MALAWI: SCENESETTER FOR CODEL PRICE

UNCLAS SECTION 01 OF 05 LILONGWE 000342 SENSITIVE SIPDIS DEPT FOR AF/S - E. PELLETREAU AND H - ANDREW MACDERMOTT E.O. 12958: N/A TAGS: PREL EAID OREP SOCI MI SUBJECT: MALAWI: SCENESETTER FOR CODEL PRICE REF: STATE 63005 LILONGWE 00000342 001.2 OF 005 ¶1. (SBU) Summary: The U.S. Mission in Lilongwe warmly welcomes the July 5-6 congressional delegation led by Representative David Price. ¶2. (SBU) Located at the southern end of Africa's Great Rift Valley, Malawi is one of the poorest countries in the world. A heavy chronic disease burden (malaria, tuberculosis, and HIV, for example),a rapidly-growing population, weather-dependent agricultural production, undeveloped mineral resources, and a cash-starved economy have relegated Malawi historically to obscurity and underdevelopment, despite its abundant freshwater and arable land. Malawi is rated critical for crime, and malaria and HIV/AIDS are significant health risks. Rain is unlikely in July and temperatures should be comfortable in the daytime, but cool at night. ¶3. (SBU) Malawi,s politics in the present era is characterized by rancorous and personalized gridlock that has stymied parliamentary activity for many months. President Bingu wa Mutharika, who ran and was elected in 2004 as a member of the former ruling party, broke with his sponsors in 2005, forming his own party in the process and splitting his erstwhile allies. His party continues to confront a hostile two-party opposition majority in Parliament that has led to numerous long impasses in the legislature, provoked by an opposition effort to impeach him in 2006 and continuing with an opposition-led effort now under way to remove most of the members of his party from the National Assembly by forcing the Speaker of Parliament to invoke a constitutional prohibition against members switching parties during their terms. Elections, currently scheduled for May 2009, will provide Mutharika an opportunity to gain reelection and potentially a majority in Parliament based on his recent macroeconomic successes. The election preliminaries are well under way, with funding assured for the process from both the Malawi government and external donors. ¶4. (SBU) Inflation and interest rates have fallen and Malawi has had over $2 billion in foreign debt canceled in the past three years. However, Malawi still faces the reality that its economy is based on rain-fed agriculture, and there continue to be major constraints to growth such as poor transportation links and limited access to reliable energy. Malawi's December 2007 selection as Compact-eligible by the Millennium Challenge Corporation compact provides an opportunity for an additional U.S. contribution to address some of these constraints. Malawi is seeking to expand its role in international peacekeeping operations and has volunteered to send an infantry battalion to the United Nations Mission in Darfur. With assistance from the President's Emergency Plan for AIDS Relief (PEPFAR),the Global Fund, and the President's Malaria Initiative, the Government of Malawi is attempting to strengthen its health care system and combat HIV/AIDS, malaria, and tuberculosis. Significant challenges remain in the delivery of health services to rural and vulnerable groups due to a severe shortage of qualified medical personnel and drug stock-outs. End Summary. ¶5. (SBU) The U.S. Mission in Lilongwe warmly welcomes the July 5-6 congressional delegation led by Representative David Price. This visit will provide an excellent opportunity to discuss Malawi's young democratic institutions and witness firsthand some of the American response, both public and private, to the HIV/AIDS epidemic and health care crisis in Malawi through PEPFAR, the Global Fund, and other U.S. assistance programs. Overview -------------- ¶6. (SBU) Located at the southern end of Africa's Great Rift Valley, Malawi is one of the poorest countries in the world. Landlocked and inward-looking, with rapid population growth and a heavy disease burden, and still suffering the political weight of thirty years of dictatorship, Malawi has historically been relegated to obscurity and underdevelopment, despite its hard-working people, abundant freshwater and arable land. Malawi spent the first thirty years of its independence from colonial rule under the idiosyncratic dictatorship of Hastings Kamuzu Banda (1964 - 1994). Having established multi-party rule only 14 years ago, the country continues to wrestle with the challenges of both genuine democracy and a true market economy. Low education levels among the country's 13 million people, periodic droughts, weak governance, and the effects of the LILONGWE 00000342 002.2 OF 005 HIV/AIDS pandemic have made progress slow. Politics - A Minority Government Plays Rough -------------- ¶7. (SBU) Much of Malawi's ongoing political tension stems from President Mutharika's decision to break with his political godfather, former president Bakili Muluzi. After failing in attempts to amend the Constitution to permit a third term in office, Muluzi personally selected Mutharika as his successor in 2004 in the expectation that he could continue to rule from behind the curtain. Mutharika, who had little following of his own, confounded Muluzi by spurning the former president after winning the election, eventually breaking from Muluzi's United Democratic Front (UDF). Trumpeting his campaign against the corruption of his erstwhile associates and wielding the power of the Presidency, Mutharika established the Democratic Progressive Party (DPP) and began wooing former legislators from the UDF and other parties to his new political vehicle. The DPP bloc eventually grew by defection to over 70 seats in the 193-seat Parliament (only five elected on DPP tickets), but failed to achieve a majority. ¶8. (SBU) Muluzi and the opposition coalition's other leader, John Tembo of the Malawi Congress Party (MCP),fought back by unsuccessfully pursuing Mutharika's impeachment. When that strategy failed, largely because the MCP and the UDF could not agree on an endgame if Mutharika were removed, opposition leaders sought and won a court judgment, based on the Constitution's Section 65, to force new elections in districts where Members of Parliament had crossed the aisle to join Mutharika's DPP. An ongoing impasse has resulted, with the opposition threatening to withhold action on the national budget until the Section 65 controversy is resolved. Last year -- and the pattern is currently repeating itself -- the President used his "bully pulpit" to convince Parliament to pass his budget, which is directly tied to government services desperately needed by the public, by claiming the Speaker of Parliament could make the necessary ruling after the budget vote on whether the defectors to DPP had lost their seats. The President then violated at least the spirit of the agreement with the opposition by adjourning Parliament in September, 2007, before Section 65 could be taken up. The President legally had to reconvene Parliament in April to discuss the next national budget, but the opposition so far remains resolute that this time they will not be fooled and they continue to insist that Section 65 must be implemented before any other business can be conducted. ¶9. (SBU) The current bitter impasse has been compounded by recent allegations of a coup attempt by police, military, and UDF supporters. In addition to nine suspects, including three active-duty brigadier generals, former president Muluzi was also detained when he returned from London on May 25. While all suspects including Muluzi have been granted bail due to a lack of proper evidence, the charges and counter-charges have created a hostile environment both within the Parliament and in the countryside where partisan campaigning for May 2009 presidential and parliamentary elections have begun in earnest. Amidst this backdrop, a clergy-led mediation team has been negotiating with both the DPP and the major opposition parties to arrive at a compromise that would allow the Parliament to proceed. Neither side appears to have budged. Clouding mediation attempts, President Mutharika recently threatened Parliament with a June 20 deadline to pass the budget or risk being dismissed again, threats similar to those he made last year during the same impasse. Elections Scheduled for 2009 -------------- ¶10. (SBU) The next presidential and parliamentary elections have been scheduled for May 19, 2009. The United States has worked closely with other development partners and the Malawi Electoral Commission (MEC) to provide support for the elections. The MEC is currently procuring new information technology equipment, preparing to create new voter rolls, and developing voter education materials in preparation for next May. The USG has focused its democracy and governance aid toward the promotion of peaceful political competition and strengthening democratic institutions. To meet this goal, a USG-supported civic education program will reach more than 750,000 voters to help them better understand their voting rights and responsibilities in the 2009 elections. This activity will build on past civic education efforts and LILONGWE 00000342 003.2 OF 005 training of election officials in 2008. Macroeconomic Improvements, but Many Constraints to Growth -------------- -------------- ¶11. (SBU) Malawi has an agricultural-based economy dominated by subsistence maize farming. Agriculture makes up over 38% of GDP, and employs over 85% of the labor force. Malawi agriculture is largely rain-fed, making it vulnerable to periodic droughts. Major exports are tobacco (over half of total export value),tea, sugar, garments, and coffee. Local subsidiaries of two U.S. companies, Universal Leaf of Richmond and Alliance One, headquartered in Raleigh, buy around three-quarters of Malawi,s entire crop of burley tobacco. A promising new element in the economy is the development of the mining sector, with a large uranium mine under development in the north and additional projects planned in the center and south. Fiscal management under the Mutharika administration has been good and the macroeconomic environment has improved significantly in the past three years. Inflation and interest rates have fallen to about 7% and 20% respectively. In recent years, Malawi has had over $2 billion in foreign debt canceled under the Highly Indebted Poor Countries (HIPC) program, and in June Malawi is expected to complete its first full IMF Poverty Reduction Growth Facility (PRGF) program. Recent government moves to set prices for maize, tobacco, and cotton, however, may signal a retreat in the market liberalization introduced with the IMF structural adjustment program. ¶12. (SBU) Major constraints to Malawi's development include poor transportation links and limited access to energy. The country's landlocked position and limited access routes result in some of the highest transportation costs in the world, amounting to as much as 30% of the total import/export bill. Malawi must import all of its fuel products and though 100% of Malawi,s electric power is generated by hydroelectric stations, only 7% of the country's population has access to electricity. There is essentially no excess power generation capacity and anticipated new developments will at best keep pace with the increasing demand. Paucity of skilled labor, bureaucratic red tape, corruption, and inadequate and deteriorating road, water, and telecommunications infrastructure further hinder economic development. U.S. efforts to promote sustainable economic growth have shown promise and there are many opportunities to 1) support agricultural diversification, 2) promote access to credit and input markets for small farmers, 3) strengthen natural resource and wildlife management, 4) expand successful micro-enterprise programs, and 5) further encourage collaboration between the private and public sectors. MCA Compact Development Underway -------------- ¶13. (SBU) In 2007, Malawi was the only new country to qualify for compact-eligible status under the Millennium Challenge Account (MCA),and it has begun the process of compact development. While the MCA compact is not guaranteed - Malawi must maintain its recent improvements on the MCC scorecard, with categories covering Ruling Justly, Investing in People, and Economic Freedom - the MCA compact has the potential to help address some of the country's most significant constraints to development. Although it is too early to say what will be included in a compact proposal, or how much money will be made available, the Government's core team has been assembled and is already performing an economic constraints analysis. ¶14. (SBU) The MCA compact development process follows a successful Millennium Challenge Corporation (MCC) Threshold Country Plan for Malawi to strengthen the institutional capacity of the government of Malawi to combat corruption and to improve fiscal management. The two-year, USD21 million program was multi-sectoral and cross-institutional in its approach to improving prevention, oversight, enforcement, and deterrence of corruption and fiscal mismanagement. Among the notable achievements of the MCC Threshold Program were: enactment of an anti-money laundering and combating financing of terrorism law and the establishment of a financial intelligence unit to investigate these crimes; strengthening Parliament through empowerment of the committee system; establishment of a media council to improve press freedom, promote journalistic ethics, and address complaints on press conduct; establishing of an internal affairs unit at the Malawi Police Service; and strengthening the Department of LILONGWE 00000342 004.2 OF 005 Public Prosecutions, the Anti-Corruption Bureau, and the Malawi Police Service. Military Cooperation - Peacekeeping as a Priority -------------- -------------- ¶15. (SBU) The Malawi Defense Force (MDF),is relatively well-trained and has a long history of respect for civilian control. After a long period of limited contributions to peacekeeping, Malawi and the MDF took an important step in 2007 by volunteering to contribute a battalion to Darfur. Resource constraints have been and remain the largest obstacle to the MDF's increased participation in peacekeeping operations. The U.S. has supported the MDF's efforts through the African Contingency Operations and Training Assistance (ACOTA),International Military Education Training (IMET), and Foreign Military Funds (FMF) programs. Additional assistance expected as part of President Bush's announced $100 million funding of equipment support for troop contributing countries to the United Nations Mission in Darfur should enable the MDF to deploy in 2009. Strengthening Health - Beyond Disease Control -------------- ¶16. (SBU) Malawi's major health challenges are high HIV/AIDS prevalence (12%); high fertility (6.0 children per women of childbearing age); high infant, child, and maternal mortality rates (76/1000, 133/1000, 984/100,000 respectively); and high mortality in the general population due to infectious diseases. Lack of knowledge about healthy behaviors, chronic malnutrition, and communicable disease outbreaks, as well as disparities in access to quality health services, exacerbate the situation. The public health services are inadequate to provide rural communities with essential health care, especially for the most vulnerable groups - women and children. The single biggest constraint on services delivery is the severe shortage of trained people, especially those willing to serve in rural areas. Despite substantial support from development partners and a significant portion of GDP devoted to the healthcare delivery, the system still fails to deliver services and essential drugs are frequently not available at facilities. ¶17. (SBU) The U.S. supports the Malawi government's goal of an integrated health, population, and nutrition program, as stated in the Malawi Growth and Development Strategy. The U.S. works in collaboration with the Government of Malawi, other bilateral and multilateral institutions, and civil society to increase access to essential health care through technical interventions that support HIV/AIDS, tuberculosis, malaria, maternal and child health, family planning and reproductive health, and nutrition support for households caring for orphans and vulnerable children and chronically ill members. Under PEPFAR, despite the fact that Malawi is not a "focus country," Malawi receives significant support to scale up integrated prevention, care, and treatment programs. PEPFAR, in partnership with the Global Fund, plays a significant role in supporting over 130,000 people on antiretroviral treatment. Under the President's Malaria Initiative (PMI),the United States has developed a three-year strategy outlining the approaches and principles to reduce the current malaria-related mortality by 50%. Precautions and Climate -------------- ¶18. (SBU) Malawi is rated critical for crime. Porous borders, easily-acquired small arms, and an under-resourced police force present an easy environment for criminals. Petty theft, car-jackings, and burglaries are common. All visitors should use caution and exercise the same security precautions you would use in any urban area of the developing world. Visitors should not carry personal valuables or large amounts of currency when visiting downtown areas. Given the high rate of traffic accidents and the lack of trauma care, the mission strongly discourages individuals from driving outside of urban areas after dark. Malaria is a significant health risk in Malawi and malaria prophylaxis is essential. Although tap water is treated in cities, it is not always safe for drinking. Bottled water is readily available in stores and restaurants. HIV/AIDS is prevalent in Malawi and visitors should exercise extreme caution at all times to avoid contact that could result in HIV/AIDS transmission. Malawi's climate is generally subtropical and there is little to no rainfall throughout most of the country from May to LILONGWE 00000342 005.2 OF 005 October. From June through August, the lake areas and far south are comfortably warm, but the rest of Malawi including Lilongwe can be chilly at night with temperatures ranging from 5-14C (41-57F). EASTHAM