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IdentifierCreatedClassificationOrigin
05HARARE1009 2005-07-25 13:54:00 CONFIDENTIAL Embassy Harare
Cable title:  

SAG-GOZ NEGOTIATIONS AND THE USG

Tags:   PREL PGOV PHUM ECON EFIN SA ZI 
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This record is a partial extract of the original cable. The full text of the original cable is not available.

251354Z Jul 05

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FM AMEMBASSY HARARE
TO SECSTATE WASHDC PRIORITY 8647
INFO SOUTHERN AFRICAN DEVELOPMENT COMMUNITY
AMEMBASSY ABUJA 
AMEMBASSY ACCRA 
AMEMBASSY ADDIS ABABA 
AMEMBASSY DAKAR 
AMEMBASSY KAMPALA 
AMEMBASSY NAIROBI 
AMEMBASSY PARIS 
AMEMBASSY ROME 
NSC WASHDC
USEU BRUSSELS
USMISSION USUN NEW YORK
					  C O N F I D E N T I A L  HARARE 001009 

SIPDIS


AF/S FOR B. NEULING
NSC FOR SENIOR AFRICA DIRECTOR C. COURVILLE

E.O. 12958: DECL: 12/31/2010
TAGS: PREL PGOV PHUM ECON EFIN SA ZI
SUBJECT: SAG-GOZ NEGOTIATIONS AND THE USG

REF: (A) HARARE 1008 (B) PRETORIA 2854 (C) PRETORIA

2841

Classified By: Charge d'Affaires, a.i., Eric T. Schultz under Section 1
.4 b/d

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Summary
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1. (C) The Mugabe regime is confronting a "perfect storm" of
converging challenges - international opprobrium over
Operation Restore Order, the economy's accelerating
implosion, and a looming IMF vote on Zimbabwe's expulsion.
As a result, the GOZ is showing growing desperation and
signaling uncharacteristic vulnerability to outside
influence. Loan negotiations underway with the SAG (ref B)
may offer the best vehicle through which the GOZ could be
pressured to implement political and economic reforms. We
believe the USG should quietly demarche the SAG on this
prospective loan and on any conditions that may be attached
to it. End Summary.



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"Perfect Storm" Converges on GOZ


--------------------------





2. (C) UN Envoy Ann Tibaijuka's damning report on Restore
Order, including a call that responsible officials be held
accountable, has broken the taboo against prominent official
Africans speaking out against the regime and has dramatically
increased the GOZ,s international isolation. Governments
that just months ago defended the flawed administration of
Zimbabwe's elections are now quiet or openly distancing
themselves from the GOZ on Restore Order.



3. (C) This increased international opprobrium could not
come at a worse time for a government trying to arrest a
national economic implosion. Foremost on the GOZ's economic
agenda appears to be securing funding to address food and
fuel shortages and to stave off IMF expulsion by paying off
arrears. In a significant about face (septel), economic
policy czar Gideon Gono appears to have convinced the regime
that expulsion would have profound adverse consequences.



--------------------------


SAG With Unprecedented Leverage


--------------------------





4. (C) Although official sources indicate publicly that the
GOZ is approaching "China, Iran, Malaysia, and so on", South
Africa is the most likely source of the needed funding and
negotiations are reportedly on-going for a $1 billion SAG
bailout of the GOZ. For its part, the SAG appears to have
attached significant priority to its negotiations with the
GOZ, as indicated by President Mbeki's recent personal
intervention with Embassy Pretoria (ref C). Moreover, while
details of the negotiations are sketchy, the SAG reportedly
is imposing unspecified political and economic reforms as
conditions for the loan (ref B).



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Comment on SAG Conditions for GOZ


--------------------------





5. (C) As the UN and elements in South Africa appear to be
leading the charge on pressing the GOZ on Restore Order and
its economic policy, there is little need for high profile
USG criticism of the regime at this point. When the stakes
get high, the ruling party historically has tried to play the
neo-colonialist imperialist conspiracy card; it would like to
now as well. We agree with President Mbeki that stepping up
western rhetoric against the regime now would only provoke it
to no constructive end and play to Mugabe's strength in his
unfolding engagement with Mbeki.



6. (C) That said, in view of our past collaboration with the
SAG, we urge a quiet but proactive approach to SAG engagement
with the GOZ. We believe the GOZ will most readily agree to
symbolic, non-substantive conditions such as inter-party

negotiations that will require little effort on their part to
undermine. We would urge instead that SAG conditionality
focus on the systemic flaws in the political environment and
economy with a view to empowering civil society and
engineering a more competitive democratic process in the long
run.



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Potential Points For Use With SAG


--------------------------





7. (C) We offer the following points to be advanced or taken
into consideration in any approach to the SAG regarding
conditions on a loan to Zimbabwe:

-- Any conditions you impose on your loan should be specific,
measurable benchmarks that will improve Zimbabwe's political
and economic environment and require the GOZ to engage not
only with the political opposition but with the Zimbabwean
people as a whole.

-- As a first step, the GOZ should terminate Operation
Restore Order fully and allow local and international
humanitarian organizations unfettered access to the
displaced.

-- The GOZ should immediately reinstate the Mayor of Mutare,
who was suspended by the Ministry of Local Government and
Housing for facilitating the UN Special Envoy during her
recent visit, and should not persecute others who attempted
to alleviate suffering associated with Restore Order.

-- The GOZ should immediately relax enforcement of, and in
the nearest future repeal, the Public Order and Security Act
(POSA) and Access to Information and Protection of Privacy
Act (AIPPA), including the immediate re-opening of the four
newspapers closed under AIPPA and allowing public meetings
without the approval or presence of police.

-- As per the IMF, economic reforms should include (but not
be limited to): implementation of a market-oriented foreign
exchange regime, restraints on public spending and credit,
and elimination of government controls on the prices and
distribution of commodities and services.
-- SAG assistance should take the form of pay-outs directly
to GOZ creditors (aside from the IMF, many of whom presumably
are South African entities) rather than direct payments to
the GOZ.
SCHULTZ


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