C O N F I D E N T I A L SECTION 01 OF 05 GABORONE 000749

SIPDIS

DEPT FOR AF/S MOZENA
PLEASE PASS TO OPIC

E.O. 12958: DECL: 06/01/2015
TAGS: PREL PGOV ECON PHUM KHIV BC
SUBJECT: SCENESETTER FOR BOTSWANA PRESIDENT MOGAE'S JUNE 13
POTUS MEETING

REF: A. GABORONE 56

B. GABORONE 667

C. GABORONE 738

D. GABORONE 651

Classified By: AMBASSADOR JOSEPH HUGGINS FOR REASONS 1.4 B AND D


1. (U) SUMMARY: Botswana President Festus G. Mogae's June
13 meeting with President Bush provides an opportunity to
affirm and advance Botswana's role as a partner in promoting
peace, democracy and human rights in Africa, increasing
economic growth through trade, and combating HIV/AIDS.
Botswana's prudent management of its mineral resources and
commitment to good governance have enabled it to achieve
remarkable success in development and economic growth since
it gained independence from the U.K. in 1966. In response to
the rapid spread of HIV/AIDS in the country, the Government
has taken bold measures to provide prevention, care and
treatment services to its citizens. Reflecting the growing
strain that HIV/AIDS has placed on the country's budget, the
President has recently expressed his hope that foreign donors
will not continue to "punish" Botswana for managing its
affairs well by withholding development assistance. Mission
has made clear that the US-Botswana partnership is predicated
on shared democra
tic values. The continuation and strengthening of that
relationship must be accompanied by the preservation of
Botswana's democratic traditions and expansion of its role as
a proponent of stability and democracy in the region, the
continent and beyond. END SUMMARY.

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BACKGROUND
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2. (U) When Botswana achieved independence from the United
Kingdom in 1966, it was one of the ten poorest countries in
the world. The country boasted a per capita income of less
than USD 100, fewer than 8,000 meters of paved road and a
handful of university graduates. Following the discovery of
diamonds in 1967 and commencement of mining in 1971, this
situation began to change. Unlike other nations blessed with
great mineral wealth, the G

overnment of Botswana ploughed its
diamond revenues into investments in infrastructure,
education and health care. Between 1967 and 1997, Botswana's
economy grew at an average annual rate of nine percent.
Education, while not compulsory, is free from Kindergarten
through PH.D. This has helped Botswana achieve an adult
literacy rate of 81 percent. By 2000, Botswana became one of
the few developing countries to graduate to middle-income
status. Today, this Texas-sized country of 1.7 million
people now enjoys a per capita income of USD 4,800 and an
investment grade sovereign credit rating at the "A" level.
Botswana now faces the challenge of rectifying the skewed
distribution of its national wealth, maintaining economic
growth despite the loss of many of the country's most
productive workers to HIV/AIDS, diversifying its economy, and
meeting the high cost of providing various HIV/AIDS
prevention and treatment programs.

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DEMOCRACY & HUMAN RIGHTS
--------------


3. (U) Botswana's remarkable development success is due
primarily to its commitment to good governance. Transparency
International has consistently ranked Botswana the least
corrupt country in Africa. The Economic Freedom of the
World Report lists Botswana as the continent's freest
economy. Listed as number 18 in the report, Botswana is
ranked higher than France, Germany and Japan. Botswana's
democratic political culture is evidenced by its independent
judiciary, a vibrant private press, and a range of political
parties. These successes notwithstanding, Botswana faces
some challenges in preserving and expanding its democratic
traditions.


4. (C) President Festus G. Mogae was re-elected President of
Botswana on October 30, 2004 in Botswana's ninth
parliamentary elections, in which the Botswana Democratic
Party returned to power as it has in every election since
independence. President Mogae's term will expire in 2008 but
he is widely expected to retire early, perhaps in 2007, to
allow Vice President Seretse Khama Ian Khama two years in
power before facing elections in 2009. Although Khama is
widely revered as the son of Botswana's first President Sir
Seretse Khama as well as being the Paramount Chief of the
country's largest ethnic group, the Bamangwato, Khama is not
universally liked or trusted. Many, including members of his
own party, senior traditional leaders, journalists and human
rights activists, worry that Khama lacks tolerance for
dissent and respect for human rights (Refs A and B).


5. (U) Although Botswana has a commendable record of
respecting human rights, two recent cases have aroused
concern in the international community. In 2002, the
Government of Botswana compelled the San/Basarwa ethnic
minority residents of the Central Kalahari Game Reserve
(CKGR) to relocate to settlements outside the park ostensibly
to preserve the ecosystem within the CKGR, reduce the costs
of providing public services to these communities and provide
the group an opportunity to improve their wellbeing. Court
hearings are currently underway in a legal challenge waged by
some of those who were relocated and claim that their
constitutional rights were violated. Bipartisan members of
the United States Congress have written to President Mogae to
express their concern that the relocation policy
discriminates against a marginalized minority and threatens
to eliminate their culture. Post anticipates a court ruling
on this case within the next two months.


6. (U) On May 31, Botswana's High Court upheld as
constitutional a February 18 deportation order against
critical academic Professor Kenneth Good pursuant to
President Mogae's declaring Good to be a prohibited immigrant
(Ref C). Good was immediately detained by immigration
officials and put on a plane to South Africa that evening.
According to the Office of the President, Mogae had received
reliable information that the seventy-year old professor
posed a threat Botswana's national security. The High Court
confirmed the constitutionality of a law which exempts the
president from disclosing to the judiciary or to the public
his reasons for declaring someone a prohibited immigrant.
Although the fact that the High Court intervened on February
19 and insisted on hearing Good's allegations demonstrated
the independence of the judiciary in Botswana, the outcome
raised concerns about the protection of free speech and about
the overwhelming power wielded by the executive in Botswana.


7. (U) Cognizant that Botswana's good governance made
possible its development success, Mission has emphasized that
Botswana's reputation as a liberal and stable democracy is
its greatest asset. Its ability to attract foreign direct
investment in the future will turn on its continued
commitment to these values.

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THE HIV/AIDS EPIDEMIC
--------------


8. (U) UNAIDS estimates that as many as 330,000 Batswana out
of a population of 1.7 million are now living with HIV/AIDS;
many are not aware of their status. The infection rate among
pregnant women aged 15-49 is 37.4 percent. Officially, some
18 percent of all deaths in the country are due to AIDS,
although the actual percentage is probably much higher. The
size of the nation's growing orphan population, largely
attributable to AIDS, is estimated at 112,000 but some
predict that it could rise to as high as 214,000 by 2010.
Over 207,000 Batswana have been tested (some more than once)
since the inception of USG-funded "Tebelopele" voluntary
counseling and testing centers. Eight of the sixteen
"Tebelopele" sites were constructed using DoD Humanitarian
Assistance funds managed by the Office of Defense
Cooperation. The Peace Corps program, which encompasses
fifty-eight volunteers, focuses exclusively on combating
HIV/AIDS.


9. (U) President Mogae has called HIV/AIDS "the greatest
challenge Botswana has faced," and has spearheaded a multi-
sectoral strategy including prevention, care and treatment
programs. A key component of the strategy is a free public
anti-retroviral treatment program, the first of its kind and
scale in the world. Nearly 43,000 patients currently receive
treatment at government clinics throughout the country. An
additional 6,000 people are treated through private medical
schemes. Botswana also introduced routine testing for
HIV/AIDS at government health facilities.


10. (U) Botswana's private/public partners in its overall
efforts to combat HIV/AIDS include the U.S. Government
(primarily through CDC, the Department of State, Peace Corps,
the Department of Defense and USAID), Baylor University,
Harvard University, Bristol Myers Squibb, the Bill and
Melinda Gates Foundation, the Merck Foundation and a number
of non-governmental organizations.


11. (U) A dozen international staff and more than one hundred
local technical and support staff work in the BOTUSA Project
- a collaboration of the Botswana government and CDC. The
BOTUSA Project provides technical assistance, consultation,
and funding; implements programs; and conducts research with
the Botswana Government and other local and international
partners for the prevention, care, treatment and surveillance
of HIV/AIDS, tuberculosis, and sexually transmitted diseases
(STDs). All components of the Embassy work closely together
in implementing the President's Emergency Plan for AIDS
Relief, which provided more than USD 21 million in HIV/AIDS
assistance in fiscal year 2004 and has doubled that
assistance to more than USD 40 million in fiscal year 2005.
The Emergency Plan is rolling out well in Botswana due in
part to the consultative manner in which the U.S. Mission
developed the program with the Government of Botswana, civil
society and United Nations programs.


12. (U) Happily, some indicators suggest that the epidemic's
rate of growth may be plateauing. Prevalence rates in
government surveillance studies for 2001, 2002 and 2003 were
36.2 percent, 35.4 percent and 37.4 percent respectively.
There also has been a decrease in rates of sexually
transmitted diseases and some evidence of a decline in risky
sexual behavior.


13. (U) However, even with support from numerous
international donors, the cost of dealing with HIV/AIDS is
taking a heavy toll. Announcing a budget shortfall for the
third year in a row, President Mogae stressed that the cost
of confronting HIV/AIDS, and associated costs such as
developing HIV/AIDS medical infrastructure and caring for
AIDS orphans and their elderly caregivers, caused a
significant drain on the national budget. The GOB is
contributing USD 140 million from its budget this year to
combat HIV/AIDS. Indirect costs, such as lost productivity
due to illness, compound the problem.

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TRADE AND INVESTMENT
--------------


14. (U) Botswana is an economic success story due largely to
its prudent fiscal and monetary policies. The Government ran
balanced budgets for decades and only in the past five years
has it encountered deficit budgets, due largely to the costs
of fighting HIV/AIDS. Although a May 2005 devaluation of the
Pula by 12.5 percent is likely to boost prices and shake
investor confidence, the Bank of Botswana historically has
kept the inflation rate relatively low and stable -- 7
percent for 2004. Consequently, Botswana enjoys a nominal
per capita GNP of USD 4,800. In 2003/4, real GDP grew at 5.7
percent, down from 7.8 percent in 2002/3. The GOB projects
that real GDP growth will slow to between 4 and 5 percent
next year as a result of expected slow-downs in both mineral
and non-mineral growth. These achievements notwithstanding,
Botswana has one of the most skewed income distributions in
the world, an unemployment rate of 24 percent (unofficial
estimates are higher), and 30 percent of its population lives
in poverty.


15. (U) To expand economic growth and reduce its dependence
on diamonds, which account for 70-80 percent of all export
earnings, one half of government revenues and one-third of
Botswana's gross domestic product, the GOB set up an
attractive tax regime, lifted foreign exchange controls, and
established bodies to facilitate investment in Botswana. In
July 2004, OPIC signed an investment guarantee with the
Kalahari Gas Corporation and Covalent Energy Corporation from
Virginia to develop Coal Bed Methane (CBM) gas reserves in
eastern Botswana.


16. (U) In 2004, U.S. exports to Botswana totaled USD 51.6
million, while imports equaled USD 73 million, reflecting
growth from 2003 of 98 percent and 433 percent, respectively.
First quarter 2005 trade figures show continued growth in
both U.S. exports (122 percent growth) and imports (61
percent growth) versus the first quarter of 2004. Botswana
exported USD 20.1 million to the U.S. under AGOA in 2004,
more than triple the figure for 2003. Botswana is looking to
diversify into other AGOA-eligible products, such as leather
and glass items, but has so far been unsuccessful.

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BOTSWANA - INCOMING SADC CHAIR
--------------


17. (C) Botswana will take over from Mauritius as chair of
the Southern African Development Community (SADC) at a
regional summit in August 2005. Although the GOB is still
putting together an agenda for its tenure as chair, it is
likely to focus on putting SADC's internal affairs in order.
SADC is in the process of constructing a new headquarters to
replace the current premises which it overflowed years ago.
The secretariat expects significant personnel turnover during
2005, which is likely to slow its operations. Botswana's
Ministry of Foreign Affairs and International Cooperation is
concerned about SADC's backlog of unused development
assistance from Europe and hopes to put that money to work in
the coming year. As expected, initial indications from the
MFA suggest that Botswana is not eager to use its
chairmanship of SADC to pressure the Mugabe regime on the
democracy and human rights front.


18. (C) The crisis in Zimbabwe continues to pose problems
for Botswana, primarily through illegal immigration.
Botswana's immigration authorities deported an average of
4,800 Zimbabwean border jumpers each month in 2004. Prior to
the Zimbabwean election, which Botswana's observers
legitimized as fair and reflective of the popular will, the
GOB was harried by occasional criticism in the regional
press, which the MFA suspected was planted by then Minister
of Information and Publicity in Harare Jonathan Moyo (Ref D).
Some of these articles took the GOB to task for constructing
an 8-foot high, electrified fence along part of the
Botswana-Zimbabwe border to prevent the transmission of
disease to Botswana's cattle herd. Other news pieces
targeted the International Broadcasting Board's station in
Selebi-Phikwe (located in the northeastern part of the
country) which broadcasts Voice of America programming into
Zimbabwe. Although the Government of Zimbabwe reportedly
raised concerns about these two issues, Botswana's MFA has
received no new complaints since the March 2005 elections.
The MFA hopes this presages a return to amicable relations
with Zimbabwe.


19. (U) Botswana has been an active participant in the talks
regarding a possible free trade agreement between the United
States and the Southern African Customs Union (SACU). While
SACU member states still have not yet arrived at common
negotiating positions, the GOB is hopeful that the staffing
of a SACU secretariat, completed in April of this year, will
expedite that process. If the FTA negotiations succeed, the
SACU countries would open up a USD 125 billion market of
fifty million consumers to the U.S. private sector. An FTA
would also help the SACU countries attract further foreign
direct investment to the region in support of its economic
diversification.

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RELUCTANT PEACEKEEPER
--------------


20. (U) The Botswana Defense Force (BDF) is a small,
professional, apolitical force that focuses on border defense
but also meets new, non-traditional national and regional
security challenges, such as apprehension of illegal
migrants, disaster relief and anti-poaching. The U.S. is
assisting Botswana with long-term peacekeeping capacity
building via the Enhanced International Peacekeeping
Capability (EIPC) program and the African Contingency
Operations Training and Assistance (ACOTA) program. The ACOTA
program has trained two BDF Infantry Battalions and will have
trained a third by the end of September.


21. (C) Although Botswana has a proven record of
accomplishment in past peacekeeping operations -- Somalia in
1992, Mozambique in 1993, Lesotho in 1998 -- it is reluctant
to commit substantial resources to a peacekeeping operation
(PKO) in Darfur or other hot spots in Africa. The Government
of Botswana has articulated the following criteria for any
PKO in which it would participate: the mission must be led by
a Western Power, there must be a clear exit strategy and end
state, the host country must specifically invite Botswana's
participation, and the mission must be in the national
interest of Botswana. According to the MFA, any such
participation also must be politically salable at home. The
GOB has indicated that a significant presence in Darfur would
expose its forces to attacks from the Jangaweed militants as
well as GOS military forces, a price it is not willing to
pay. However, according to some senior BDF officers, the
military understands the importance of PKOs and is preparing
for its inevitable role in some future operation. Botswana
has received three USG C-130s through excess defense articles
sales. Botswana could carve out a niche in African
peacekeeping by using its C-130s to move troops from their
country to the country of the peacekeeping operation. This
is a low risk mission both politically and militarily. But
fall-out from Botswana's signing of the extremely unpopular
Article 98 agreement on July 1 2003, still influences the
Government's political willingness to accommodate the USG on
PKO projects.

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PARTNER IN WAR ON TERRORISM
--------------


22. (U) As one of the first countries to sign all 12 of the
UN protocols on terrorism, the Government of Botswana
recognizes that its good infrastructure and open economy
could attract organizations seeking to use the country as a
place to stage terrorist attacks. Mission is working with
the Treasury Department's Office of Technical Assistance and
the GOB to initiate a program of assistance to enable the GOB
to develop the capacity to prevent and prosecute acts of
money laundering and financing of terrorism. The
International Law Enforcement Academy, located outside
Gaborone, has conducted training specifically addressing
terrorist financing and provides other courses that deal with
various aspects of counter-terrorism, such as border
management.

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PARTNERSHIP PREDICATED ON SHARED VALUES
--------------


23. (U) Mission has made clear through conversations with
the GOB and via public outreach that its partnership with the
people of Botswana is predicated on shared democratic values.
The continuation and strengthening of our relationship must
be accompanied by the preservation of Botswana's own
democratic traditions and the expansion of its role as an
active proponent of stability and democracy in the region,
the continent, and beyond.

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MOGAE LIKELY TO RAISE ASSISTANCE QUESTION
--------------


24. (U) During the May 17 - 19 visit to Botswana of
President Pohamba of Namibia, President Mogae stated at a
press conference that donor nations should not punish
Botswana by withholding development assistance because it is
now a middle-income country. This statement brought to the
fore a sentiment previously expressed by various GOB
officials that Botswana's good governance ironically appears
to have had the regrettable affect, from Botswana's
perspective, of drying up foreign assistance. President
Mogae is likely to raise this point with President Bush,
particularly stressing the costs of fighting HIV/AIDS, in
making a case for reviving development assistance to Botswana.
HUGGINS