GONO ON MUGABE'S FUTURE, ECONOMY

C O N F I D E N T I A L SECTION 01 OF 04 HARARE 000795 SIPDIS SIPDIS AF/S FOR S.HILL ADDIS ABABA FOR USAU ADDIS ABABA FOR ACSS STATE PASS TO USAID FOR E.LOKEN AND L.DOBBINS STATE PASS TO NSC FOR SENIOR AFRICA DIRECTOR B.PITTMAN E.O. 12958: DECL: 07/09/2012 TAGS: PREL PGOV ECON ZI SUBJECT: GONO ON MUGABE'S FUTURE, ECONOMY REF: A. A) HARARE 692 ¶B. B) PRETORIA 2210 ¶C. C) HARARE 771 Classified By: Pol/Econ Chief Glenn Warren under 1.4 b/d -------------- Summary -------------- ¶1. (C) President Robert Mugabe has been urged by those closest to him to leave office, according to Gideon Gono, Governor of the Reserve Bank of Zimbabwe, in a meeting with Charge on September 1. In particular, Mugabe's personal physician advised him to step down immediately to preserve his health. Mugabe demurred, citing current party infighting, his desire to lead a united ZANU-PF to a credible victory next year, and his desire to surpass ex-Zambian president Kenneth Kaunda's term in office. He told his physician, however, that he would leave after the election. ¶2. (C) Gono also used our meeting to burnish his credentials, both as an economic reformist and as a political leader. He noted his advocacy of a free market approach to solve Zimbabwe's economic problems and his opposition to the recent price control policy. He also described personal ties with government security forces and the opposition. Expressing admiration for the U.S., he urged the U.S. to seek out enlightened Zimbabwean leaders and support them. End Summary. ¶3. (C) The almost two-hour meeting with Gono took place in a private conference room. Gono was unaccompanied. He entered the room after we arrived and left before we did, an apparent effort not to be seen in the company of U.S. officials. -------------- Mugabe Urged by Intimates to Step Down -------------- ¶4. (C) Gono told us he had broached Mugabe's retirement with him by suggesting the country needed his memoirs. Mugabe responded with a litany of reasons as to why he did not wish to step down now: --Vice-President Msika was not well. --There was currently significant infighting within ZANU-PF. He agreed with Tony Blair on one thing--the time to step down was after leading one's party to victory, thereafter giving it time to consolidate before the next election. He did not want to have led the party for much of his life and then see it get defeated after his departure. --There had been questions about his legitimacy, and he wanted to put those to rest through an election victory next year. --Former Zambian president Kenneth Kaunda had left office after 27 years. He wanted to exceed this, which meant staying on until next year. (Note. Gono thought Mugabe felt a personal rivalry with Kaunda since Kaunda had supported ZAPU. End Note.) ¶5. (C) In a hushed voice, Gono then told us Mugabe's personal physician from Malaysia was now living in Harare, close to Mugabe. He said he (Gono) alone was part of health discussions with Mugabe and the physician. The physician had urged Mugabe to step down immediately; continuing as president would be dangerous to his health. Mugabe had resisted and asked him to keep him going until next year's HARARE 00000795 002 OF 004 elections. The physician agreed on condition that Mugabe leave office right after the election. Mugabe agreed. ¶6. (C) Noting that the most important confidantes in a person's life were one's spouse, lawyer, banker, doctor, and priest, Gono, who was once Mugabe's personal banker, indicated he knew that all wanted Mugabe to leave office. He specifically mentioned he had been involved in discussions with Mugabe's lawyer to set up Mugabe's retirement on his farm, and on his will. (Note: Father Fidelis Makoni, long-time Mugabe confidante and confessor, told us two months ago he thought Mugabe had been in office too long and he would subtlely suggest this to him (Ref B) End Note.) -------------- Kofi Annan Could Also Help -------------- ¶7. (C) Referring to potential efforts by African leaders to pressure Mugabe (Ref B),Gono said Mugabe did not respond well to his peers. Gono thought, however, Mugabe would listen to Kofi Annan. Gona had contacted Annan, and was trying to arrange a meeting for the two. Gono thought Annan could be helpful in Mugabe eventually leaving office, but would not be able to persuade him to leave before elections. -------------- Seeking to Impress -------------- ¶8. (C) Shortly after arriving and exchanging pleasantries, as if on cue, the phone rang. In the ensuing conversation, Gono spoke of an article in that morning's The Herald on new regulations that would ban raising wages, rents, prices, and school fees based on increases in the consumer price index except as permitted by the National Income and Pricing Commission (Commission),and would remove from various ministries the power to set government fees and tariffs and place such power with the Commission. Identifying his interlocutor during the conversation as the Minister of Economic Development, Gono protested he had not been informed of the new regulations and exclaimed, "If you don't reverse this, we're going under." He also stated he would not be subject to the actions of Obert Mpofu, Minister of Industry and International Trade and also Price Commission Chair). ¶9. (C) Gono then commenced a lengthy prepared presentation, calling our attention to highlighted portions of his January Monetary Policy Statement and April Monetary Policy Interim Review Statement in which he argued that political expediency had overridden economic common sense, that hard political decisions were necessary to right the economy, and that these decisions must involve movement to a market-based economy, including the protection of property rights and space for entrepreneurship. He said he expected soon to convince Mugabe to allow the exchange rate to depreciate to the UN rate (now 135,000),and provided Charge with several economic policy documents he had recently presented to Mugabe (septel). -------------- Gono to the Rescue -------------- ¶10. (C) Gono related that after a July 6 front-page article in The Independent detailed his criticism of price controls and his clash with Minister Without Portfolio Elliot Manyika, acting chair of the Commission, Mugabe had summoned him. HARARE 00000795 003 OF 004 Gono had expected Mugabe to fire him; instead the president told Gono he had been right in his opposition to price controls. Mugabe also said the security and defense forces had complained there was no meat for the troops. Feeding the troops was a national priority; Mugabe asked Gono what he could do. ¶11. (C) Gono told us that for over a month he supplied the defense forces with 260 head of cattle from his herd of 1200. He stopped supplying beef when the Commission taskforce raided his small abattoir and arrested its operator, and then went to Gono's rural home, where he raises chickens. and accused him (Gono) of hoarding. ¶12. (C) Gono received a letter the day of our meeting from the Army, which he showed to us, requesting renewed supplies of beef. According to the letter, the Army had been without beef for the last three weeks, since Gono ended deliveries. ¶13. (C) Close contact with the defense forces enabled him to influence policy, Gono averred. He had told the security forces that the price control policy was a disaster; he expected his interlocutors to take his message to the Friday meeting of the Joint Operational Command, Mugabe's policy-making body. ¶14. (C) According to Gono, defense forces were planning to give him a tour of barracks around the country next week. He proudly showed us a photo album of his last tour with the military. -------------- A Pitch for Better U.S.-Zimbabwe Relations... -------------- ¶15. (C) A somewhat exasperated Gono lamented that he had stayed on the job not for personal gain but to help his country. Nevertheless, he had been criticized by those within his party for arguing against economic controls, for economic liberalization, and for cooperation with the IMF; and he had been vilified by the West and had sanctions imposed on him and his family because of his position with the government. He appealed for dialogue with the West, noting that the U.S. had talked with dictators around the world, including Yasser Arafat. ¶16. (C) While mentioning that he had good ties with the MDC--whose leaders sometimes called him for advice--Gono thought their disunity would preclude them from winning next year's elections. ZANU-PF would continue to struggle with the economy, but people would not see the MDC as a viable alternative. ¶17. (C) Expressing admiration for the U.S., Gono advised that the U.S. should not paint everyone in ZANU-PF with the same brush. We should identify those in the party we could work with and support them. ¶18. (C) Returning to the issue of sanctions, Gono said three of his children studying in Australia had been placed on the Australian sanctions list and forced to leave that country. Nevertheless, he was not bitter and preferred to look to the future. On the positive side, personal sanctions directed at him enabled him better to counter assertions that he was an agent of the West; he now had the modern-day equivalent of "liberation credentials." HARARE 00000795 004 OF 004 -------------- ...And a New Start -------------- ¶19. (C) In looking to the future, Gono said it would be a mistake to talk about the Hague and human rights prosecutions. "Where do you start," he asked rhetorically. To go after generals would destroy the security of the country. As for genocide, although many mentioned GOZ-Shona massacres of Ndebele in the 1980s, further back in history there wereinstances of Ndebele massacres of Shona. Zimbabwe needed to open a new chapter, Gono concluded. -------------- I'm Your Man -------------- ¶20. (C) Gono finished by saying he had talked to us in the hope that overtures could be made and confidence given to the people (presumably including himself) that would take Zimbabwe forward. -------------- Comment -------------- ¶21. (C) Mugabe has appeared composed in recent public appearances and we have no evidence that he is in ill health. Gono, however, has a long history with Mugabe, is one of his closest advisors, and presumably could be privy to discussions with Mugabe's physician. Assuming the physician advised Mugabe to leave office, we don't know whether this was because of illness or the stresses of a difficult job on an almost 84-year old man. ¶22. (C) The assumption within ZANU-PF appears to be that Mugabe will stand for election in March. The current infighting is increasingly directed at succession following elections (Ref C). The question is whether he will actually step down after a victory. In this regard, Gono's remarks are encouraging, although obviously not definitive. The wild card is the economy. Many Zimbabweans say the current situation is as bad as it has ever been, and an even worsening economy could change the political dynamic. ¶23. (C) Gono's conversation with us, including the revealing of confidences, his protestations of economic reasonableness, and his detailing of connections ranging from the military to the MDC, seemed directed at convincing us he is a man with whom we can do business. He has been mentioned as a possible "third way" president, but for now has a constituency of one--Mugabe. Nevertheless, he appears to be reaching out in an attempt to position himself for the post-Mugabe era. DHANANI