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