MOZAMBIQUE: ASSISTANT SECRETARY FOR AFRICAN

C O N F I D E N T I A L SECTION 01 OF 04 MAPUTO 000310

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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
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
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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