Biti says Mpofu is corrupt

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

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

(54 VIEWS)