US embassy cable - 03HARARE337

UNCLAS HARARE 000337 
 
SIPDIS 
 
SENSITIVE 
 
STATE FOR AF/S AND AF/EX 
NSC FOR SENIOR AFRICA DIRECTOR JFRAZER 
USDOC FOR 2037 DIEMOND 
PASS USTR ROSA WHITAKER 
TREASURY FOR ED BARBER AND C WILKINSON 
STATE PASS TO USAID FOR MARJORIE COPSON 
 
E. O. 12958: N/A 
TAGS: ECON, ETRD, EFIN, ZI 
SUBJECT: Leading Banker Fears Decision Paralysis 
 
Ref: a) Harare 111  b) Harare 244 
 
1. (SBU) Summary:  Unless the GOZ modifies its economic 
policies, the Bankers' Association President believes its 
once-formidable infrastructure will be irreparably 
damaged.  End summary. 
 
2. (SBU) Standard Chartered Chief Executive and Zimbabwe 
Bankers' Association President Washington Matsaira told 
Ambassador Sullivan that President Mugabe's inner-circle 
"hawks" are subverting the Tripartite Agreement (septel) 
as well as the Confederation of Zimbabwe Industries' 
(CZI) proposal to devalue the Zimdollar for exporters 
(ref a).  Hardliners -- Justice Minister Patrick 
Chinamasa, Agriculture Minister Joseph Made, Information 
Minister Jonathan Moyo and Public Works Minister Ignatius 
Chombo -- are either still enriching themselves from the 
GOZ's interventionist policies (often accessing U.S. 
dollars at the official rate) or unwilling to press 
Mugabe to make a change.  This has led to decision-making 
paralysis, particularly frustrating because CZI's 
leadership believed it had convinced all the key players 
of the need to devalue.  Matsaira said a group of 
exporters even persuaded the GOZ to allow a one-time 
parallel market exchange US$ 25 million last month, 
seeming admission that the official rate is untenable. 
There has been no further positive sign from government. 
 
3. (SBU) Matsaira notices increasing infrastructure and 
even moral decay in Zimbabwe, symptoms of the economic 
crisis that may become permanent by the year's end.  An 
every-man-for-himself dictum is taking grip of a society 
that once exalted community.  The banker sees unmotivated 
teachers and bribe-hungry policemen with an audacity 
unthinkable just 5 years ago.  The brain-drain is so 
severe that it is no longer possible to fill certain 
professional positions at Standard Chartered (in spite of 
the country's high unemployment).  Indigenous fuel 
companies clandestinely send their supply of heavily- 
subsidized fuel to neighboring countries.  In sum, 
Matsaira thinks Zimbabwe is gradually being "Zaire-ized," 
a reference to Mobutu Sese Seko's misrule in today's 
Democratic Republic of the Congo. 
 
Comment 
------- 
4. (SBU) Matasaira's somber observations parallel those 
that lower-grade local employees shared with us a few 
weeks ago (ref b).  Zimbabweans surprise themselves with 
their own growing contempt for laws and social-norms, one 
step in the country's rapid metamorphism. 
 
Sullivan