US embassy cable - 01HARARE1275

C O N F I D E N T I A L SECTION 01 OF 03 HARARE 001275 
 
SIPDIS 
 
NSC FOR SENIOR AFRICA DIRECTOR JENDAYI FRAZER 
 
LONDON FOR CHARLES GURNEY 
 
PARIS FOR BISA WILLIAMS 
 
NAIROBI FOR TERRY PFLAUMER 
 
PASS USAID FOR A.AA/AFR V. DICKSON-HORTON AND 
AFR/SA C. PALMA 
                       CONFIDENTIAL 
 
PAGE 02        HARARE  01275  01 OF 03  091226Z 
 
PASS USTR FOR ROSA WHITAKER 
 
E.O. 12958: DECL: 04/03/11 
TAGS: PGOV, ECON, EFIN, PREL, PINR, ZI 
SUBJECT: ZANU-PF INSIDER: THE COUNTRY IS UNDER 
INFORMAL SANCTIONS 
 
 
CLASSIFIED BY CHARGE D'AFFAIRES EARL M. IRVING FOR 
REASONS 1.5 (B) AND (D). 
 
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SUMMARY 
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1.  (C) AN ACADEMIC WITH VERY CLOSE TIES TO ZANU-PF 
LEADERSHIP CIRCLES, CLEVER MUMBENGEGWI, TOLD US APRIL 2 
THAT THE ZIMBABWEAN GOVERNMENT BELIEVES IT IS OPERATING 
UNDER AN INFORMAL INTERNATIONAL SANCTIONS REGIME.  THE 
GOVERNMENT PERCEIVES THE INTERNATIONAL COMMUNITY AS 
BEING BIASED IN FAVOR OF THE OPPOSITION MOVEMENT FOR 
DEMOCRATIC CHANGE (MDC), A PARTY HE DISMISSED AS 
INEFFECTIVE AND BOUND FOR OBLIVION.  HE BELIEVED THE 
WEST WAS WILLING TO ENGAGE MEANINGFULLY WITH ZIMBABWE 
ONLY WHEN PRESIDENT MUGABE IS OFF THE SCENE.  HE 
CONFIRMED TENSIONS BETWEEN THE GOVERNMENT AND THE WHITE 
BUSINESS COMMUNITY, ATTRIBUTING THEM TO AN AGENDA OF 
WRECKING THE ECONOMY TO THE LATTER.  HE DEFENDED THE 
GOVERNMENT'S POLICY OF NOT DEVALUING THE CURRENCY, 
SAYING THAT TO DO SO WOULD HURT THE MAJORITY OF 
ZIMBABWEANS WHO ARE DEPENDENT ON CHEAP IMPORTS.  HE SAW 
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PAGE 03        HARARE  01275  01 OF 03  091226Z 
RESOLUTION OF THE LAND REFORM PROBLEM AS THE PANACEA FOR 
ZIMBABWE'S POLITICAL TROUBLES, NOTING THAT THE 
GOVERNMENT COULD SORT OUT QUICKLY ANCILLARY DIFFICULTIES 
ASSOCIATED WITH THE FAST TRACK RESETTLEMENT EFFORT.  HE 
THOUGHT THE INTERNATIONAL COMMUNITY HAS A KEY ROLE TO 
PLAY IN RESTORING ZIMBABWE TO ECONOMIC HEALTH, BUT 
DOUBTED IT WOULD MAKE ANY MOVE TO HELP PRIOR TO THE 
PRESIDENTIAL ELECTION SCHEDULED FOR 2002.  WE BELIEVE 
MUMBENGEGWI'S COMMENTS REFLECT THE MAINSTREAM THINKING 
OF ZANU-PF -- PARANOID, ISOLATIONIST, ECONOMICALLY 
UNSOUND AND MARKED BY CONSPIRACY THEORIES.  IF THE 
INTERNATIONAL COMMUNITY WANTS TO REVERSE ZIMBABWE'S 
RAPID ECONOMIC AND POLITICAL DECLINE, IT MUST DO A 
BETTER JOB OF GETTING AND SUSTAINING THE GOVERNMENT'S 
ATTENTION.  END SUMMARY. 
 
-------------- 
US VERSUS THEM 
-------------- 
 
2.  (C) ZANU-PF INSIDER AND DEAN OF THE UNIVERSITY OF 
ZIMBABWE'S FACULTY OF SOCIAL STUDIES CLEVER MUMBENGEGWI 
(HIS BROTHER SAMUEL IS THE MINISTER OF EDUCATION, SPORT 
AND CULTURE, AND HIS BROTHER SIMBARASHE IS THE 
ZIMBABWEAN HIGH COMMISSIONER IN LONDON) TOLD US APRIL 2 
THAT IT WAS THE GOVERNMENT'S WIDELY-HELD PERCEPTION THAT 
ZIMBABWE WAS UNDER UNOFFICIAL SANCTIONS, WITH THE 
PROSPECT OF THEIR BEING LIFTED SOON CLOSE TO NIL.  HE 
THOUGHT THAT FOREIGN INVESTORS AND THE INTERNATIONAL 
FINANCIAL INSTITUTIONS WERE ON THE SIDELINES AND WAITING 
FOR THE PRESIDENTIAL ELECTION TO TAKE PLACE BEFORE 
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PAGE 04        HARARE  01275  01 OF 03  091226Z 
ENGAGING ZIMBABWE MEANINGFULLY ONCE AGAIN. 
 
3.  (C) THE PERCEPTION IS THAT THE INTERNATIONAL 
COMMUNITY WAS SITTING WITH ITS ARMS CROSSED WATCHING 
ZIMBABWE COLLAPSE, ASSUMING THAT IT IS A BASKET CASE 
LIKE OTHER AFRICAN COUNTRIES.  THE POSITION OF THE 
INTERNATIONAL COMMUNITY TO FOSTER THE DOWNFALL AND 
REMOVAL OF THE RULING PARTY IMPINGES ON ZIMBABWE'S 
ECONOMIC HEALTH; IT IS NOT SOLELY A DOMESTIC ISSUE.  THE 
INTERNATIONAL COMMUNITY'S FOCUS ON A PERSONALITY, AND 
ITS WITHHOLDING OF ASSISTANCE UNTIL THAT PERSONALITY IS 
CHANGED ONLY GETS US INTO A POLITICAL PROBLEM, HE 
AVERRED. 
 
4.  (C) MUMBENGEGWI CONTINUED THAT THE GOVERNMENT WANTED 
TO USE THE ISSUE OF LAND REFORM TO BEGIN SOLVING 
DOMESTIC PROBLEMS ONCE AND FOR ALL, AS IT WAS AN ISSUE 
AROUND WHICH MOST ZIMBABWEANS COULD RALLY.  ONCE 
COMPENSATION FOR LAND COULD BE ARRANGED, THE GOVERNMENT 
COULD QUICKLY TAKE CARE OF THE OTHER THINGS, SUCH AS 
FARM INVASIONS, IN A SHORT PERIOD OF TIME.  THE REASON 
WHY THERE IS NO GOING BACK ON THE LAND ISSUE IS THAT 
POLITICIANS HAVE SOLD THE PROGRAM TO THE NATION. 
ALTHOUGH HE AGREED THAT THEY OUGHT TO HAVE SOMETHING 
ELSE TO OFFER, IT WOULD COST ZANU-PF POLITICALLY IF IT 
 
                       CONFIDENTIAL 
 
                           CONFIDENTIAL     PTQ1542 
 
PAGE 01        HARARE  01275  02 OF 03  091226Z 
ACTION AF-00 
 
INFO  LOG-00   NP-00    AID-00   ACQ-00   CEA-01   CIAE-00  COME-00 
      CTME-00  DINT-00  DODE-00  DOTE-00  SRPP-00  DS-00    EB-00 
      EUR-00   EXIM-01  E-00     FAAE-00  FBIE-00  VC-00    FRB-00 
      H-01     TEDE-00  INR-00   ITC-01   L-00     VCE-00   AC-01 
      NSAE-00  OMB-01   OPIC-01  PA-00    PM-00    PRS-00   ACE-00 
      P-00     SP-00    SSO-00   STR-00   TRSE-00  USIE-00  FMP-00 
      PMB-00   DSCC-00  DRL-02   G-00     NFAT-00  SAS-00     /009W 
                  ------------------DD1A08  091226Z /38 
P 091230Z APR 01 
FM AMEMBASSY HARARE 
TO SECSTATE WASHDC PRIORITY 8611 
INFO NSC WASHDC PRIORITY 
SOUTHERN AFRICAN DEVELOPMENT COMMUNITY 
AMEMBASSY NAIROBI 
 
C O N F I D E N T I A L SECTION 02 OF 03 HARARE 001275 
 
SIPDIS 
 
NSC FOR SENIOR AFRICA DIRECTOR JENDAYI FRAZER 
 
LONDON FOR CHARLES GURNEY 
 
PARIS FOR BISA WILLIAMS 
 
NAIROBI FOR TERRY PFLAUMER 
 
PASS USAID FOR A.AA/AFR V. DICKSON-HORTON AND 
AFR/SA C. PALMA 
                       CONFIDENTIAL 
 
PAGE 02        HARARE  01275  02 OF 03  091226Z 
 
PASS USTR FOR ROSA WHITAKER 
 
E.O. 12958: DECL: 04/03/11 
TAGS: PGOV, ECON, EFIN, PREL, PINR, ZI 
SUBJECT: ZANU-PF INSIDER: THE COUNTRY IS UNDER 
INFORMAL SANCTIONS 
 
WERE TO RETRACT THE FAST-TRACK RESETTLEMENT PROGRAM. 
THAT THE GOVERNMENT ALONE SHOULD PAY FOR THE LAND 
RESETTLEMENT EXERCISE WAS ABSURD, MUMBENGEGWI STATED, 
AVERRING THAT AT NO TIME IN HISTORY HAS THIS OCCURRED. 
HE DISMISSED ANY GOVERNMENT RESPONSIBILITY FOR THE 
IMPENDING MAIZE SHORTAGE, ASSIGNING BLAME FOR IT TO THE 
MID-SEASON DROUGHT, WHICH KILLED OFF MOST OF THE EARLY 
CROP, AND THE DAMAGE DONE TO THE LATE CROP BY RECENT, 
EXCEEDINGLY HEAVY RAINS. 
 
----------------------------- 
THE RHODESIAN LEGACY LIVES ON 
----------------------------- 
 
5.  (C) THE SOCIAL STUDIES DEAN STATED THAT THERE WAS A 
LACK OF TRUST BETWEEN THE GOVERNMENT AND THE WHITE 
BUSINESS COMMUNITY BECAUSE THAT COMMUNITY WAS DOING ITS 
BEST IT COULD TO DESTROY THE COUNTRY'S ECONOMY IN ORDER 
TO BRING DOWN THE CURRENT GOVERNMENT.  WHITE 
BUSINESSMEN, HE ALLEGED, ARE DIRECTING SUBSTANTIAL 
PORTIONS OF THEIR FOREIGN EXCHANGE INFLOWS "THROUGH 
OTHER CHANNELS," BRINGING ONLY A SMALL FRACTION OF THEIR 
EARNINGS VIA OFFICIAL CHANNELS INTO ZIMBABWE.  THE 
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PAGE 03        HARARE  01275  02 OF 03  091226Z 
PRIVATE SECTOR WAS MYOPIC AS TO WHERE ITS INTERESTS LIE 
AND SHORT-TERM IN ITS OUTLOOK, NOT INTERESTED IN THE 
GOOD OF THE COUNTRY, ITS GOVERNMENT OR ITS BLACK 
CITIZENS.  THIS VIEW IS WIDELY HELD AND ACCEPTED AS TRUE 
BY THE GOVERNMENT AND ITS LEADERSHIP, HE STATED. 
 
6.  (C) HE LECTURED US WITH A STRAIGHT FACE THAT FOR 
YEARS BUSINESSPERSONS HAVE LIVED OFF THE TAXPAYER 
(NOTWITHSTANDING THE FACT THAT BUSINESSES, VIA COMPANY 
AND PERSONAL INCOME TAXES, PAY OVER HALF THE NATIONAL 
TAX BILL), BUYING UP GOVERNMENT PAPER AND DRIVING UP 
INTEREST RATES, SO THAT THEY AND THE BANKS CAN GET THE 
HIGH YIELDS, THEREBY PLACING THE GOVERNMENT IN ITS 
CURRENT DEBT TRAP.  THERE'S A SHORT-TERM PRICE TO BE 
BORNE IN TURNING AROUND THE ECONOMY, HE OFFERED, AND THE 
COST SHOULD BE BORNE BY THE POPULATION IN GENERAL, AND 
NOT JUST THE GOVERNMENT.  "WE HAVE TO START SOMEWHERE," 
HE SHRUGGED; "SOMEONE WILL ALWAYS CALL FOUL."  HE SAID 
THAT THE NATION IS IN CRISIS AND IT IS TIME TO STAND 
TOGETHER AND NOT TRY TO SPLIT THE NATION, SOMETHING THE 
DONOR COMMUNITY IS CLEARLY TRYING TO DO.  THE WHITE 
BUSINESS COMMUNITY, ON THE OTHER HAND, IS OF THE VIEW 
THAT "YOU CAUSED THIS MESS, YOU GET OUT OF POWER." 
 
7.  (C) TURNING TO THE REASON WHY THE GOVERNMENT STUCK 
TO A DYSFUNCTIONAL A FIXED EXCHANGE RATE, MUMBENGEGWI 
EXPLAINED THAT ZIMBABWE IS EXTREMELY IMPORT DEPENDENT; 
EVEN MANY OF ITS EXPORTS CONTAIN A HIGH PERCENTAGE OF 
IMPORTED CONTENT.  ALLOWING THE ZIMBABWE DOLLAR TO FLOAT 
TO ITS MARKET VALUE WOULD INCREASE THE PRICE OF INPUTS. 
EXPORTERS, WHO HAVE ACCESS TO FOREIGN CURRENCY, FAVOR 
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PAGE 04        HARARE  01275  02 OF 03  091226Z 
DEVALUATION.  HOWEVER, BECAUSE THEY ARE A MINORITY OF 
THE POPULATION (WHEREAS IMPORTS IMPACT A MAJORITY OF THE 
POPULATION), THE POLITICAL PRESSURE THEY BRING TO BEAR 
TO DEVALUE IS NOT AS INTENSE.  IT IS THE GOVERNMENT'S 
SINCERE VIEW THAT COUNTRIES THAT HAVE DEVALUED THEIR 
CURRENCIES OR IMPLEMENTED STRUCTURAL ADJUSTMENT HAVE NOT 
DONE BETTER THAN THOSE THAT HAVE NOT DONE SO, HE 
CLAIMED.  HE COMPLAINED THAT THE LAST TIME THE 
GOVERNMENT DEVALUED THE CURRENCY FOR 38.5 TO 55 TO THE 
U.S. DOLLAR, THERE WAS NO COMMENSURATE IMPROVEMENT IN 
EXPORT SECTOR PERFORMANCE.  THE GOVERNMENT, HE HELD, 
COULD DEVALUE THE CURRENCY BY 1000 PERCENT -- A MOVE 
THAT WOULD WRECK THE IMPORT SECTOR -- AND STILL GET NO 
RESPONSE.  EXPORTERS ARE SIMPLY SEEKING WINDFALL GAINS, 
HE ALLEGED, WHICH THEY ARE GETTING IN THE FOREIGN 
EXCHANGE BLACK MARKET. 
 
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BUT WE SHALL PREVAIL 
-------------------- 
 
8.  (C) WHILE MUMBENGEGWI BELIEVED THAT THE 
INTERNATIONAL COMMUNITY FAVORED THE OPPOSITION MDC, HE 
PREDICTED THAT IF IT WERE TO LOSE THE PRESIDENTIAL 
ELECTION IT WOULD SUFFER THE FATE OF ALL AFRICAN ALSO- 
 
                       CONFIDENTIAL 
 
                           CONFIDENTIAL     PTQ1543 
 
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ACTION AF-00 
 
INFO  LOG-00   NP-00    AID-00   ACQ-00   CEA-01   CIAE-00  COME-00 
      CTME-00  DINT-00  DODE-00  DOTE-00  SRPP-00  DS-00    EB-00 
      EUR-00   EXIM-01  E-00     FAAE-00  FBIE-00  VC-00    FRB-00 
      H-01     TEDE-00  INR-00   ITC-01   L-00     VCE-00   AC-01 
      NSAE-00  OMB-01   OPIC-01  PA-00    PM-00    PRS-00   ACE-00 
      P-00     SP-00    SSO-00   STR-00   TRSE-00  USIE-00  FMP-00 
      PMB-00   DSCC-00  DRL-02   G-00     NFAT-00  SAS-00     /009W 
                  ------------------DD1A13  091227Z /38 
P 091230Z APR 01 
FM AMEMBASSY HARARE 
TO SECSTATE WASHDC PRIORITY 8612 
INFO NSC WASHDC PRIORITY 
SOUTHERN AFRICAN DEVELOPMENT COMMUNITY 
AMEMBASSY NAIROBI 
 
C O N F I D E N T I A L SECTION 03 OF 03 HARARE 001275 
 
SIPDIS 
 
NSC FOR SENIOR AFRICA DIRECTOR JENDAYI FRAZER 
 
LONDON FOR CHARLES GURNEY 
 
PARIS FOR BISA WILLIAMS 
 
NAIROBI FOR TERRY PFLAUMER 
 
PASS USAID FOR A.AA/AFR V. DICKSON-HORTON AND 
AFR/SA C. PALMA 
                       CONFIDENTIAL 
 
PAGE 02        HARARE  01275  03 OF 03  091227Z 
 
PASS USTR FOR ROSA WHITAKER 
 
E.O. 12958: DECL: 04/03/11 
TAGS: PGOV, ECON, EFIN, PREL, PINR, ZI 
SUBJECT: ZANU-PF INSIDER: THE COUNTRY IS UNDER 
INFORMAL SANCTIONS 
 
RANS: DISINTEGRATION.  "IF THEY WIN," HE OBSERVED 
IRONICALLY, "THEN WE WILL HAVE VERY EXCITING TIMES."  HE 
WAVED AWAY THE CONSTITUTION THAT THE NATIONAL 
CONSTITUTIONAL ASSEMBLY IS PREPARING, CALLING IT A 
CAMPAIGN DOCUMENT TO BE USED AS A RALLYING POINT.  HE 
THOUGHT THAT THE CIVIL SOCIETY ORGANIZATION, INSTEAD OF 
WORKING TO DEFEAT A FLAWED CONSTITUTION IN THE FEBRUARY 
2000 REFERENDUM, SHOULD INSTEAD HAVE PARTICIPATED IN THE 
DRAFTING PROCESS AND NEGOTIATED ON THE PORTIONS WITH 
WHICH IT DISAGREED.  HE CLAIMED THAT THE OPPOSITION, 
WHICH HAD GROWN FROM THE PRESIDENT AND THE GOVERNMENT'S 
ECONOMIC MISMANAGEMENT OF THE COUNTRY, HAD NOT COME UP 
WITH AN ALTERNATIVE PROGRAM TO PULL THE COUNTRY OUT OF 
ITS CURRENT PREDICAMENT.  FURTHERMORE, IT HAD NOT 
ARTICULATED HOW IT PLANNED TO BRING THE DONORS BACK. 
INDEED, THE OPPOSITION HAS FAILED TO CAPTURE THE 
IMAGINATION OF THE PEOPLE OF ZIMBABWE, HE DECLARED.  HE 
CLAIMED THAT THE FEELING IN THE COUNTRY WAS THAT THE 
RULING PARTY HAD GAINED GROUND OVER THE OPPOSITION IN 
THE LAST FEW MONTHS.  HE ALSO WINKED THAT THE 
INTERNATIONAL COMMUNITY'S PUTTING PRESIDENT MUGABE IN A 
CORNER SERVED TO BOLSTER HIS DOMESTIC POPULARITY. 
 
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PAGE 03        HARARE  01275  03 OF 03  091227Z 
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COMMENT 
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9.  (C) IF WE PART FROM THE PREMISE THAT PERCEPTION IS 
REALITY, THEN THE U.S.-EDUCATED MUMBENGEGWI GIVES A 
DISTRESSING ACCOUNT OF HIS COUNTRY'S GOVERNANCE: THE 
MINDS OF ITS LEADERSHIP ARE IN A PRISON OF ECONOMIC 
OBSCURANTISM AND CONSPIRACY THEORIES.  WE HAVE NO DOUBT 
THAT THE SOCIAL SCIENCE PROFESSOR'S EPISTEMOLOGY 
REPRESENTS THE MAINSTREAM THINKING OF THE RULING PARTY. 
UNFORTUNATELY, THE CHASM BETWEEN THIS PERCEPTION AND 
REALITY IS WIDE, AND CORRECTIVE ACTION WITH ANY HOPE OF 
DOING GOOD IS THUS FAR OUT OF GRASP.  BETWEEN NOW AND 
THE PRESIDENTIAL ELECTION, REAL DAMAGE TO ZIMBABWE WILL 
CONTINUE TO OCCUR AT AN UNSUSTAINABLE RATE, AS THE PARTY 
FAITHFUL IGNORE THE CARNAGE AND PLAY FOLLOW-THE-LEADER 
TO NEVER-NEVER LAND.  IF THE WEST OR THE DONORS WANT TO 
CHANGE THIS PATTERN THEY MUST DO A BETTER JOB OF GETTING 
-- AND SUSTAINING -- THE GOVERNMENT'S ATTENTION.  WE ARE 
CONVINCED NOW THAT ONLY STEPS WHICH AFFECT PRESIDENT 
MUGABE AND HIS CRONIES PERSONALLY -- SUCH AS RESTRICTING 
THEIR INTERNATIONAL TRAVEL AND FREEZING THEIR ASSETS -- 
CAN HALT ZIMBABWE'S SLIDE TOWARD ECONOMIC AND POLITICAL 
COLLAPSE.  END COMMENT. 
 
IRVING 
 
                       CONFIDENTIAL 
 
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