PM SUPPORTS COUNTRY ASSISTANCE STRATEGY AND

UNCLAS SECTION 01 OF 02 MAPUTO 000675

SIPDIS

STATE PASS USAID - AFR/SA MARJORIE COPSON

E.O. 12958: N/A
TAGS: EAID KHIV SOCI KMCA KTIA AMGT
SUBJECT: PM SUPPORTS COUNTRY ASSISTANCE STRATEGY AND
HIV/AIDS PARTNERSHIP FRAMEWORK

REF: A. MAPUTO 610

B. MAPUTO 493

MAPUTO 00000675 001.2 OF 002




1. SUMMARY: The Charge d'Affaires and other senior Mission staff met
with Mozambican Prime Minister, Dr. Luisa Diogo on June 19 to share
the recently-approved USG Country Assistance Strategy and discuss
the process of developing a Partnership Framework to guide
programming to address HIV/AIDS over the next five years. The Prime
Minister was pleased to see the strong alignment of the U.S. foreign
assistance strategy with Mozambican government priorities and noted
the important signal continued U.S. assistance and high resource
levels represents for Mozambique at this time. She pledged her
support, as head of the National Council to Combat HIV/AIDS
involving various key Ministries, to the development of a
Partnership Framework, noting that the Government is also developing
a new HIV/AIDS strategy over the next few months that will inform
this process. In response to information regarding difficulties in
getting work permits for expatriates required to implement USG
foreign assistance programs or open up U.S. companies wanting to
invest in Mozambique (reftels),the Prime Minister expressed concern
and asked for further information to raise the issue in high-level
government discussions. END SUMMARY.

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Country Assistance Strategy
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2. On June 19, 2009, the Charge d'Affaires, USAID Mission Director,
CDC Director, and the Director of USAID's Health Office met with
Mozambican Prime Minister, Dr. Luisa Diogo to present the new
Country Assistance Strategy that will guide USG foreign assistance
over the next five years and solicit her support for the development
of a five-year Partnership Framework to guide USG programming under
the President's Emergency Plan of AIDS Relief (PEPFAR). The USG
delegation began by outlining the strategic focus and priorities of
the Country Assistance Strategy, noting that it was a result of
various consultations with representatives from government, private
sector, civil society, and expert analysts and was based on various
Mozambican government strategies. The Charg indicated that current
projections for future USG foreign assistance to Mozambique over the
next five year, including the implementation of the existing
Millennium Challenge Compact, could total nearly $2 billion.


3. The Prime minister stated that this strong U.S. commitment to
development assistance in Mozambique in the midst of the
international crisis sent a very strong, positive message to the
Government of Mozambique and other donor countries. Further, she
was extremely impressed with the focus of the strategy, praising the
in-depth consultative process resulting in a strategy directly
aligned with the most critical needs of Mozambique. She highlighted
the two new areas of U.S. Government involvement, education and
support for the police as particular needs of her country. The
Prime Minister noted the strength of current U.S. Government
assistance programs, especially the Millennium Challenge Account,
PEPFAR, and food security programs, and expressed satisfaction that
the U.S. Government is scaling up assistance to Mozambique.

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Partnership Framework for USG Investment in HIV/AIDS
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4. The U.S. delegation explained that the projected U.S. Government
investment of $1 billion in HIV/AIDS in Mozambique over the next
five years would need to be guided by a Partnership Framework that
will clarify the priorities and commitments of both the U.S.
Government and the Government of Mozambique to combat HIV/AIDS
through service delivery, policy reform, and coordinated financial
commitments. The USG group noted that her leadership would be
crucial in coordinating all the key Ministries that form part of the
National AIDS Council and that she would be asked to sign the
Framework on behalf of the Mozambican government.


5. The Prime Minister was very pleased with this approach, stating
that HIV/AIDS is a cross cutting theme of extremem importance to
every part of the Mozambican Government. Further, she stated that
this planning process would coincide with the Mozambican Government
five-year planning process including the development of the third
Mozambican national planning process, including the development of
the third Mozambican national plan for HIV/AIDS that would be
developed over the next few months. The Prime Minister agreed that
coordination with the National AIDS Council would be important
because of the multisectoral nature of their membership, including
civil society. She also stated that she would inform the Minister
of Public Administration to request close collaboration in the
development of the Partnership Framework as they develop an HIV/AIDS

MAPUTO 00000675 002.2 OF 002


initiative within the public sector.

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Work Permit Challenges
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6. The Charg stressed the continued commitment of the U.S.
Government to strengthening our bilateral partnership through
development assistance but noted that implementing this ambitious
and complex program would require the contribution of some
expatriate professionals to compensate for the sever human resource
shortage in Mozambique. The Charg stated that non-transparent,
bureaucratic work permit approval processes are negatively affecting
the U.S. Government's ability to obtain work permits for expatriate
staff members (reftels). The Charg highlighted several specific
examples including the cancelation of a training of 30 health
workers in HIV treatment provision because the expatriate trainers
were denied work permits. The Charg stated that the private sector
has also been negatively impacted, discouraging critical foreign
investment, noting that Chiquita operations in Nampula had been
fined $200,000 shortly after the visit of President Guebuza and that
Chiquita had chosen to locate its bureaucratic red-tape.


7. The Prime Minsiter was very concerned about the negative impact
of the work permit issue on both development assistance and private
sector investment. She stated that elements of the new labor law
such as quotas are not new, concluding that this is more of a
political problem and an incorrect interpretation of the law rather
than a legal issue. She mentioned hearing similar concerns about
the work permit system during her overseas travel and asked the
Charg for more information on concrete examples of work permit
challenges and the negative consequences. The Prime Minister stated
that she would follow up on this important issue.

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COMMENT: Positive Move on Framework Agreement
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8. The Prime Minister's comments on the close alignment between the
Country Assistance Strategy with government priorities and plans
were a welcome confirmation of the consultation process and new
directions proposed. Her leadership as chair of the board of
National AIDS Council, which includes the Minister of Health,
Minister of Education, and Minister of Women and Social Action,
among others, will be critical to developing a multi-sectoral
strategy for HIV/AIDS that orients the development of a Partnership
Framework with the USG. Though some see her political influence
waning within the government, she still wields significant influence
on economic and technical issues that may be helpful in addressing
the work permit problems that have negatively affected our
assistance programs and been a disincentive for private investment.
CHAPMAN