US embassy cable - 04HARARE1110

UNCLAS SECTION 01 OF 03 HARARE 001110 
 
SIPDIS 
 
SENSITIVE 
 
STATE FOR AF/S 
NSC FOR SENIOR AFRICA DIRECTOR JFRAZER 
USDOC FOR AMANDA HILLIGAS 
TREASURY FOR OREN WYCHE-SHAW 
PASS USTR FLORIZELLE LISER 
STATE PASS USAID FOR MARJORIE COPSON 
 
E. O. 12958: N/A 
TAGS: SENV, EAID, BTIO, EINV, ECON, PGOV, ZI, Economic Situation 
SUBJECT: GA-GA FOR GONO 
 
1. (SBU) Summary:  During their visit to Harare, the 
Staff Delegation lunched with Reserve Bank of Zimbabwe 
(RBZ) Governor Gideon Gono. The conversation touched upon 
the local economy and the international community, land 
nationalization, food security and recent food deals, 
electoral reform, and Zanu-PF rivalries. End summary. 
 
LOCAL ECONOMY AND THE INTERNATIONAL COMMUNITY 
--------------------------------------------- -- 
2. (SBU) Gono repeated his goals of reducing inflation to 
200% by year-end and accounting for every penny of 
foreign exchange. RBZ has US$30 million (about two weeks' 
cover) in reserves. 
 
3. (SBU) Gono appealed for help from the international 
community, stating Zimbabwe's economy could do a lot 
better with financial assistance. In his meetings with 
Treasury and IMF in Washington, he was encouraged by 
praise for recent RBZ actions to stabilize the economy. 
He congratulated Treasury for being forthright and laying 
their cards on the table. This is his nice way of 
acknowledging both USG skepticism and his understanding 
the message- the need for political and economic reforms. 
 
LAND NATIONALIZATION 
---------------------- 
4. (SBU) Gono confirmed that 99- and 25-year leases 
applied only to land acquired through fast track land 
reform. He agreed the 25-year lease term was insufficient 
both for profit generation and as collateral for loans. 
He is working to move the leases to 50 years or more. 
(The American conservancy owner has secured a meeting 
with Gono for July 7 and will discuss this point.) Gono 
also stated that farmers would be compensated for 
improvements after expiration or termination of a lease. 
(Note: The old commercial farmers are still waiting for 
promised compensation for their improvements and 
equipment. Gono called this an "administrative issue". 
End Note.) GOZ continues to list properties for 
acquisition a year after declaring land reform complete. 
There is, therefore, no end yet to the amount of land 
that would be nationalized. 
 
5. (SBU) The Land Ministry's Permanent Secretary's 
(PermSec) recent statements to the German Charge 
partially contradict Gono's assessment of the 
nationalization plan. The PermSec asserted that GOZ 
policy was to take all designated land regardless of 
court orders or bilateral investment agreements. GOZ will 
acquire all land owned by MDC supporters. Although not 
news policy wise, it is surprising that a GOZ official 
would state the policy so baldly to a foreign diplomat. 
 
FOOD SECURITY AND RECENT FOOD DEALS 
------------------------------------- 
6. (SBU) Gono again dismissed the 2.4 million tones of 
maize as fantasy, adding that the RBZ was conducting its 
own assessment to be completed in two weeks. Preliminary 
results suggest 1.3 million tones of maize. Gono 
conducted his own study because the RBZ would be expected 
to provide foreign exchange to cover any deficit from the 
official figures. Gono instructed the acting Finance 
Minister to present the findings to Cabinet, threatening 
to speak publicly if he does not. Gono also distanced 
himself from recent statements by Minister Chombo 
regarding kicking NGOs out of the country. 
 
7. (SBU) Gono recognizes that donors must decide where to 
deliver assistance. If WFP tears down its infrastructure, 
rebuilding could not occur overnight. He hopes RBZ's food 
assessment will force Cabinet to change its position and 
allow continued donor assistance, especially to rural 
school children and the HIV/AIDS affected. 
 
8. (SBU) Gono explained the news reports of a food deal 
between GOZ and Sentry Financial. In 1999, GOZ struck a 
five-year deal to pre-sell Zimbabwe tobacco in exchange 
for financing maize purchases. GOZ committed 80 million 
tons of tobacco each year to Diamond, the largest tobacco 
purchaser in the world. Sentry financed the deal with 
US$700 million. This year, due to land reform-induced 
production declines, GOZ allocated 30 million tons. The 
current maize shipments are actually deferments from last 
year. Apparently, GOZ deferred receipt of the maize due 
to the over-worked Mozambiquean ports, the over-taxed 
Zimbabwean railroad system, and storage charges. Gono was 
exasperated with Agricultural Minister Made's deal 
denial, wondering aloud why he felt the need to hide it. 
 
ELECTORAL REFORM 
-------------------- 
9. (SBU) Gono claimed a lack of expertise in this arena. 
(Note: An unusual admission for someone who has his hands 
in everything). However, he highlighted the most recent 
election reforms announced by the Politburo. These 
reforms include an independent Election Commission that 
Gono hopes to change from a president-appointed 
chairperson to an independent one. Congressional Staff 
emphasized that the commission must be able to timely 
receive complaints, make decisions, and have the means to 
enforce those decisions. The new policies could be 
implemented for the March 2005 parliamentary elections. 
Gono also suggested that constitutional reforms and 
simultaneous presidential and parliamentary elections 
next year were still a possibility despite Mugabe's 
recent statements that he intended to serve out his term. 
 
10. (SBU) Governor Gono equated reports of use of GOZ 
food as an election weapon with GOZ claims that donors 
inserted pamphlets in maize bags promoting the MDC- 
largely hearsay and founded in deep suspicion. This 
seemed a bit flippant. There is no doubt that individuals 
have often had to show their Zanu-PF identity card before 
they can access GOZ maize. He also suggested Zimbabweans 
are independent-minded and will simply take assistance 
from whoever offers while voting for who they want to 
anyway. Congressional Staff responded that it is pretty 
hard to remain independent when your stomach is empty. 
 
11. (SBU) Gono suggested Zanu-PF extremists (read 
Information Minister Jonathan Moyo) were the main 
obstacle to press freedoms. The problem could be resolved 
in approximately two months, although he made no mention 
of the The Daily News or The Tribune (both independent 
dailies GOZ closed down). 
 
ZANU-PF RIVALRIES 
------------------- 
12. (SBU) The extremists give Gono headaches and prevent 
him from doing his job. He cannot engage with civil 
society, the MDC, and the international community with 
some of their public statements. Their misrepresentations 
also force him to cover their mistakes. 
 
13. (SBU) Daggers are drawn over food security, 
especially with RBZ's assessment showing 1.3 million tons 
of maize. Gono stated this issue would be heated in up- 
coming Cabinet meetings and he hopes that GOZ will revise 
its estimates to allow donors to continue their work. 
 
14. (SBU) Information Minister Jonathan Moyo is 
apparently in trouble. There is recognition that he has 
become a liability rather than an asset. Moyo apparently 
has been called before a Zanu-PF disciplinary committee 
to explain recent attacks on several party elders like 
Vice-President Msika, Land Minister (and Zanu-PF party 
chairman) Nkomo, Matabeleland heavy Damiso Dabengwa, and 
Zanu-PF Information Officer Nathan Shamuyarira. 
 
 
 
 
COMMENT 
---------- 
15. (SBU) Gono continued his charm offensive. He 
emphasized the need for engagement with the international 
community, between Zanu-PF and MDC, and within the 
differing Zanu-PF factions, especially his unique ability 
to facilitate all of the above. He repeated several 
stories of his crucial involvement in brokering deals 
between the World Bank and both Made and Nkomo as well as 
his friendships with the MDC leadership (growing up with 
Morgan Tsvangirai, giving Welshman Ncube a leave of 
absence from the University of Zimbabwe, and teaching 
most of the leadership as college students). Gono also 
emphasized his role with civil society through his RBZ 
policy board. (Note: Gono failed to mention that ZCTU 
declined to participate without significant governmental 
reform. End Note.) Gono claims the confidence of 
President Mugabe as his personal banker. 
 
16. (SBU) Gono is some combination of Uriah Heep in 
describing his humble beginnings and "modest influence" 
and show-off in listing his hundreds of friends and close 
access to the President. He describes himself as 
resisting every evil and fighting every good fight. The 
test is how many good fights he can win. 
 
BIOGRAPHIC NOTE 
----------------- 
17. (SBU) Gono mentioned he served both as the Chair of 
Zimbabwe Broadcasting Corporation (ZBC) and Chair of the 
Economics Department at the University of Zimbabwe. He 
repeatedly mentioned his study of American presidents and 
produced tapes of President Ronald Reagan's speeches that 
he said he listens to in his car. He recently received a 
copy of President Clinton's autobiography. 
 
18. (SBU) Note: Staffdel left post prior to reviewing 
this message. End Note. 
 
Sullivan