VZCZCXRO3821
RR RUEHBZ RUEHDU RUEHJO RUEHMR RUEHRN
DE RUEHTO #0791/01 2321114
ZNR UUUUU ZZH
R 191114Z AUG 08
FM AMEMBASSY MAPUTO
TO RUEHC/SECSTATE WASHDC 9258
INFO RUCNSAD/SOUTHERN AFRICAN DEVELOPMENT COMMUNITY
RUEHLO/AMEMBASSY LONDON 0217
UNCLAS SECTION 01 OF 02 MAPUTO 000791
SENSITIVE
SIPDIS
E.O. 12958: N/A
TAGS: ECON PGOV PREL MZ
SUBJECT: DECENTRALIZATION INITIATIVE INCREASES LOCAL
PARTICIPATION
1. (SBU) SUMMARY: A rural development/decentralization
initiative using low-interest loans implemented by the GRM
has brought resources to remote districts that often see
relatively little state investment and has generated some
increased local participation in decision-making regarding
the projects to be funded and accountability by local
administrators to oversee successful projects. FRELIMO
leaders also appeared to hope that the program would pay
political dividends for the party in upcoming local
elections. As local administrators were unaware that funds
need to be repaid however, and many projects funded were not
income-producing, the news that repayment is required has
produced an outcry that might undermine any political gains.
END SUMMARY.
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$280,000 FOR DISTRICTS, AND SOME ACCOUNTABILITY
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2. (U) The GRM Ministry of State implemented a program late
last year to ensure central government resources reached each
district of the country to address local development needs.
The cornerstone of this initiative was the Local Initiative
Investment Fund (OIIL), which awarded up to 7 million
meticais ($280,000) to development projects at the district
level (one step below provincial administration). Some
observers criticized the scheme for its lack of financial
controls, suggesting that it would be easily pocketed by
local officials or used to reward party faithful at the local
level. Nonetheless, in many districts, the process used to
identify projects (through councils made up of local citizens
before approval by local administrators appointed by the
central-government) generated significant local participation
in decision-making and citizen oversight of the use of funds.
While some favoritism occurred, funds were used in many
cases to build public infrastructure such as health clinics
or schools or finance loan programs for local citizens.
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GUEBUZA STRESSES DECENTRALIZATION EFFORTS...
--------------------------------------------- -
3. (SBU) In order to gain favor with voters in rural
areas--where FRELIMO did not fare well in previous national
elections--President Guebuza has put great pressure on
district administrators (mostly FRELIMO members appointed by
the central government) to engage in rural development
strategies at the grassroots level*of which OIIL plays a key
part. Guebuza has also made the program a fundamental part
of his 'open government,' when he visits districts, and
highlights particularly successful OIIL projects.
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...BUT REPAYMENT REQUIREMENT COMES AS A SURPRISE
--------------------------------------------- ---
4. (U) While originally defined as small-scale development
funds, the parameters of the OIIL haven,t seemed clear, even
to the central government. In late July, the GRM clarified
that OIIL funding did not constitute a grant, but must be
repaid. Guebuza responded to negative comments about the
repayment requirement by citing the need for transparency in
governmental processes and alleging that the repayment was
necessary to create an on-going source of future funding.
Following the announcement, several district-level
politicians announced that they will not seek OIILs due to
repayment concerns. Others who have received OIIL funding
threatened to sue over regulation changes.
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COMMENT: POLITICAL MOTIVATION; POSITIVE RESULTS
--------------------------------------------- --
5. (SBU) Public claims to the contrary aside, the Guebuza
administration likely intended the program to further FRELIMO
influence, especially in rural areas where the party has been
less successful. There is no doubt that constituents in a
country where the same party has been in power for so long
see the line between FRELIMO and the government as blurred,
and could equate funding as coming from the party and not the
government. However, if Guebuza persists in his message that
the funds must be repaid and penalties will accrue if
repayment is not forthcoming, FRELIMO stands to potentially
lose much of the political gain generated by the program from
the resulting backlash.
6. (SBU) Irrespective of intentions however, the OIIL
program ultimately appears to have had positive consequences
in some districts by empowering local politicians, increasing
accountability of those officials to their constituencies and
MAPUTO 00000791 002 OF 002
further decentralizing government, particularly in the
creation of local district councils to manage programs.
These councils provide governance experience at the local
level, and help to engage local populations, bridging the
distance between the central government and rural voters, and
may act to empower local politicians outside of the central,
Maputo-based FRELIMO structure.
Amani