US embassy cable - 01HARARE750

C O N F I D E N T I A L HARARE 000750 
 
SIPDIS 
 
STATE FOR AF, AF/S, AF/EPS, EB/IFD/ODF, EB/TPP/ODC 
TREASURY FOR ED BARBER, AND BARAK HOFFMAN 
USDOC FOR 2037/ERIC HENDERSON 
STATE PASS USTR/RWHITTAKER 
NSC FOR SENIOR AFRICA DIRECTOR JFRAZER 
LONDON FOR CHARLES GURNEY 
PARIS FOR BISA/WILLIAMS 
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NAIROBI FOR PFLAUMER 
 
E.O. 12958: DECL: 07/05/11 
TAGS: ECON, EFIN, PREL, PINR, ZI 
SUBJECT: THE FINANCE PERMSEC FEEDS US THE GOVERNMENT 
LINE 
 
 
CLASSIFIED BY CHARGE D' AFFAIRES EARL IRVING, REASON 
1.5 (B), (D) 
 
REF: 00 HARARE 6566 
 
1.  (C) ON FEBRUARY 13 NICHOLAS NCUBE, PERMANENT 
SECRETARY - MINISTRY OF FINANCE, PAID A CALL ON US AT 
 
SIPDIS 
OUR INVITATION TO DISCUSS ECONOMIC AND POLITICAL 
DEVELOPMENTS, AND THE BILATERAL RELATIONSHIP.  WE KNOW 
NCUBE WELL, AS HE HAS BEEN A DEPENDABLE AND SOLID 
EMBASSY INTERLOCUTOR FOR OVER A DECADE THROUGHOUT HIS 
STRING OF GOVERNMENT POSITIONS.  IN THIS VEIN NCUBE 
SAT DOWN AND ASKED, "WHAT DO YOU THINK OF US?"  CHARGE 
INFORMED HIM FRANKLY AND DIRECTLY OF THE VERY SERIOUS 
CONCERNS WE HAVE FOR THE MULTITUDE OF NEGATIVE 
DEVELOPMENTS OCCURRING WITH DIRECT GOVERNMENT SUPPORT 
AND BACKING.  WE ADVISED HIM THAT TOLERANCE THRESHOLDS 
ARE BEING OVERWHELMED, AND THAT SIMULTANEOUS ATTACKS 
ON THE JUDICIARY, THE INDEPENDENT PRESS AND THE 
LEADERSHIP OF THE OPPOSITION PARTY ARE CAUSING SEVERE 
DAMAGE TO ZIMBABWE'S STANDING AND NATIONAL CHARACTER. 
NCUBE TOOK OUR MESSAGE IN WITH LITTLE OR NO REBUTTAL 
AND ADMITTED THAT HIS COUNTRY HAS EXCEEDINGLY GOOD AIM 
WHEN IT COMES TO SELF-INFLICTED WOUNDS. 
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2.  (C) ON THE FINANCE MINISTRY'S OPERATIONS AND 
DOMESTIC ECONOMIC CONDITIONS NCUBE, TO OUR 
DISAPPOINTMENT, FED US A STRAIGHTFORWARD VERSION OF 
THE GOVERNMENT LINE.  HE BOASTED THAT GOZ JANUARY 
RECEIPTS WERE ABOVE BUDGET, PARTIALLY DUE TO THE VERY 
HEFTY FEE INCREASES THEY HAVE BEEN PUSHING ACROSS THE 
BOARD (FROM SPEEDING TICKETS TO BIRTH CERTIFICATE FEES 
TO PHOTOCOPIES FOR THE PUBLIC).  HE FURTHER CLAIMED 
THAT TOTAL GOVERNMENT SPENDING WAS "GOOD", AND EVEN 
PROCLAIMED THAT THE DEFENSE MINISTRY WAS WITHIN ITS 
BUDGET, DESPITE THE 50 PERCENT CUT (IN REAL TERMS) IT 
SUFFERED IN THE 2001 BUDGET (REFTEL).  HOW THIS COULD 
BE THE CASE, ESPECIALLY IN LIGHT OF THE ADDITIONAL 
TROOPS SENT TO THE CONGO AFTER THE KABILA 
ASSASSINATION, WAS NOT FORTHCOMING FROM THE PERMSEC. 
 
3.  (C) HE ADMITTED TO DIFFICULTIES IN CARRYING OUT 
PRIVATIZATION, CITING AS AN EXAMPLE THE PROCLAIMED 
INABILITY OF THE RESPONSIBLE MINISTRY (READ 
AGRICULTURE) TO FIND THE SHARE CERTIFICATES NEEDED TO 
SELL OFF THE GOZ'S MAJORITY STAKE IN COTTCO (A 
PARTIALLY-PRIVATIZED PARASTATAL INVOLVED IN COTTON 
PRODUCTION AND SALES).  HE LAMENTED THAT THE STOCK 
MARKET PRICE WAS DROPPING OF LATE, AND JOKED THAT HE 
HAD THREATENED TO MAKE UP ANY LOSSES CAUSED BY THE 
DELAY FROM THE MINISTRY'S OWN BUDGET.  NCUBE ALSO TOLD 
US THAT THE NEW CASH PAYMENT SYSTEM INSTALLATION 
(DESIGNED TO PREVENT MINISTRIES FROM SPENDING MORE 
THAN THEIR BUDGET ALLOCATION) WAS GOING WELL, WITH 
EDUCATION, AGRICULTURE, FINANCE AND THE CENTRAL 
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PAYMENTS OFFICE ALREADY ONLINE.  COMING UP NEXT WAS 
FOREIGN AFFAIRS, DEFENSE AND THE PRESIDENT'S OFFICE. 
THE FINANCE MINISTRY PLACES GREAT FAITH IN THE ABILITY 
OF THE SYSTEM TO CONTROL OVERSPENDING, THOUGH WE WILL 
RESERVE OUR JUDGMENT UNTIL WE SEE WHAT COMES OF WELL- 
CONNECTED MINISTERS' VISITS TO THE PRESIDENT'S OFFICE, 
TO PLEA FOR THAT SPECIAL, EXTRA, ONE-TIME-ONLY 
ALLOCATION. 
 
4.  (C) COMMENT: NCUBE LISTENED CLOSELY AND WE HAVE NO 
DOUBT THAT HE WILL COMMUNICATE OUR MESSAGE BOTH TO 
MANAGEMENT AT HIS MINISTRY AND TO THE ORAL NETWORK OF 
HIS GOVERNMENT COLLEAGUES.  HIS BLASE PRESENTATION OF 
WHAT CAN ONLY BE CHARITABLY DESCRIBED AS HALF-TRUTHS 
WAS A LETDOWN, BUT IT MIMICKED WHAT HIS BOSS, SIMBA 
MAKONI, HAD DONE DURING HIS RECENT WASHINGTON VISIT. 
WE WILL KEEP THE CHANNELS OPEN, AND WILL ONLY BELIEVE 
FISCAL CONTROL SUCCESS WHEN WE SEE IT.  END COMMENT. 
 
IRVING 
 
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