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

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Summary
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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.

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Mugabe Urged by Intimates to Step Down
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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.)

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Kofi Annan Could Also Help
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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.

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Seeking to Impress
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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).

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Gono to the Rescue
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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.

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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.

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A Pitch for Better U.S.-Zimbabwe Relations...
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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


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...And a New Start
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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.

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I'm Your Man
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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.

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Comment
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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