Indians saw South Africa of today as Zimbabwe of 10 years ago

A Bulawayo Indian businessman told a United States embassy official that Indians were now leaving the country but they were not going to South Africa because they saw too many parallels between the South African of today and the Zimbabwe of 10 years ago.

Instead they were leaving for Australia, the UK and more recently the United States. He said roughly eighty percent of Indian families in Zimbabwe had relatives who had left Zimbabwe.

The businessman, Jyots Laxmidas, reminisced that ten years ago Indian Zimbabweans would never have contemplated such a move.

Full cable:

Viewing cable 05HARARE1, THE INDIAN COMMUNITY OF BULAWAYO

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

UNCLAS SECTION 01 OF 02 HARARE 000001

SIPDIS

AF/S FOR BNEULING

NSC FOR SENIOR AFRICA DIRECTOR C. COURVELLE, D. TEITELBAUM

USDOC FOR ROBERT TELCHIN, TREASURY FOR OREN WYCHE-SHAW,

PASS USTR FOR FLORIZELLE LISER, STATE PASS USAID FOR

MARJORIE COPSON

E.O. 12958: N/A

TAGS: ECON PGOV ELAB ZI

SUBJECT: THE INDIAN COMMUNITY OF BULAWAYO

¶1. (SBU) Summary: Despite their strong ties to the country,

Zimbabwe,s ethnic Indians are increasingly contemplating

emigration as a result of the country,s continuing economic

slide. This was the message Econoff received from the Indian

community in Bulwayo on a recent visit. The loss of this

economically important minority would be a further blow to

the country. End Summary.

——————————————-

THE BUSINESS CLIMATE: AN ASIAN PERSPECTIVE

——————————————-

¶2. (SBU) On a December 6-7 visit to Bulawayo, Zimbabwe,s

second largest city, EconOff met on December 7 with 40 ethnic

Indian businesspeople. Jyots Laxmidas, a prominent Indian

and owner of a textile manufacturer called Style

International, undertook to give EconOff a tour of

Bulawayo,s industrial and commercial areas. During the

tour, Laxmidas noted in particular the significant number of

manufacturers who had gone out of business. He said their

place was increasingly being taken by distributors of

imported products. However, these distributors employ far

fewer people than the outgoing manufacturers did and as a

result unemployment in Bulawayo has worsened. Laxmidas noted

that for those still manufacturing in Zimbabwe, costs are

rising and sales dwindling. For instance, his company went

from 170 employees at the start of 2004 to 60 by December.

¶3. (SBU) In order to make up for declining sales, Laxmidas

said Indians were expanding the scope of their businesses and

investing in real estate. In addition to his textile

business, Laxmidas said he now exported Zimbabwean curios and

other items and that he and his friends had purchased several

buildings around Bulawayo. Laxmidas said with high inflation

and negative real interest rates, it was the only safe

domestic investment. He added that the GOZ had effectively

made overseas investments illegal through its prohibition on

externalizing foreign exchange. Several businesspeople with

whom Econoff met pressed for the U.S. to do more for

Zimbabwe, with one person noting that the U.S. was unfairly

punishing Zimbabwe by excluding it from AGOA, arguing that

other countries which do not meet the qualifying criteria

were being included.

—————————————-

ETHNIC INDIANS CONSIDER LEAVING ZIMBABWE

—————————————-

¶4. (SBU) Laxmidas and others noted that the Indian community

in Zimbabwe has historically had close ties to President

Mugabe and the ZANU-PF, one of the reasons they had not

suffered the same fate as white farmers over the past few

years. Nonetheless, he said most ethnic Indians had at least

considered leaving Zimbabwe, and had at least one relative

who has done so. He reminisced that ten years ago Indian

Zimbabweans would never have contemplated such a move.

Driving down streets of Indian-owned businesses, Laxmidas

recounted how one Indian shop owner,s son had gone to the

U.K., another,s parents had departed for Australia, and so

on. In fact, he said roughly eighty percent of Indian

families in Zimbabwe had relatives who had left Zimbabwe.

Laxmidas noted that the U.S. was also becoming a popular

destination. His own brother had recently left for the U.S.

and several of the Indian business people in Bulawayo had

already obtained U.S. citizenship. Interestingly, Indian

Zimbabweans are not going to South Africa as they see too

many parallels between the South Africa of today and the

Zimbabwe of 10 years ago.

¶5. (SBU) Laxmidas said the main spur to Indian emigration was

economic. However, a strong contributing factor was their

fear for their children,s future. Before the temporary

closure of private schools this past winter, Indians believed

their children could at least receive a quality high school

education in Zimbabwe. Now the education-minded Indian

community worried that the GOZ would run down the private

schools as they had already done to the public ones.

¶6. (SBU) Another contributing factor is the political climate

and especially the uncertain presidential succession. Both

ZANU-PF and the opposition MDC have appealed to the Indian

community for financial and electoral support. Those appeals

include promises of &protection8 for the Indian community

but also veiled threats should the Indians support the wrong

side. Laxmidas said Indians believe they are safe from any

ethnic backlash while Mugabe remains in power due to their

(and India,s) historic support for the ruling ZANU-PF.

However, the Indian community is worried that any Mugabe

successor might be tempted to &indigenize8 Indian-owned

businesses, especially if the community supports the losing

side.

——–

COMMENT

——–

¶7. (SBU) It,s a measure of how far conditions in Zimbabwe

have deteriorated in recent years that so many ethnic Indians

are leaving or thinking of leaving. The loss of this

economically significant minority would be yet another heavy

blow to the country. Yet, if economic and social conditions

continue to deteriorate- especially the school system- it

seems inevitable. We will continue to engage this small but

important minority in follow-up reporting on both the larger

Indian community in Harare and smaller communities in other

parts of Zimbabwe.

SCHULTZ

(159 VIEWS)