US embassy cable - 05HARARE938

C O N F I D E N T I A L SECTION 01 OF 02 HARARE 000938 
 
SIPDIS 
 
AF/S FOR BNEULING 
NSC FOR SENIOR AFRICA DIRECTOR C. COURVILLE 
USDOC FOR ROBERT TELCHIN 
TREASURY FOR OREN WYCHE-SHAW 
PASS USTR FOR FLORIZELLE LISER 
STATE PASS USAID FOR MARJORIE COPSON 
USDOL FOR ROBERT YOUNG 
 
E.O. 12958: DECL: 12/31/2009 
TAGS: EINV, ECON, PGOV, ZI, Economic Situation 
SUBJECT: COCA-COLA REPRESENTATIVE OFFERS A CANDID PERSONAL 
VIEW OF ZIMBABWE,S FUTURE 
 
Classified By: Charge d'affaires Eric T. Schultz a.i. for reason 1.4 d 
 
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Summary 
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1. (C) Coca-Cola Communications Director Sherree Gladys 
Shereni told the CDA on July 7 that Coca-Cola had resolved a 
payment dispute with its main Zimbabwe distributor and would 
continue providing Coke syrup to the country.  Coca-Cola 
remained committed to the country long-term but she said she 
had advised them that economic conditions were unlikely to 
improve any time soon.  As a &Zimbabwean8 she confided that 
no change would come without President Mugabe,s departure 
from power.  Zimbabweans, fear of the regime prevented them 
from rebelling, therefore the country,s great hope was that 
the presidential succession would tear ZANU-PF apart and open 
political space in the country.  Joyce Mujuru and Emmerson 
Mnangagwa were the main contenders but neither could win a 
free and fair election given the degree to which the party 
was now hated.  End Summary. 
 
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Coke Sees Long-Term Potential but Short-Term Problems 
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2. (C) Shereni told the CDA that Coca-Cola remained committed 
to the Zimbabwean market.  The company believed the country 
had long-term economic potential and that eventually 
conditions would improve.  Moreover, the Reserve Bank of 
Zimbabwe (RBZ) had solved the company,s biggest problem when 
it had agreed to provide local bottler Delta Beverages with 
$1 million in foreign exchange per month to pay off its debts 
for Coca-Cola syrup and to finance additional imports.  As a 
result the total debt had been reduced from $4 million to a 
little over $2 million since April. 
 
3. (C) That said, Shereni agreed with the CDA that economic 
conditions in Zimbabwe were unlikely to improve in the near 
term given current government policies and that the unlikely 
prospect that they would change for the better any time soon. 
 Moreover, she suggested that RBZ Governor Gono had been 
given latitude before the elections because ZANU-PF needed 
someone to keep the economy going, but with a two-thirds 
parliamentary majority, the party no longer needed Gono,s 
stewardship and he was n his way out. 
 
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Waiting for Mugabe 
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4. (C) In that regard, Shereni offered her opinion "as a 
Zimbabwean" (and a highly educated one who started her 
professional life in the RBZ in the 1980s) that no economic 
or social reforms could take place with Mugabe still in 
power.  As a proud man who never admitted mistakes, Mugabe 
was incapable of seeing the fault in his own policies and had 
led the country further and further down the wrong path.  She 
said the problems had really begun in the 1980s when 
corruption first became a factor in the government. 
Mugabe,s refusal to embrace fiscal discipline had further 
exacerbated the situation, especially the 1997 budget that 
had caused the first economic crash.  Finally, his disdain 
for real democracy, that had ZANU-PF stalwarts calling it in 
&intensive care8 as early as 1989, was the final key factor 
in the country,s deterioration. 
 
5. (C) Shereni said Mugabe was now so insulated from the 
people that he was unaware of the scale of suffering.  The 
CIO had told him the people were unhappy in the late 1990s 
and Mugabe had responded by shouting them down.  When the 
elections of 2000 had proven them right, Mugabe had taken 
vengeance on the people who had opposed him.  He was deeply 
unpopular as was his party even with rural voters who only 
voted for him out of fear.  They had seen how ZANU-PF had 
dealt with &collaborators8 and other opponents during the 
liberation struggle with summary executions and would not 
stand up to the government.  For most Zimbabweans, &peace8 
meant avoiding government terror. 
 
6. (C) Shereni said how Mugabe stepped down and how much 
longer he stayed in power would have a profound effect on the 
country,s future.  The country,s great hope was that 
dissension within ZANU-PF over the succession would open up 
political space in the country.  The party was deeply divided 
along tribal lines, both intra-Shona (Zezerou versus Karanga) 
and inter-tribal (Ndebele versus Shona), and the war veterans 
were deserting it.  The party was also divided between 
supporters of the two main candidates to succeed Mugabe: 
Joyce Mujuru (with her husband Solomon behind her), a 
Zezerou, and Emmerson Mnangagwa, a Karanga.  Shereni said the 
population would probably prefer Mujuru to Mnangagwa, but 
that the party was now so hated that no ZANU-PF candidate 
could win a truly free and fair election. 
 
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Not Waiting For Africa 
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7. (C) Shereni said African leaders had failed to criticize 
Mugabe because of the skeletons in their own closets.  They 
were afraid that their domestic opponents would use their 
criticism of Mugabe against them.  In addition, Zimbabwe was 
even now relatively better off than most African countries 
(though falling fast) and African leaders used this to 
rationalize their silence.  Shereni also recounted a 
conversation she had with former Mozambican President 
Chissano on a recent flight from South Africa in which he 
vehemently argued against a superpower (i.e. the U.S.) 
telling an African leader when it was time to leave. 
Chissano had said that Mugabe should be allowed to determine 
on his own when he wanted to leave power.  However, 
independently, Shereni had heard rumors about the UN asking 
Chissano to present Mugabe with an exit-package. 
 
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Comment 
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8. (C) Shereni's bleak and honest assessment is 
representative of Zimbabwe's educated elite, especially its 
enterprising business people.  They are keenly aware of 
everything that is wrong with the country but are resigned to 
the reality that nothing will change as long as Robert Mugabe 
is in power.  Instead they continue with what has become an 
exhausting struggle to keep their businesses alive within the 
dysfunctional parameters set by a control-obsessed 
government.  In a sense their struggle is mirrored in the 
daily struggle of poor Zimbabweans to physically survive in 
the face of an uncaring and often hostile regime.  Shereni,s 
account confirms the pervasiveness of intimidation and 
despondency throughout Zimbabwean society, from rural 
residents to captains of industry.  But it also offers a ray 
of hope in that it also confirms that all layers of society 
are increasingly united against the regime, whose base of 
support has narrowed to the military, the police, and the 
CIO. 
SCHULTZ