US embassy cable - 04HARARE1347

UNCLAS HARARE 001347 
 
SIPDIS 
 
STATE FOR AF/S 
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: ECON, ETRD, EINV, PGOV, ZI, Economic Situation 
SUBJECT: Govt/Business: At Least They Talk 
 
1. Summary: The Confederation of Zimbabwe Industries 
(CZI) annual conference intimates the GOZ is more willing 
to listen to, though not act upon, private sector 
concerns.  End summary. 
 
Cordial Confrontation 
--------------------- 
2. Government and business repeatedly congratulated 
themselves during the Aug 5-6 sessions on a newfound 
inclination for discussion.  The GOZ's daily Herald 
shared this view, proclaiming an end to "mud-slinging 
between the two parties."  In fact, the GOZ turned out in 
full-force for this business congress.  Five ministers as 
well as the Reserve Bank (RBZ) Governor planned to 
address the gathering of some 300 businesspersons at the 
Victoria Falls resort town. (The death of Zanu-PF leader 
and other unforeseen commitments kept several away.) 
 
3. The two sides did not agree concretely on much.  The 
GOZ regurgitated familiar polemics, e.g.: 
 
- Trade/Industry Minister Mumbengegwi credited President 
Mugabe's so-called war cabinet with turning around the 
economic decline.  (Comment: Named in August 2002, the 
cabinet enacted strict price controls.  On the heels of 
fast-track land reform, these controls plunged the 
country into its deepest ever recession, culminating with 
negative-15 percent growth in 2002.  Two years on, the 
economy is still shrinking.) 
 
- RBZ Governor Gono continued to label exporters 
complaining of an overvalued exchange rate "crybabies." 
 
- Trade/Industry Permanent Secretary Katsande insisted 
Western sanctions had largely caused Zimbabwe's economic 
plight. 
 
This is not the stuff of GOZ moderation or introspection. 
However, top officials also listened politely while 
speakers and delegates blasted the overvalued currency, 
controlled media and ministerial land-grabs.  Zimsun CEO 
Shingi Munyeza, who heads the country's top tourism 
outfit, nearly shouted to roaring applause: "I urge all 
A2 farmers [recipients of larger farms during land 
reform] to go farm and stop being weekend farmers." 
 
Comment 
------- 
4. Given how combative government-business relations have 
been, such open exchanges hint at progress, albeit 
minute.  During breaks, many businesspersons commented to 
Emboff that this dialogue would not have taken place a 
year ago.  Both sides have moderated their tone, led by 
RBZ Governor Gono for the GOZ and CZI President Anthony 
Mandiwanza - a Zanu-PF loyalist - for the business 
community.  Transforming words to action, however, 
there's still an ocean to scale. 
 
Sullivan