Finance Minister Tendai Biti said one of the major problems in trying to regularise the situation at the Chiadzwa diamond fields was that Mines Minister Obert Mpofu was corrupt.
He told United States embassy officials that Mpofu was susceptible to trying to cut deals with opportunistic and corrupt investors.
The other problem was that, though there was an inter-ministerial committee to deal with Chiadzwa, cabinet lacked capacity to deal with issues such as human rights, smuggling, granting concessions, and surveys to determine locations and quantities of diamonds.
He said what was needed was a special minister to deal with Chiadzwa since the ministers on the inter-ministerial committee had individual ministerial responsibilities.
Full cable:
Viewing cable 09HARARE759, ZIM MINFIN BITI BRIEFS CHARGE
If you are new to these pages, please read an introduction on the structure of a cable as well as how to discuss them with others. See also the FAQs
|
Reference ID |
Created |
Released |
Classification |
Origin |
VZCZCXRO1473
OO RUEHBZ RUEHDU RUEHMR RUEHRN
DE RUEHSB #0759/01 2651559
ZNY CCCCC ZZH
O 221559Z SEP 09
FM AMEMBASSY HARARE
TO RUEHC/SECSTATE WASHDC IMMEDIATE 4934
INFO RUCNSAD/SOUTHERN AF DEVELOPMENT COMMUNITY COLLECTIVE
RUEHAR/AMEMBASSY ACCRA 3041
RUEHDS/AMEMBASSY ADDIS ABABA 3154
RUEHRL/AMEMBASSY BERLIN 1583
RUEHBY/AMEMBASSY CANBERRA 2417
RUEHDK/AMEMBASSY DAKAR 2786
RUEHKM/AMEMBASSY KAMPALA 3202
RUEHNR/AMEMBASSY NAIROBI 5647
RUEAIIA/CIA WASHDC
RUZEJAA/JAC MOLESWORTH RAF MOLESWORTH UK
RHMFISS/EUCOM POLAD VAIHINGEN GE
RHEFDIA/DIA WASHDC
RUEHGV/USMISSION GENEVA 2334
RHEHAAA/NSC WASHDC
C O N F I D E N T I A L SECTION 01 OF 04 HARARE 000759
SIPDIS
AF/S FOR B.WALCH
DRL FOR N. WILETT
ADDIS ABABA FOR USAU
ADDIS ABABA FOR ACSS
STATE PASS TO USAID FOR J. HARMON AND L. DOBBINS
E.O. 12958: DECL: 09/22/2019
TAGS: PGOV PREL ASEC PHUM EFIN ECON ZI
SUBJECT: ZIM MINFIN BITI BRIEFS CHARGE
REF: A. HARARE 753
¶B. HARARE 736
Classified By: CDA Donald Petterson for reasons 1.4 (b) and (d)
——-
SUMMARY
——-
¶1. (C) Minister of Finance and MDC Secretary-General Tendai
Biti told the Charge on September 21 that the MDC will
canvass its supporters as to whether the MDC should remain in
government; he believes most MDC members favor staying in the
inclusive government and confronting Mugabe and ZANU-PF.
While many ZANU-PF officials want the inclusive government to
fail, he believes Mugabe does not, and will give in on
outstanding issues. Three of the Global Political Agreement
(GPA) negotiators (Biti, Welshman Ncube, and Patrick
Chinamasa) will be part of a constitutional oversight
committee to unlock the constitution-making process. These
negotiators will also focus on outstanding issues. Biti
believes a “decent” constitution will emerge from the
constitutional process which will then pave the way for
elections.
¶2. (C) Turning to financial and economic issues, Biti said
he had been in contact with the IMF over the last four months
and had discussed Zimbabwe’s newly allocated Special Drawing
Rights (SDRs). He said he is considering using SDRs for
arrears clearance, infrastructure development, support for
the export sector, and budget support, but will consult with
the IMF in making any decisions. Revenues have now leveled
off and additional economic growth, in the absence of donor
an International Financial Institution (IFI) support, will
depend on private investment. South Africa in particular
appears ready to invest. Biti intimated that ZDERA should be
modified as Zimbabwe makes progress, and that sanctions on
certain parastatals and banks should be lifted as they are
now under the control of the Ministry of Finance.
¶3. (C) On the issue of the Chiadzwa diamond fields, Biti
claims that the Kimberley Process has not been cooperative in
providing technical assistance. Additionally, corruption and
lack of capacity within the government have prevented it from
dealing adequately with Chiadzwa. END SUMMARY.
¶4. (C) The Charge met on September 21 with Biti at the
Ministry of Finance.
——————
MDC Ready to Fight
——————
¶5. (C) Following up on last week’s meeting with Prime
Minister Morgan Tsvangirai (Ref A), the Charge asked Biti
about prospects for progress on GPA outstanding issues and
the MDC’s course of action. Biti responded that the MDC
would canvass supporters on three options: 1) Remain in
government and continue as is; 2) Pull out of government; 3)
Remain in government and fight for progress within the
existing framework.
¶6. (C) He summarized some of the advances since the
formation of the inclusive government in February. The
economy was growing, albeit slowly. He noted that in rural
areas where there was no food a year ago, meat was available.
Violence had dramatically decreased in rural areas. Schools
had reopened. As a consequence, even though most GPA issues
Qhad reopened. As a consequence, even though most GPA issues
had not been resolved — the appointment of governors and Roy
Bennett, prosecutions of MDC parliamentarians, a stalled
constitutional process, and lack of progress on the democracy
agenda (failure to repeal POSA and AIPPA), for example —
HARARE 00000759 002 OF 004
Biti thought most MDC supporters would support remaining in
government and “fighting.” This was also his position.
Tsvangirai, in Biti’s opinion, should no longer talk about
working well with Mugabe but should talk tough, as in his
Bulawayo speech celebrating the MDC’s 10th anniversary (Ref
B).
¶7. (C) Asked whether Mugabe would give ground on outstanding
issues, Biti replied that Mugabe was “tired.” While most
ZANU-PF officials wanted the inclusive government to fail,
Mugabe did not, Biti surmised. This was because a failed
government would be bad for his legacy and because he did not
want to fight an MDC attacking him from outside of
government. Biti said the MDC would continue “chipping away”
at ZANU-PF, which he characterized, like Mugabe, as “tired.”
¶8. (C) Biti expected progress on the formation of
commissions. Mugabe’s failure to select members of the Media
Commission had precipitated Tsvangirai’s threat on September
14 to end their one-on-one conversations on the GPA (Ref B)
and resulted in discussion of the constitution and moving
forward later in the week. Biti thought that Mugabe, on his
return from the UNGA, would name the members of the Media
Commission, and that efforts would proceed to select nominees
for other commissions (electoral, human rights, and
anti-corruption).
¶9. (C) The Charge noted that continuing farm invasions and
efforts to expropriate interests in conservancies by the
governor of Masvingo and other ZANU-PF officials in the Save
area featured prominently in the news and would be a
deterrent to investment. Biti responded that this was a
delicate issue, since any actions on behalf of white farmers
would be portrayed by ZANU-PF as racist. Nevertheless, this
was a top issue that Tsvangirai would continue to raise with
Mugabe.
¶10. (C) Biti said that if Mugabe did not give on outstanding
issues, the MDC’s recourse was to “raise the decibel level,”
boycott cabinet, and/or appeal to the SADC Troika.
¶11. (C) Biti said ZANU-PF had made a mistake in giving the
“social” ministries such as health and education to the MDC.
These ministries had had a positive effect on peoples’ lives,
and the MDC was receiving credit. As an example, Biti said
an MDC rally in Karoi last weekend had been well-attended,
and people spoke to him about how much better their living
situation was this year compared to last.
—————————————–
Moving the Constitutional Process Forward
—————————————–
¶12. (C) Elaborating on the new constitutional mechanism (Ref
A), Biti said there had been little leadership exercised over
the constitutional process in the last few months. The GPA
principals would now have overall responsibility for the
process to draft a new constitution, but a steering committee
of three of the GPA negotiators (Biti, Patrick Chinamasa, and
Welshman Ncube), the three chairs of the parliamentary Select
Committee on the Constitution, and the Minister of
QCommittee on the Constitution, and the Minister of
Constitutional and Parliamentary affairs (Eric Matinenga)
would oversee an operational committee and secretariat. Biti
underscored that the three GPA negotiators would also
constitute a de facto committee to deal with outstanding
issues since the Joint Monitoring and Implementation
Committee (JOMIC) had been useless.
¶13. (C) Biti thought that a “decent” constitution would
emerge from the process. He commented that the Kariba Draft
was a “decent” constitution; its primary shortcoming was
provision for a strong president — Biti favored a French
HARARE 00000759 003 OF 004
model with powers divided between president, prime minister,
and cabinet. If necessary, however, he would not object to
the adoption of the Kariba Draft. The importance of a
constitution, he emphasized, was as a vehicle to get to
elections, since under the GPA a new constitution was a
prerequisite to elections. (COMMENT: Biti negotiated the
Kariba draft, and his favorable assessment of it is no
surprise. Civil society has a different view — and much of
civil society will not see shifing the stewardship of the
constitutional reform process from the parliament to the
principals as a step in the right direction, since they wish
to see it moved closer to the people, not further away. END
COMMENT.)
————————-
SDRs, HPIC, and Sanctions
————————-
¶14. (C) Biti’s thoughts at present regarding SDRs were to
use Zimbabwe’s allocation to clear arrears, for
infrastructure, for balance of payment support to the export
sector, and possibly for budgetary support. In this regard,
he noted that tax revenues had leveled off — in fact, they
had decreased from USD 98 million in July to USD 95 million
in August — and would not increase under present
circumstances. He noted he had been in conversations with
the IMF for the last four months and would have further
consultations next week in Istanbul; he stated he would use
SDRs in consultation with the IMF. Referring to attacks on
him from Reserve Bank of Zimbabwe Governor Gideon Gono and
ZANU-PF for not agreeing to use SDRs for economic stimulus,
Biti commented that they viewed SDRs as a funding source for
“one last Christmas party.”
¶15. (C) Acknowledging that significant IFI and donor support
was not on the horizon, Biti said he was looking for private
investment to boost the economy. He believed South Africa
was prepared to make significant investments, although he
expressed concerns that much of this investment would be to
buy up cheap assets. Biti was skeptical that investors would
be deterred by indigenization laws; Mugabe had promised to be
flexible with indigenization requirements and had conveyed
this message to visiting investors.
¶16. (C) According to Biti, a mammoth debate had taken place
in Cabinet last week on whether Zimbabwe should apply to the
IMF for Highly Indebted Poor Country (HIPC) relief. Most
ZANU-PF ministers had opposed requesting relief, arguing that
this was part of a western agenda to subjugate Zimbabwe.
Also, Zimbabwe would be equating itself with countries it
considered less advanced. Biti stated that Mugabe had
finally appointed a committee, which Biti thought would be
sympathetic to seeking HIPC relief, to study the issue and
make recommendations to Cabinet. (COMMENT: ZANU-PF
propagandists have been attacking Biti on HIPC in the local
media. We suspect that Biti in discussions with Cabinet
included HIPC as part of long range economic plans and this
has provided another hook for the ruling party to portray the
Qhas provided another hook for the ruling party to portray the
MDC as subservient to the West. END COMMENT.)
¶17. (C) While not specifically advocating repeal, Biti
opined that ZDERA should be modified in response to progress
on political reforms. He advocated lifting of sanctions on
the Infrastructure Development Bank of Zimbabwe, Agribank,
and ZB Bank since they were effectively under the control of
the Ministry of Finance.
———————
No Action on Chiadzwa
———————
¶18. (C) Biti said that the government had accepted all the
HARARE 00000759 004 OF 004
recommendations of the Kimberley Process team that visited
Zimbabwe from June 30 to July 4 to investigate Chiadzwa, with
the exception of demilitarization. Minister of Mines Obert
Mpofu had sent a letter to Kimberly representatives for
technical assistance on issues such as smuggling, security,
resolution of conflicting claims, and issuing concessions.
According to Biti, Mpofu had not received a response.
¶19. (C) Biti identified two problems in trying to regularize
the Chiadzwa situation: corruption and lack of capacity.
Mpofu himself, according to Biti, was corrupt and was
susceptible to trying to cut deals with opportunistic and
corrupt investors. Additionally, an interministerial
committee to deal with Chiadzwa notwithstanding, Cabinet
lacked capacity to deal with the myriad issues — human
rights, security, smuggling, granting of concessions, surveys
to determine locations and quantities of diamonds, etc. The
ministers on the interministerial committee all had
individual ministerial responsibilities; what was needed was
a special minister to deal with Chiadzwa.
——-
COMMENT
——-
¶20. (C) Although he was one of the negotiators of the GPA,
Biti thought there were too many open-ended issues to justify
the MDC entering into government in February, and he was one
of the last to accept the formation of the inclusive
government. The fact that he supports remaining in the
government and believes most MDC supporters do as well,
albeit with a more assertive posture vis-a-vis Mugabe and
ZANU-PF, is a strong indication that despite press reports of
MDC dissatisfaction with the GPA and consideration of leaving
government, the MDC will remain in government for the long
haul. The MDC will continue to press, probably more vocally
than before, for ZANU-PF compliance with the GPA and
resolution of outstanding issues, but the focus will be on
the constitution and elections.
¶21. (C) On the economic side, the most contentious issue
recently has been use of SDRs. ZANU-PF and Gono have
attacked Biti for not agreeing to use SDRs for stimulus in
the context of a very weak economy. Biti has fought back and
let it be known he will not allow SDRs to be used for a
ZANU-PF shopping spree. He and his advisers have made clear
to us that while he has some initial ideas about how to use
SDRs, he wishes to cooperate with the IMF and will make any
decisions in consultation with the Fund. END COMMENT.
PETTERSON
(52 VIEWS)
