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Cablegate: Businessmen Foresee Recovery (Somehow)

This record is a partial extract of the original cable. The full text of the original cable is not available.

260636Z Aug 03

UNCLAS HARARE 001677

SIPDIS

SENSITIVE

STATE FOR AF/S
NSC FOR SENIOR AFRICA DIRECTOR JFRAZER
USDOC FOR 2037 DIEMOND
TREASURY FOR OREN WYCHE-SHAW
PASS USTR FLORIZELLE LISER
STATE PASS USAID FOR MARJORIE COPSON

E. O. 12958: N/A
TAGS: ECON EINV PGOV ZI
SUBJECT: Businessmen foresee recovery (somehow)


1. (U) Summary: Local businessmen assured a visiting
congressional staffer that the Zimbabwean economy can
regain past prowess. While despairing of the present
economic climate, the businessmen's medium-term
hopefulness stunned our visitor, a seasoned Zimbabwe-
watcher. Although we share our interlocutors' faith in
this economy's ultimate potential, we are less sanguine
about a rapid rebound. End Summary.

2. (SBU) Malik Chaka, majority staffer for the Africa
Subcommittee of the House International Relations
Committee, met a plethora of movers-and-shakers during an
August 19-26 visit to Zimbabwe. (A readout of political
meetings will follow via septel.) On the economic side,
Chaka sat down with former Finance Minister Simba Makoni,
Finance PermSec Nick Ncube, Banker's Association
President (and Standard Chartered CEO) Washington
Matsaira, Stanbic CEO Pindi Nyandoro and a dozen reps of
various U.S. businesses.

3. (SBU) Unsurprisingly, the executives were in broad
agreement that the economy is in dire straits. Most
consider President Mugabe incapable of improving business
conditions, as reflected in yet another failure recently
to normalize oil procurement and sales through
multinational companies. However, they believe a
successor government could restore the economy to late-
1990 levels. A few salient details:

- They still consider Zimbabweans smarter, better-
educated and harder-working than most Africans. Standard
Chartered CEO Matsaira said the years he spent in Uganda
convinced him of Zimbabweans' superior skills.

- Several interlocutors expressed horror at the National
Railway's state, agreeing it is the most critical
component in the economic infrastructure.

- The businessmen believe reformalizing rather than
reproaching Zimbabwe's black/gray economy holds an
important key to economic rebound.

- Most believe a recovery to 1997 levels will take 3-6
years.

- Some business reps feel that land redistribution may be
reversible in part. Former Finance Minister Makoni, a
potential president, insists a future GOZ could return up
to 40 percent of white farmers to a portion of their
land.

Comment
-------
4. (SBU) Many of these views strike us as extravagantly
hopeful. We do not believe this economy can grow 67
percent in 3-6 years (to return to 1997 levels, assuming
a 40 percent cumulative drop has taken place), even under
the best of circumstances. Although it would no doubt
help to reformalize economic activity that has gone
underground, rebuilding the country's infrastructure
(including the education and health systems) is a long-
term endeavor. We are also skeptical that a future
government could reactivate anywhere near 40 percent of
white farmers. That said, we would love for eternally-
optimistic Zimbabweans to prove us wrong.

Sullivan

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