US embassy cable - 04LILONGWE457

UNCLAS SECTION 01 OF 02 LILONGWE 000457 
 
SIPDIS 
 
C O R R E C T E D  C O P Y (TEXT PARA 7 AND PARA NUMBERING) 
 
SENSITIVE 
 
E.O. 12958: N/A 
TAGS: PGOV, KDEM, EFIN, PINR, MI, Political, Development, Economic 
SUBJECT: MUTHARIKA MEETS DONORS, SENDS MIXED MESSAGES 
 
REF: LILONGWE 451 
 
1. (U) Summary.  President Bingu wa Mutharika convened heads 
of mission from donor countries and agencies in Lilongwe for 
a two-hour meeting on May 27 during which he outlined his 
plans to move Malawi from "poverty to prosperity."   While 
the bulk of the meeting was spent paraphrasing the 
inauguration speech he delivered three days earlier, he 
deviated from the script long enough to divulge plans to 
dramatically reduce the size of the cabinet; that he favors 
state subsidies in the agriculture sector; that he intends to 
establish a new university; that he will jail opposition 
leader Gwanda Chakuamba if he continues to cause problems; 
and that he wants the support of international donors to deal 
with Malawi's crushing domestic debt burden.  End summary. 
 
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"From Poverty to Prosperity"..... 
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2. (U) Mutharika provided chiefs of mission with copies of 
his inaugural speech outlining his plans to turn Malawi's 
economy around.  (A copy of the speech has been faxed to 
AF/S.)  As noted in reftel, Mutharika intends to move Malawi 
"from poverty to prosperity" (which has already become his 
administration's tag-line) by implementing a four-pronged 
reform package in the public, private, agricultural, and 
civil service sectors.  He reiterated his pledges to control 
corruption, make statutory corporations profitable (or close 
them down), and reduce expenditures and borrowing. 
 
3. (SBU) The president said he was still working on reducing 
the size of the cabinet from 46 (29 ministers and 17 deputy 
ministers).  Though he has yet to settle on an exact figure, 
he said its size should be "no more than twenty" -- including 
the president himself and the two vice presidents.  He made 
clear to donors that he is "running a risk" and that there 
will be many (presumably from the former government) who will 
soon be "cursing me at their breakfast tables." 
 
4. (U) To further lower expenditures, Mutharika said he would 
reduce state residence and travel expenses, and would soon 
begin "dismantling" government offices in Blantyre.  He vowed 
to make Lilongwe a true capital and noted he had moved from 
Blantyre on the first day of his administration. 
 
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,,, but at a Cost 
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5. (SBU) While pressing for expenditure reductions, Mutharika 
also announced several big-ticket items that will be 
difficult for the government to fund.  He announced his plan 
to turn Malawi into a "hunger-free" nation in about two 
years.  To do so,he said the prices of fertilizer and maize 
must be reduced, and that farmers needed to be provided 
Starter Packs (seeds and fertilizer).  He stated that if the 
private sector fails to reduce prices of fertilizer and 
maize, he will "close down their shops" and have the state 
take over -- if only on a "temporary" basis.  He added that 
he would also promote irrigation projects to increase 
Malawi's agricultural output. 
 
6. (SBU) Another expensive proposal is Mutharika's plan to 
establish a third university in Malawi.   Pointing out that 
there is a university in the Southern Region and one in the 
Northern Region, he said it was only natural that there 
should be one in the capital city of Lilongwe in the Central 
Region. 
 
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Chakuamba: "I'll Lock Him Up!" 
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7. (SBU) In telling donors he intended to enhance security in 
the country by increasing the government's support to the 
police and the military, Mutharika went off-script to skewer 
opposition candidate Gwanda Chakuamba, who has filed a court 
petition to have the results of the election declared null 
and void.  Pointing out that Chakuamba also contested the 
national elections in 1994 and 1999 and incited his 
supporters to cause disturbances, Mutharika said: "The man is 
a thug, pure and simple."  Mutharika added (three times) that 
if disturbances continued, he would lock Chakuamba up. 
Insisiting that Chakuamba's protests are not political ("the 
man is greedy and crazy"), he vowed he "will not tolerate 
disturbance of the peace in this country." 
 
8. (SBU) Mutharika also told donors not to believe stories 
that the Catholics and Presbyterians had opposed his 
candidacy. Insisting that only a few individuals were the 
instigators of anti-UDF sentiment in the churches, he claimed 
that religious leaders were now making known their support of 
him. 
 
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Appeal to Donors: "It's Not My Debt" 
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9. (SBU) Mutharika appealed to donors for support in reducing 
domestic debt.  Saying he could not implement his reforms 
while simultaneously paying off Malawi's domestic debt (note: 
currently at about $600 million), he asked for donors' help 
in "eliminating" domestic debt.  Claiming that "it's not my 
debt," Mutharika said he should not be burdened with the 
situation created by the previous government.   (Note: 
Mutharika served as Minister of Economic Planning up until 
his election.) 
 
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Comment 
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10.  (SBU) While almost everything Mutharika said in two hours 
was measured, soothing, well-reasoned, and designed to enlist 
the good will of donors, his discourse was punctuated by some 
jarring comments.  Talking about reducing expenditures while 
at the same time announcing plans for a new university (in a 
country where primary and secondary education is 
disfunctional) represents a clear disconnect.   Likewise, 
extolling the virtues of the private sector while announcing 
that the GOM will subsidize agriculture (and close down 
private vendors if they fail to reduce prices sufficiently) 
is unsettling.  And while many would agree that Chakuamba is 
indeed stirring up trouble after his electoral loss, 
Mutharika's vitriol and threats of imprisonment (which would 
certainly provide Chakuamba the mantle of martyrdom) seem 
unwise for a new head of state who somehow has to find a way 
both to unify a badly divided country and to reassure donors. 
 End comment. 
DOUGHERTY