US embassy cable - 05MAPUTO310

C O N F I D E N T I A L SECTION 01 OF 04 MAPUTO 000310 
 
SIPDIS 
AF/FO, AF/S FOR HTREGER, AF/RSA/ACOTA BHUGHES 
E.O. 12958: DECL: 03/07/2015 
TAGS: EINV, ECON, KPKO, PGOV, MARR, MASS, KTIA, PREL, MZ, MCC, Nyati, Peacekeeping 
SUBJECT: MOZAMBIQUE: ASSISTANT SECRETARY FOR AFRICAN 
AFFAIRS CONSTANCE NEWMAN'S VISIT MARCH 2, 2005 
 
 
Classified By: Ambassador Helen La Lime for reasons 1.4 b/d 
 
1. (C) Summary: In her March 2 meetings with President 
Guebuza, Prime Minister Diogo, Foreign Minister Abreu, and 
other officials visiting A/S Newman outlined USG priorities 
of fighting HIV/AIDS and promoting economic development. She 
emphasized the need for the GRM to show leadership in 
discussions on a Millennium Challenge Account compact, urged 
resolution of the land dispute involving the OPIC-supported 
Nyati Beach Lodge, encouraged Mozambique to play a greater 
peacekeeping role, and discussed concerns over Zimbabwe and 
SADC. President Guebuza explained the priorities of his new 
government and thanked A/S Newman for USG support in economic 
development, fighting HIV/AIDS, and attacking corruption. 
GRM officials were uniformly concerned about the Nyati 
dispute, understood the need to act on the MCA compact, and 
said Mozambique was ready to expand its peacekeeping efforts 
if outside funding could be obtained. End Summary. 
 
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Meeting with the President 
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2. (C) President Guebuza welcomed Assistant Secretary Newman 
by thanking her for the support received from the United 
States and by highlighting that Mozambique is still the same 
country as under his predecessor - one that will live up to 
past commitments as it pursues his administration's agenda. 
Mozambique values its relationship with the United States and 
will work to strengthen the partnership. He viewed it as 
significant that the Assistant Secretary had undertaken to 
visit Mozambique so soon after the appointment of his 
government. 
 
3. (C) DEVELOPMENT AND MCA: Guebuza was very focused on the 
need for his administration to produce tangible results in 
fighting poverty, reducing corruption, eliminating excessive 
red tape and bureaucratic laziness, and tackling crime. He 
stressed that he considered Mozambique's qualification for an 
MCA compact an opportunity to achieve results in eliminating 
absolute poverty and promoting rural development. Agreeing, 
A/S Newman emphasized the need for government leadership to 
keep the process on track and to ensure that MCA activities 
were coordinated with the efforts of other donors. The 
President replied saying, "We will work on that." He also 
told her that Mozambique needed to do more to develop 
infrastructure in rural areas and to extend banking and 
credit facilities throughout the country. 
 
4. (C) CORRUPTION: Addressing a question from the Assistant 
Secretary on how he intended to fight corruption, the 
 
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President noted that as a first step, his new government was 
made up of people who took the issue seriously and who were 
committed to doing something about the problem. Guebuza 
continued by saying that he viewed reform of the justice 
system as key in the fight against corruption. He referred 
to a speech he had given the day before when he opened the 
judicial year, saying he had been very firm on the need for 
the justice sector to address problems plaguing it. He 
intends to deliver on this campaign promise to reduce 
corruption by directing additional resources for training 
within the justice system to create an environment within the 
courts and the police where the rule of law prevails. The 
President also thanked the Assistant Secretary for the 
support the United States has given in training police and 
for the work we were doing in the area of community policing. 
 
5. (C) HIV/AIDS: Other priorities the President discussed 
with Ms. Newman included the need for more practical 
education, particularly at the secondary level. His new 
minister of education will also be involved in an effort to 
increase technical training opportunities, especially in the 
agricultural sector. He agreed that HIV/AIDS represents 
Mozambique's greatest challenge and welcomed the support the 
U.S. was providing via the President's Emergency Plan. 
Mentioning that he had met with Ambassador Tobias last 
summer, President Guebuza asked that we continue to expand 
our efforts along the "HIV corridors" and along the borders 
with Malawi and Zimbabwe. 
 
6. (C) PEACEKEEPING: A/S Newman asked whether Mozambique was 
prepared to participate in AU or other peacekeeping 
operations. Mozambique, the President said, was willing to 
participate towards the peaceful resolution of problems in 
Africa and could contribute well-disciplined troops, as 
evidenced by Mozambique's record participating in the Burundi 
peacekeeping operations. The ongoing ACOTA program would 
also further prepare Mozambique for peacekeeping operations. 
The issue is not the willingness or the capacity to 
participate in peacekeeping operations, the President noted, 
rather it is the lack of available funding for equipment and 
lift. Mozambique's limited defense budget simply could not 
cover such costs, he said. A/S Newman welcomed Mozambique's 
willingness to contribute to peace efforts on the continent 
and pointed out that in Sudan donors have contributed funding 
for lift, equipment and ground support via the African Union. 
 
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Prime Minister Diogo 
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7. (C) MCA: The Assistant Secretary emphasized the 
importance of government leadership in the MCA compact 
process and of government ownership of the country's final 
proposal. She cited the active involvement of Madagascar's 
president in its process and noted that Madagascar was 
expected to sign a compact soon. (The Prime Minister asked 
if Mozambique could see a copy of Madagascar's compact; post 
would appreciate receiving a copy once it is made public.) 
A/S Newman also noted the importance of projects that could 
be completed within the MCC,s time horizon. She stressed 
the importance of the visit in two weeks of an MCA 
delegation, saying it would be crucial for the government to 
show leadership. 
 
8. (C) Diogo responded that, while it may not have always 
appeared to the MCC to be the case, the government had shown 
leadership in the process. She noted her own visit to MCC 
headquarters last year. She said the Minister of Planning 
and Development had the lead in the new government (his new 
ministry has been split off from what was the Ministry of 
Finance and Planning in the Chissano government). She 
discussed aspects of the GRM,s concept paper, including the 
Nacala airport, roads in the north, and agricultural and 
industrial parks in Zambezia province. Repeating a theme of 
President Guebuza, she cited the importance of vocational 
training, and she discussed policy reforms. 
 
9. (C) NYATI BEACH LODGE DISPUTE: A/S Newman told the Prime 
Minister that the still-unresolved land dispute between an 
American and a Zimbabwean threatened American investor 
confidence in Mozambique and affected USG perceptions of the 
country. Diogo characterized it as one of the "most unhappy 
cases" for the government, and agreed that it was bad for the 
country's image. She said that it was most unusual for a 
lower court to ignore a Supreme Court ruling for so long. 
She added that she had discussed with the Supreme Court 
president the failure to implement the decision and had urged 
him to take a quick decision on the underlying case, which 
has been appealed to the Supreme Court. (Note: The 
Zimbabwean had evicted the American from the lodge in January 
based on lower court rulings in October and January. After 
the Supreme Court suspended enforcement of those rulings 
while it considered the American's appeal, police who were 
occupying the lodge left. However, the Zimbabwean still has 
possession, and the lower court has not ordered police to 
evict them. End note.) Prime Minister Diogo remarked that 
such a standoff only happened in one case in a thousand, but 
she also said the government had &a lot of work8 to do on 
the judicial sector. She said the GRM was working through 
Interior Minister Pacheco on this issue. At the end of the 
meeting, she returned to the issue, saying the GRM was 
&with8 the American investor and had to work on the matter. 
 
10. (SBU) HIV/AIDS AND PRIVATE SECTOR ISSUES: A/S Newman 
noted the importance of measurable results to the USG 
Emergency Plan actions to fight HIV/AIDS. PM Diogo said that 
HIV/AIDS was costing Mozambique 1% of GDP growth each year. 
She said the National AIDS Commission would issue a strategic 
action plan by April. She discussed business efforts to 
fight HIV/AIDS but said that large companies such as the 
MOZAL aluminum smelter were doing more than small companies. 
Diogo also outlined GRM priorities that would help the 
private sector, including increasing provision of 
infrastructure, reducing red tape, and reforming the labor 
law. She expressed interest in the June CCA Business Summit 
in Baltimore, and she noted efforts to establish a 
Nacala-Baltimore sister city relationship. 
 
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Foreign Minister Abreu 
---------------------- 
10. (C) MCA: The Assistant Secretary underscored the need for 
evidence of more government involvement, in addition to 
private sector and civil society participation, in 
discussions over the proposed compact. She noted that 
Madagascar was likely to be the first country to sign a 
compact and that its president had been personally involved 
in discussions. She added that the arrival of an MCC 
delegation in two weeks would be an important event. 
Minister Abreu replied that MCC assistance would be an 
important element in the GRM's strategy to reduce poverty and 
promote development, and that the GRM was prepared to work 
hard to reach a compact. She noted the importance the GRM 
placed on technical training of the unemployed as part of its 
development strategy. She emphasized that newly-elected 
President Guebuza had infused his cabinet with a strong sense 
of service towards Mozambique's people and a serious attitude 
toward work and performance. Guebuza had also encouraged his 
government to work with other political parties, she said. 
She noted that members of the major opposition party, Renamo, 
in the session of Parliament that began March 1, had pledged 
to contribute positively to Guebuza's agenda. 
 
11. (C) SADC/ZIMBABWE: FM Abreu raised Mozambique's hopes 
that former Transport and Communications Minister Tomaz 
Salomao would be chosen as the next Executive Secretary of 
the Southern Africa Development Community (SADC). (Comment: 
Salomao is a member of the ruling Frelimo party's powerful 
15-member Political Commission.) A/S Newman replied that the 
U.S. understood the importance to Mozambique of SADC as a 
regional organization and appreciated the GRM's desire to see 
its candidate chosen. 
 
12. (C) The Assistant Secretary then raised Zimbabwe, the 
importance of SADC,s actions, and their implications for 
US-SADC relations. She told the Foreign Minister that the 
United States was very concerned that the March 31 
parliamentary elections be free and fair, and indicated that 
we hoped that SADC would urge that they be conducted 
properly. U.S. relations with SADC had soured in recent 
years, with SADC refusing U.S. funding in 2002 due to our 
criticism of Mugabe's rule, she told Abreu. We would be 
watching to see how SADC, which would be monitoring the 
elections, responded if Mugabe's party committed fraud. Ms. 
Newman said that until there were stronger statements about 
democracy in Zimbabwe, it would be hard to resume our former 
close relationship with SADC. Abreu said her government 
expected Mugabe to respect SADC principles in the election. 
She added that GRM Minister in the Presidency for Diplomatic 
Affairs Madeira was that day returning from a visit to Harare 
(septel reports on A/S Newman,s meeting with Madeira). 
 
13. (C) PEACEKEEPING: Responding to a query by the Assistant 
Secretary about Mozambique's support for peacekeeping 
 
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efforts, FM Abreu turned to Vice Foreign Minister Banze, who 
had served as Vice Minister of Defense under Chissano. Banze 
was blunt: "Whenever we are able to take part, we will," he 
replied. Mozambique felt morally obligated to contribute 
peacekeepers, he continued, having benefited from 
peacekeeping forces in Mozambique in 1992-1994 post civil war 
period. More importantly, though, the government had a 
strong interest in "peace in the region and beyond." He 
noted, though, that the armed forces' lacked lift capacity 
and would need additional equipment for additional 
operations. Ms. Newman replied that the U.S. had provided 
lift and the European Union had given money in the past for 
equipping peacekeepers. She recommended that the U.S. and 
the GRM discuss further Mozambique's needs and how we could 
help. Banze nodded and added that internal government 
discussions had already begun over contributing to 
peacekeeping operations in Darfur, starting in the final 
months of the Chissano administration. Banze also noted 
Mozambique's interest in continuing discussions started last 
year on an Acquisition and Cross Servicing agreement with the 
USG. 
 
14. (C) NYATI DISPUTE AND PROMOTING TRADE AND INVESTMENT: 
Couching her comments in terms of the value for Mozambique of 
trade and investment as opposed to aid, the Assistant 
Secretary stressed to the Foreign Minister the need for a 
 
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stable regulatory environment. In this context, the ongoing 
land dispute over the Nyati Beach Lodge hurt Mozambique's 
reputation among U.S. investors and within the USG. She 
pointed out, too, that because the U.S. investor had 
financial backing from the Overseas Private Investment 
Corporation (OPIC), the dispute now was widely known within 
the USG, affecting perceptions of the country. She urged 
that the GRM deal with Nyati as soon as possible. FM Abreu 
said that she understood the harm the matter caused and that 
her government would "push" the matter. The Council of 
Ministers had discussed the matter the previous week, and 
discussions had taken place with Interior Minister Pacheco. 
She noted the difficulty of the executive branch influencing 
judicial matters. When A/S Newman raised the June summit of 
the Corporate Council on Africa in Baltimore, Minister Abreu 
responded that her government was very interested, and she 
assured Ms. Newman that a delegation would be sent. 
 
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Other Events 
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15. (SBU) A/S Newman also met with HIV/AIDS NGO leader and 
former Mozambican first lady Graca Machel to discuss the 
fight against HIV/AIDS. Septel reports her meeting with 
Minister in the Presidency for Diplomatic Affairs Francisco 
Madeira. At a lunch in her honor hosted by Vice Foreign 
Minister Banze, she elaborated on the topics listed above and 
discussed other regional issues with Banze and other Foreign 
Ministry officials. An evening press event and an impromptu 
interview after her meeting with President Guebuza resulted 
in positive media coverage of her visit. A dinner hosted by 
the Ambassador gave her an opportunity to discuss USG 
priorities informally with Minister Madeira, Vice Minister 
Banze, Maputo Mayor Comiche, FRELIMO party whip in the 
National Assembly Manuel Tome, National AIDS Council chair 
Joanna Mangueira, and business and media figures. 
LALIME