US embassy cable - 04MAPUTO541

C O N F I D E N T I A L SECTION 01 OF 03 MAPUTO 000541 
 
SIPDIS 
S/GAC FOR RTOBIAS AND WBRENCICK 
BERLIN PLEASE PASS TO RTOBIAS AND WBRENCICK 
E.O. 12958: DECL: 04/20/2014 
TAGS: KHIV, PREL, EAID, MZ, Scenesetters, HIV/AIDS/PEPFAR 
SUBJECT: SCENESETTER FOR GAC AMBASSADOR RANDALL TOBIAS' 
VISIT TO MOZAMBIQUE APRIL 28-30 
 
 
Classified By: Econ/Pol Officer Elizabeth Jaffee for reasons 1.4 (b) and (d) 
 
1. (C) Introduction and summary. Mozambique is at a critical 
stage in its efforts to stem the HIV/AIDS epidemic. In 
Southern Africa, Mozambique presents both the greatest 
challenges and possibly the greatest opportunity to become 
the next Uganda-like success in turning around the HIV/AIDS 
threat. The Mozambican Government (GRM) has been outspoken in 
the battle against HIV/AIDS and is a cooperative partner in 
our HIV/AIDS efforts. The USG has been a leading player in 
international HIV/AIDS efforts in Mozambique, working closely 
with our implementing partners, other donors, and the 
Ministry of Health (MOH) and the National AIDS Council (NAC). 
While the MOH has welcomed the significant increase in USG 
support to combat HIV/AIDS in Mozambique through the 
President's Emergency Plan, there has been friction with the 
Minister of Health over some aspects of our support (see 
below). Likewise, bilateral and multilateral donors have 
perceived the program as unilateral. Your visit can be an 
important opportunity to inform key government officials of 
the Emergency Plan's objectives and assure donors of our 
sincere desire to coordinate efforts. 
 
POLITICAL/ECONOMIC OVERVIEW: 
============================ 
2. (U) Mozambique is rightly considered a post-conflict 
success story. Since the signing of the 1992 Peace Accords 
that ended sixteen years of civil war, Mozambique has made 
significant progress in promoting economic reforms and 
consolidating democracy. Yet, Mozambique faces enormous 
development challenges. The HIV/AIDS epidemic puts at risk 
much of the progress gained over the past decade. US 
bilateral relations are strong. US government efforts in 
Mozambique have focused on good governance, economic 
development and health. The USG was also the major donor 
contributing to reconstruction and rehabilitation activities 
following the catastrophic floods in 2000. 
 
3. (U) In late 2004, Mozambique will hold its third 
multi-party presidential elections since independence in 
1975. The current constitutionally-elected president, Joaquim 
Chissano, will step down after having served two terms. 
Chissano and the leadership of FRELIMO dominate policy-making 
and implementation. Mozambique currently holds the Presidency 
of the African Union (AU). President Chissano has been 
actively engaged on broader African issues and has sought to 
use his AU Presidency both to build stronger African 
institutions and to find African-led solutions to African 
problems. In February, Planning and Finance Minister Luisa 
Diogo replaced Pascoal Mocumbi as Prime Minister (while 
retaining the finance portfolio). Mocumbi, a medical doctor 
and former candidate for Secretary General of the WHO, 
resigned his post to serve as the High Commissioner of a new 
European Commission health body, the Europe-Developing 
Countries Clinical Trial Partnership. On November 19, 2003, 
Mozambique held municipal elections which were considered 
generally free and fair. However, many institutions, such as 
the judiciary and the police, remain weak. Corruption remains 
a problem in both the public and private sectors. 
 
4. (U) Mozambique continues to be one of the most dynamic and 
fastest-growing economies in sub-Saharan Africa, albeit from 
a low base. Mozambique is one of the world's poorest 
countries, with per capita GDP of less than $250. That said, 
economic growth has averaged 8% over the last 3-4 years and a 
recent household survey indicates that the incidence of 
extreme poverty has declined from 70% to 55% over the past 5 
years. Mozambique has significant but so far mostly untapped 
natural resources, including coal, natural gas, titanium ore, 
tantalite, graphite, iron ore, and semi-precious stones. One 
third of the economy is based on agriculture, most of it 
subsistence, but Mozambique exports cashews, cotton, sugar, 
sorghum, tea, citrus fruit, and tobacco. Mozambique has 
privatized over 1200 mostly smaller companies and 37 large 
enterprises since the privatization program began 10 years 
ago. Only 11 large state-owned or operated companies remain, 
including the national airline, telephone, electricity, 
insurance, oil and gas exploration, port and rail, airports, 
water supply, and fuel distribution companies. US-Mozambican 
trade, although quite small, is expanding, with the vast 
majority of Mozambique's exports to the US entering under 
either AGOA or GSP. South Africa and Portugal are the leading 
foreign investors. Only 6 of the top 100 companies in 
Mozambique are US: Coca-Cola, Mobil, Seaboard, Avis, 
Colgate-Palmolive and KPMG In 2003, Mozambique was assigned 
an international credit rating of B/B by Fitch Ratings, 
reflecting Mozambique's positive track record on economic 
reforms, political stability, strong economic growth, 
openness to FDI, and expanding exports. 
 
5. (U) Mozambique faces significant development challenges. 
The literacy rate is about 40 percent and infant mortality 
rates are among the highest in Africa. Life expectancy is 46 
and is expected to decline into the 30s by 2010 as a result 
of AIDS. The country also lacks infrastructure, power, and 
clean water for most of its citizens. The Government has 
placed its Plan for the Reduction of Absolute Poverty (PARPA) 
at the head of its policy agenda. PARPA emphasizes six areas 
as the key reducers of absolute poverty: education; health; 
basic infrastructure; agriculture and rural development; good 
governance; and macroeconomic and financial management. The 
donor community funds approximately 60 percent of the 
national budget, though the HIPC and Enhanced HIPC (Heavily 
Indebted Poor Countries) debt relief programs have permitted 
increased budgetary support to alleviate poverty. 
 
HIV/AIDS: 
========= 
6. (U) Mozambique's overall HIV/AIDS prevalence rate is 
14.9%, though prevalence rates vary greatly by region, with 
the highest rates occurring in the central provinces and near 
the principal transportation corridors. The GRM's efforts to 
combat HIV/AIDS are led by the Ministry of Health and the 
National AIDS Council, chaired by the Prime Minister and 
comprised of several ministries and civil society. In March 
2004, the Ministry of Health approved a National Strategic 
Plan for HIV/AIDS/STI, which presents an integrated and 
comprehensive approach to scale up prevention, care and 
treatment services through existing health facilities and 
linkages with community support groups, to be provided 
through an Integrated HIV/AIDS Network model. The political 
environment in Mozambique is very favorable to accelerating 
ARV treatment throughout the country, though Mozambique's 
significant development challenges are a constraint for rapid 
scale-up of treatment activities. The MOH already has 
national guidelines for provision of ARV services, through 
which all treatment programs, including NGO activities, are 
expected to work. In addition to the Emergency Plan, funding 
has been committed through the Global Fund, the World Bank 
MAP and the Clinton Foundation (via several European donors) 
to strengthen the MOH and its services to expand ARVs. 
 
7. (U) Principal Challenges: 
A - Mozambique's severely limited human resource capacity is 
a principal constraint to improved and expanded treatment. 
Currently, Mozambique has an inadequate number of physicians 
and other health care providers to provide treatment. Given 
the fact that the country has under 500 local medical doctors 
to treat a population of over 17 million, training of health 
care practitioners is a priority to ensure goals for 
treatment are reached. Training support is needed at all 
levels-- from curriculum development for universities and 
technical schools, to support for development of short, 
targeted training for service delivery, public health 
programs, management and administration, monitoring and 
evaluation, laboratory services, etc. To this end, the 
mission has established a human resource capacity working 
group to discuss programs that will enhance the country's 
ability to provide ARV treatment. A number of Track 2 
proposals will have training components and the working group 
is planning for a human capacity technical assessment. 
B - Another significant factor limiting rapid scale-up of 
treatment programs is the country's inadequate laboratory 
facilities. Currently, the country has only two 
lab sites that have the ability to process CD4 counts. Year 
1 Emergency Plan funding will be used to build and equip new 
laboratory facilities and expand existing facilities. Post 
has been successful in linking with other organizations such 
as Sant'Egidio to more rapidly expand laboratory services 
related to ARV treatment. 
C- One of the major deficiencies of the health care system in 
Mozambique is its coverage, which extends to less than 60% of 
the population and concentrates services in urban areas. Over 
98% of the population, however, report that they regularly 
seek care from traditional healers. Emergency Plan funding 
will be instrumental in expanding both geographic coverage 
and activity scope. 
? 
OTHER ISSUES IMPACTING USG PROGRAMS: 
==================================== 
8. (C) Ministry of Health. Our relations with Minister of 
Health Francisco Songane, a medical doctor who has served as 
Minister since January 2000, have been strained at times. 
Like many GRM agencies, the MOH remains a highly bureaucratic 
and centralized institution, where key decisions and policies 
rest in the hands of the Minister. Qualified, competent human 
resources within the Ministry are scarce and the flow of 
information between the Minister and his staff appears 
constrained. On occasion, Songane has attempted to dictate 
the scope of USG programs. While Songane has welcomed the 
significant increase in US funding being provided to 
Mozambique through the Emergency Plan, he has raised concerns 
over several aspects of the program. For example, Songane 
expressed concern over the Track 1 award to Columbia 
University, our principal implementing partner in the area of 
treatment. As a new partner receiving funding under Track 1, 
the MOH was not consulted in the development or awarding of 
Columbia's proposal. Songane has stated that an agreement 
should have been signed between Columbia and the MOH prior to 
the award. Having said that, Columbia has been very flexible 
in adjusting its program to address MOH concerns. 
 
9. (C) Another issue has been the USG's decision not to fund 
the MOH's Common Fund for Health. The US has been criticized 
by both donors and the GRM for not using this sector budget 
support mechanism to fund HIV/AIDS programs, with the 
perception being that the USG is taking a unilateral 
approach. However, until very recently, donors had not 
contributed to the Common Fund and financial mechanisms did 
not exist to enable financing of projects. One of the 
explicit conditions of our Emergency Plan support going to 
NGO and FBO partners has been demonstrated, close 
coordination in the field with provincial MOH authorities. 
 
10. (C) Donor Coordination. The role of USG in the Country 
Coordination Mechanism for the Global Fund has also been a 
sensitive issue for post in terms of coordinating efforts in 
HIV/AIDS. Here, the USG's reluctance to contribute to the 
Common Fund has been a principal issue. In addition, there 
has been criticism of the Emergency Plan's exclusive focus on 
HIV/AIDS and not broader health sectors concern. 
LA LIME