THE MORNING AFTER: ZIMBABWE'S POST-ELECTION

C O N F I D E N T I A L SECTION 01 OF 03 HARARE 002810

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LONDON FOR PFLAUMER
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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).

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SUMMARY
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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
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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.

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THREE OUTCOME SCENARIOS
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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,
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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

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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 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

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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.

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RIGHTING THE SHIP OF STATE
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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
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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.

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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

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ACTION AF-00

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.

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THE NEAR TERM OUTLOOK FOR VIOLENCE
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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
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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

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