DAS THOMPSON SEES MOZAMBIQUE'S CHALLENGES AND USG

C O N F I D E N T I A L SECTION 01 OF 02 MAPUTO 000233

SIPDIS

SIPDIS

E.O. 12958: DECL: 03/11/2018
TAGS: PGOV PREL ECON EAID MZ
SUBJECT: DAS THOMPSON SEES MOZAMBIQUE'S CHALLENGES AND USG
OPPORTUNITY

Classified By: Charge d,Affaires Todd C. Chapman, Reasons 1.4(b) & (d)


1. (C) SUMMARY: In a March 2-3 visit to Maputo, Deputy
Assistant Secretary for African Affairs Carol Thompson met
with the Prime Minister and Minister of the Presidency to
urge the GRM to strengthen the business environment,
participate in peacekeeping operations, and recognize
Kosovo's independence. She met with Western ambassadors who
expressed concern about the future of democracy in
Mozambique, journalists who said communication with the
government is declining, and with businessmen who claim
government corruption is on the rise. She also met with the
Mission's senior LE Staff and PEPFAR task force, toured an
Embassy-supported orphanage and visited an Islamic learning
center that receives USG funding. END SUMMARY

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PRESSING THE PRIME MINISTER ON THE BUSINESS ENVIRONMENT,
PKOs, KOSOVO
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2. (C) In a courtesy call, DAS Thompson told Mozambican
Prime Minister Luisa Diogo that the bilateral relationship
was strong and highlighted the country's impressive economic
growth. Diogo expressed appreciation for USG support of
Mozambique's return to peace after the civil war and the
recent USG assistance for flood victims. Diogo added that
continued USG assistance programs, highlighting the more
recent PEPFAR and Millennium Challenge Corporation programs,
was key to the success of the next wave of reforms the GRM
was implementing for the country's development.


3. (C) DAS Thompson stressed that strengthening the local
business environment was important to attracting additional
foreign investment, noting that Mozambique could improve
significantly in the World Bank's Doing Business index. The
Charge said that at a U.S. Foreign Commercial
Service-sponsored seminar on February 29 in Johannesburg,
more than 30 U.S. companies expressed interest in investing
in Mozambique, but remained concerned about the business
environment and security. Diogo agreed, pointing to GRM
efforts to implement better customs procedures and create a
streamlined 'one-stop' business licensing process. The
Charge suggested that dropping the visa requirement for
American tourists would also attract more tourism dollars.


4. (C) Just as recognizing Kosovo's independence would show
Mozambique to be more interested in a broader range of
international issues, DAS Thompson emphasized that
participation in peacekeeping operations (PKOs) would be an
excellent way for Mozambique to contribute to continental
stability. As the Prime Minister lamented the lack of funds
for the military, the Charge noted that many countries had
utilized the funds generated through participation in PKOs to
fund their militaries. Diogo said that the GRM continues to
train its military and is now focusing on improved internal
security by training police to better respond during civil
unrest.

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DISCUSSING ZIMBABWE AND CUBA WITH MINISTER OF THE
PRESIDENCY
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5. (C) DAS Thompson met with Minister of the Presidency
Antonio Sumbana and pointed to USG interest in expanding the
U.S. partnership with Mozambique beyond economic cooperation.
Noting previous discussions with the Charge on this topic,
Sumbana welcomed this initiative to establish a political
dialogue. Thompson highlighted USG concerns about Zimbabwe
and said that we looked to Africans to take action to ensure
the survival of democracy in that country. Sumbana, formerly
Mozambique's Ambassador to Zimbabwe, acknowledged
Mozambique's shared concern with ZANU-PF's inability to
manage a leadership transition away from Mugabe, though it
could never state this concern publicly. Thompson continued
that President Guebuza's official trip to Cuba was sending
confusing signals when Mozambique was going down a democratic
path and Raul Castro was not. The Charge added that the
Foreign Minister's presence with Guebuza in Cuba also
precluded her from participating in the SADC Foreign
Ministers' meeting with the Nordic Foreign Ministers in
Gaborone, a slight that did not go unnoticed by the Nordic
Ambassadors. Sumbana showed surprise at this analysis,
claiming that the trip had been long planned (though never
announced) and that it was not meant to be a sign of support
for Raul Castro. Thompson responded that, regardless of
intent, this is how it would be interpreted.

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WESTERN AMBASSADORS UNEASY ABOUT DEMOCRACY

MAPUTO 00000233 002 OF 002


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6. (C) At a dinner with the Ambassadors of Denmark, Finland,
Ireland, Norway and Canada, attendees told DAS Thompson of
concerns about government corruption and lagging private
sector growth. They questioned whether the ruling party
FRELIMO is truly supporting democratic institutions and
criticized the competence of the Foreign Ministry. Each
agreed that Mozambique was less of a post-conflict democracy
"success story" and more of a "work-in-progress story." They
agreed to review ways to act together to raise the profile of
these issues with the GRM.

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JOURNALISTS SAY GRM-PRESS COMMUNICATION DECLINING
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7. (C) In a roundtable discussion, representatives of print,
broadcast, and electronic media told DAS Thompson that
relations between the GRM and press have become poor to
non-existent under President Guebuza's administration, and
that his press office serves to threaten and intimidate the
press corps rather than to inform them. Upon learning that
the DAS had just met with Diogo, one attendee observed that
"at least the USG has some sense of the PM's perspectives- we
in the press have no idea."

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BUSINESS LEADERS DESCRIBE WORSENING CORRUPTION
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8. A group of eminent Mozambican businessmen told DAS
Thompson that corruption in government has increased markedly
since President Guebuza assumed office and is now worse than
ever. They agreed that it was necessary to pay bribes at
every level of the government to obtain necessary approvals
and licenses and that it is essential to have a partner with
FRELIMO connections in order to conduct business. They
claimed that the vast extent of corruption has made it more
and more difficult to make money operating a business in
Mozambique.

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MISSION PERSPECTIVES - LE STAFF AND PEPFAR TASK FORCE
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9. (C) DAS Thompson met with senior mission LE staff for a
discussion of USG efforts and effectiveness in Mozambique.
LE staff expressed concerns over the current state and future
of democracy in Mozambique, and recommended that the USG
increase spending and support for democracy-strengthening
programs. DAS Thompson also met with members of the
mission's PEPFAR Task Force who reported on successes in
inter-agency cooperation, and improving service delivery and
program effectiveness.

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MISSION SUCCESSES - MUSLIM INSTITUTE AND ORPHANAGE
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10. (U) DAS Thompson visited the Hamza Institute, an Islamic
learning institution which trains the imams for nearly all of
Mozambique. She met with Sheikh Aminnudin Mohammad and toured
their radio station which receives a small amount of PEPFAR
support for AIDS prevention programs. DAS Thompson also
toured a local orphanage supported by the Embassy's employee
association. The orphanage houses 75 children, nearly all
HIV positive.

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COMMENT: USG ENGAGEMENT APPRECIATED BY SENIOR LEADERS
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11. (C) DAS Thompson's visit reinforced at the highest
levels of the Mozambican Government the USG's commitment to
maintaining active bilateral engagement on economic and
political issues. The Prime Minister and Minister of the
Presidency both noted their appreciation for the opportunity
to hold discussions with a senior representative from State's
Africa Bureau. Private Mozambicans expressed their desire to
see Mozambique continue its transition into a fully
democratic, economically stable country, though were candid
in expressing their concerns about corruption, weak
democratic systems, and the challenging business climate.


DAS Thompson did not review this cable.


Chapman
Chapman