WILL NEW FINANCE MINISTER BE ABLE TO STAND UP

C O N F I D E N T I A L SECTION 01 OF 03 HARARE 004039

SIPDIS

NSC FOR SENIOR AFRICA DIRECTOR GAYLE SMITH

LONDON FOR PFLAUMER

PARIS FOR BISA WILLIAMS

USDOC FOR DHENKE-ROGERS

PASS USAID FOR R. MCALL AND AFR/SA T. PARK

PASS USTR FOR ROSA WHITAKER

E.O. 12958: DECL: 07/20/2010
TAGS: PGOV PINR ECON ZI
SUBJECT: WILL NEW FINANCE MINISTER BE ABLE TO STAND UP
TO MUGABE?

REF: HARARE 3967

CLASSIFIED BY CHARGE D'AFFAIRES EARL M. IRVING FOR
REASONS 1.5 (B) AND (D).


1. (C) SUMMARY: LESS THAN A WEEK AFTER THE APPOINTMENT
WAS ANNOUNCED, ALL EYES ARE ON FINANCE MINISTER SIMBA
MAKONI, A TALENTED TECHNOCRAT WHO MANY BELIEVE IS THE
CABINET'S MOST IMPORTANT MINISTER, WHILE INDUSTRY AND
INTERNATIONAL TRADE MINISTER NKOSANA MOYO ARGUABLY HAS
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THE NUMBER TWO SPOT. THE CHOICE OF MAKONI SURPRISED
MANY, GIVEN THE ROCKY RELATIONSHIP HE HAS HAD WITH THE
PRESIDENT AND RECENT INDICATIONS THAT MACON MIGHT JOIN
THE OPPOSITION MOVEMENT FOR DEMOCRATIC CHANGE (MDC). WE
THINK THAT THE IDEOLOGICALLY UNRECONSTRUCTED MUGABE WILL
NOT YIELD ANY POWER AND WILL BE UNABLE TO RESIST
MEDDLING IN MAKONI'S BRIEF. IF THAT TURNS OUT TO BE THE
CASE, MAKONI MAY NOT LAST LONG IN THE JOB AND HIS MOST
POWERFUL WEAPON WOULD BE A CRITICALLY WORDED RESIGNATION
LETTER. MUGABE MAY ATTEMPT TO CO-OPT HIS NEW FINANCE
MINISTER BY ELEVATING HIM TO ZANU-PF'S POLITBURO, A MOVE
THAT SURELY WILL BE RESISTED BY INSIDERS LIKE EMMERSON
MNANGAGWA AND SYDNEY SEKERAMAYI. ZANU-PF OFFICIALS ARE
IN CAMPAIGN MODE FOR THE 2002 PRESIDENTIAL ELECTION, AND
IT IS NOT REALISTIC TO EXPECT ENLIGHTENED BEHAVIOR FROM
THEM. THE BEST THAT CAN BE SAID IS THAT MAKONI IS
LIKELY TO FIGHT HARD TO PUT IN PLACE SOUND ECONOMIC
POLICIES, BUT WILL ONLY WIN SOME OF THEM. END SUMMARY.


2. (C) WHEN PRESIDENT MUGABE APPOINTED HIS NEW CABINET,
IT WAS WIDELY AGREED THAT THE BEST NEWS WAS THE
APPOINTMENT OF DR. SIMBARASHE "SIMBA" HERBERT STANLEY
MAKONI AS MINISTER OF FINANCE. THE CHOICE WAS SOMETHING
OF A SURPRISE, GIVEN PAST TENSIONS BETWEEN THE TWO MEN.
ONCE A RISING STAR IN CABINET AS ENERGY MINISTER,
MAKONI, LATER AS CHIEF EXECUTIVE OF THE STATE-OWNED
NEWSPAPER CORPORATION, ANGERED MUGABE AFTER TRYING TO
SUSPEND "SUNDAY MAIL" EDITOR CHARLES CHIKEREMA, A ZANU-
PF HEAVYWEIGHT. THE ZIMBABWEAN PRESIDENT ARRANGED FOR
POLITICALLY CENTRIST MAKONI TO BE PUSHED OUT OF HIS
POSITION AS EXECUTIVE SECRETARY OF THE SOUTHERN AFRICAN
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DEVELOPMENT COMMUNITY, A POSITION HE HELD FROM 1984 TO

1993. MAKONI IS SEEN AS THE MOST IMPORTANT MINISTER IN
THE NEW CABINET, AND, LESS THAN A WEEK AFTER MAKONI'S
APPOINTMENT, ALL EYES ARE ON HIM. MINISTER OF INDUSTRY
AND INTERNATIONAL TRADE NKOSANA MOYO, WHO UNTIL LAST
WEEK DID NOT HAVE A ZANU-PF PARTY CARD, IS IN THE SAME
LEAGUE AND HAS RECEIVED ALMOST AS MUCH ATTENTION.


3. (C) THERE ARE TWO STORIES CIRCULATING IN HARARE ON
THE APPOINTMENT OF THE CAPABLE SIMBA MAKONI AS MINISTER
OF FINANCE. THE FIRST IS THAT PRESIDENT MUGABE ASKED
VICE PRESIDENT JOSEPH MSIKA TO INFORM MAKONI OF HIS
DECISION. WHEN THE VICE PRESIDENT DID SO, THE MINISTER
DESIGNATE ASKED FOR AN AUDIENCE WITH MUGABE TO DISCUSS
HOW HE WOULD HANDLE THE PORTFOLIO. MSIKA TOOK THE
MESSAGE BACK, AND IN TYPICAL MUGABE FASHION NO AUDIENCE
TOOK PLACE AND THE PUBLIC ANNOUNCEMENT WAS MADE. IN THE
SECOND VERSION, MAKONI ACTUALLY MET WITH MUGABE FOR
THREE HOURS DURING WHICH TIME HE SPELLED OUT THE
CONDITIONS UNDER WHICH HE WOULD ACCEPT THE APPOINTMENT.
DEPENDING ON WHICH VERSION YOU BELIEVE, EITHER MUGABE OR
MAKONI HAS ALREADY WON THE FIRST OF WHAT ARE LIKELY TO
BE MANY BATTLES.

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INFO LOG-00 NP-00 AID-00 ACQ-00 CEA-01 CIAE-00 SMEC-00
CTME-00 DINT-00 DODE-00 DOEE-00 DOTE-00 SRPP-00 DS-00
EB-00 EUR-00 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 OIC-02 OMB-01 OPIC-01
PA-00 PM-00 PRS-00 ACE-00 P-00 SP-00 SSO-00
STR-00 USIE-00 R-00 PMB-00 DSCC-00 DRL-02 G-00
NFAT-00 SAS-00 /012W
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FM AMEMBASSY HARARE
TO SECSTATE WASHDC PRIORITY 6666
INFO NSC WASHDC PRIORITY
DEPTTREAS WASHDC
AMCONSUL CAPE TOWN
AMEMBASSY GABORONE
AMEMBASSY LILONGWE
AMEMBASSY LONDON
AMEMBASSY LUSAKA
AMEMBASSY MAPUTO
AMEMBASSY MASERU
AMEMBASSY MBABANE
AMEMBASSY NAIROBI
AMEMBASSY PARIS
AMEMBASSY PRETORIA
USDOC WASHDC
USMISSION USUN NEW YORK
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AMEMBASSY WINDHOEK

C O N F I D E N T I A L SECTION 02 OF 03 HARARE 004039

SIPDIS

NSC FOR SENIOR AFRICA DIRECTOR GAYLE SMITH

LONDON FOR PFLAUMER

PARIS FOR BISA WILLIAMS

USDOC FOR DHENKE-ROGERS

PASS USAID FOR R. MCALL AND AFR/SA T. PARK

PASS USTR FOR ROSA WHITAKER

E.O. 12958: DECL: 07/20/2010
TAGS: PGOV PINR ECON ZI
SUBJECT: WILL NEW FINANCE MINISTER BE ABLE TO STAND UP
TO MUGABE?


4. (C) SOME CRITICS, FOR EXAMPLE MDC PRESIDENT MORGAN
TSVANGIRAI, BELIEVE THAT MAKONI'S ACCEPTANCE OF THE

SIPDIS
APPOINTMENT WAS IN ITSELF A CAPITULATION TO MUGABE. IT
CAUGHT THE OPPOSITION LEADER BY SURPRISE BECAUSE AT ONE
POINT IT APPEARED PROBABLE THAT MAKONI MIGHT JOIN THE
MDC, ADDING TO THE NEW PARTY'S INTELLECTUAL HEFT AND
PRESTIGE. TSVANGIRAI TOLD AN OFFICER OF THE BRITISH
HIGH COMMISSION HERE THAT HE THOUGHT MAKONI WAS A
"COWARD," AND THAT IF HE THOUGHT THAT WAS THE WAY TO
ADVANCE HIS POLITICAL CAREER, HE WAS WRONG.
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NEVERTHELESS, MAKONI HAS A REPUTATION FOR INDEPENDENT
THINKING, AND IF MUGABE DOES WISH TO CO-OPT HIM,
ELEVATING HIM TO THE POLITBURO OF ZANU-PF IS PROBABLY
THE BEST WAY TO DO SO. THE BUSINESS COMMUNITY LIKELY
WILL APPLAUD THE MOVE, AS IT WILL GIVE MAKONI THE
POLITICAL CLOUT TO PURSUE HIS POLICIES. SIMILARLY, IT
MAY SHOW THE POPULATION THAT MUGABE IS FORGIVING, IN THE
TRADITION OF AFRICAN CHIEFS, OF A "LITTLE MAN" WHO ONCE
INSULTED HIM. FINALLY, MAKONI WOULD BE A "MADE MAN,"
DEPENDENT ON THE ONE WHO MADE HIM -- MUGABE.


5. (C) TSVANGIRAI'S PERSONAL DISAPPOINTMENT
NOTWITHSTANDING, MANY OBSERVERS HERE SEE MAKONI AND MOYO
OPERATING FROM A POSITION OF STRENGTH. THEY ARGUE THAT
IT IS UNLIKELY THAT THE TWO MEN WOULD HAVE ACCEPTED
THEIR POSITIONS IF IT WAS CLEAR FROM THE OUTSET THAT
THEIR HANDS WOULD BE COMPLETELY TIED. FURTHERMORE, IF
THE PRESIDENT HAD SIMPLY WANTED A ZANU-PF PARTY HACK, HE
WOULD HAVE APPOINTED ONE. IN FACT, WE UNDERSTAND THE
PRESIDENT MADE THE APPOINTMENT AT THE PRODDING OF SOME
MEMBERS OF HIS ENTOURAGE, WHO SEE ADDRESSING THE
COUNTRY'S ECONOMIC ILLS AS THE KEY TO ZANU-PF'S (AS WELL
AS THEIR) OWN SURVIVAL. THE PRESIDENT HIMSELF IS
PROBABLY NOT CONVINCED THAT THE ECONOMY IS THE MOST
PRESSING ISSUE ON HIS AGENDA, BUT HE LIKES TO SURPRISE
AND CHALLENGE CONVENTIONAL WISDOM, AND THUS AGREED TO
MAKE THE APPOINTMENT. IF THE TWO MINISTERS DO FIND
THEMSELVES STYMIED BY MUGABE, THEIR MOST POWERFUL WEAPON
AT THE MOMENT WOULD BE A CRITICALLY WORDED LETTER OF
RESIGNATION, SHOULD PRESIDENTIAL INTERFERENCE IN THEIR
PORTFOLIO MAKE THEIR POSITION UNTENABLE.
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6. (C) EVEN IF MUGABE DOES NOT ACT DIRECTLY TO THWART
MAKONI, THE NEW FINANCE MINISTER STILL FACES A DIFFICULT
TASK. WHILE THE OUTCOME OF THE JUNE 24-25 PARLIAMENTARY
ELECTION WAS THE BEST POSSIBLE FOR MINIMIZING THE
POTENTIAL FOR WIDESPREAD VIOLENCE, AND THE NATURE OF THE
DOMESTIC DEBATE IS SHIFTING TOWARD ECONOMICS, CURRENT
CONDITIONS MAKE IT DIFFICULT TO REACH DECISIONS ON THE
ECONOMY. WHILE MAKONI IS AN ABLE TECHNOCRAT, HE LACKS
THE POLITICAL BASE OR CLOUT TO ENFORCE THE TOUGH
ECONOMIC DECISIONS THAT HAVE TO BE MADE. HE ENJOYS THE
SUPPORT AND RESPECT OF THE BUSINESS COMMUNITY, BUT
GETTING TOO CLOSE TO IT WOULD RAISE THE PRESIDENT'S
SUSPICIONS, AS MUGABE PERCEIVES IT AS THE ENEMY. IN
ADDITION, THE BOSSY AND IDEOLOGICALLY UNRECONSTRUCTED
MUGABE MAY FIND IT DIFFICULT TO RESIST MEDDLING WITH
MAKONI'S PORTFOLIO. MEMBERS OF THE ZANU-PF INNER
CIRCLE, SUCH AS EMMERSON MNANGAGWA AND SYDNEY
SEKERAMAYI, WOULD SEE MAKONI'S SUDDEN RISE INTO THE
POLITBURO AS A THREAT TO THEIR INTERESTS AND WOULD DO
EVERYTHING THEY COULD TO BLOCK IT.


7. (C) FURTHERMORE, ZIMBABWE'S ECONOMIC RECOVERY
DEPENDS ON A NUMBER OF FACTORS OUTSIDE MAKONI'S CONTROL,

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ACTION AF-00

INFO LOG-00 NP-00 AID-00 ACQ-00 CEA-01 CIAE-00 SMEC-00
CTME-00 DINT-00 DODE-00 DOEE-00 DOTE-00 SRPP-00 DS-00
EB-00 EUR-00 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 OIC-02 OMB-01 OPIC-01
PA-00 PM-00 PRS-00 ACE-00 P-00 SP-00 SSO-00
STR-00 USIE-00 R-00 PMB-00 DSCC-00 DRL-02 G-00
NFAT-00 SAS-00 /012W
-------------- 70E203 210958Z /38
P 211002Z JUL 00
FM AMEMBASSY HARARE
TO SECSTATE WASHDC PRIORITY 6667
INFO NSC WASHDC PRIORITY
DEPTTREAS WASHDC
AMCONSUL CAPE TOWN
AMEMBASSY GABORONE
AMEMBASSY LILONGWE
AMEMBASSY LONDON
AMEMBASSY LUSAKA
AMEMBASSY MAPUTO
AMEMBASSY MASERU
AMEMBASSY MBABANE
AMEMBASSY NAIROBI
AMEMBASSY PARIS
AMEMBASSY PRETORIA
USDOC WASHDC
USMISSION USUN NEW YORK
CONFIDENTIAL

PAGE 02 HARARE 04039 03 OF 03 210958Z
AMEMBASSY WINDHOEK

C O N F I D E N T I A L SECTION 03 OF 03 HARARE 004039

SIPDIS

NSC FOR SENIOR AFRICA DIRECTOR GAYLE SMITH

LONDON FOR PFLAUMER

PARIS FOR BISA WILLIAMS

USDOC FOR DHENKE-ROGERS

PASS USAID FOR R. MCALL AND AFR/SA T. PARK

PASS USTR FOR ROSA WHITAKER

E.O. 12958: DECL: 07/20/2010
TAGS: PGOV PINR ECON ZI
SUBJECT: WILL NEW FINANCE MINISTER BE ABLE TO STAND UP
TO MUGABE?

PRIMARILY THE LAND ISSUE, WHICH MUST BE RESOLVED IF
ZIMBABWE IS TO WIN THE CONFIDENCE OF INVESTORS AND THE
INTERNATIONAL FINANCIAL ORGANIZATIONS. ZANU-PF
OFFICIALS ARE IN CAMPAIGN MODE FOR THE 2002 PRESIDENTIAL
ELECTION AND ARE UNLIKELY TO BEHAVE DIFFERENTLY THAN
THEY HAVE SO FAR.


8. (C) THE PRESIDENT WILL ULTIMATELY CALL THE SHOTS ON
THE PORTFOLIOS OF BOTH MAKONI AND MOYO. WE DOUBT THAT
THEY WILL LAST IN OFFICE, ONCE THEY REALIZE THEY ARE
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PAGE 03 HARARE 04039 03 OF 03 210958Z
LITTLE MORE THAN WINDOW DRESSING. THEY HAVE THE
OPPORTUNITY TO BE HEROES, UNLESS THEY HAVE BEEN
COMPLETELY BOUGHT OFF. THE BEST THAT CAN BE SAID IS
THAT MAKONI IS LIKELY TO FIGHT HARD TO PUT IN PLACE
SOUND POLICIES BUT WILL ONLY WIN SOME OF THEM.

IRVING

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