This record is a partial extract of the original cable. The full text of the original cable is not available.

241448Z May 00


                           CONFIDENTIAL     PTQ2086

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                  ------------------5AE569  241447Z /38    
FM AMEMBASSY HARARE
TO SECSTATE WASHDC PRIORITY 6138
INFO NSC WASHDC PRIORITY
SOUTHERN AFRICAN DEVELOPMENT COMMUNITY
USDOC WASHDC
DEPTTREAS WASHDC

C O N F I D E N T I A L SECTION 01 OF 03 HARARE 002810 
 
SIPDIS 
 
LONDON FOR PFLAUMER 
PARIS FOR BISA WILLIAMS 
PASS USTR FOR ROSA WHITAKER 
PASS USAID FOR A/AID RMCCALL AND AFR/SA WJEFFERS 
NSC FOR SENIOR AFRICA DIRECTOR GAYLE SMITH 
TREASURY FOR ED BARBER AND GRACE SONE 
USDOC FOR 2037/ERIC HENDERSON 
 
E.O. 12958: DECL: 05/24/2010 
                       CONFIDENTIAL 
 
PAGE 02        HARARE  02810  01 OF 03  241446Z 
TAGS: PGOV ECON PINR ZI
SUBJECT: THE MORNING AFTER: ZIMBABWE'S POST-ELECTION 
ECONOMIC HANGOVER 
 
REF: HARARE 2684 
 
CLASSIFIED BY AMBASSADOR TOM MCDONALD FOR REASONS 1.5 
(B) AND (D). 
 
------- 
SUMMARY 
------- 
 
¶1.  (C) ZIMBABWE'S ECONOMIC PROBLEMS ARE NOT BEING 
DISCUSSED DURING THIS ELECTION CAMPAIGN; PRESIDENT 
MUGABE HAS DONE A BRILLIANT JOB MAKING LAND 
REDISTRIBUTION THE PRINCIPAL AGENDA ITEM FOR DEBATE.  WE 
SEE THREE POSSIBLE ELECTION SCENARIOS UNFOLDING IN THE 
NEXT MONTH: 1. A MORE OR LESS EVEN SPLIT BETWEEN THE 
RULING PARTY AND THE OPPOSITION MOVEMENT FOR DEMOCRATIC 
CHANGE (MDC); 2. AN OUTRIGHT MDC VICTORY; OR 3. AN 
OVERWHELMING ZANU-PF VICTORY.  AT THIS WRITING THE LAST 
OUTCOME IS THE MOST PROBABLE, AND SHOULD IT COME TO PASS 
IT SEEMS CLEAR TO US THAT ZIMBABWE'S ECONOMIC PROBLEMS 
WILL ONLY WORSEN, BECAUSE PROPONENTS OF RESPONSIBLE 
FISCAL AND MONETARY POLICIES WILL BE MARGINALIZED.  WE 
THINK PRESIDENT MUGABE MAY RUN FOR OFFICE AGAIN IN 2002 
ON THE STRENGTH OF HIS HANDLING OF THE LAND ISSUE AND 
CLAIM OF UNIQUE ABILITY TO STEER THE COUNTRY THROUGH ITS 
MOUNTING DIFFICULTIES.  HE WILL NOT, HOWEVER, ADDRESS 
THE ZIMBABWE'S ECONOMIC MALAISE SINCERELY, BUT RATHER 
                       CONFIDENTIAL 
 
PAGE 03        HARARE  02810  01 OF 03  241446Z 
WILL SHIFT THE BLAME FOR IT ON OTHERS.  MEANWHILE, WE ARE 
PICKING UP SIGNALS THAT POLITICALLY-MOTIVATED VIOLENCE 
MAY TAPER OFF IN THE RUN-UP TO THE ELECTION.  END 
SUMMARY. 
 
¶2.  (C) PRESIDENT ROBERT MUGABE SUCCEEDED BRILLIANTLY IN 
SHIFTING THE FOCUS OF THE ELECTORAL CAMPAIGN DEBATE AWAY 
FROM WHAT REALLY AILS THIS COUNTRY -- THE FAILING OF 
LEADERSHIP AND THE ECONOMIC MORASS -- TO THE LAND ISSUE. 
IF ALLOWED TO PROCEED UNCHECKED IN HIS HOMEGROWN LAND 
REFORM PROGRAM, HE WILL INFLICT DAMAGE THAT WILL BE VERY 
DIFFICULT TO REVERSE. 
 
----------------------- 
THREE OUTCOME SCENARIOS 
----------------------- 
 
¶3.  (C) THREE SCENARIOS PRESENT THEMSELVES FOR THE JUNE 
24-25 PARLIAMENTARY ELECTION, WHICH, THANKS TO THE 
ACHIEVEMENTS OF THE VIOLENCE AND INTIMIDATION CAMPAIGN 
AGAINST OPPOSITION SUPPORTERS, THE PRESIDENT FELT 
SUFFICIENTLY CONFIDENT TO CALL.  THE FIRST SEES A MORE 
OR LESS EVEN SPLIT OF THE VOTE, WITH A SMALL WIN FOR ONE 
OF THE PARTIES.  SUCH AN OUTCOME WOULD IMPLY A TWO-YEAR 
DE FACTO TRANSITION PERIOD FOR ZANU-PF, UNTIL THE 2002 
PRESIDENTIAL ELECTION.  THE RULING PARTY NO LONGER WOULD 
HAVE THE LEGITIMACY SIMPLY TO IGNORE THE MDC, AND THE 
MODERATES AND REFORMERS IN ZANU-PF WOULD GAIN STRENGTH 
FROM THE POLITICAL DYNAMICS OF THE DAY. 
 
¶4.  (C) THE SECOND SEES AN OUTRIGHT VICTORY FOR THE MDC, 
                       CONFIDENTIAL 
 
PAGE 04        HARARE  02810  01 OF 03  241446Z 
AN INCREASINGLY REMOTE POSSIBILITY.  WE CANNOT RULE IT 
OUT BECAUSE OF AT LEAST TWO UNKNOWNS: FIRST, WHETHER 
ZANU-PF'S INTIMIDATION CAMPAIGN HAS BACKFIRED, AND ON 
ELECTION DAY THE PEOPLE WILL BRAVE THREATS OF 
RETRIBUTION AND VOTE FOR THE MDC; AND SECOND, WHETHER 
THE CIVIL SERVANTS, INCREASINGLY TARGETED BY ZANU-PF'S 
IRE AND WHOSE TASK IT HAS BEEN IN THE PAST TO OFFICIATE 
AT THE POLLS, WILL BE REPLACED BY MORE "LOYAL" ZANU-PF 
SUPPORTERS (AMONG THEM WAR VETS) TO HELP RIG THE POLLS. 
THE GOVERNMENT THAT EMERGES IN THAT CASE WILL BE FACED 
WITH CONTINUOUS CONSTITUTIONAL CHALLENGES, OCCASIONALLY 
EVEN PARALYSIS, AS THE CURRENT CONSTITUTION DOES NOT 
ENVISION SUCH AN EVENTUALITY.  IT WILL BE ROUGH, BUT 
WITH HOPE.  AT THIS WRITING THAT OUTCOME IS IMPROBABLE. 
WE DO NOT RULE OUT A SUBSET OF THIS SCENARIO IN WHICH 
THE MDC IS ALLOWED TO HAVE AS MANY AS 30 SEATS, 
REGARDLESS OF THE OUTCOME AT THE BALLOT BOX, AND BE 
SATISFIED WITH THE OUTCOME. 
 
¶5.  (C) THE THIRD SCENARIO SEES AN OUT-AND-OUT ZANU-PF 
MAJORITY (THIS ALLOWS FEWER THAN 30 SEATS FOR MDC).  AT 
THIS TIME, THIS SEEMS LIKE THE MOST PROBABLE ELECTORAL 
OUTCOME, ACHIEVED THROUGH INTIMIDATION, RIGGING, AND 
NEUTRALIZING THE OPPOSITION'S ABILITY TO MOUNT ANY 
RESISTANCE.  CONCERN FOR THE ECONOMY IN THAT CASE WILL 
 
                       CONFIDENTIAL 
 
                           CONFIDENTIAL     PTQ2087 
 
PAGE 01        HARARE  02810  02 OF 03  241447Z 
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      EB-00    EUR-01   EXIM-01  E-00     FAAE-00  FBIE-00  VC-00 
      FRB-00   H-01     TEDE-00  INR-00   IO-00    ITC-01   LAB-01 
      L-00     VCE-00   AC-01    NSAE-00  OMB-01   OPIC-01  PA-00 
      PM-00    PRS-00   ACE-00   P-00     SP-00    IRM-00   SSO-00 
      STR-00   USIE-00  R-00     PMB-00   DSCC-00  DRL-02   G-00 
      NFAT-00  SAS-00     /012W 
                  ------------------5AE57A  241447Z /38 
P 241448Z MAY 00 
FM AMEMBASSY HARARE 
TO SECSTATE WASHDC PRIORITY 6139 
INFO NSC WASHDC PRIORITY 
SOUTHERN AFRICAN DEVELOPMENT COMMUNITY 
USDOC WASHDC 
DEPTTREAS WASHDC 
 
C O N F I D E N T I A L SECTION 02 OF 03 HARARE 002810 
 
SIPDIS 
 
LONDON FOR PFLAUMER 
PARIS FOR BISA WILLIAMS 
PASS USTR FOR ROSA WHITAKER 
PASS USAID FOR A/AID RMCCALL AND AFR/SA WJEFFERS 
NSC FOR SENIOR AFRICA DIRECTOR GAYLE SMITH 
TREASURY FOR ED BARBER AND GRACE SONE 
USDOC FOR 2037/ERIC HENDERSON 
 
                       CONFIDENTIAL 
 
PAGE 02        HARARE  02810  02 OF 03  241447Z 
E.O. 12958: DECL: 05/24/2010 
TAGS: PGOV ECON PINR ZI
SUBJECT: THE MORNING AFTER: ZIMBABWE'S POST-ELECTION 
ECONOMIC HANGOVER 
 
BE THE PREOCCUPATION OF A FEW, PROBABLY CIVIL SERVANTS, 
WHO WORRY ABOUT THE COUNTRY'S CREDIBILITY ON THE 
INTERNATIONAL SCENE.  THESE INDIVIDUALS LIKELY WILL BE 
MARGINALIZED OR SILENCED.  THE TRIUMPHANT ZANU-PF 
LEADERSHIP WILL CONTINUE ITS ECONOMIC ISOLATION WITH 
PRIDE, AND WILL BE IN NO HURRY TO RESTORE RELATIONS WITH 
THE INTERNATIONAL FINANCIAL INSTITUTIONS OR THE DONORS. 
MANY THINK, LIKE COMMERCE AND INDUSTRY MINISTER NATHAN 
SHAMUYARIRA, THAT THE COUNTRY WAS BADLY ADVISED BY THE 
WEST TO ADOPT A STRUCTURAL ADJUSTMENT PROGRAM IN 1991, 
AND THAT MUGABE COULD RETURN TO THE STATIST, AUTARCHIC 
AND MARXIST ECONOMIC POLICIES OF THE 1980'S. 
 
-------------------------- 
RIGHTING THE SHIP OF STATE 
-------------------------- 
 
¶6.  (C) NO COUNTRY APPEARS ABLE TO SURVIVE ANY MORE WITH 
SUCH POLICIES IN PLACE (THE EXAMPLES OF NORTH KOREA, 
CUBA AND IRAQ SPRING TO MIND), AND NOT ONLY ZIMBABWE'S 
PEOPLE BUT THE SUB-REGION AS A WHOLE WILL FEEL THE 
IMPACT OF DECLINING ECONOMIC PERFORMANCE.  THE PROBLEMS 
CURRENTLY FACED OF AN OVERVALUED BUT FUNDAMENTALLY WEAK 
CURRENCY, NO FOREIGN EXCHANGE, GALLOPING INFLATION, 
BALLOONING PUBLIC DEBT AND SHRINKING OUTBOUND TRADE WILL 
ONLY GET WORSE.  IT WILL ONLY BE A MATTER OF TIME UNTIL 
                       CONFIDENTIAL 
 
PAGE 03        HARARE  02810  02 OF 03  241447Z 
TURMOIL RESURFACES.  AT THIS POINT WE FORESEE 
SUBSTANTIAL CAPITAL FLIGHT, WITH WHITES QUEUING UP TO 
FLEE TO WHATEVER COUNTRY WILL TAKE THEM, AND 
MANUFACTURERS CLOSING FACTORIES AND SHRINKING OPERATIONS 
TO STAUNCH THEIR LOSSES. 
 
¶7.  (C) IN OUR JUDGMENT, FOR ZIMBABWE TO GET BACK ON THE 
ECONOMIC TRACK THE GOVERNMENT NEEDS TO: 
 
-- SLASH SPENDING TO REIN IN THE DEFICIT (FISCAL 
POLICY); 
 
-- ADHERE TO A STRICT MONETARY POLICY; 
 
-- SUPPORT, AND NOT ATTACK, THE PRIVATE SECTOR; 
 
-- PRIVATIZE THE PARASTATALS, VIRTUALLY ALL OF WHICH ARE 
LOSS MAKERS; 
 
-- INITIATE A SERIOUS ANTI-CORRUPTION DRIVE WITH 
CREDIBLE FOLLOW-THROUGH; 
 
-- PARTICIPATE IN SADC IN A SERIOUS MANNER (THE ATTITUDE 
NOW IS STRICTLY WHAT'S IN IT FOR ZIMBABWE AND USING IT 
AS A POLITICAL FORUM); 
 
-- CARRY OUT LAND REFORM IN A RESPONSIBLE MANNER; AND 
 
-- RESTORE THE CITIZENRY'S FAITH IN RULE OF LAW AND 
RESPECT FOR FREE MARKET PRINCIPLES. 
 
                       CONFIDENTIAL 
 
PAGE 04        HARARE  02810  02 OF 03  241447Z 
¶8.  (C) FOR THE TIME BEING WE HAVE SEEN LITTLE 
INDICATION THAT ANYONE IN THE POLITICAL LEADERSHIP IS 
GIVING ANY OF THESE MEASURES SERIOUS THOUGHT, NEVER MIND 
TAKING ANY STEPS IN SUCH A DIRECTION.  ONE SENIOR 
MINISTRY OF FINANCE OFFICIAL, TRYING TO PUT THE BEST 
FACE ON THINGS, TOLD US ON MAY 23 THAT HIS MINISTRY'S 
PATRIOTIC CIVIL SERVANTS HAD INSTITUTED A PRE-PAID 
SYSTEM OF COUPONS TO BAR OTHER GOVERNMENT DEPARTMENTS 
FROM GETTING FREE FUEL AT THE GOVERNMENT'S DEPOTS.  NO 
GOVERNMENT OFFICIAL WILL BE PINNED DOWN ON WHAT THE 
POST-ELECTION ECONOMIC POLICY MIGHT BE BEYOND REFERRING 
TO THE MILLENNIUM ECONOMIC RECOVERY PROGRAM (MERP), A 
COMPILATION OF ECONOMIC GOALS LONG ON DESIDERATA AND 
SHORT ON SPECIFICS OF HOW TO REACH THEM.  THE ZANU-PF 
ELECTORAL PARTY PLANK, IN ANY CASE, MIGHTILY CONTRADICTS 
THE MERP'S PRECEPTS AND GOALS.  CIVIL SERVANTS WHO WILL 
BE BRUTALLY FRANK WITH US SAY THAT THEY HOPE THE WORLD 
WILL FORGET THE BEHAVIOR AND EVENTS LEADING UP TO THE 
ELECTION AND LEND ZIMBABWE A HELPING HAND.  "WE WILL 
NEED A FEW FRIENDS," OUR FINANCE MINISTRY INTERLOCUTOR 
TOLD US, "TO HELP US OUT OF THE PIT WE HAVE DUG 
OURSELVES." 
 
¶9.  (C) ROBERT MUGABE WILL BE DEALING WITH A HIGHLY 
INDEBTED AND DYSFUNCTIONAL COUNTRY AS HE CONTEMPLATES 
ANOTHER RUN AT THE PRESIDENCY IN 2002.  ONCE THE LAND 
 
                       CONFIDENTIAL 
 
                           CONFIDENTIAL     PTQ2088 
 
PAGE 01        HARARE  02810  03 OF 03  241447Z 
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INFO  LOG-00   NP-00    AID-00   ACQ-00   CEA-01   CIAE-00  CTME-00 
      INL-01   DINT-00  DODE-00  DOTE-00  ANHR-00  SRPP-00  DS-00 
      EB-00    EUR-01   EXIM-01  E-00     FAAE-00  FBIE-00  VC-00 
      FRB-00   H-01     TEDE-00  INR-00   ITC-01   LAB-01   L-00 
      VCE-00   AC-01    DCP-01   NSAE-00  OMB-01   OPIC-01  PA-00 
      PM-00    PRS-00   ACE-00   P-00     SP-00    SSO-00   STR-00 
      USIE-00  PMB-00   DSCC-00  DRL-02   G-00     NFAT-00  SAS-00 
        /013W 
                  ------------------5AE585  241447Z /38 
P 241448Z MAY 00 
FM AMEMBASSY HARARE 
TO SECSTATE WASHDC PRIORITY 6140 
INFO NSC WASHDC PRIORITY 
SOUTHERN AFRICAN DEVELOPMENT COMMUNITY 
USDOC WASHDC 
DEPTTREAS WASHDC 
 
C O N F I D E N T I A L SECTION 03 OF 03 HARARE 002810 
 
SIPDIS 
 
LONDON FOR PFLAUMER 
PARIS FOR BISA WILLIAMS 
PASS USTR FOR ROSA WHITAKER 
PASS USAID FOR A/AID RMCCALL AND AFR/SA WJEFFERS 
NSC FOR SENIOR AFRICA DIRECTOR GAYLE SMITH 
TREASURY FOR ED BARBER AND GRACE SONE 
USDOC FOR 2037/ERIC HENDERSON 
 
                       CONFIDENTIAL 
 
PAGE 02        HARARE  02810  03 OF 03  241447Z 
E.O. 12958: DECL: 05/24/2010 
TAGS: PGOV ECON PINR ZI
SUBJECT: THE MORNING AFTER: ZIMBABWE'S POST-ELECTION 
ECONOMIC HANGOVER 
 
ISSUE IS DEALT WITH (WHETHER INEPTLY AND UNJUSTLY OR 
NOT, IT WILL BE MORE THAN DIFFICULT FOR ANY SUBSEQUENT 
GOVERNMENT TO REVERSE IT), IT WOULD SEEM, PERFORCE, 
MUGABE WILL HAVE TO ADDRESS THE ECONOMY. WE PREDICT HE 
WILL DO SO INSINCERELY, IF HISTORY TEACHES US ANY 
LESSONS IN ZIMBABWE.  THE PRESIDENT LIKELY WILL SHIFT 
THE BLAME FOR ITS POOR PERFORMANCE ON THE WEST 
(SPECULATORS, THE BRITISH, HOMOSEXUALS AND WHOMEVER ELSE 
COMES TO MIND), AND ARGUE THAT HE IS THE ONLY ONE WHO 
CAN SAVE ZIMBABWE FROM THE TENEBROUS FORCES UNLEASHED BY 
GLOBALIZATION. 
 
---------------------------------- 
THE NEAR TERM OUTLOOK FOR VIOLENCE 
---------------------------------- 
 
¶10.  (C) REGARDING POLITICAL VIOLENCE, WE ARE PICKING UP 
COUNTERINTUITIVE SIGNALS THAT IT LIKELY WILL ABATE IN 
THE IMMEDIATE RUN-UP TO THE ELECTION, ALTHOUGH THE WEEK 
PRECEDING THE JUNE 24 AND 25 VOTING DATES COULD SEE AN 
ESCALATION.  WITH THE SAME, SIMPLE LOGIC HIS PRESIDENT 
USED ON LAND (THEY STOLE IT FROM US, WE'LL TAKE IT 
BACK), THE MINISTER OF STATE FOR NATIONAL SECURITY, 
SYDNEY SEKERAMAYI, ON MAY 21 IN MARONDERA CALLED FOR AN 
END TO POLITICAL VIOLENCE, BUT WARNED OMINOUSLY THAT, 
"AFTER THE VOTES WE WILL SEE WHO HAS BEEN CHEATING US 
                       CONFIDENTIAL 
 
PAGE 03        HARARE  02810  03 OF 03  241447Z 
AND WE WILL DEAL WITH EACH OTHER."  THE ARRIVAL OF 
FOREIGN OBSERVERS IS BEGINNING TO HAVE AN EFFECT.  THE 
ZANU-PF LEADERSHIP DOES NOT WISH TO BE SEEN AS THE 
PERPETRATOR OF CRUDE SAVAGERY WHEN IT IS SQUARE IN THE 
FOCUS OF THE WORLD, PARTICULARLY THAT OF FELLOW 
AFRICANS. 
 
MCDONALD 
 
                       CONFIDENTIAL 
 
>