US embassy cable - 03HARARE2342

UNCLAS HARARE 002342 
 
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, EFIN, EINV, ETRD, PGOV, ZI 
SUBJECT: Mugabe shifts blame for recession 
 
 
1. (SBU) Summary: In his December 2 State of the Nation 
address to Parliament, President Mugabe slammed foreign 
exchange fraud rather than sanctions for the country's 
economic downturn, adopting a slightly less 
confrontational stance toward the U.S.  End Summary. 
 
2. (SBU) Over the past year, the GOZ has only rarely 
spoken at length about the economy without identifying 
U.S. and European sanctions as a prime cause.  In 
yesterday's remarks, Mugabe also acknowledged that a 
World Food Program contribution of US$212.8 million 
"through the international community is sincerely 
appreciated."  He asked that "partners extend their 
support to our land reform programme." 
 
3. (SBU) On the other hand, Mugabe did indirectly 
criticize U.S. policy in Iraq and upbraided "the Anglo- 
Saxon unholy alliance against Zimbabwe" in the 
Commonwealth.  The President offered no coherent 
proposals to turn around the economy. 
 
Comment 
------- 
4. (SBU) The GOZ now sees forex leakages as the main 
economic villain, even displacing mythical Western trade 
and investment sanctions.  We understand the GOZ is 
trying to more firmly control remissions, foreign 
currency accounts and export processing zones - but it 
has not decided on a policy.  Interestingly, Reserve Bank 
Governor Gideon Gono's bank - CBZ - continues to be one 
of the most brazen parallel market players.  Finally, we 
do not know if Mugabe's failure to mischaracterize U.S. 
travel and financial restrictions in this address is a 
result of Amb's Sullivan's interviews in the independent 
press last week - and whether the GOZ will continue in 
this vein. 
 
Sullivan