Murerwa said he disliked price controls

Former Finance Minister Herbert Murerwa told United States ambassador to Zimbabwe Joseph Sullivan that he disliked price controls and hoped that with the help of other moderates within the Zimbabwe African National Union-Patriotic Front he could push for more reforms.

Murerwa said he had proposed raising the price of maize and allowing the import of white maize at market value against Agriculture Minister Joseph Made’s opposition.

Full cable:

Viewing cable 03HARARE590, Finance Head Dislikes Price Controls

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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 HARARE 000590

SIPDIS

SENSITIVE

STATE FOR AF/S

NSC FOR SENIOR AFRICA DIRECTOR JFRAZER

USDOC FOR 2037 DIEMOND

PASS USTR ROSA WHITAKER

TREASURY FOR ED BARBER AND C WILKINSON

STATE PASS USAID FOR MARJORIE COPSON

¶E. O. 12958: N/A

TAGS: ECON EINV ETRD ZI

SUBJECT: Finance Head Dislikes Price Controls

¶1. (SBU) Summary: During a meeting with Ambassador

Sullivan, Finance Minister Herbert Murerwa agreed that

economic intervention has gone too far. He expressed

hope that he and other GOZ moderates will be able to push

through reforms that reach beyond last month’s

devaluation. End summary.

Less International Support?

—————————

¶2. (SBU) Amb Sullivan recounted that the U.S. has

provided about US$ 130 million total assistance to

Zimbabwe during the past year. With the possibility

looming that only Zimbabwe among southern African

countries will continue to suffer significant food

deficiency, he stressed the need for meaningful economic

reform and better coordination between the donor

community and the GOZ’s Grain Marketing Board (GMB).

Murerwa concurred that Zimbabwe will require some degree

of food assistance, probably in Masvingo as well as

Matabeleland North and South. He said he was “unhappy”

that the GOZ still subsidized maize-meal “at a horrendous

rate.” Against Agriculture Minister Joseph Made’s

opposition, Murerwa told us he has proposed raising the

price of maize and allowing the import of white maize at

market value. (Note: There is presently little incentive

for producers to sell grain to the GMB at controlled

prices.)

3 Bilateral Friction Points

—————————

¶3. (SBU) Expropriations of Amcit Properties: Amb

Sullivan protested the GOZ’s unlawful seizure of land

belonging to five U.S. citizens under fast-track land

reform, requesting Murerwa’s intercession. The Finance

Minister agreed to look at the cases and accepted copies

of the Embassy’s notes verbal to date.

¶4. (SBU) Enfeebled Democracy: Murerwa expressed regret

that the land issue had soured bilateral relations. Amb

Sullivan countered that the USG had long supported land

redistribution within a legal framework. He argued that

the USG was most concerned with Zimbabwe’s undemocratic

elections last March and deteriorating human rights

record. Murerwa insisted repeatedly that the GOZ’s main

conflict was with the United Kingdom and not domestic

opposition. He expressed outrage at alleged opposition

violence in the just-concluded two-day national strike.

¶5. (SBU) Financial Sanctions: Amb Sullivan gave Murerwa

a copy of the March 6 executive order authorizing

financial sanctions against Zimbabwe’s leaders. Murerwa

asked whether sanctions extended to businesses owned by

listed Zimbabweans. The Ambassador told him the USG has

yet to define these parameters.

Comment

——-

¶6. (SBU) Murerwa shares customary ZANU-PF biases, blaming

the UK — rather than suppression of opposition and rule-

of-law — for Zimbabwe’s estrangement from much of the

international community. However, he is decidedly among

GOZ moderates, more empirical than ideological, who are

working quietly to rationalize economic policies. We

have no doubt the Harvard-trained educator recognizes

that the GOZ has gone overboard on self-destructive price

controls and other statist policies. He will continue to

lobby gingerly for liberalization and against cabinet

hard-liners, probably with mixed results.

Sullivan

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