US embassy cable - 03HARARE1677

UNCLAS HARARE 001677 
 
SIPDIS 
 
SENSITIVE 
 
STATE FOR AF/S 
NSC FOR SENIOR AFRICA DIRECTOR JFRAZER 
USDOC FOR 2037 DIEMOND 
TREASURY FOR OREN WYCHE-SHAW 
PASS USTR FLORIZELLE LISER 
STATE PASS USAID FOR MARJORIE COPSON 
 
E. O. 12958: N/A 
TAGS: ECON, EINV, PGOV, ZI 
SUBJECT: Businessmen foresee recovery (somehow) 
 
 
1. (U) Summary:  Local businessmen assured a visiting 
congressional staffer that the Zimbabwean economy can 
regain past prowess.  While despairing of the present 
economic climate, the businessmen's medium-term 
hopefulness stunned our visitor, a seasoned Zimbabwe- 
watcher.  Although we share our interlocutors' faith in 
this economy's ultimate potential, we are less sanguine 
about a rapid rebound.  End Summary. 
 
2. (SBU) Malik Chaka, majority staffer for the Africa 
Subcommittee of the House International Relations 
Committee, met a plethora of movers-and-shakers during an 
August 19-26 visit to Zimbabwe.  (A readout of political 
meetings will follow via septel.)  On the economic side, 
Chaka sat down with former Finance Minister Simba Makoni, 
Finance PermSec Nick Ncube, Banker's Association 
President (and Standard Chartered CEO) Washington 
Matsaira, Stanbic CEO Pindi Nyandoro and a dozen reps of 
various U.S. businesses. 
 
3. (SBU) Unsurprisingly, the executives were in broad 
agreement that the economy is in dire straits.  Most 
consider President Mugabe incapable of improving business 
conditions, as reflected in yet another failure recently 
to normalize oil procurement and sales through 
multinational companies.  However, they believe a 
successor government could restore the economy to late- 
1990 levels.  A few salient details: 
 
- They still consider Zimbabweans smarter, better- 
educated and harder-working than most Africans.  Standard 
Chartered CEO Matsaira said the years he spent in Uganda 
convinced him of Zimbabweans' superior skills. 
 
- Several interlocutors expressed horror at the National 
Railway's state, agreeing it is the most critical 
component in the economic infrastructure. 
 
- The businessmen believe reformalizing rather than 
reproaching Zimbabwe's black/gray economy holds an 
important key to economic rebound. 
 
- Most believe a recovery to 1997 levels will take 3-6 
years. 
 
- Some business reps feel that land redistribution may be 
reversible in part.  Former Finance Minister Makoni, a 
potential president, insists a future GOZ could return up 
to 40 percent of white farmers to a portion of their 
land. 
 
Comment 
------- 
4. (SBU) Many of these views strike us as extravagantly 
hopeful.  We do not believe this economy can grow 67 
percent in 3-6 years (to return to 1997 levels, assuming 
a 40 percent cumulative drop has taken place), even under 
the best of circumstances.  Although it would no doubt 
help to reformalize economic activity that has gone 
underground, rebuilding the country's infrastructure 
(including the education and health systems) is a long- 
term endeavor.  We are also skeptical that a future 
government could reactivate anywhere near 40 percent of 
white farmers.  That said, we would love for eternally- 
optimistic Zimbabweans to prove us wrong. 
 
Sullivan