: I'm responsible for GRM proposal to MCC
--------------------------------------------- ----

Advertisement - scroll to continue reading

Are you getting our free newsletter?

Subscribe to Scoop’s 'The Catch Up' our free weekly newsletter sent to your inbox every Monday with stories from across our network.

3. In a courtesy call November 20th, President Guebuza
thanked Ambassador Danilovich for USG support to Mozambique.
Guebuza indicated that the GRM's proposal to the MCC for
funding reflected his personal input*&this MCC plan is my
plan,8 he said. The President expressed interest in
learning more about other MCC agreements signed in
sub-Saharan Africa, especially Sao Tome and Principe. He
noted that international and U.S. investment is increasing.
Referring to the GRM purchase of the Cahora Bassa
hydroelectric dam from Portugal with commercial financing, he
declared the act &a second day of independence for the
country.8 Ambassador Danilovich responded that many
international companies include MCC indicators and the
signing of a Compact as part of their risk analysis before
investing in a country. The Ambassador pressed for continued
GRM focus on Compact implementation, and to finalize the
MCC's tax agreement and to engage qualified local MCA staff.
In a subsequent meeting with the MCA Board of Directors that
included the Ministers of Planning and Development,
Agriculture, and State Administration, he reiterated the
importance of timely Compact implementation.

Private Sector Competitiveness Concerns

4. Private sector representatives from the U.S.-Mozambique
Chamber of Commerce (CCMUSA) and the Confederation of
Economic Associations of Mozambique (CTA) told Ambassador
Danilovich that many Mozambican companies don't yet have the
technical capacity and expertise to successfully compete for
many of the projects contemplated by MCC, and pressed for MCC
to use Compact funds for capacity building. Representatives
also shared a common concern that domestic financing
obstacles make it very difficult for the private-sector in
Mozambique to compete with foreign companies with better
access to international credit, pointing to many existing
examples of large-scale projects in Mozambique contracted out
to foreign companies, especially from South Africa.
Participants also expressed concern about Chinese companies
outcompeting local businesses. Pointing to a similar World
Bank strategy, representatives suggested that large MCC
contracts be broken into smaller components, which would help
local compete.

--------------------------------------------- ----
International Donors Urge for Closer Coordination
--------------------------------------------- ----

5. Ambassadors and heads of cooperation from more than 20
diplomatic and international missions had a roundtable
discussion with Ambassador Danilovich, the Charge, USAID
Director and MCC acting country director. The IMF resident
representative expressed concern about MCC's tax exemptions.
The Norwegian representative noted that most other donors are
providing direct budget support, while the USG through the
MCC does not. The French and Dutch Ambassadors urged for
more MCC coordination with other donors to minimize overlap
and ensure efficient use of the GRM's limited capacity.
Ambassador Danilovich pointed to the U.S. legal requirements
which prevent the MCC from paying local taxes. He assured
participants that coordination efforts are ongoing, noting
many joint efforts between the USG and other donors already
existed in other countries and were being developed in
Mozambique, including with the World Bank, the United
Kingdom, and France. The Charge emphasized that while the
USG doesn't provide direct budget support bilaterally, USG
contributions to international organizations that do provide
direct support in Mozambique are significant.

MAPUTO 00001451 002.2 OF 002

Policy Speech: U.S. Committed to Africa

6. In a presentation at Maputo's Polytechnic University,
Ambassador Danilovich reviewed the depth of the USG's
commitment to Africa, including the President's Emergency
Plan for AIDS Relief (PEPFAR), the President's Malaria
Initiative (PMI), and assistance through USAID and MCC. In
an extended question and answer period following, there were
many requests for additional information on the specifics of
procurement and bidding processes for the MCC Compact, and
opportunities for training and capacity building.

--------------------------------------------- ---
Comment: Capacity, Implementation Top Challenges
--------------------------------------------- ---

7. Ambassador Danilovich's visit underscored USG commitment
to Mozambique's development and furthered understanding of
the MCC program by other donors and Mozambican stakeholders.
In each venue, participants highlighted the importance of
developing additional human capacity to implement programs in
Mozambique. The private sector and government have limited
qualified personnel, and supporting systems and
infrastructure are sometimes still nascent and untested.
President Guebuza's personal commitment to MCC Compact
implementation, reiterated again at a private sector
conference November 28, will be vital for implementation and
keeping the Compact on schedule.

© Scoop Media

Advertisement - scroll to continue reading
World Headlines

UN News: Aid Access Is Key Priority

Among the key issues facing diplomats is securing the release of a reported 199 Israeli hostages, seized during the Hamas raid. “History is watching,” says Emergency Relief Coordinator Martin Griffiths. “This war was started by taking those hostages. Of course, there's a history between Palestinian people and the Israeli people, and I'm not denying any of that. But that act alone lit a fire, which can only be put out with the release of those hostages.” More

Save The Children: Four Earthquakes In a Week Leave Thousands Homeless

Families in western Afghanistan are reeling after a fourth earthquake hit Herat Province, crumbling buildings and forcing people to flee once again, with thousands now living in tents exposed to fierce winds and dust storms. The latest 6.3 magnitude earthquake hit 30 km outside of Herat on Sunday, shattering communities still reeling from strong and shallow aftershocks. More

UN News: Nowhere To Go In Gaza

UN Spokesperson Stéphane Dujarric said some 1.1M people would be expected to leave northern Gaza and that such a movement would be “impossible” without devastating humanitarian consequences and appeals for the order to be rescinded. The WHO joined the call for Israel to rescind the relocation order, which amounted to a “death sentence” for many. More

Access Now: Telecom Blackout In Gaza An Attack On Human Rights

By October 10, reports indicated that fixed-line internet, mobile data, SMS, telephone, and TV networks are all seriously compromised. With significant and increasing damage to the electrical grid, orders by the Israeli Ministry of Energy to stop supplying electricity and the last remaining power station now out of fuel, many are no longer able to charge devices that are essential to communicate and access information. More


Join Our Free Newsletter

Subscribe to Scoop’s 'The Catch Up' our free weekly newsletter sent to your inbox every Monday with stories from across our network.