US embassy cable - 02HARARE2819

UNCLAS HARARE 002819 
 
SIPDIS 
 
SENSITIVE 
 
STATE FOR AF/S 
NSC FOR SENIOR AFRICA DIRECTOR J FRAZER 
USDOC FOR 2037 DIEMOND 
PASS USTR ROSA WHITAKER 
TREASURY FOR ED BARBER AND C WILKINSON 
DEPARTMENT PASS USAID FOR MARJORIE COPSON 
 
E. O. 12958: N/A 
TAGS: ECON, EPET, EFIN, ETRD, ZI 
SUBJECT: Business Leader Believes Zimbabwe Must Change 
Course 
 
 
Sensitive but unclassified.  Handle accordingly. 
 
1. (SBU) Summary: Jewel Bank CEO Gideon Gono told us he 
believes Zimbabwe's macroeconomic imbalances are 
unsustainable over the next 6 months.  Gono's frank 
appraisal hints that a dose of reality may be seeping 
through to the country's upper echelon.  End Summary. 
 
2. (SBU) The Ambassador and Econchief met on December 2 
with Gono, head of a major indigenous bank and confidant 
of President Mugabe.  Gono argued that contradictions in 
Zimbabwe's macroeconomic policy could lead to meltdown in 
the next 6 months.  He showed us a document he had 
submitted to Mugabe and other political higher-ups at the 
beginning of 2002, advocating more capital expenditure, 
devaluation of the official exchange rate and 
rapprochement with international lenders.  He also gave 
us a paper he presented to the Reserve Bank last month, 
calling for the granting of title deeds to farmers 
resettled on white commercial farms. 
 
3. (SBU) Comment: An acknowledgement from someone who has 
Mugabe's ear that GOZ economic and land policies are 
failing is welcome, even though Gono probably couches 
these criticisms in more delicate terms to the President. 
We hope it is an early sign that political higher-ups are 
willing to entertain the notion, at least in private, 
that policies of price controls, overvalued currency, 
chaotic land redistribution and overbearing taxation are 
destroying the economy.  End Comment. 
 
Sullivan