HARARE BFIF PROJECT PROPOSAL

UNCLAS SECTION 01 OF 02 HARARE 000059 SIPDIS SENSITIVE AF/S FOR B. NEULING NSC FOR SENIOR AFRICA DIRECTOR C. COURVILLE STATE PASS TO USAID FOR M. COPSON AND E.LOKEN TREASURY FOR J. RALYEA AND B. CUSHMAN E.O. 12958: N/A TAGS: ABUD AMGT BEXP BTIO ECON ETRD ZI SUBJECT: HARARE BFIF PROJECT PROPOSAL REF: STATE 215954 ¶1. (U) Embassy Harare proposes to draw on the Business Facilitation and Incentive Fund (BFIF)(reftel) to sponsor a business/economic policy forum on "A Foundation for Economic Turnaround: Private Sector Perspectives." ¶2. (SBU) With Zimbabwe's GDP having contracted by more than a third in just six years, the private sector here is on the ropes. GOZ mismanagement has been a case study in how to stifle an economy: eviscerate security of land tenure; undermine sanctity of contract; compromise court integrity, capacity and competence; control foreign exchange; constantly shift regulatory overlays; engage in profligate government spending. The result has been deep shortages of fuel and other critical inputs, scarcity of foreign exchange, and the world's highest inflation rate, to name just a few characteristics of this most difficult business operating environment. ¶3. (SBU) Despite chilly bilateral relations, American brand names and products remain popular among Zimbabwean consumers, and our exports to Zimbabwe actually grew in value in 2004 before apparently declining last year (final figures are yet to be released). Zimbabwe has not seen meaningful new American invesment for years. For American companies here, the biggest business impediments are not prejudicial barriers to entry or cutting edge distorting trade practices, but the government's comprehensive mismanagement of the economy. ¶4. (SBU) A first step necessary to begin to overcome such a fundamental obstacle is to generate public debate and pressure on the government for economic reform. Encouragingly, the Zimbabwean private sector and civil service well know the basic reforms needed to turn things around. What is missing is a venue at which debate can be meaningfully aired when the upper echelons of the GOZ and ruling party are so openly hostile to criticism. For its part, the private sector has been very tentative in publicly criticizing GOZ policy, although it has pressed its prescriptions behind the scenes. Academia has similarly avoided initiatives to publicly air the debates in which they engage outside the public glare. The independent press has aired criticism and debate, but is generally reactive, cautious, self-censored or outright intimidated by the GOZ. ¶5. (SBU) The outpouring of assent and debate that followed the Ambassador's November speech in Mutare, in which he dismissed GOZ excuses for economic failure and attributed Zimbabwe's misery to GOZ mismanagement and corruption, suggests the eagerness Zimbabwean audiences have for real debate. Importantly, a debate on economic policy is relatively new ground on which the regime is very uncomfortable. It had manipulated traditional criticisms about human rights and democracy to its advantage with "nationalist" audiences in Zimbabwe and Africa; however, the country's economic implosion holds little room for the regime to maneuver rhetorically. Accordingly, fomenting debate on economic policy will embolden domestic critics and citizen activists, thus supporting our principal MPP goal: supporting democracy and human rights. ¶6. (SBU) Our proposed event would bring together private sector leaders and thinkers, supplemented by academics, business journalists and selected government figures, to identify and to deliberate over the key measures needed to right Zimbabwe's course. Among the participants and desired beneficiaries would be the American Business Association of Zimbabwe, a networking organization interested in getting into the lobbying arena. ¶7. (SBU) We envision two segments to the forum: a smaller, closed door, off the record gathering of dynamic opinion makers to talk in a frank setting; followed by a public segment in which panels from the smaller gathering make presentations or discuss selected topics before larger public audiences. Forum topics will need to be fleshed out in consultation with prospective participants and audiences, but we would expect the event would spotlight property rights, regulatory consistency, foreign exchange policy, GOZ inflationary practices, and government/municipal services, among others. ¶8. (SBU) We fully anticipate that the government would not participate, but we would invite media coverage to take the event's substance public. Inviting speakers from countries that have undergone post-conflict recovery would stimulate local interest, draw broader lessons, and accentuate a mindset that we are trying to instill here: that Zimbabwe already is in the post-Mugabe era emotionally and needs to start planning for it in fact. In any event, we believe the forum would helpfully put the GOZ into a lose-lose position - participate and hear constructive prescriptions that it lacks political will to implement, or not participate and embolden participants with a robust debate that would encourage broader public dialogue through follow-on media coverage. ¶9. (U) Planning would involve venue reservation and arrangements; narrowing topics; stimulating communication among participants in advance to develop themes and positions before the event; developing invitation lists; identifying and securing speakers, making travel arrangements for speakers coming from outside the country; developing media strategies for the pre- and post-event periods. ¶10. (SBU) Desired outcomes include enhanced confidence and lobbying capacity of ABAZ and other private sector associations, enhanced communication on policy issues among private sector players and the media, and media coverage and follow-on private sector activity that would provoke public pressure on the GOZ. ¶11. (U) Initial estimated costs include venue/refreshments for day and a half ($2500),transportation and per diem for outside speakers ($2500),pre-event publicity/communications ($1000) and follow-on media coverage/publications ($5000), for a total of $11,000. ¶12. (U) Post point of contact is econoff Frances Chisholm, 263-4-250-595, ext. 206, chisholmfm@state.gov. DELL