UNCLAS SECTION 01 OF 05 LUANDA 000537

SIPDIS

FROM AMBASSADOR DAN MOZENA

E.O. 12958: N/A
TAGS: PREL OVIP JEFFERY REUBEN ECON PGOV EAID AO
SUBJECT: SCENESETTER FOR U/S REUBEN JEFFERY'S VISIT TO ANGOLA

1. (U) My staff and I warmly welcome your July 21-22 visit to
Angola. Your visit, the highest level USG visit to Angola since
Secretary Powell's four-hour stop in September 2002, manifests what

the Angolan government most wants from America: respect. I hope
your visit presages more high level USG engagement with Angola.
Your visit affords an excellent opportunity to engage Angolans on a
range of issues, including regional stability (especially Zimbabwe
and DRC), democracy (in the context of Angola's September
legislative elections, the first in 16 years), economic reform and
diversification. The government remembers well that the U.S. backed
their enemies, the losing horses in the nation's horrific civil war,
but nonetheless seems increasingly open to deepening the
relationship with the U.S. and continues to value its long
relationship with American oil companies. Angola's annual economic
growth rate is over 20 percent, but most Angolans live in abject
poverty. Although the government seeks greater US investment beyond
the oil/gas sector, it has much to do to make the investment climate
more appealing to potential investors. Many members of a new
generation of economic leaders are open to economic reform; your
visit will help chart how best the U.S. can support much needed
reforms.

2. (U) Angola matters to the United States. Specifically,
a peaceful, stable Angola is essential to the peace and security of
central and southern Africa. Also, Angola has a large, healthy, and
relatively capable military, one that could play a much larger role
in fostering peace on this troubled continent. In addition, Angola
is America's sixth or seventh largest source of imported oil
(depending upon the state of Iraq's pipelines,) a source outside the
volatile Middle East. In pursuit of these strategic interests, we
seek an Angola that is peaceful, secure, prosperous, healthy and
democratic. When I presented my credentials to President Dos Santos
this past January, he told me that he shared this vision of Angola
and urged me to work with his government to make this vision a

reality. Today, our endeavors in Angola focus on advancing Angola's
development along these lines.

3. (U) In some respects, Angola is only six years old. Following
the February 2002 end of its civil war, Angola first overcame a
massive humanitarian disaster in feeding and resettling millions of
internally displaced persons and refugees. U.S. food assistance was
key to averting widespread starvation. Successfully averting this
disaster, Angola has now shifted to a huge reconstruction campaign
to rebuild the nation's devastated physical infrastructure (roads,
railroads, schools, clinics, telecommunications and other
utilities). Although the U.S. continues to play an important role
in helping Angola deal with the millions of land mines and
unexploded ordnance, which obstruct reconstruction, the huge and
lucrative contracts for the reconstruction work have gone to others,
especially the Chinese, Brazilians and Portuguese. American
petro-dollars fund these contracts to a great extent. I would like
to see more of these petro-dollars coming back to the U.S.


4. (U) Meanwhile, Angola is strengthening its emerging democratic
institutions. On September 5, it will hold elections for the
national assembly; these will be Angola's first elections in 16
years. The game plan is to hold presidential elections next year
and local elections, the first ever in Angola's history, in 2010.
We are an important partner in helping Angola prepare for these
elections.


5. (U) Angola seeks a more prominent role in the region. It has
engaged constructively in helping stabilize neighboring DRC (a
strategic Angolan objective,) and it has provided some limited
forces to peacekeeping operations in select parts of Africa but
could do so much more in this regard. As chairman of the SADC
Troika of the Organ on Politics, Defense, and Security Cooperation,
Angola is pivotal in ongoing SADC efforts to find a solution to the
deepening crisis in Zimbabwe.
The Economy
--------------

6. (U) Angola's economy is one of the fastest growing in the world,
thanks to growing oil production and rising oil prices. Although
oil production is supposedly capped by OPEC at 1.9 million barrels
per day (bpd), Angola is currently producing about 2.0 million bpd;
production is expected to plateau within a year or so at about 2.2
million bpd. Angola's economy grew by 19.5 percent in 2006 and 23.4
percent in 2007, and should match or beat that pace in 2008.
Inflation was reduced from triple digits near the end of the war to
just under 12 percent last year. Thanks to petroleum revenue,
foreign exchange reserves are growing rapidly; Angola currently has
an estimated USD 15 billion in reserve. Angola paid off the USD 6
billion principal of its Paris club debt in late 2007 and early
2008, and then negotiated payment of late interest arrearages.


7. (U) Angola's impressive success on the macro-economic front has
yet to yield tangible benefits for most Angolan citizens, 12 million
of whom live on less that $1.70 per day. Angola ranks 162 out of
177 countries in the UNDP Human Development Index, and maternal and
child mortality rates are among the worst in the world.
Unemployment and underemployment are rampant, as the high-tech oil
sector creates relatively few jobs for Angolans. Angola's challenge

LUANDA 00000537 002 OF 005


1. (U) My staff and I warmly welcome your July 21-22 visit to
Angola. Your visit, the highest level USG visit to Angola since
Secretary Powell's four-hour stop in September 2002, manifests what
the Angolan government most wants from America: respect. I hope
your visit presages more high level USG engagement with Angola.
Your visit affords an excellent opportunity to engage Angolans on a
range of issues, including regional stability (especially Zimbabwe
and DRC), democracy (in the context of Angola's September
legislative elections, the first in 16 years), economic reform and
diversification. The government remembers well that the U.S. backed
their enemies, the losing horses in the nation's horrific civil war,
but nonetheless seems increasingly open to deepening the
relationship with the U.S. and continues to value its long
relationship with American oil companies. Angola's annual economic
growth rate is over 20 percent, but most Angolans live in abject
poverty. Although the government seeks greater US investment beyond
the oil/gas sector, it has much to do to make the investment climate
more appealing to potential investors. Many members of a new
generation of economic leaders are open to economic reform; your
visit will help chart how best the U.S. can support much needed
reforms.

2. (U) Angola matters to the United States. Specifically,
a peaceful, stable Angola is essential to the peace and security of
central and southern Africa. Also, Angola has a large, healthy, and
relatively capable military, one that could play a much larger role
in fostering peace on this troubled continent. In addition, Angola
is America's sixth or seventh largest source of imported oil
(depending upon the state of Iraq's pipelines,) a source outside the
volatile Middle East. In pursuit of these strategic interests, we
seek an Angola that is peaceful, secure, prosperous, healthy and
democratic. When I presented my credentials to President Dos Santos
this past January, he told me that he shared this vision of Angola
and urged me to work with his government to make this vision a
reality. Today, our endeavors in Angola focus on advancing Angola's
development along these lines.

3. (U) In some respects, Angola is only six years old. Following
the February 2002 end of its civil war, Angola first overcame a
massive humanitarian disaster in feeding and resettling millions of
internally displaced persons and refugees. U.S. food assistance was
key to averting widespread starvation. Successfully averting this
disaster, Angola has now shifted to a huge reconstruction campaign
to rebuild the nation's devastated physical infrastructure (roads,
railroads, schools, clinics, telecommunications and other
utilities). Although the U.S. continues to play an important role
in helping Angola deal with the millions of land mines and
unexploded ordnance, which obstruct reconstruction, the huge and
lucrative contracts for the reconstruction work have gone to others,
especially the Chinese, Brazilians and Portuguese. American
petro-dollars fund these contracts to a great extent. I would like
to see more of these petro-dollars coming back to the U.S.

is to kick-start the now-moribund non-oil sectors to generate jobs
for the nation's young and rapidly growing population, which largely
remains on the sidelines of the economic boom. Agriculture and
agriculture processing offer the most promise; Angola once was a
major food producing and exporting country. Other sectors rich with
potential include fisheries, forestry and light industry.


8. (U) Investment is key to unleashing the non-oil sectors of the
economy, but Angola remains a difficult environment for such
investment. Angola continues to rank near the bottom in most of the
World Bank's "Doing Business" indicators. According to the 2007
index, Angola ranks 167 out of 178 countries in promoting an open
and efficient business climate, and its rankings of 173 out of 178
in the category of "starting a business" and 176 out of 178 in
"enforcing contracts" are of particular concern for investors. Rule
of law is weak; corruption is pervasive; and, the cost of doing
business here is high, as Angola, especially Luanda, is among the
most expensive places in the world. Basic infrastructure, roads,
railroads, electricity supply, water, ports, and air service are all
deeply deficient, thus driving up further the cost of doing business
here. Clearly, deep, broad-based reform is essential if ever Angola
is to attract the investment needed to energize the economy.
Politics and Elections
--------------

9. (SBU) Angola is nominally a multi-party democracy, but its
government is dominated by the Popular Movement for the Liberation
of Angola (MPLA) and a strong chief executive, Jose Eduardo Dos
Santos, who has been in office since 1979. Angola's only democratic
elections since independence in 1975 were held in 1992. The result
was disputed by Jonas Savimbi, leader of the opposition party Union
for the Total Independence of Angola (UNITA), who plunged the nation
back into civil war for another decade. That devastating war ended
only in February 2002, when Savimbi was killed in battle.

10. (U) Angola has made impressive progress in preparing for the
September legislative elections, the first since 1992. The
high-tech voter registration put over 8 million Angolans on the
voter rolls. U.S. assistance for democracy-building and good
governance in FY 07 was approximately $7.5 million. Our programs
are administered through USAID and implemented by the International

LUANDA 00000537 003 OF 005


1. (U) My staff and I warmly welcome your July 21-22 visit to
Angola. Your visit, the highest level USG visit to Angola since
Secretary Powell's four-hour stop in September 2002, manifests what
the Angolan government most wants from America: respect. I hope
your visit presages more high level USG engagement with Angola.
Your visit affords an excellent opportunity to engage Angolans on a
range of issues, including regional stability (especially Zimbabwe
and DRC), democracy (in the context of Angola's September
legislative elections, the first in 16 years), economic reform and
diversification. The government remembers well that the U.S. backed
their enemies, the losing horses in the nation's horrific civil war,
but nonetheless seems increasingly open to deepening the
relationship with the U.S. and continues to value its long
relationship with American oil companies. Angola's annual economic
growth rate is over 20 percent, but most Angolans live in abject
poverty. Although the government seeks greater US investment beyond
the oil/gas sector, it has much to do to make the investment climate
more appealing to potential investors. Many members of a new
generation of economic leaders are open to economic reform; your
visit will help chart how best the U.S. can support much needed
reforms.

2. (U) Angola matters to the United States. Specifically,
a peaceful, stable Angola is essential to the peace and security of
central and southern Africa. Also, Angola has a large, healthy, and
relatively capable military, one that could play a much larger role
in fostering peace on this troubled continent. In addition, Angola
is America's sixth or seventh largest source of imported oil
(depending upon the state of Iraq's pipelines,) a source outside the
volatile Middle East. In pursuit of these strategic interests, we
seek an Angola that is peaceful, secure, prosperous, healthy and
democratic. When I presented my credentials to President Dos Santos
this past January, he told me that he shared this vision of Angola
and urged me to work with his government to make this vision a
reality. Today, our endeavors in Angola focus on advancing Angola's
development along these lines.

3. (U) In some respects, Angola is only six years old. Following
the February 2002 end of its civil war, Angola first overcame a
massive humanitarian disaster in feeding and resettling millions of
internally displaced persons and refugees. U.S. food assistance was
key to averting widespread starvation. Successfully averting this
disaster, Angola has now shifted to a huge reconstruction campaign
to rebuild the nation's devastated physical infrastructure (roads,
railroads, schools, clinics, telecommunications and other
utilities). Although the U.S. continues to play an important role
in helping Angola deal with the millions of land mines and
unexploded ordnance, which obstruct reconstruction, the huge and
lucrative contracts for the reconstruction work have gone to others,
especially the Chinese, Brazilians and Portuguese. American
petro-dollars fund these contracts to a great extent. I would like
to see more of these petro-dollars coming back to the U.S.

Republican Institute (IRI), the National Democratic Institute (NDI),
and IFES. They focus on educating voters, building civil society
capacity, strengthening political parties, and providing technical
assistance on the logistics of elections. We expect the elections
to be peaceful, but the concentration of power and wealth in the
ruling party and the state control of media tilt the playing field
in the incumbents' favor.
Military Cooperation
--------------
11.(U) Bilateral cooperation in the military sphere has been the
toughest nut to crack. Angolan participation in the International
Military Education and Training Program (IMET) has gone to virtually
zero. Angolan engagement in other proposed activities (VIP visits,
US defense-related conferences and programs, and a wide variety of
assistance programs) has been hit or miss, mainly miss. In April, I
raised directly with President Dos Santos our concern that
military-to-military cooperation was not advancing along the lines
that he had told me during my January credentialing. Dos Santos
responded that he would "look into this" concern, and subsequently
there has been some movement in breaking this bilateral logjam.
Whether this progress continues remains to be seen, given the
seeming antipathy of Angolan leaders for military engagement with
the U.S.
Human Rights Record is Poor
--------------

12. (U) Angola's human rights record is poor. The country's
overburdened judicial system does not protect the rights of
individuals. Elements of the military and police continue to
disregard human rights. A December 2007 report by Doctors without
Borders (MSF) documented systematic abuse, including mass rape, by
Angolan security forces of illegal Congolese immigrants who were
being deported from the diamond-rich Lunda Norte. The Army Chief of
Staff promised to investigate the allegations, but he has not issued
any report of his findings or taken any evident action against
perpetrators. Reports of security force abuses of illegal Congolese
continue.

13. (U) Prisons are overcrowded and conditions harsh, especially in
the provinces. The NGO movement is still nascent, but there are
some indigenous organizations tracking human rights abuses and

LUANDA 00000537 004 OF 005


1. (U) My staff and I warmly welcome your July 21-22 visit to
Angola. Your visit, the highest level USG visit to Angola since
Secretary Powell's four-hour stop in September 2002, manifests what
the Angolan government most wants from America: respect. I hope
your visit presages more high level USG engagement with Angola.
Your visit affords an excellent opportunity to engage Angolans on a
range of issues, including regional stability (especially Zimbabwe
and DRC), democracy (in the context of Angola's September
legislative elections, the first in 16 years), economic reform and
diversification. The government remembers well that the U.S. backed
their enemies, the losing horses in the nation's horrific civil war,
but nonetheless seems increasingly open to deepening the
relationship with the U.S. and continues to value its long
relationship with American oil companies. Angola's annual economic
growth rate is over 20 percent, but most Angolans live in abject
poverty. Although the government seeks greater US investment beyond
the oil/gas sector, it has much to do to make the investment climate
more appealing to potential investors. Many members of a new
generation of economic leaders are open to economic reform; your
visit will help chart how best the U.S. can support much needed
reforms.

2. (U) Angola matters to the United States. Specifically,
a peaceful, stable Angola is essential to the peace and security of
central and southern Africa. Also, Angola has a large, healthy, and
relatively capable military, one that could play a much larger role
in fostering peace on this troubled continent. In addition, Angola
is America's sixth or seventh largest source of imported oil
(depending upon the state of Iraq's pipelines,) a source outside the
volatile Middle East. In pursuit of these strategic interests, we
seek an Angola that is peaceful, secure, prosperous, healthy and
democratic. When I presented my credentials to President Dos Santos
this past January, he told me that he shared this vision of Angola
and urged me to work with his government to make this vision a
reality. Today, our endeavors in Angola focus on advancing Angola's
development along these lines.

3. (U) In some respects, Angola is only six years old. Following
the February 2002 end of its civil war, Angola first overcame a
massive humanitarian disaster in feeding and resettling millions of
internally displaced persons and refugees. U.S. food assistance was
key to averting widespread starvation. Successfully averting this
disaster, Angola has now shifted to a huge reconstruction campaign
to rebuild the nation's devastated physical infrastructure (roads,
railroads, schools, clinics, telecommunications and other
utilities). Although the U.S. continues to play an important role
in helping Angola deal with the millions of land mines and
unexploded ordnance, which obstruct reconstruction, the huge and
lucrative contracts for the reconstruction work have gone to others,
especially the Chinese, Brazilians and Portuguese. American
petro-dollars fund these contracts to a great extent. I would like
to see more of these petro-dollars coming back to the U.S.

working with the GRA to train the national police on human rights
issues. Angola's 2007 candidacy for a three-year term on the UN
Human Rights Council was seen by many as an indicator of increased
willingness to engage with the international community on human
rights issues, but the GRA's April 2008 decision to close the local
UN Human Rights Office (in direct contradiction to a written promise
made in campaigning for the seat on the UNHRC) raises question about
the nation's commitment to protecting human rights.

14. (U) USG-funded programs have helped train police through the
International Law Enforcement Academy (ILEA) in Gaborone. In
addition, USG-funded international organization partners in Angola
have provided training and capacity-building for law enforcement
officials on specific issues such as trafficking in persons and
child rights. The USG and the Portuguese government also automated
the Luanda Provincial criminal court.
Peace and Security
--------------

15. (SBU) Angola emerged from conflict littered with the refuse of
war. Millions of landmines and unexploded ordnance continue to kill
and maim Angolans and impede the country's reconstruction and
development. Demining is a GRA priority. Government demining
focuses on land clearance for large reconstruction projects like
railroads and electric transmission towers. Humanitarian demining
continues to be done almost exclusively by international and
national NGOs. USG remains a major player in demining (USD 6
million in FY-07 and a total of USD 56 million since 1995), helping
to restore access to war torn areas, return land for agricultural,
social and productive use, and build the capacity of the national
demining authority.
Development and US Assistance
--------------

16. (U) Despite recent economic growth and development, Angola still
has some of the lowest development indicators in the world.
Although statistical data are imprecise, best international
estimates are that 68 percent of the population lives in poverty, 26
percent in abject poverty. Life expectancy is 47 years, more than
30 percent lower than the average for developing nations; infant
mortality, maternal mortality and other measures of the quality of
life are among the worst in the world. Fertility is high, an average

LUANDA 00000537 005 OF 005


1. (U) My staff and I warmly welcome your July 21-22 visit to
Angola. Your visit, the highest level USG visit to Angola since
Secretary Powell's four-hour stop in September 2002, manifests what
the Angolan government most wants from America: respect. I hope
your visit presages more high level USG engagement with Angola.
Your visit affords an excellent opportunity to engage Angolans on a
range of issues, including regional stability (especially Zimbabwe
and DRC), democracy (in the context of Angola's September
legislative elections, the first in 16 years), economic reform and
diversification. The government remembers well that the U.S. backed
their enemies, the losing horses in the nation's horrific civil war,
but nonetheless seems increasingly open to deepening the
relationship with the U.S. and continues to value its long
relationship with American oil companies. Angola's annual economic
growth rate is over 20 percent, but most Angolans live in abject
poverty. Although the government seeks greater US investment beyond
the oil/gas sector, it has much to do to make the investment climate
more appealing to potential investors. Many members of a new
generation of economic leaders are open to economic reform; your
visit will help chart how best the U.S. can support much needed
reforms.

2. (U) Angola matters to the United States. Specifically,
a peaceful, stable Angola is essential to the peace and security of
central and southern Africa. Also, Angola has a large, healthy, and
relatively capable military, one that could play a much larger role
in fostering peace on this troubled continent. In addition, Angola
is America's sixth or seventh largest source of imported oil
(depending upon the state of Iraq's pipelines,) a source outside the
volatile Middle East. In pursuit of these strategic interests, we
seek an Angola that is peaceful, secure, prosperous, healthy and
democratic. When I presented my credentials to President Dos Santos
this past January, he told me that he shared this vision of Angola
and urged me to work with his government to make this vision a
reality. Today, our endeavors in Angola focus on advancing Angola's
development along these lines.

3. (U) In some respects, Angola is only six years old. Following
the February 2002 end of its civil war, Angola first overcame a
massive humanitarian disaster in feeding and resettling millions of
internally displaced persons and refugees. U.S. food assistance was
key to averting widespread starvation. Successfully averting this
disaster, Angola has now shifted to a huge reconstruction campaign
to rebuild the nation's devastated physical infrastructure (roads,
railroads, schools, clinics, telecommunications and other
utilities). Although the U.S. continues to play an important role
in helping Angola deal with the millions of land mines and
unexploded ordnance, which obstruct reconstruction, the huge and
lucrative contracts for the reconstruction work have gone to others,
especially the Chinese, Brazilians and Portuguese. American
petro-dollars fund these contracts to a great extent. I would like
to see more of these petro-dollars coming back to the U.S.

of 5.8 births per woman.

17. (U) USAID programs help Angola address the challenges of
achieving long-term stability and improving the quality of life for
its citizens. Our flagship program is the President's Malaria
Initiative (PMI), which seeks to halve by 2010 mortality from
malaria among children under five, and we're on track to do that.
The Angolan government, in particular the Health Ministry, has been
closely involved in the program, and collaboration with other donors
is strong. In FY-07, the second year of implementation, PMI sprayed
over 110,000 houses (affecting over 500,000 Angolans), distributed
over 90,000 bed nets and furnished over 2.4 million treatments for
malaria.

18. (U) The USG is also highly visible in the fight against
HIV/AIDS. Angola presents a unique opportunity to combat the spread
of HIV/AIDS. According to the best available data, Angola has a
relatively low prevalence rate (2.1 percent among adults), but areas
bordering higher-prevalence neighboring countries have rates now up
to four times as high and rising. Angola has many factors that
contribute to the spread of HIV/AIDS: early age of sexual debut,
common practice of multiple concurrent sex partners, and increased
cross border trade with countries that have significantly higher
HIV/AIDS infection rates. The USG (CDC, USAID, State and Defense)
is working as a strong interagency team in partnership with the
Angolan government, especially the Ministry of Health, private
partners and NGOs to implement the national plan against HIV-AIDS.

19. (U) The USG supports job creation to promote broad-based
economic growth. Small and medium enterprises in Angola lack
management and technical skills, and have limited access to
technology and capital. A bilateral agreement with the Angolan
Central Bank helps with finance; other programs help with skills.
Agriculture could employ large numbers of people but lacks inputs,
credit, and access to markets. USAID assistance strengthens the
value chains for crops with commercial potential: bananas, potatoes
and coffee.
MOZENA