MOZAMBIQUE - AUGUST ECONOMIC DIGEST

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
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