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O 191504Z AUG 09
FM AMEMBASSY HARARE
TO RUEHC/SECSTATE WASHDC IMMEDIATE 4835
INFO RUCNSAD/SOUTHERN AF DEVELOPMENT COMMUNITY COLLECTIVE
RUEHAR/AMEMBASSY ACCRA 2990
RUEHDS/AMEMBASSY ADDIS ABABA 3105
RUEHRL/AMEMBASSY BERLIN 1534
RUEHBY/AMEMBASSY CANBERRA 2368
RUEHDK/AMEMBASSY DAKAR 2735
RUEHKM/AMEMBASSY KAMPALA 3153
RUEHNR/AMEMBASSY NAIROBI 5598
RUEAIIA/CIA WASHDC
RUZEJAA/JAC MOLESWORTH RAF MOLESWORTH UK
RHMFISS/EUCOM POLAD VAIHINGEN GE
RHEFDIA/DIA WASHDC
RUEHGV/USMISSION GENEVA 2283
RHEHAAA/NSC WASHDC

UNCLAS SECTION 01 OF 06 HARARE 000677 
 
SENSITIVE 
SIPDIS 
 
DEPT FOR AF/RSA KMOODY 
AF/S FOR B.WALCH 
DRL FOR N. WILETT 
ADDIS ABABA FOR USAU 
ADDIS ABABA FOR ACSS 
STATE PASS TO USAID FOR J. HARMON AND L. DOBBINS 
STATE PASS TO HOUSE FOR STEPHANE LEBOUDER 
 
E.O. 12958: N/A 
TAGS: OREP AMGT PREL ASEC PHUM ECON EAID ZI
SUBJECT: SCENESETTER FOR CODEL MEEK'S VISIT TO ZIMBABWE 
SEPTEMBER 2-3, 2009 
 
------- 
SUMMARY 
------- 
 
¶1.  (SBU) U.S. Mission Zimbabwe welcomes Representative Meeks 
and his delegation.  Your visit comes at an important period 
in Zimbabwe's history following the entry into government of 
the Movement for Democratic Change (MDC) in February of this 
year and is an opportunity to express support for democratic 
reform in Zimbabwe and emphasize our expectations of the new 
government.  While the power-sharing agreement between 
President Mugabe's ZANU-PF and the MDC is flawed and fragile, 
under the new government the economy has stabilized after a 
lost decade and there are signs of political change.  Most 
noteworthy is that Morgan Tsvangirai is Prime Minister, 
something that was virtually inconceivable a year ago, and 
the MDC has a majority in Parliament.  Also, the process of 
drafting a new constitution has begun.  Disturbingly, 
however, Mugabe and ZANU-PF continue to drag their heels on 
full implementation of the Global Political Agreement (GPA). 
MDC governors have not yet been appointed, Deputy Minister of 
Agriculture-designate Roy Bennett has not yet been sworn in, 
and Reserve Bank of Zimbabwe (RBZ) Governor Gideon Gono and 
Attorney General Johannes Tomana, appointed in violation of 
the GPA, remain in office.  The Attorney General's office 
under Tomana has selectively prosecuted MDC Members of 
Parliament (MPs) in an apparent attempt to weaken the MDC 
majority in Parliament.  While violence has decreased, 
ZANU-PF structures remain in place in parts of the country 
and there is intimidation of MDC supporters.  Invasions and 
disruptions of white-owned farms and wild-animal 
conservancies continue. 
 
¶2.  (SBU) Investors are showing renewed interest in Zimbabwe 
due to the country's abundant natural resources and 
well-educated populace.  But so far they are remaining on the 
sidelines, concerned about political instability and absence 
of investment security.  There is no land tenure -- title to 
land resides in the State and seizure of land is 
constitutional -- and the government has threatened to 
require 51 percent indigenous ownership of businesses in all 
sectors. 
 
¶3.  (SBU) Donors, especially the U.S., provide large amounts 
of humanitarian assistance, but are unwilling to reengage in 
direct development assistance to the GOZ until there is 
greater compliance with the GPA, particularly an end to human 
rights violations and establishment of the rule of law.  In 
an effort to achieve greater compliance with the GPA, 
Tsvangirai and the MDC have appealed to the Southern African 
Development Community (SADC) and its current head, South 
African President Jacob Zuma.  Zuma is scheduled to visit 
Zimbabwe for an agricultural show on August 27 at which time 
he is expected to hold talks with Mugabe and Tsvangirai.  The 
SADC Heads of State and Government will meet in Kinshasa 
September 7-8.  There are reports that Zuma intends to exert 
QSeptember 7-8.  There are reports that Zuma intends to exert 
more pressure on Mugabe than his predecessor, Thabo Mbeki, 
but this remains to be seen.  Real change appears unlikely 
until there are new elections, and this will probably occur 
in 2012 or 2013.  END SUMMARY. 
 
--------------------------------------------- - 
Despite Flawed Agreement, MDC Joins Government 
--------------------------------------------- - 
 
¶4.  (SBU) Presidential and parliamentary elections took place 
on March 29, 2008 and were relatively fair.  The Tsvangirai 
(MDC-T) and Mutambara (MDC-M) factions of the MDC combined 
 
HARARE 00000677  002 OF 006 
 
 
won a parliamentary majority.  Tsvangirai may have won a 
majority in the presidential vote, but after delaying the 
announcement of results for almost a month, the Zimbabwe 
Electoral Authority announced he was just short of the 50 
percent of the vote necessary to claim outright victory.  In 
the run-up to the June 27, 2008 presidential runoff election, 
ZANU-PF unleashed a campaign of violence against MDC 
supporters.  Tsvangirai ultimately withdrew his name and 
Mugabe won a clearly flawed victory. 
 
¶5.  (SBU) The international community, including SADC 
countries, refused to recognize Mugabe's victory and grant 
him the legitimacy he craved.  Under pressure from SADC, and 
with the economy imploding under inflation that ultimately 
reached over a quadrillion percent, Mugabe entered into 
negotiations with the MDC.  The GPA was signed on September 
15, 2008.  For Mugabe, a coalition government represented a 
way to shift responsibility to the MDC and to gain 
legitimacy; for Tsvangirai, it presented an opportunity to 
enter government and to stabilize the economy and help badly 
affected Zimbabweans. 
 
¶6.  (SBU) While lofty in tone -- the GPA called for an end to 
violence, institution of the rule of law, and power sharing 
-- the agreement was scant as to detail and Tsvangirai spent 
the next five months trying to negotiate with Mugabe as to 
the specifics of the new government.  During this period of 
negotiation, over 30 MDC officials and members of civil 
society were abducted, tortured and prosecuted.  (NOTE:  Even 
after the formation of the new government, many of these 
people are still being prosecuted, although there is no 
evidence to support charges against them.  END NOTE.) 
Despite few gains in negotiations with Mugabe, in February, 
2009 Tsvangirai and the MDC agreed to the passage of 
Amendment 19 which incorporated the GPA and paved the way for 
the inauguration of MDC officials and the establishment of 
the new government in mid-February of this year. 
 
----------------------------- 
Political Progress is Slow... 
----------------------------- 
 
¶7.  (SBU) Two years ago, it would have been difficult to 
conceive that Morgan Tsvangirai would be Prime Minister of 
Zimbabwe, that the MDC would have a majority in parliament, 
and that the Speaker of the House of Assembly would be from 
the MDC.  The MDC is now in a position to influence the 
political and economic trajectory of Zimbabwe, and Tsvangirai 
has been received in the U.S., Europe, and Africa as a head 
of government.  Nevertheless, ZANU-PF is attempting to 
frustrate political progress and the GPA remains unfulfilled. 
 
¶8.  (SBU) The GPA called for major appointments subsequent to 
its signature to be made by Mugabe as president in 
consultation with Tsvangirai.  Nevertheless, Mugabe without 
consultation appointed Gono as Reserve Bank Governor and 
Tomana as Attorney General.  Finance Minister Tendai Biti of 
QTomana as Attorney General.  Finance Minister Tendai Biti of 
MDC-T has largely marginalized Gono whose source of power 
over the last several years rested in his ability to print 
money; with the abandonment of the Zimbabwe dollar and the 
usage of foreign currency, principally the U.S. dollar, 
Gono's wings have been clipped.  Gono remains a symbol, 
however, of economic mismanagement and ZANU-PF patronage. 
Tomana has been largely responsible for the selective 
prosecution of a number of MDC MPs.  This is quite likely 
part of a ZANU-PF strategy to weaken and perhaps overcome the 
MDC's parliamentary majority.  Tsvangirai and the MDC have 
urged Mugabe to comply with the GPA by dismissing both Gono 
 
HARARE 00000677  003 OF 006 
 
 
and Tomana and replacing them in consultation with 
Tsvangirai.  There are signs that Mugabe may accede to a 
compromise:  the replacement of Tomana.  Gono is a Mugabe 
confidante who knows where the skeletons are buried, and 
Mugabe is reluctant to have him on the outside. 
 
¶9.  (SBU) Under the GPA, ZANU-PF and the MDC are supposed to 
divide governorships, ministerial permanent secretaries, and 
ambassadorships.  The parties agreed that permanent 
secretaries and ambassadors will remain in place and be 
replaced proportionally as positions become open.  The first 
five MDC ambassadors were recently named.  An agreement was 
reached several weeks ago dividing governorships between the 
parties.  New governors were to assume their positions the 
first of September.  Last week, Mugabe reneged on the 
agreement; the MDC will appeal to SADC if he fails to comply. 
 
¶10.  (SBU) Roy Bennett, the MDC treasurer, returned from 
exile after the formation of the new government.  He was 
appointed to be a Senator and designated by Tsvangirai as the 
Deputy Minister of Agriculture.  Bennett was arrested and 
charged with treason three days after the new government was 
formed and released on bail a month later.  He is alleged to 
have illegally possessed weapons to use against the 
government.  Bennett's trial is scheduled for October and 
Mugabe has refused to swear him in as deputy minister despite 
the fact that other government officials have been sworn in 
despite pending charges. 
 
¶11.  (SBU) ZANU-PF structures, used to terrorize and 
intimidate MDC supporters in the last election, remain in 
place in many rural areas. 
 
¶12.  (SBU) Invasions and disruptions of farms and wild-animal 
conservancies continue to take place.  These actions prevent 
harvests and are inimical to tourism which is a key component 
of economic growth in Zimbabwe. 
 
------------------------ 
...But There is Progress 
------------------------ 
 
¶13.  (SBU) The GPA calls for an 18-month process to draft a 
new constitution.  This process is being guided by Parliament 
and, despite opposition from ZANU-PF (which fears that 
completion of a new constitution will be a prelude to early 
elections), and elements of civil society (who oppose a 
political, as opposed to a civic-led process), it is 
proceeding. 
 
¶14.  (SBU) The BBC is now operating openly -- albeit with 
some pressures to self-censor -- and there are possibilities 
that independent daily newspapers will be allowed to publish 
in the coming months. 
 
¶15.  (SBU) The MDC is celebrating its 10th anniversary and 
has openly held rallies around the country.  Last weekend in 
Mutare, Zimbabwe's third-largest city, the party claimed 
attendance of 40,000. 
 
¶16.  (SBU) The MDC is present in government and in ministries 
it controls is establishing policies and taking actions.  In 
general, it is seen by the public, which has never known 
Qgeneral, it is seen by the public, which has never known 
post-independence anything but a ZANU-led government, as a 
legitimate democratic governing force. 
 
-------------------------- 
Reversing Economic Decline 
 
HARARE 00000677  004 OF 006 
 
 
-------------------------- 
 
¶17.  (SBU) Zimbabwe's economy shrank across all sectors 
between 1999 and 2008; real GDP is estimated to have declined 
by over 40 percent.  President Mugabe's large unbudgeted 
payments in late 1997 to agitating veterans of the 1970s 
liberation war precipitated the economic decline, and 
Zimbabwe's costly military intervention in the Democratic 
Republic of Congo in the late 1990s further destabilized the 
economy.  The disastrous fast-track land redistribution 
exercise that began in 2000 and the implementation of such 
wrongheaded policies as draconian price controls led to a 
sharp fall in food production and exports.  The collapse of 
the agricultural sector had a multiplier effect on Zimbabwe's 
largely agriculturally-based manufacturing sector - a second 
pillar of the economy.  In addition, Zimbabwe's pariah status 
devastated the tourism industry.  A fourth pillar of the 
economy - the mining sector - failed to take advantage of a 
decade of rising commodity prices, being subject, as well, to 
misguided pricing, poor foreign exchange policies, and 
patronage abuse. 
 
¶18.  (SBU) Zimbabwe's external payments position deteriorated 
sharply in the past decade and the rate of inflation spiraled 
out of control as the government turned to money creation to 
fund its spending.  Inflation is estimated to have peaked at 
an unprecedented level of 500 quadrillion percent in 
September 2008.  In late 2008, the Zimbabwe dollar virtually 
disappeared from circulation and the pricing of goods and 
services shifted to foreign currency. 
 
¶19.  (SBU) Formal acceptance of dollarization by the 
government in February 2009 finally stopped hyperinflation 
overnight and ushered in macroeconomic stability.  The 
adoption of a cash budget (monthly expenses matching monthly 
revenue) by the new government put an end to high deficits 
while dollarization provided a strong nominal anchor for the 
control of inflation.  Upon the new government's reengagement 
with the IMF this year, the Fund approved the provision of 
limited technical assistance to Zimbabwe. 
 
¶20.  (SBU) While the economy has begun to stabilize, the 
systematic and ongoing attack on property rights, and reports 
that all companies will be required to have 51 percent 
indigenous ownership, have scared off investors.  Today 
Zimbabwe, once the breadbasket of southern Africa, is a poor 
and deeply indebted country with a per capita GDP of less 
than US$1/day.  The success of the new government's economic 
policies will depend on introducing further far-reaching 
reforms that will spur production and attract support from 
international donors and investors alike. 
 
----------------------- 
Current U.S. Assistance 
----------------------- 
 
¶21.  (SBU) The Mission's current FY 2009 budget level for 
Zimbabwe (excluding centrally-funded humanitarian assistance) 
is approximately US$66 million.  These funds support 
Qis approximately US$66 million.  These funds support 
activities related to democracy and governance, health, and 
the start-up of an economic growth program.  A supplemental 
budget of US$45 million is currently on the Hill to raise the 
Mission's FY 2009 budget to approximately US$111 million. 
This funding level, although US$60 million short of the 
Mission's full transition request, would enable the Mission 
to begin to implement components of the National Security 
Council's recently-approved transition strategy for Zimbabwe. 
 In addition to the above funding, the Mission receives 
 
HARARE 00000677  005 OF 006 
 
 
significant support from USAID's Bureau for Democracy, 
Conflict, and Humanitarian Assistance (USAID/DCHA) for food 
and non-food humanitarian assistance and transition support. 
To date, FY 2009 funding from DCHA is another US$114 million 
- US$94 million from the Office for Food for Peace 
(USAID/FFP), US$16 million from the Office of Foreign 
Disaster Assistance (USAID/OFDA), and US$4 million from the 
Office of Transition Initiatives (USAID/OTI). 
 
--------------------------------- 
Status of GOZ and Donor Community 
--------------------------------- 
 
¶22.  (SBU) Through a Multi-Donor Trust Fund (MDTF), the donor 
community, including the USG, has created a mechanism to 
provide technical assistance to progressive-line ministries 
and the Office of the Prime Minister to fill critical gaps. 
This mechanism is intended to assist overwhelmed ministries 
to identify and prioritize critical needs and to advise on 
policy reforms.  Coordination between the GOZ and the donor 
community is at a nascent stage.  Much work remains to 
improve coordination at all levels and to educate the GOZ on 
aid effectiveness principles and standard development 
practices. 
 
---------------------------- 
U.S. Policy and Reengagement 
---------------------------- 
 
¶23.  (SBU) The U.S. and other donors form a very cohesive 
front subscribing to a set of principles to guide 
reengagement with Zimbabwe to ultimately include 
developmental assistance.  These principles include: 
 
-- Full and equal access to humanitarian assistance; 
-- Commitment to macroeconomic stabilization; 
-- Restoration of the rule of law, including enforcement of 
contracts, an independent judiciary, and respect for property 
rights; 
-- Commitment to the democratic process and respect for 
internationally accepted human rights standards; and 
-- Commitment to timely free and fair elections with 
international standards, and in the presence of international 
observers. 
 
¶24.  (SBU) Access to humanitarian assistance has improved, 
the MDC-controlled finance ministry is working to achieve 
macroeconomic stabilization, and a constitutional process 
called for by the GPA is underway -- a new constitution is a 
predicate to new elections.  Much remains to be done, 
however, in the area of human rights and rule of law and the 
USG has signaled that greater engagement and developmental 
assistance will depend on progress in these areas.  In the 
interim, and following the guidance of President Obama from 
his meeting in June with Prime Minister Tsvangirai, we are 
putting in place "humanitarian plus" assistance in the areas 
of health, education, and agriculture, including credit 
guarantees. 
 
 
----------- 
The Outlook 
----------- 
 
¶25.  (SBU) Tsvangirai has made clear he is committed to 
remaining in the government.  While he will raise the failure 
of Mugabe and ZANU-PF to fully comply with the GPA with South 
Qof Mugabe and ZANU-PF to fully comply with the GPA with South 
African President Zuma (due to visit Zimbabwe on August 27) 
 
HARARE 00000677  006 OF 006 
 
 
and with SADC (a SADC Heads of State and Government summit 
will take place in Kinshasa in early September), Mugabe is 
only likely to give enough to satisfy SADC and Zuma without 
relinquishing control of government or acceding to meaningful 
reform.  Without such reform, the engagement of donors and 
the International Financial Institutions is likely to be 
limited and economic growth therefore constrained.  On the 
political front, it was initially assumed that the drafting 
of a new constitution would lead to elections in 2010 or 
¶2011.  At this point in time, the most likely scenario is a 
continuing and uneasy coalition between ZANU-PF and the MDC 
with some economic progress and fitful and limited political 
reform.  Real political change would seem possible only after 
a new election.  Neither party, however, seems eager to 
advance elections which are scheduled under the current 
constitution for 2013. 
 
-------------------- 
A Note on Your Visit 
-------------------- 
 
¶26.  (SBU) Your visit provides an opportunity to demonstrate 
U.S. commitment to democratic transition in Zimbabwe.  You 
will be meeting with President Mugabe, Prime Minister 
Tsvangirai, and House of Assembly Speaker Lovemore Moyo and 
other parliamentarians.  With Mugabe, you will be able to 
reiterate the message that the U.S. supports the Zimbabwean 
people, but that greater engagement, including assistance, 
depends on a demonstration of greater commitment to political 
reform and rule of law.  With Tsvangirai, you can express 
support for his efforts to achieve democratic reform and 
encourage him to continue to press for full implementation of 
the GPA.  With parliamentarians, you can underscore the 
importance of drafting a constitution that enshrines 
fundamental liberties and contains property guarantees.  You 
can also emphasize the importance of an independent 
legislature. 
 
DHANANI