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2004-06-24 08:37:00
Embassy Maputo
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						C O N F I D E N T I A L SECTION 01 OF 02 MAPUTO 000834 

E.O. 12958: DECL: 06/23/2014


B. B) MAPUTO 776
Classified By: Charge d'Affaires Dennis Hankins for reason 1.4 (b and d)

1. (SBU) Summary. Recent visits to Nampula and Cabo Delgado
Provinces impressed upon embassy officers major challenges
facing northern Mozambique and the need for continued USG
attention to the region. Corruption, smuggling, porous
borders and weak infrastructure compound high unemployment
and a lack of economic development. In political terms, the
FRELIMO government is aware that it needs to demonstrate
economic results and investment in the region to avoid a
defeat in this December's general election. The Muslim
population is growing, approaching two thirds of the
population in some areas, and commerce is almost entirely in
the hands of South Asian Muslims. People and goods move
freely in and out of the country, and the GRM has no capacity
to control their movement. End summary.

2. (C) A High Interest Area: A number of US interests
converge in Mozambique's northern provinces of Cabo Delgado
and Nampula. Reported reports of drug smuggling, alien
trafficking, illegal entry of Pakistanis and Somalis raise
concerns about the potential of the region as a headquarters
for criminal and terrorist activities. The rapidly growing
control of South Asians over key business sectors as well as
active proselytizing activities by conservative Muslim groups
add to the concerns. At the same time, the region has drawn
some US investment interest in the transportation area and
the potential exists for future investments in the tourism
and minerals sectors.

3. (U) Economically Lagging: Economic development in the
northern provinces lags far behind that of southern
Mozambique and the Maputo region. In contrast to booming
construction and renovation taking place in the capital,
Nampula appears run-down and neglected. Unemployment is high
and most large businesses have been closed for years, or even
decades. Plans for rehabilitation of the rail line from the
port of Nacala to Malawi have stalled and the government
ports and rail authority, CFM, has laid off numerous
employees in preparation for long-delayed privatization. CFM
will need to lay off many more in conjunction with an
eventual Nacala Corridor concession agreement (Ref A). In
Pemba, the capital of Cabo Delgado Province, some development
is tangible in the tourism sector. Despite the enormous
potential and some successful high-end tourism projects,
further growth is hampered by weak infrastructure, in
particular the lack of good health care facilities. The
agricultural products that the region exports include
cashews, timber, prawns, and cotton. Exports of marble and
some other minerals have dropped significantly. (Ref B).

4. (C) A Haven for Somalis and Other Aliens: During the

June 1-3 visit by poloff and A/RSO to Nampula City and
Nacala, it was clear that the Mozambican authorities have no
capability, and little interest, in effectively controlling
the flow of people and goods, in and out of the country.
UNHCR officials at the refugee camp in Maratane confirmed
that hundreds of Somali refugees have simply shown up at the
camp, having crossed the border with Tanzania or entered
through smaller ports in Cabo Delgado. Camp registration
records only account for refugees entering the camp and there
are no controls for monitoring those refugees that leave.
Although records showed that the registered camp population
numbered approximately five-thousand residents, UNHCR
officials felt that the true population was only about
four-thousand. In Pemba and Nampula, Somalis are now engaged
in selling smuggled goods in the markets and also engage in
illegal money exchange. Somalis who register at the camp
seldom stay more than a few days, and many show up later at
the border with Swaziland, destined for South Africa. A
cabinet member of the Mayor's office and an aide to the
Governor also confirmed that a growing number of Nigerians
are engaged in business activities in the informal markets of
Nampula. The Mayor's office in Nacala complained about the
dominant position of South Asian businessmen in the local
economy, in particular their practice of bringing a large
number of family members from Pakistan and India to run and
staff most of their businesses.

5. (C) A Leaky Harbor: In a visit to the port of Nacala,
embassy officers spoke with CFM Port Director Agostinho Langa
and also met with Ussemane Julaia of Manica Freight Services.
Julaia was very open and candid about the problems of
corruption and smuggling present in Nacala, the most
notorious port for illegal activity. Despite the recent
contracting of a private security firm (with FRELIMO ties),
theft from the port has not stopped. Also, as Langa
explained, thirty-five percent of the traffic from the port
is destined for Malawi, and thus avoids customs inspection.
Julaia and Langa both confirmed that it is easy for train
cars to be emptied out at isolated rail sidings and
transported to other parts of Northern Mozambique or on to
South Africa. Ships at the dock are also boarded by persons
in crafts as small as rowboats. Maritime patrols in the
harbor are nonexistent. There appears to be a thriving black
market of such illegally imported goods from Dubai and other
ports of origin. Additional, authorities concede that
narcotics trafficking is prevalent, using these or other
methods of transit.

6. (C) Growing Muslim Influence: Traveling around Pemba or
on the road from Nampula to Nacala, it is common to find
small mosques built by the African Muslim Agency. Large new
mosques have been constructed, both in the north and in
Maputo, with funds from successful Muslims in Mozambique and
with outside funding from the Gulf states. Some schools and
other social services are visibly funded by Muslim
organizations, including training centers to prepare
Mozambican students for study abroad in Sudan. Pemba is a
good example of the power of the Muslim business community,
with all major shops owned by Osman Jacob, an embassy contact
with close ties to FRELIMO. Jacob, and his son who is
responsible for operations of most of his businesses, both
told embassy officers that corrupt practices and bribery are
essential to successfully running both legitimate and illegal
business in the region. The illegal export of precious
hardwood from Cabo Delgado, Nampula, and Zambezia provinces
by East Asian-controlled enterprises is but one example.

7. (C) Comment: The prevalence of corruption, lax security,
and a large Muslim business community in the northern
provinces combine to accentuate fears among the diplomatic
community, government officials, and well-informed private
businessmen that an increasingly conducive environment for
international terrorists exists in the region. Uncontrolled
flows of Somalis, Nigerians, refugees from Central Africa,
and South Asians with long-standing ties to Mozambique or
South Africa are one area of concern. The ability of
economic migrants and narcotics traffickers alike to move
freely across Mozambique's borders is heightened by
corruption among GRM officials. The sea border in the North
is particularly susceptible to undetected maritime traffic.

8. (C) Comment Continued: In the past year, the Mission
has significantly increased its resources devoted to
developments in the north. Ambassador, Econ/Pol, Consular
and RSO have made repeated visits despite the high cost and
distance involved (a four hour flight to Pemba). Public
Affairs supports the Musa Bin Bique University in Nampula (a
moderate, generally Muslim, institution) and Mission
personnel have held public diplomacy meetings with Muslim
leaders as well as high school students. End comment.