Business Leader Believes Zimbabwe Must Change

UNCLAS HARARE 002819

SIPDIS

SENSITIVE

STATE FOR AF/S
NSC FOR SENIOR AFRICA DIRECTOR J FRAZER
USDOC FOR 2037 DIEMOND
PASS USTR ROSA WHITAKER
TREASURY FOR ED BARBER AND C WILKINSON
DEPARTMENT PASS USAID FOR MARJORIE COPSON


E. O. 12958: N/A
TAGS: ECON EPET EFIN ETRD ZI
SUBJECT: Business Leader Believes Zimbabwe Must Change
Course


Sensitive but unclassified. Handle accordingly.


1. (SBU) Summary: Jewel Bank CEO Gideon Gono told us he
believes Zimbabwe's macroeconomic imbalances are
unsustainable over the next 6 months. Gono's frank
appraisal hints that a dose of reality may be seeping
through to the country's upper echelon. End Summary.


2. (SBU) The Ambassador and Econchief met on December 2
with Gono, head of a major indigenous bank and confidant
of President Mugabe. Gono argued that contradictions in
Zimbabwe's macroeconomic policy could lead to meltdown in
the next 6 months. He showed us a document he had
submitted to Mugabe and other political higher-ups at the
beginning of 2002, advocating more capital expenditure,
devaluation of the official exchange rate and
rapprochement with international lenders. He also gave
us a paper he presented to the Reserve Bank last month,
calling for the granting of title deeds to farmers
resettled on white commercial farms.


3. (SBU) Comment: An acknowledgement from someone who has
Mugabe's ear that GOZ economic and land policies are
failing is welcome, even though Gono probably couches
these criticisms in more delicate terms to the President.
We hope it is an early sign that political higher-ups are
willing to entertain the notion, at least in private,
that policies of price controls, overvalued currency,
chaotic land redistribution and overbearing taxation are
destroying the economy. End Comment.

Sullivan