BUSINESS CONGRESS UNDERSCORES GOZ'S ECONOMIC

C O N F I D E N T I A L SECTION 01 OF 02 HARARE 000800

SIPDIS

SIPDIS

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

E.O. 12958: DECL: 07/07/2015
TAGS: ECON PGOV PREL ZI
SUBJECT: BUSINESS CONGRESS UNDERSCORES GOZ'S ECONOMIC
INEPTITUDE


Classified By: Ambassador Christopher Dell for reasons 1.5 b/d

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Summary
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1. (SBU) The Zimbabwe National Chamber of Commerce,s (ZNCC)
annual congress, which brought together private and public
sector participants in late June to address Zimbabwe's
economic decline, was a dismal failure that highlighted in
particular the GOZ,s inability to consider needed economic
reforms. Outgoing ZNCC President Luxon Zembe opened the
congress by noting that economic conditions had worsened
since last year's meeting but that none of last year's
recommendations to government had been acted upon. In
response, government participants offered stale assertions
that western sanctions were the actual cause of the decline
and promised &economic salvation8 under the GOZ's latest
turnaround package. In a moment of pure symbolism, the
organizers ended the planned three-day conference a day early
due to lack of funds. End Summary.

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ZNCC Faults Government for Worsening Economy
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2. (SBU) Opening the congress on June 28, Zembe recalled the
economic problems and policy recommendations that the ZNCC
had discussed at its meeting last year. Rhetorically asking
the roughly 150 participants what had changed in the past
year, Zembe replied that economic conditions had only
worsened. Government had not responded to the Chamber's
numerous recommendations, which had included liberalizing the
exchange rate and providing security of land tenure.


3. (SBU) The GOZ instead had created in Zembe,s words a
"parasitic agrarian bourgeoisie" that demanded ever-more
government handouts without a commensurate rebound in
agricultural output. The end result was a population with a
very few who were filthy rich and where the masses were
filthy poor. The middle class had been decimated. Zembe
said he still had hope that the government's National
Economic Development Priority Program (NEDPP),of which he
and other Chamber officials were members, could facilitate a
turnaround, but cautioned against expectations of quick
gains, especially if the government failed again to initiate
needed reforms.

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GOZ Offers Excuses, Platitudes
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4. (SBU) In response, the few government officials who
attended the congress dodged Zembe's critique and offered
vague assurances that they were working to improve the
business environment. Industry and Trade Minister Obert
Mpofu claimed unconvincingly that all of the concerns raised
by the Chamber's outgoing president were being addressed by
NEDPP, although he refused to provide details. Attempting to
echo these assurances, Deputy Minister of Economic
Development Samuel Undenge recounted the work of yet another
GOZ economic revival plan, Vision 2020. (N.B. Providing an
apt commentary on the GOZ's series of failed turn around
plans, newly elected ZNCC President Marah Hativagone thanked
Undenge for reminding the business community that Vision 2020
was still in existence.)


5. (SBU) The assorted government officials, finding
themselves unable to respond to the pointed economic
questions posed by ZNCC members, retreated to stale

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assertions that U.S. and EU sanctions were to blame for the
decline rather than government policies. Local economist
Eric Bloch eviscerated this claim by noting that Zimbabwe had
a growing trade surplus with both the US and EU, and jokingly
wished that all countries placed similar "sanctions" on
Zimbabwe.

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Early Closure
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6. (SBU) Originally scheduled for three days, organizers
abruptly canceled the last day due to a lack of funds.
Participants had little time to debate recommendations to
government. In the 45-minutes left to them, delegates
developed a "wish list" of outcomes, such as positive real
interest rates, increased foreign investment, and a floating
exchange rate, but offered no solutions on for achieving
those outcomes.

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Comment
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7. (C) One has come to expect nothing less than ineptitude
from government ministers, so their performance was not
surprising. Perhaps more disheartening was the lack energy
emanating from the private sector. Despite Zembe's initial
volley against the GOZ's shortcomings, he and other Chamber
participants were at a loss for ideas and appeared inclined
to accept at face value the government's latest turnaround
effort.
DELL