FY05 SPECIAL SELF-HELP (SSH) FUNDING REQUEST -

UNCLAS SECTION 01 OF 02 MAPUTO 000089

SIPDIS
PLS PASS AF/S TREGER AND AF/EPS DECQUIR
E.O. 12958: N/A
TAGS: EAID MZ SSH
SUBJECT: FY05 SPECIAL SELF-HELP (SSH) FUNDING REQUEST -
MOZAMBIQUE

REF: STATE 06604


1. Post requests USD 65,000 for the Ambassador's Special
Self-Help Fund in FY05.


2. Mozambique has experienced rapid economic growth for
the past decade, registering an 8-10% increase in GDP per
year. Further, the country's lead political parties,
Frelimo and Renamo, on opposite sides during a
devastating civil war that ended in 1992, have since
competed largely peacefully in three general elections
for the presidency and seats in the National Assembly.
These achievements deem Mozambique an African success
story, economically and politically. However, a sharp
dichotomy exists, as economic growth has not translated
into increased opportunities or significantly improveded
standards of living for all of the poor, particularly in
many rural communities. According to the most recent
household survey taken by the Mozambican Ministry of
Planning and Finance, fifty-four percent of the
population lives below the poverty line, making
Mozambique still one of the world's poorest nations.
Rural per capita income is estimated at $70/year in the
central and northern provinces. Mozambique ranks at 170
of 175 countries on the 2003 UN Human Development Index.
Based on 2002 data, the estimated HIV/AIDS prevalence
rate for adults ages 15-49 was 13.6 percent. The
population's HIV/AIDS rate continues to rise, with the
estimated 2004 prevalence rate at 15 percent among adults
ages 15-49. The development corridors, which handle
Mozambique's transit and national trade, register
HIV/AIDS rates as high as 26.5%. Sixty percent of the
adult population is illiterate, with adult women's
illiteracy rate at more than 70%. If Mozambique is to
truly succeed, the GRM must direct more resources to
development needs and provision of basic services
(health, education, water) to its people, especially in
rural areas where most of the people reside.


3. The Special Self-Help Fund is critical to the
Mission's effectiveness in encouraging the GRM to invest
in its people and the advancement of their well-being. In
FY04, Post funded twelve projects in the areas of
education and socio-economic development. Projects were
spread across six of Mozambique's ten provinces. Below
is a list of some of the items provided with the funds.
- a health clinic in remote northern Mozambique;
- chemistry, biology, and physics laboratory material to
a high school with over 4,000 students;
- irrigation equipment to farmers living in a dry region
on the border with Malawi;
- an environmental library in an environmentally-
vulnerable area (foresting, coastal resources);
- sewing machines to women's organizations.
Projects are sustainable and benefit communities.
Investments in education, health, sanitation, and
agricultural capacity have brought groups together,
creating critical linkages and supplying communities with
vital resources. The Mission's ability to play a role in
development and be on the front lines of poverty
alleviation for the rural and urban poor sets an example
for the government of Mozambique and positively portrays
the USG's role in Mozambique.


4. In 2005, the Mission is keen to use SSH projects to
support the GRM's poverty reduction strategy (PARPA),
approved by the Mozambican Council of Ministers in April

2001. PARPA is the GRM's top national priority through
2005, and supporting PARPA is one of the tactics in the
Mission Program Plan. Additionally, aligning SSH
projects with GRM priorities will strengthen bilateral
relations. This is particularly important in 2005, when
a new government under president-elect Armando Guebuza
takes office.


5. We request USD 65,000 in funding for the Special Self-
Help Fund for 2005. New focal areas will include but not
be limited to:
- Women and Girls' Programs Women and young girls are
in need of assistance, particularly in rural areas. Post
will select projects that will generate income for
women's groups. By improving living standards, women
will have greater opportunities to succeed in their
community and become leaders.
- Agricultural capacity-building - Rural communities must
survive off of their own agricultural production. They
frequently need access to inputs and technical training
to provide sufficient food for their families. The hope
is that resources and training will improve quality of
life and encourage farmers to produce and sell, creating
small and sustainable business operations. According to
the World Bank Report, most Mozambican farmers live on
fewer than three hectares of land and only about one in
ten is able to sell surplus produce.


6. Maintaining a strong SSH Program for the Mission will
demonstrate our continued commitment to help better the
well being of Mozambique's people. Local awareness about
the SSH process has increased, leading to a steady rise
in the number of excellent applications for potential
projects. Strengthening the SSH Program is a clear way
to show USG support for an African nation that has
potential to be a well-rounded success story -
economically, politically, and socially.


7. The Self-Help Coordinator is Economic/Political
Officer Loren Dent. The Assistant Coordinator is
Economic/Commercial Assistant Elizabeth Filipe.
La Lime