US embassy cable - 01HARARE2117

UNCLAS HARARE 002117 
 
SIPDIS 
 
STATE FOR EB/IFD/OIA, AF/S, AF/EPS 
USAID FOR AFR/SA, BHR/FFP, BHR/OFDA 
 
USDOC FOR 4510 HENDERSON 
STATE PASS USTR FOR ROSA WHITAKER 
                       UNCLASSIFIED 
 
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STATE PASS NSC FOR SENIOR AFRICA DIRECTOR JENDAI 
FRAZIER 
STATE PASS USAID FOR AFR/SA-PALMA, NEWMAN AND BHR/FPP 
LONDON FOR CGURNEY 
PARIS FOR BWILLIAMS 
PRETORIA FOR AG ATTACHE RHELM 
NAIROBI FOR REDSO/ESA/ARO-GGOTTLIEB AND ESA/FFP 
USDA FAS FOR EXPORT CREDITS/CHAMBLISS AND FAA/AME 
HOFFMAN 
TREASURY FOR OASIA/ED BARBER AND C. WALKER 
STATE PASS EXIM/MLHALEY, OPIC/RNEHRA 
 
E.O. 12958: N/A 
TAGS: EAGR, EAID, EFIN, ECON, ZI 
SUBJECT: EXPECTED FOOD SHORTAGE ACKNOWLEDGED BY A 
CABINET MEMBER 
 
 
1.  (SBU) ON JULY 6 THE MINISTER FOR FINANCE AND 
ECONOMIC DEVELOPMENT, SIMBA MAKONI, TOLD THE PRESS 
FOLLOWING AN ADDRESS HE DELIVERED TO THE NATIONAL 
ECONOMIC CONSULTATIVE FORUM THAT HIS MINISTRY'S GOOD 
BUDGET RESULTS TO DATE FOR 2001 SHOWING A SMALL SURPLUS 
WERE THREATENED BY THE NEED TO SET ASIDE FUNDS TO 
IMPORT GRAIN AND MAIZE LATER IN THE YEAR.  "THAT THERE 
WILL BE A SHORTAGE IN NATIONAL (FOOD) PRODUCTION HAS 
BEEN CONFIRMED.  THE DISCUSSION IS IN THE MAGNITUDE", 
HE SAID.  "I AM VERY CONCERNED BECAUSE OUR BUDGET HAS 
NOT PROVIDED FOR FOOD IMPORTS", MAKONI ADDED.  THE 
FINANCE MINISTER ALSO STATED THAT THE GOVERNMENT WOULD 
APPROACH DONORS TO DISCUSS POSSIBLE ASSISTANCE THEY 
COULD OFFER IN THE FACE OF THE LOOMING FOOD SHORTFALL. 
                       UNCLASSIFIED 
 
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2.  (SBU) THIS MARKS THE FIRST TIME A HIGH GOVERNMENT 
OFFICIAL HAS PUBLICLY CONTRADICTED THE LINE MAINTAINED 
BY AGRICULTURE MINISTER MADE, THAT THE COUNTRY FACES NO 
FOOD DEFICIT OR SHORTFALL, AND THAT CURRENT STOCKS AND 
THE HARVEST WILL SUFFICE.  IT ALSOFOLLOWS THE DECISION 
BY THE AGRICULTURE MINISTERON JULY 3 TO GIVE THE GRAIN 
MARKETING BOARD A TOAL MONOPOLY OVER ALL MAIZE SALES, 
DECLARING ALL CORN HARVESTED IN ZIMBABWE A "NATIONAL 
ASSET", EFFCTIVELY HALTING ALL PRIVATE SALES BETWEEN 
GROWER AND, FOR EXAMPLE, MILLERS OR OTHER WHOLESALE 
USRS.  (MAIZE SALES WERE LIBERALIZED IN THE EARLY 
990'S AFTER A WORLD BANK AND USAID FUNDED MARKET 
REFORM PROGRAM, AND THE SETUP OF THE ZIMBABWE 
AGRCULTURAL COMMODITY EXCHANGE (ZIMACE).)   IT IS, IN 
THE WORDS OF A FOOD SECURITY EXPERT BASED HERE, A 
GIANT STEP BACKWARD" FOR ZIMBABWE'S AGRICULTURL SECTOR 
AND THE CONSUMER AS WELL, AND IT MAY VERY WELL COMMIT 
THE COUNTRY TO A LEGACY OF FOOD SHOTAGES IN COMING 
YEARS. 
 
3.  (SBU) COMMENT: DESITE REPEATED GOVERNMENT 
ASSURANCES TO THE CONTRAY, OUR ANALYSIS SUPPORTS 
MINISTER MAKONI'S CONTETIONS REGARDING THE LIKELIHOOD 
OF POTENTIALLY SERIOUS FOOD SHORTAGES OVER THE COMING 
YEAR(S).  MOROVER, THE RE-MONOPOLIZATION OF THE 
DOMESTIC GRAI TRADE WILL LIKELY EXACERBATE THESE 
PROBLEMS IF URSUED FOR ANY LENGTH OF TIME.  HOWEVER, 
AS WE'V RECENTLY SEEN WITH DEVALUATION, IT REMAINS TO 
BE SEEN WHETHER THIS GOVERNMENT WILL ACT ON MAKONI'S 
COUNSEL IN THIS INSTANCE, AS THIS WOULD ONLY ADD O THE 
                       UNCLASSIFIED 
 
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GROWING LIST OF GOVERNMENT FAILURES.  IF RQUESTED, 
DONOR SUPPORT WOULD PROBABLY BE FORTHCOING FOR SUCH 
HUMANITARIAN PURPOSES.  HOWEVER, SUCH ASSISTANCE WOULD 
NOT COME WITHOUT POTENTIALLY DFFICULT CONDITIONALITY 
FOR THE GOVERNMENT DURINGTHIS SENSITIVE ELECTION 
PERIOD, INCLUDING, AMONGOTHER THINGS, A FULL WAIVER 
FROM THE PROPOSED BA ON PRIVATE GRAIN TRADING FOR 
OBVIOUS POLITICAL REASONS.  END COMMENT. 
 
WOERNER 
 
                       UNCLASSIFIED 
 
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