US embassy cable - 05MAPUTO1176

UNCLAS SECTION 01 OF 03 MAPUTO 001176 
 
SIPDIS 
SENSITIVE 
AF-S FOR HTREGER AND JMALONEY 
PRETORIA FOR JRIPLEY 
JOHANNESBURG FCS FOR RDONOVAN, JVANRENSBURG 
USDOC FOR RTELCHIN 
MCC FOR SGAULL, TBRIGGS 
PASS USAID FOR AA/AFR AND AFR/SA 
E.O. 12958: N/A 
TAGS: ECON, EFIN, ELAB, KCRM, KCOR, ETRD, SENV, KHIV, EINV, MZ, Monthly Econ Digest, Commerce 
SUBJECT: MOZAMBIQUE - AUGUST ECONOMIC DIGEST 
 
1. (U) The following is a brief summary of significant 
economic issues in Mozambique in August 2005. We provide it 
as a supplement to our other reporting. 
 
2. (U) Index: 
- Labor Arbitration Centers Planned by End of Year 
- Government Reorganizes Anti-Corruption Office 
- Audit of Alleged Criminal Activity Underway at Austral Bank 
- EU Launches Zambezi Bridge Tender 
- Mozambique and Swaziland Agree to Abolish Visas 
- 73,000 Mozambicans work in South Africa's Mines 
- Mozambique to Open New Border Post/Park Entrance in 
Transboundary Park 
- New National Park Planned (Mozambique's Ninth) 
- HIV/AIDS Kills 1,000 Police Each Year 
- WHO Gives Green Light to DDT Spraying for Malaria 
 
3. (U) Government Hopes to Establish Labor Arbitration 
Centers in Provincial Capitals - On August 10 Labor Minister 
Taipo, while visiting Mozambique's second city, Beira, 
announced that the government plans to open labor conflict 
arbitration centers in all ten provinces by the end of the 
year, provided it can obtain sufficient funds from donors. 
The centers are intended to give the government the means to 
relieve the court system of an enormous backlog of labor 
cases - over 14,000. In making the announcement, Minister 
Taipo added that there were a sufficient number of 
arbitration experts, provided jointly by the Ministry, 
employers and trade unions, ready to staff the centers. She 
noted, however, that the government had not yet obtained all 
necessary funding from international donors. Mozambique's 
proposal for a compact with the Millennium Challenge 
Corporation calls for centers in four northern provinces. 
 
4. (SBU) Government Reorganizes Anti-Corruption Office - 
Attorney General Madeira announced on August 12 that the 
government would revamp its Anti-Corruption Unit and form a 
new body called the Corruption Fighting Office. The unit 
will be headed by Assistant Attorney General Rafael 
Sebastiao. Madeira pointed to the creation of the new office 
as an instance of reform of the public sector. According to 
him, the previous Anti-Corruption Unit was more of an ad hoc 
arrangement, with its staff drawn from other attorneys, 
offices on a quasi-temporary basis. The new Corruption 
Fighting Office, however, would be institutionalized under 
the Attorney General as an autonomous body "permanently on 
duty." Note - The reorganization of the Anti-Corruption Unit 
comes only days after the government released the results of 
a study of public perception of corruption, which showed that 
the average Mozambican had very little confidence in the 
integrity of the public sector - particularly the judicial 
branch and the police. End note. 
 
5. (SBU) Audit of Alleged Financial Crimes at Austral Bank - 
Finance Minister Manuel Chang told reporters on August 18 
that auditors from Leboeuf, Lamb, Green, and MacRae have 
been, since "early this year," conducting an audit of the 
accounts of the failed bank, Banco Austral. This is the bank 
that was being supervised by Antonio Siba-Siba Macuacua when 
he was murdered in August 2001, allegedly because he had 
uncovered evidence of significant criminal activity. No one 
has been arrested so far for his death. The bank was later 
bought by the South African banking corporation, ABSA. 
Minister Chang said the audit was being done at the request 
of the government and not due to any pressure from outside 
donors. Comment - Donors have been united since 2001 in 
pushing the government for this audit and to fully 
investigate the crime. End comment. 
 
6. (U) EU Launches Tender for Building Zambezi Bridge - On 
August 13 the EU announced a tender for bids to build 
Mozambique,s new national highway bridge over the Zambezi at 
Caia. The EU has allocated 80 million dollars for the 
building of the new bridge. The bridge will reconnect the 
north and south of the country along the national highway. 
It will replace a system of ferries used to move vehicles, 
people and goods across the river. The ferry system was 
adopted after a previous bridge in the area was destroyed 
during the civil war. 
 
7. (U) Mozambique and Swaziland to Abolish Visa Requirements 
- On August 16 Swaziland's King Mswati III and President 
Guebuza signed an agreement abolishing all visas between the 
two countries, to be implemented on October 1. The purpose 
is to allow the free circulation of people and goods between 
the two countries, and thereby promote mutual economic 
development. In April this year Mozambique and South Africa 
eliminated the need for visitor visas for those from either 
country for stays of less than 30 days. This has led to 
noticeably more border traffic and trade between Mozambique 
and South Africa. 
 
8. (U) South African Mines Employ 73,000 Mozambicans - On 
August 11 Deputy Labor Minister Nhaca told reporters that 
73,000 Mozambicans were employed in mines in South Africa. 
He noted that the number of Mozambicans working in the mines 
has been declining in recent years, down from a peak of 
103,000 in 1975. Nhaca explained that South Africa's 2003 
immigration law made it more difficult for foreigners, 
including Mozambicans, to be recruited to work in the mines. 
 
9. (U) New Border Post, Entrance to Limpopo Park, to Open in 
October - Mozambique plans to open a new border post, 
enabling tourists to enter its newly-established Limpopo 
Park. On August 23 a delegation from seven Mozambican 
ministries visited the Parfuri border post, where the 
frontiers of South Africa, Zimbabwe and Mozambique meet, to 
inspect the new crossing point/entrance to the park, which 
the government plans to open in October. The Limpopo Park is 
part of a bigger transboundary body, known as the 
Cross-Border Limpopo Park, formed from the union of the three 
adjacent parks: Kruger Park (South Africa), Gonarhezu Park 
(Zimbabwe) and Mozambique's Limpopo Park. Mozambique plans 
to have the three heads of state from the three adjoining 
countries on hand for the official opening of the new border 
post and park entrance. Comment: USAID funded a great deal 
of the initial work on establishing the larger transboundary 
park. The African Wildlife Fund is working in Mozambique's 
Limpopo Park using USAID funds. End Comment. 
 
10. (U) Mozambique to Establish its Ninth National Park -- 
The Government of Mozambique is planning to establish a new 
national park by the end of 2006, according to a wildlife 
expert in the Ministry of Tourism speaking on August 9. The 
park is to cover a stretch of coastline in northern 
Mozambique from geocoordinates 173000S/0383000E to 
170000S/0393000E (an area midway between the towns of 
Quelimane and Angoche), and will enclose numerous primary and 
secondary islands, some of which lie 15 miles offshore. The 
government is also considering including the Sofala Bank, an 
adjacent undersea region rich in marine life, as part of the 
park, but a final decision on adding this area has not yet 
been made. This will be Mozambique,s ninth national park. 
 
11. (U) HIV/AIDS Kills 1,000 Police Every Year - Deputy 
Interior Minister Mandra told reporters on August 16 that the 
HIV/AIDS pandemic was aggravating staffing shortages in the 
police force, killing about 1,000 police officers every year. 
He added that the number of officers succumbing to the 
disease was "increasing by the day." 
 
12. (U) WHO Gives Green Light to Use of DDT in Mozambique - 
Former Prime Minister Mocumbi, speaking at a meeting of the 
African Regional Committee of the World Health Organization 
(WHO) in Maputo August 25, said that the WHO had decided to 
approve the use of the pesticide DDT in Mozambique (and 
elsewhere in Africa) to control the spread of malaria. 
Mozambique began spraying DDT in malarial areas of the 
country earlier this year, following the example of South 
Africa and other neighboring countries. 
La Lime