US embassy cable - 03HARARE590

UNCLAS HARARE 000590 
 
SIPDIS 
 
SENSITIVE 
 
STATE FOR AF/S 
NSC FOR SENIOR AFRICA DIRECTOR JFRAZER 
USDOC FOR 2037 DIEMOND 
PASS USTR ROSA WHITAKER 
TREASURY FOR ED BARBER AND C WILKINSON 
STATE PASS USAID FOR MARJORIE COPSON 
 
E. O. 12958: N/A 
TAGS: ECON, EINV, ETRD, ZI 
SUBJECT: Finance Head Dislikes Price Controls 
 
1. (SBU) Summary: During a meeting with Ambassador 
Sullivan, Finance Minister Herbert Murerwa agreed that 
economic intervention has gone too far.  He expressed 
hope that he and other GOZ moderates will be able to push 
through reforms that reach beyond last month's 
devaluation.  End summary. 
 
Less International Support? 
--------------------------- 
2. (SBU) Amb Sullivan recounted that the U.S. has 
provided about US$ 130 million total assistance to 
Zimbabwe during the past year.  With the possibility 
looming that only Zimbabwe among southern African 
countries will continue to suffer significant food 
deficiency, he stressed the need for meaningful economic 
reform and better coordination between the donor 
community and the GOZ's Grain Marketing Board (GMB). 
Murerwa concurred that Zimbabwe will require some degree 
of food assistance, probably in Masvingo as well as 
Matabeleland North and South.  He said he was "unhappy" 
that the GOZ still subsidized maize-meal "at a horrendous 
rate."  Against Agriculture Minister Joseph Made's 
opposition, Murerwa told us he has proposed raising the 
price of maize and allowing the import of white maize at 
market value.  (Note: There is presently little incentive 
for producers to sell grain to the GMB at controlled 
prices.) 
 
3 Bilateral Friction Points 
--------------------------- 
3. (SBU) Expropriations of Amcit Properties:  Amb 
Sullivan protested the GOZ's unlawful seizure of land 
belonging to five U.S. citizens under fast-track land 
reform, requesting Murerwa's intercession.  The Finance 
Minister agreed to look at the cases and accepted copies 
of the Embassy's notes verbal to date. 
 
4. (SBU) Enfeebled Democracy:  Murerwa expressed regret 
that the land issue had soured bilateral relations.  Amb 
Sullivan countered that the USG had long supported land 
redistribution within a legal framework.  He argued that 
the USG was most concerned with Zimbabwe's undemocratic 
elections last March and deteriorating human rights 
record.  Murerwa insisted repeatedly that the GOZ's main 
conflict was with the United Kingdom and not domestic 
opposition.  He expressed outrage at alleged opposition 
violence in the just-concluded two-day national strike. 
 
5. (SBU) Financial Sanctions:  Amb Sullivan gave Murerwa 
a copy of the March 6 executive order authorizing 
financial sanctions against Zimbabwe's leaders.  Murerwa 
asked whether sanctions extended to businesses owned by 
listed Zimbabweans.  The Ambassador told him the USG has 
yet to define these parameters. 
 
Comment 
------- 
6. (SBU) Murerwa shares customary ZANU-PF biases, blaming 
the UK -- rather than suppression of opposition and rule- 
of-law -- for Zimbabwe's estrangement from much of the 
international community.  However, he is decidedly among 
GOZ moderates, more empirical than ideological, who are 
working quietly to rationalize economic policies.  We 
have no doubt the Harvard-trained educator recognizes 
that the GOZ has gone overboard on self-destructive price 
controls and other statist policies.  He will continue to 
lobby gingerly for liberalization and against cabinet 
hard-liners, probably with mixed results. 
 
Sullivan