Cablegate: Scenesetter for a/S Frazer Dec 18 Visit To

DE RUEHTO #1247/01 3451144
R 101144Z DEC 08



E.O. 12958: N/A

1. (SBU) The Embassy warmly welcomes you to Mozambique,
widely considered to be an exemplary post-conflict democratic
success story in Africa. Following the 2008 visits of
Ambassador Yates and Major General Altshuler from AFRICOM,
Deputy Assistant Secretary of Defense for African Affairs
Theresa Whelan, and Department of State DAS Carol Thompson,
your presence in Mozambique will further accentuate the
upswing in bilateral relations. Your visit will again
underscore that the U.S. is the largest bilateral donor to
Mozambique, one of only two countries in the world benefiting
from President Bush's three major initiatives--the Millennium
Challenge Corporation (MCC), the President's Emergency Plan
for AIDS Relief (PEPFAR), and the President's Malaria
Initiative (PMI). The visit will also provide the
opportunity to further USG interest in encouraging Mozambique
to participate politically towards regional stability and
militarily in regional peacekeeping operations.

A Post-Conflict Success Story

2. (U) Since the signing of the 1992 Rome Peace Accord which
ended sixteen years of civil war, Mozambique has made
significant progress as a young democracy and is rightfully
considered a post-conflict success story. The Frelimo party
led the independence struggle and has maintained political
power since Portuguese colonial rule ended in 1975. Frelimo's
military opponent during the subsequent civil war, Renamo,
has been the main opposition party since the first elections
in 1994. In December 2004 Mozambique held its third
presidential and legislative elections. Armando Guebuza won
the presidency by a wide margin, defeating Renamo leader
Afonso Dhlakama (who also ran unsuccessfully in 1994 and

A Democratic Example, But Still Fragile

3. (SBU) Voter turnout in the December 2004 presidential and
legislative elections was approximately 45 percent, down
substantially from the 75 percent turnout in 1999. Although
slightly fewer Frelimo voters cast their ballots than did so
in 1999, about half of the Renamo supporters did not vote.
Some analysts suggest Renamo supporters may have felt cheated
in the very close 1999 election and cynically saw little
point in participating. International observer groups
monitored the elections and indicated that the elections were
carried out in a generally successful and peaceful manner but
noted there were irregularities in the administration of the
elections. All agreed, nonetheless, that final results
broadly reflected the will of voters.

4. (SBU) In the December 2004 legislative election Frelimo
won 160 out of 250 seats in the National Assembly, just seven
short of a two-thirds majority. Renamo won 84 seats and an
allied coalition of small parties took the remaining six.
Since 2005 several of these small parties have distanced
themselves from Renamo. Renamo's unexpectedly poor showing
has led to disarray within the party and Dhlakama's
leadership has been called into question. This has weakened
any organized opposition to Frelimo, now in power for more
than thirty years.

5. (SBU) Local elections were held November 19, 2008 in all
43 municipalities; in 2009, the country will hold its fourth
national elections. Prior to the November 19 elections,
Renamo failed to re-nominate popular Beira mayor Daviz
Simango, allegedly due to his success and potential as a
threat to wrest control of Renamo from Dhlakama. Simango ran
and won as an independent, in an election which saw Frelimo
consolidate its power. A successful independent candidate
could pave the way for a new political party.

Responsible Economic Stewardship

6. (U) Since the mid 1980s, the government has broadly
followed IMF and World Bank guidelines on economic issues.
Mozambique's macroeconomic reforms and success in attracting
large investment projects have resulted in an average annual
GDP growth rate of eight percent from 1994-2007, the highest
in Africa over this time period. The 2008 growth rate is
lower, 6.5 percent due, in part, to the difficult world

MAPUTO 00001247 002 OF 002

economic situation. Economic growth is from a very low base
however, as per capita GDP for 2008 registered around USD
375. Foreign direct investment, exports, and revenue
collection all have increased significantly. U.S. investment
in Mozambique has grown steadily, and in 2007 the U.S. was
the largest foreign direct investor. Most of the state
companies have been privatized, with only about one dozen
remaining in government hands.

--------------------------------------------- ----
Aid Community Voicing Concerns; USG Largest Donor
--------------------------------------------- ----

7. (U) The government receives approximately 50% of its
budget directly from foreign aid and this trend is expected
to continue despite recent complaints by European donors
about the state of democracy, particularly governance and
corruption issues. As the line between Frelimo and the
government continues to blur, the group of donor nations
expressed concern in 2008 that many democracy indicators have
not been met. As a result, Sweden, Switzerland, and Denmark
recently announced a restructuring of their foreign
assistance which appears to reduce the amount of aid provided
to Mozambique. The USG is the largest bilateral donor in the
country with USD 325 million. In particular, our USD 216
million in PEPFAR funds in 2008 total more than the HIV/AIDS
funds committed by all other donors and the Mozambican
government combined. Although the USG does not provide direct
budget support, we have forgiven all of Mozambique's USD 151
million debt as part of Mozambique's Highly Indebted Poor
Countries relief initiative.

PEPFAR, MCC, PMI: A Unique Mix

8. (SBU) Mozambique is one of only two countries in the world
to receive combined PEPFAR, MCC and PMI support from the USG.
The MCC Compact signed in 2007 is on track for
implementation. The five-year, $507 million Compact will
reduce poverty through increased incomes and employment by
improving water systems, sanitation, roads, land tenure, and
agriculture, with a focus on the country's four northern
provinces. Despite some frustration about the lengthy
negotiation and implementation process, in July the MCC
program began advertising tenders to bidders for several of
its projects.


9. (SBU) The GRM has been hesitant to criticize other African
governments over human rights violations and historically has
abstained from voting on any such resolutions. GRM officials
have stated publicly that Mozambique, instead of criticizing
actions, prefers to focus on what can be done to address such
issues within the regional institutions (e.g. the AU and
SADC). Mozambique is the vice-chair of the Political and
Defense Organ of SADC and GRM officials have been very
involved in the SADC mediation efforts in Zimbabwe. Senior
GRM officials explain that it is important for them to keep
the channels of communication open with Mugabe, even though
they too see the need for some kind of political solution to
the ongoing crisis. The growing humanitarian crisis may
spill across the border into Mozambique.

Peacekeeping Operations

10. (SBU) Mozambique's armed forces (FADM) have benefited
from substantial USG military training and assistance,
especially through the African Contingency Operations and
Training Assistance (ACOTA) program. The FADM successfully
participated in the African Union's 2005 peacekeeping
operations in Burundi, and has publicly recognized its
interest in a higher-profile contribution to peacekeeping
operations in Sudan. The Embassy is working to assist FADM in
further developing its peacekeeping capacity and we look
forward to supporting the GRM's eventual contribution to
regional operations.

© Scoop Media

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