PROPOSAL FOR LIMITED, SPECIFIED TECHNOLOGY

C O N F I D E N T I A L SECTION 01 OF 03 HARARE 002567

SIPDIS

FOR AF, AF/S, AND EPS; ALSO FOR EB

E.O. 12958: DECL: 08/30/06
TAGS: PREL ECON CG ZI
SUBJECT: PROPOSAL FOR LIMITED, SPECIFIED TECHNOLOGY
SANCTIONS FOR ZIMBABWE

REF: (A) LUSAKA 2532, (B)IIR 6926 005701

CLASSIFIED BY DCM REWHITEHEAD DUE TO 1.5 (B) AND (D).


1. (C) SUMMARY. IN ADDITION TO ASSET SEIZURE AND
TRAVEL SANCTIONS FOCUSED ON A SMALL NUMBER OF TOP GOZ
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PAGE 02 HARARE 02567 01 OF 03 301518Z
OFFICIALS IMPLICATED IN POLITICAL VIOLENCE AND THE
BREAKDOWN OF THE RULE OF LAW (REF A),THE HARARE COUNTRY
TEAM HAS ALSO EXPLORED WHAT VIABLE TECHNOLOGY/DUAL USE
SANCTIONS MIGHT BE CONSIDERED. IDENTIFICATION OF ANY
MEANINGFUL SANCTIONS THAT WOULD NOT ADVERSELY AFFECT
CRITICAL POPULATION GROUPS HAS BEEN DIFFICULT. THE LOW-
TECH NATURE OF ZIMBABWE'S ECONOMY, THE ZIMBABWE DEFENSE
FORCE'S (ZDF) DEPENDENCE ON (FORMER) EAST-BLOC HARDWARE,
AND THE LACK OF INFORMATION ON COMMERCIAL LINKS BETWEEN
PARASTATAL/ZANU-PF COMPANIES AND U.S. SUPPLIERS ARE
IMPEDIMENTS TO TIGHTLY FOCUSED SANCTIONS THAT COULD
PINCH THE ZANU-PF RINGLEADERS WITHOUT INFLICTING SERIOUS
COLLATERAL DAMAGE ON THE ECONOMY.


2. (C) SUMMARY CONTINUED. WE HAVE IDENTIFIED A SHORT
LIST OF OUTMODED U.S. EQUIPMENT WITHIN THE ZDF INVENTORY
THAT COULD BE TARGETED, BUT TO MINIMAL EFFECT. WE WILL
FORWARD A LIST OF ZANU-PF-OWNED COMPANIES TO THE
DEPARTMENT TO DETERMINE IF THERE IS INFORMATION IN
WASHINGTON OR ELSEWHERE ON LINKS TO U.S. SUPPLIERS. UN
STUDIES ON EXPLOITATION OF THE DEMOCRATIC REPUBLIC OF
CONGO'S (DRC) RESOURCES MAY OFFER ANOTHER, MORE
INTERNATIONAL APPROACH. EVEN HERE WE WILL NEED TO TREAD
CAREFULLY, SINCE MANY PARASTATAL/ZANU-PF FIRMS DEAL IN
CONSUMER OR SERVICE PRODUCTS. SANCTIONS ON THESE WOULD
RISK GENERATING UNEMPLOYMENT AND FURTHER SLOWDOWN OF THE
ZIMBABWEAN ECONOMY, CREATING THE IMPRESSION AMONG
ZIMBABWEANS THAT THE U.S. DOES NOT DIFFERENTIATE BETWEEN
BABY AND BATH. END SUMMARY.

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PAGE 03 HARARE 02567 01 OF 03 301518Z
BACKGROUND
--------------


3. (C) THE EMBASSY'S CAREFUL PREPARATIONS FOR Y2K
REVEALED INTERESTING INSIGHTS INTO ZIMBABWE'S ECONOMY.
BECAUSE OF INTERNATIONAL SANCTIONS IMPOSED DURING THE
UDI PERIOD, ZIMBABWE WAS FORCED TO BECOME AS SELF-
RELIANT AS POSSIBLE. ONE RESULT WAS A RELATIVELY LOW-
TECH APPROACH TO BOTH THE MANUFACTURING AND SERVICE
SECTORS. GLOBAL TECHNOLOGY MARCHED FORWARD BUT ZIMBABWE
DID NOT. MUCH OF ITS TECHNOLOGY AND MANUFACTURING
REMAINS TECHNOLOGICALLY STUCK IN THE 1960'S, 1970'S OR
1980'S, DEPENDING UPON THE SECTOR IN QUESTION. THIS
REMAINS TRUE OF THE MILITARY ESTABLISHMENT AS WELL --
OUR Y2K SURVEY INDICATED THAT THERE WERE LESS THAN 100
COMPUTERS IN THE MOD, ALMOST ALL OF THESE STAND-ALONES
AND MANY NOT COMPATIBLE.


4. (C) SINCE INDEPENDENCE, SOME SECTORS HAVE MODERNIZED
DUE TO FOREIGN INVESTMENT AND THE AVAILABILITY OF UP-TO-
DATE TECHNOLOGY. FOREIGN INVESTORS LAUNCHED SEVERAL
WORLD CLASS MINING OPERATIONS (SOME NOW CLOSED). THE
COMMERCIAL FARMING SECTOR, WHICH IMPORTS MANY OF ITS
CHEMICAL AND MECHANICAL INPUTS, ALSO TAKES A BACK SEAT
TO NO ONE. HOWEVER, BOTH OF THESE SECTORS HAVE SUFFERED
SHARP DOWNTURNS DUE TO UNREALISTIC EXCHANGE RATES, THE
CONCOMITANT UNAVAILABILITY OF FOREX, AND UNENLIGHTENED
GOZ POLICIES ACROSS THE BOARD. ALREADY ON THE ROPES,
THESE SECTORS WILL BE FURTHER WEAKENED BY EXTERNAL
SANCTIONS. THE MEDICAL SECTOR ALSO ENJOYED SIGNIFICANT
TECHNOLOGICAL ADVANCES, ALTHOUGH MANY OF THESE ARE IN
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PAGE 04 HARARE 02567 01 OF 03 301518Z
THE PROCESS OF BEING ROLLED BACK BY A DEARTH OF FUNDING
AND A LACK OF SPARE PARTS. (A RECENT NEWS ACCOUNT
INDICATED THAT 100 PATIENTS IN BULAWAYO ARE AT RISK
BECAUSE THE DIALYSIS MACHINERY THEY NEED HAS BROKEN
DOWN.) IT GOES WITHOUT SAYING THAT THIS IS OFF LIMITS.

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MILITARY SANCTIONS
--------------


5. (C) IN RECENT YEARS THE ZDF HAS SHOPPED FOR MOST OF
ITS MILITARY HARDWARE IN EITHER CHINA OR THE FORMER EAST
BLOC. ACQUISITIONS FROM THE WEST HAVE BEEN INCREASINGLY
RARE. THE ZDF MAINTAINS IN ITS INVENTORY A FEW
VENERABLE AIRCRAFT OF U.S. MANUFACTURE, INCLUDING TWELVE
BELL 412 JET RANGERS, EIGHT DAKOTA FIXED-WING
TRANSPORTS, AND TWO CESSNA 235'S. VERY FEW OF THESE ARE
CURRENTLY AIRWORTHY DUE TO A LACK OF SPARE PARTS.
SENIOR ZDF OFFICERS HAVE RECENTLY TOLD US THAT THEY
WOULD LIKE TO GET THIS EQUIPMENT ALOFT, PREFERABLY WITH
U.S. ASSISTANCE. HOWEVER, THE ROOT OF THE PROBLEM IS
MONEY RATHER THAN TECHNOLOGY, SINCE SPARES FOR ALL OF
THESE AIRCRAFT ARE READILY AVAILABLE ON THE OPEN MARKET
WITHOUT END USER CERTIFICATION, ON A CASH BASIS. THE
ZDF'S BUDGET CRUNCH, AND THE DECISION BORN OF NECESSITY

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CONFIDENTIAL PTQ6738

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ACTION AF-00

INFO LOG-00 NP-00 AID-00 ACQ-00 CEA-01 CIAE-00 COME-00
CTME-00 INL-00 USNW-00 DODE-00 DOTE-00 SRPP-00 DS-00
EB-00 EXIM-01 E-00 FAAE-00 VC-00 FRB-00 H-01
TEDE-00 INR-00 ITC-01 LAB-01 L-00 VCE-00 MED-07
AC-01 DCP-01 NSAE-00 NSCE-00 OMB-01 OPIC-01 PA-00
PM-00 PRS-00 ACE-00 P-00 SP-00 SSO-00 SS-00
STR-00 TRSE-00 T-00 USIE-00 R-00 EPAE-00 PMB-00
DSCC-00 DRL-02 G-00 NFAT-00 SAS-00 SWCI-00 /018W
-------------- 18EAE1 301519Z /38
O 301508Z AUG 01
FM AMEMBASSY HARARE
TO SECSTATE WASHDC IMMEDIATE 9602

C O N F I D E N T I A L SECTION 02 OF 03 HARARE 002567

SIPDIS

FOR AF, AF/S, AND EPS; ALSO FOR EB

E.O. 12958: DECL: 08/30/06
TAGS: PREL ECON CG ZI
SUBJECT: PROPOSAL FOR LIMITED, SPECIFIED TECHNOLOGY
SANCTIONS FOR ZIMBABWE

TO PUT MONEY INTO SALARIES AND BENEFITS RATHER THAN
UPGRADING OR MAINTAINING HARDWARE, IS THE ROOT ISSUE
(REF B),NOT THE AVAILABILITY OF PARTS.

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DUAL USE TECHNOLOGY
CONFIDENTIAL

PAGE 02 HARARE 02567 02 OF 03 301519Z
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6. (C) ZIMBABWE MILITARY INDUSTRIES (ZMI),ANOTHER
VESTIGE OF THE UDI POLICY OF SELF-RELIANCE, MANUFACTURE
A RANGE OF MILITARY EQUIPMENT. OUTPUT IS TAILORED FOR
THE ZDF AND OTHER SECURITY SERVICES. UNIFORMS AND KIT
ARE THE MOST SIGNIFICANT ITEMS. LIGHT WEAPONRY
PRODUCTION INCLUDES HAND GRENADES, SMALL ARMS MUNITIONS,
40 MM ROCKET LAUNCHERS AND ROCKETS, 60 MM MORTAR TUBES
AND SHELLS, 81 MM AND 120 MM MORTAR SHELLS. OTHER
WEAPONS SYSTEMS AND HEAVY MUNITIONS ARE ALL IMPORTED.
WE HAVE BEEN ABLE TO IDENTIFY ONLY ONE U.S. LINK TO THE
ZMI IMPORT/EXPORT CYCLE, THE EXPORT OF APPROXIMATELY
20,000 ROUNDS OF SMALL CALIBER HUNTING AMMUNITION TO A
CALIFORNIA BUYER.

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OTHER OPTIONS
--------------


7. (C) BOTH SENIOR MILITARY AND ZANU-PF OFFICIALS, IN
ADDITION TO THE RULING PARTY ITSELF, SHARE OWNERSHIP IN
A DIVERSE BUSINESS EMPIRE THAT RANGES FROM
TRANSPORTATION TO TOURISM TO FINANCE TO MINING AND
MANUFACTURE TO TELECOMMUNICATIONS. WE HAVE ACQUIRED A
USEFUL STUDY DONE IN 2000 THAT LISTS THESE HOLDINGS AND
THAT REVEALS SOME OF THE ZANU-PF OFFICIALS INVOLVED
BEHIND THE SCENES, INCLUDING IN VENTURES IN THE DRC.


8. (C) FOCUSING ON THE DRC ECONOMIC CONNECTIONS
(TECHNOLOGICALLY OR OTHERWISE) SHOULD BE CONSIDERED,
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PAGE 03 HARARE 02567 02 OF 03 301519Z
SINCE THE REVENUES FROM ZIMBABWEAN VENTURES THERE FLOW
INTO THE PRIVATE ACCOUNTS OF ZANU-PF INSIDERS AND NOT
THE ZIMBABWEAN TREASURY. THE LOSS OF THESE REVENUES
WOULD HAVE LITTLE EFFECT ON THE ZIMBABWEAN ECONOMY BUT
WOULD BE FELT DIRECTLY BY MUGABE CRONIES. OSLEG LTD., A
HOLDING COMPANY, BOASTS ZDF FORCE COMMANDER ZVINAVASHE,
MOD PERMANENT SECRETARY TRUST MAPOSA, AND SPEAKER OF THE
PARLIAMENT MNANGAGWA ON ITS BOARD OF DIRECTORS. OSLEG
HAS INTERESTS IN A RANGE OF DRC MINING AND TIMBER
VENTURES: COSLEG, ORYX ZIMCOM, PETRA DIAMONDS LTD.,
COMIEX CONGO SARL, SENGAMINES/MIBA, TSHIBUA KIMBERLITE
DEPOSITS, AND SENGA-SENGA ALLUVIAL MINE.


9. (C) WE WILL PROVIDE AVAILABLE DOCUMENTATION TO AF/S
TO DETERMINE IF IT IS POSSIBLE TO USE COMMERCE OR
TREASURY DATABASES TO ESTABLISH U.S. LINKAGES WITH ZANU-
PF BUSINESS INTERESTS LOCATED IN ZIMBABWE OR DRC. THIS
MAY BE THE BEST HOPE OF IDENTIFYING TECHNOLOGIES OR
OTHER INSTRUMENTS THAT COULD GIVE TECHNOLOGY SANCTIONS
TEETH. CROSS-REFERENCING WITH UN STUDIES THAT TRACE THE
OUTSIDE EXPLOITATION OF DRC NATURAL RESOURCES MAY ALSO
REVEAL ADDITIONAL LINKAGES AND PROVIDE THE IMPETUS TO
PUSH FOR INTERNATIONAL RATHER THAN BILATERAL MEASURES.

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LIKELY RESULTS ON GOZ POLICY
--------------


10. (C) UNLESS SIGNIFICANT LINKAGES BETWEEN ZANU-PF/ZDF
COMPANIES CAN BE ESTABLISHED, COUNTRY TEAM DOES NOT
BELIEVE THAT TECHNOLOGY/DUAL-USE SANCTIONS WOULD HAVE A
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PAGE 04 HARARE 02567 02 OF 03 301519Z
MEASURABLE IMPACT ON PRESIDENT MUGABE AND HIS INNER
CIRCLE, OR RESULT IN A CHANGE IN GOZ POLICY. MUGABE
WOULD UNDOUBTEDLY REACT LOUDLY TO THE ANNOUNCEMENT OF
SANCTIONS, HARMFUL OR NOT, AND ATTEMPT TO BEND THESE TO
HIS OWN PROPAGANDA PURPOSES. WE DO NOT ANTICIPATE
MEANINGFUL RETALIATORY MEASURES, ALTHOUGH THE GOZ COULD
THEORETICALLY TAKE ACTION AGAINST THE APPROXIMATELY 45
AMERICAN COMPANIES OR THEIR REPRESENTATIVES OPERATING
HERE.

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COMMENT
--------------


11. (C) ECONOMIC/TECHNOLOGY SANCTIONS LEVIED ON
ZIMBABWE MUST BE CAREFULLY FOCUSED TO AVOID COLLATERAL
DAMAGE TO AN ALREADY IMPLODING ECONOMY. IN RECENT
REMARKS TO THE PRESS IN SOUTH AFRICA, MDC LEADER MORGAN
TSVANGARAI REPEATED THAT AT THIS TIME HE OPPOSES

SIPDIS
INTERNATIONAL (ECONOMIC) SANCTIONS, SINCE THE ZIMBABWEAN
ECONOMY CANNOT BEAR THE STRAIN. IT IS OUR VIEW THAT
TECHNOLOGY OR ECONOMIC SANCTIONS THAT HAVE THE POTENTIAL
OR EFFECT OF CREATING ADDITIONAL UNEMPLOYMENT AND
ERODING ECONOMIC ACTIVITY WOULD BE SEEN BY MOST
ZIMBABWEANS AS SPITEFUL RATHER THAN CONSTRUCTIVE.

CONFIDENTIAL

CONFIDENTIAL PTQ6739

PAGE 01 HARARE 02567 03 OF 03 301519Z
ACTION AF-00

INFO LOG-00 NP-00 AID-00 ACQ-00 CEA-01 CIAE-00 COME-00
CTME-00 INL-00 USNW-00 DODE-00 DOTE-00 SRPP-00 DS-00
EB-00 EXIM-01 E-00 FAAE-00 VC-00 FRB-00 H-01
TEDE-00 INR-00 ITC-01 LAB-01 L-00 VCE-00 MED-07
AC-01 DCP-01 NSAE-00 NSCE-00 OMB-01 OPIC-01 PA-00
PM-00 PRS-00 ACE-00 P-00 SP-00 SSO-00 SS-00
STR-00 TRSE-00 T-00 USIE-00 R-00 EPAE-00 PMB-00
DSCC-00 DRL-02 G-00 NFAT-00 SAS-00 SWCI-00 /018W
-------------- 18EAE3 301519Z /38
O 301508Z AUG 01
FM AMEMBASSY HARARE
TO SECSTATE WASHDC IMMEDIATE 9603

C O N F I D E N T I A L SECTION 03 OF 03 HARARE 002567

SIPDIS

FOR AF, AF/S, AND EPS; ALSO FOR EB

E.O. 12958: DECL: 08/30/06
TAGS: PREL ECON CG ZI
SUBJECT: PROPOSAL FOR LIMITED, SPECIFIED TECHNOLOGY
SANCTIONS FOR ZIMBABWE

ROTH

CONFIDENTIAL

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