SCENESETTER FOR SECRETARY PAULSON'S NOVEMBER 2007

UNCLAS SECTION 01 OF 04 DAR ES SALAAM 001483 SIPDIS SENSITIVE SIPDIS DEPT AF/E FOR MBEYZEROV TREASURY FOR V BRANDON, J RALYEA, A SAEED MCC FOR K FICKENSCHER, M KAVANAGH COMMERCE FOR B ERKUL E.O. 12958: N/A TAGS: OVIP PREL PGOV EAID ECON TZ SUBJECT: SCENESETTER FOR SECRETARY PAULSON'S NOVEMBER 2007 VISIT TO TANZANIA Summary -------------- ¶1. (SBU) The U.S.-Tanzanian bilateral relationship has witnessed a sea change over the past two years. With the election of a charismatic, pro-Western President, and increasing levels of U.S. assistance, cooperation has expanded in areas ranging from health and education to counterterrorism and military affairs. As a nascent democracy with an impressive record of peaceful political transition, Tanzania is an anchor of stability in a turbulent region. Despite daunting challenges -- HIV/AIDS, poor infrastructure, corruption, and political stalemate in Zanzibar -- the Government of Tanzania (GOT) is clearly committed to furthering both economic development and democracy. Providing more than USD 392 million in direct assistance to the GOT, the Mission aims to advance several strategic priorities such as enhancing Tanzania's counterterrorism capability and strengthening the checks and balances of Tanzania's democracy. In early 2008, we will sign a USD 698 million MCC Compact; clouds are gathering, however, as one corruption case after another is aired in the press, without decisive action by President Kikwete. Major donors have threatened to reduce "medium term" assistance levels without greater transparency and accountability. End Summary. Political and Economic Background -------------- ¶2. (SBU) In 1992, Tanzania opened the door to multi-party democracy, transitioning from a single party, socialist state. Under the stewardship of former President Mkapa, fundamental macro-reforms were introduced and Tanzania began its transition toward free-market capitalism. With the landslide election of President Kikwete in 2005, Tanzania underwent its third peaceful transition to a new President. Taken together, political and economic reforms introduced since 1992 have made Tanzania an example of peace and stability in the region. ¶3. (SBU) Formidable challenges remain. Located in a turbulent neighborhood, Tanzania has eight porous borders and a 1,500 kilometer coastline. Infrastructure remains rudimentary, red tape and corruption impede private sector development, and HIV/AIDs prevalence hovers around seven percent. While elections on the Mainland have been free and fair, Tanzania is still a state dominated by the executive branch and the ruling Chama Cha Mapinduzi (CCM) party. In Zanzibar, serious irregularities and sporadic violence marred elections in 1995, 2000, and 2005. ¶4. (SBU) While Tanzania has achieved major macro-economic reform over the past decade, macro stability has yet to translate into significant gains at the micro level. More than one third of Tanzanians live in abject poverty and per capita GDP is USD 340. In 2006, the Tanzanian government had to revise its growth forecasts downward (from 7.2 to 5.8 percent) due to a food shortage and an ongoing power crisis. The lack of electricity, coupled with rising oil and food prices, caused inflation to increase from approximately 4 to 7 percent. Tanzania's oil import bill quadrupled and its business climate suffered set backs. In 2007, with good rains and new leadership in the energy sector, economic forecasts suggest a growth rate of 6 to 7 percent is achievable. U.S.-Tanzanian Bilateral Relationship -------------- ¶5. (SBU) With the election of President Kikwete in December 2005, U.S.-Tanzanian bilateral relations have warmed significantly. President Kikwete's pro-Western stance, coupled with an increasing level of U.S. assistance, has precipitated this change, enhancing cooperation in sectors ranging from health and education, to counterterrorism and military affairs. President Kikwete has visited the U.S. three times since taking office, meeting President Bush in Washington D.C. (May 2006) and in New York (September 2006). In September 2007, President Kikwete attended the UN General Assembly in New York, met with Secretary of State Condoleezza Rice in Washington D.C., and attended a dinner in Washington D.C. hosted by the MCC CEO, Ambassador Danilovich. ¶6. (SBU) As a member of the UN Security Council (January 2005-December 2006),Tanzania supported key resolutions sanctioning North Korea and Iran. Tanzania did not fully DAR ES SAL 00001483 002 OF 004 support the USG's effort to address Burma's human rights situation in the Security Council, insisting the issue be dealt with in the Human Rights Council instead. With respect to country specific human rights resolutions in the Third Committee, Tanzania was also not completely cooperative and abstained from votes on several human rights resolutions which the GOT believed should be handled by the Human Rights Council. ¶7. (SBU) Tanzania has started to play an increasingly prominent role in the region on issues ranging from Sudan to Somalia. Standing up to Sudan, the Kikwete administration was outspoken in its support of a UN peacekeeping mission to take over the African Union (AU) mission in Darfur and against Sudan assuming the AU Chairmanship. President Kikwete has also pledged to send 1,000 peacekeeping troops to Darfur. With the recent outbreak of violence in Somalia, Tanzania has also been supportive. Tanzania joined the Somalia Contact Group at the U.S.' behest and President Kikwete swiftly voiced his support for Ethiopia, the need for an African peacekeeping mission to be put in place, and offered to train 1,000 Somali troops to help stabilize the situation. Tanzania has long played a constructive role in the Burundi peace process and recently, President Kikwete assumed a lead role within SADC on Zimbabwe. Strategic Priorities -------------- ¶8. (SBU) The Mission's strategic priorities in Tanzania are: (i) building the GOT's counterterrorism (CT) capacity, with specific focus on establishing a national CT Center; (ii) improving health and education by combating HIV/AIDS and malaria, and increasing access to school for underserved children such as Muslim girls; (iii) strengthening Tanzania's nascent democracy and anti-corruption efforts; (iv) promoting regional stability by developing Tanzania's peacekeeping capability and deepening military-to-military ties; (v) spurring economic growth through policy reform and improved natural resource management; and (vi) influencing public opinion especially among Tanzania's Muslims who tend to view U.S. policy as anti-Islam. ¶9. (SBU) We support these strategic priorities with active diplomatic engagement and a generous foreign assistance program. Although Tanzania enjoys the support of numerous donor countries, the U.S. is one of the top donors in Tanzania in dollar amounts. In FY08, foreign assistance from USAID and State Department will reach approximately USD 38 million, while total USG assistance will amount to USD 392 million including presidential initiatives such as PEPFAR and PMI. Taking into account the U.S. share of contributions from multilateral donors such as the World Bank and African Development Bank, U.S. assistance will total USD 648 million in 2008. This does not include major private U.S. benefactors such as the Gates Foundation. Other major bilateral donors include the U.K., Norway, Sweden, and the European Union. ¶10. (SBU) To ensure that corruption does not undermine development efforts, the Mission is sharply focused on supporting President Kikwete's anti-corruption campaign. The Kikwete administration has taken several steps to combat corruption, appointing a new Director General of the Prevention and Combating of Corruption Bureau (PCCB) and passing two new pieces of legislation: the Anti-Money Laundering Bill and the Anti-Corruption Bill. While pleased with passage of these bills, we are disappointed that the Anti-Corruption Bill does not adequately safeguard the independence of the PCCB. We are also extremely troubled by the steady drum beat of corruption allegations featured in the press involving many of Tanzania's senior leaders. Thus far, these senior leaders have not felt compelled to counter the allegations, nor have they been brought to justice for their alleged actions. We and other donors increasingly question whether there is the political will in State House to tackle corruption at senior reaches of government. ¶11. (SBU) In the wake of the 1998 Embassy bombing, the Mission is actively engaged in furthering counterterrorism (CT) cooperation with the Tanzanian government. The Mission has an integrated strategy involving modernization of Tanzania's law enforcement as well as winning the hearts and minds of the Tanzanian people. Our work in Pemba -- a Muslim enclave along the Swahili coast -- exemplifies this strategy. DAR ES SAL 00001483 003 OF 004 We have knit together cultural preservation projects to repair mosques, self-help projects to improve rural livelihoods, and a multitude of small USAID projects including the donation of generators to provide electricity to two hospitals. In addition, CDC is providing HIV prevention and treatment services at the central hospital in Pemba. USAID and the Combined Joint Task Force-Horn of Africa (CJTF-HOA) have also partnered to build and furnish a primary school and the Mission has plans to inaugurate an American Corner to advance Islamic outreach efforts. Another key component of the Mission's strategy is helping the government establish its own national, interagency CT Center to collect, share and analyze CT data. Zanzibar's "Political Problem" -------------- ¶12. (SBU) In his December 2005 inaugural address, President Kikwete pledged to address Zanzibar's "political problem," as many call it, which involves the bitter divide between the two political parties - CCM and the Civic United Front (CUF) - and between Zanzibar's two islands - Unguja and Pemba. Like the 1995 and 2000 elections, Zanzibar's 2005 elections were marred by irregularities. A National Democratic Institute observer team reported "serious problems in Zanzibar's urban region where 40 percent of the registered voters reside." However, 2005 did register important administrative improvements and violence was contained. Nevertheless, the elections ended in an impasse: CCM claimed victory (53 percent of the vote) and CUF contested the elections and refused to recognize President Karume's government. ¶13. (SBU) Throughout 2006, neither party made any formal reconciliation attempt. Among CUF members, there appeared to be a divide between older members urging patience and time for President Kikwete to address the problem, and the CUF youth wing which was increasingly frustrated and impatient. Within CCM there also appeared to be a divide between more moderate members recognizing that06*'[ CSQ@Qoi]{YJJzQJQ%QQl reconciliation talks between the CCM Secretary General, Yusuf Makamba, and CUF's three time SIPDIS presidential candidate, Maalim Seif Sharif Hamad. The negotiations are ongoing, although little progress has been made. CUF leaders have stressed that their bottom line is the formation of a government of national unity in advance of the 2010 elections. CCM, on the other hand, appears unwilling to implement a power sharing agreement prior to the 2010 elections. CUF leaders have repeatedly emphasized that without a government of national unity, the 2010 elections will be neither free nor fair and have repeatedly warned that their membership is becoming increasingly restless and disillusioned with the democratic process. Military-to-Military Relations -------------- ¶15. (SBU) Under the Kikwete administration, the GOT has expressed its intent to begin participating in international peacekeeping operations. In 2006, Tanzania became our newest partner in the African Contingency Training and Assistance (ACOTA) program. With Kikwete's offer to deploy a peacekeeping brigade to Darfur under UN auspices, the Mission's goal is to train three Tanzanian battalions by ¶2009. These battalions will not only contribute to UN deployments but constitute part of an AU regional standby brigade. (Note: Demonstrating its intent to become more active in peacekeeping, Tanzania deployed 75 military police to Lebanon in January 2007 to help secure the UNAFIL mission, and as recently as October 2007 President Kikwete repeated his pledge to deploy a battalion of peacekeepers to Darfur.) ¶16. (SBU) The Tanzanian government has also signaled its desire to deepen military-to-military ties with the U.S. more broadly. In December 2006, the GOT gave approval to CJTF-HOA to establish a Civil Affairs presence on the Swahili Coast. The Civil Affairs team has begun humanitarian projects and will help build civil military operations capacity within the Tanzania People's Defence Forces (TPDF). Among some members of TPDF's old guard, however, there remains a residual resistance to developing deeper ties with the U.S. DAR ES SAL 00001483 004 OF 004 ¶17. (SBU) The Tanzanian government has repeatedly requested military equipment from the U.S. but its failure to sign Article 98 is an impediment. To respond to the GOT's requests for increased training opportunities, the Mission will use IMET funds to send promising officers from Tanzania's army and navy to the U.S. for educational exchange programs. We also use funds from a State Department source (NADR-EXBS) to provide equipment to Tanzanian coastal security forces to strengthen the country's maritime security capacity. Finally, using DoD Section 1206 funding, we provided nearly USD 1 million in FY07 to train Tanzania's military in Special Forces Operations with an emphasis on patrolling the country's borders. Health Challenges: HIV/AIDS and Malaria -------------- ¶18. (SBU) Tanzania faces a mature generalized HIV epidemic, with a prevalence rate of approximately 7 percent and 1.4 million people living with HIV/AIDS. In FY 2008, PEPFAR will provide Tanzania with over USD 303 million to support treatment, care, and prevention programs. The PEPFAR program is on track to meet its final targets: 150,000 individuals on anti-retroviral drugs; care for 750,000 individuals, including orphans and vulnerable children; and prevention of 490,000 new HIV infections. Although the U.S. has fostered positive relationships with the Tanzanian government in the health sector, significant challenges remain including: poor health infrastructure; a shortage of health care workers; a weak procurement system; and occasional allegations of corruption. ¶19. (SBU) Malaria is the number one killer of children in Tanzania and continues to be a major cause of maternal mortality. As a focus country under the President's Malaria Initiative (PMI),Tanzania will receive up to USD 31 million in FY08 to support the delivery of long-lasting, insecticide treated bed-nets, indoor residual insecticide spraying, and the use of Artemisinin-based Combined Therapy (ACT) as treatment. Since 2006, USAID has focused its efforts in Zanzibar, significantly reducing malaria cases, and will expand its campaign to the Mainland with the goal of reducing malaria deaths by 50 percent by 2010. Millennium Challenge Corporation (MCC) -------------- ¶20. (SBU) In September 2007, the MCC Board approved Tanzania for the largest MCC Compact to date, USD 698 million. The Compact will strengthen Tanzania's infrastructure network in three key areas: roads, water, and energy. Tanzania's Compact is now on track for signature and funding in January ¶2008. However, with the rising tide of corruption allegations leveled at the government, our message has been that a Compact is an agreement of reciprocal responsibilities, and to sustain it over five years, Tanzania must pay heed to its corruption index and inject greater transparency and accountability into governance. ¶21. (SBU) Tanzania also received MCC Threshold funds - USD 11.2 million from FY05-07 . The Threshold program, which is aimed at good governance and anti-corruption projects, consists of four components: (i) public procurement reform; (ii) a rule of law initiative with focus on the Prevention of Corruption Bureau; (iii) civil society strengthening; and (iv) technical assistance to establish a Financial Intelligence Unit. Comment -------------- ¶22. (SBU) Secretary Paulson's visit comes at a time when the U.S. is providing unprecedented support to Tanzania and when there is a great deal of positive momentum in the U.S.-Tanzanian bilateral relationship. While his visit, therefore, will accentuate the positive, we will also ask him to underline the critical importance of transparency and accountability in government. Tanzania is poised for the largest MCC Compact ever, at the very moment donors have begun to question its commitment to clean government. More broadly, Tanzania today is a model of stability, enjoying peaceful transitions of power and promising economic growth. It is in U.S. interests to strengthen and sustain this model for the continent. A rising tide of unchecked corruption puts it all at risk. GREEN