Mzembi said China was pressing for reform in Zimbabwe

Zimbabwe African National Union-Patriotic Front legislator Walter Mzembi told United States embassy officials that he had just returned from China as part of a government delegation that had gone to seek financial assistance but China had refused to offer any loans and instead pressed Zimbabwe to reform.

Mzembi said the Chinese had said Zimbabwe should follow China’s example and embark on free market-oriented reforms.

He said he was impressed with the manner in which China had “copied the West” and agreed that the government needed to embrace reforms.

US embassy officials said though China’s stance was a welcome development, Beijing would have more impact if the Chinese, and the Russians, joined the international community’s calls for change in Zimbabwe.

Full cable:

Viewing cable 06HARARE1280, LOOK EAST “SUCCESSES” FALL FLAT

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RR RUEHMR RUEHRN

DE RUEHSB #1280/01 2971457

ZNY CCCCC ZZH

R 241457Z OCT 06

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RUCNDT/USMISSION USUN NEW YORK 1563

C O N F I D E N T I A L SECTION 01 OF 02 HARARE 001280

SIPDIS

SIPDIS

AF/S FOR S. HILL

NSC FOR SENIOR AFRICA DIRECTOR B. PITTMAN

E.O. 12958: DECL: 10/24/2016

TAGS: ECON PGOV PREL ZI

SUBJECT: LOOK EAST “SUCCESSES” FALL FLAT

Classified By: Ambassador Christopher W. Dell under Section 1.4 b/d

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Summary

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¶1. (C) In the GOZ’s most recent flirtation with countries to

its east, state-controlled media on October 10 reported that

a Russian delegation had signed memorandums of understanding

(MOUs) with the GOZ totaling US$300 million. South African

journalists checking into the contracts, however, could not

find evidence that the Russian company involved was

legitimate and a GOZ official privately told us the visitors

put the breaks on any investment due to the lack of

investment guarantees. Would-be Russian investors appear to

have come to the same conclusion as the Chinese who,

according to a ruling party parliamentarian, recently told

the GOZ to follow their model, and deregulate the market and

embrace reform. End Summary.

————————————–

GOZ Signs MOUs With Briefcase Company?

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¶2. (U) A delegation of 48 Russian businesspersons and

journalists visited Zimbabwe in early October, and on October

10 reportedly signed several MOUs worth US$300 million with

the GOZ. Trumpeting the agreements, the state-controlled

Herald newspaper said the Russian investment company Rusavia

Trade would build a commuter rail link between Harare and the

nearby dormitory town of Chitungwiza, construct a freight

terminal at the Harare international airport, improve two

airfields near Victoria Falls, and develop a coalfield near

Hwange.

¶3. (U) Subsequent investigations by South African

journalists, however, have shown that the Russian company

that signed the MOUs appears to be little more than a

briefcase company. Phone numbers for the company distributed

at a Harare press conference were inoperable and Russian

business insiders contacted by the journalists had never

heard of the company.

¶4. (C) Meanwhile, Deputy Reserve Bank of Zimbabwe Governor

Nick Ncube ) a fluent Russian-speaker who was involved in

the visit – told the DCM in early October that in previous

negotiations reputable Russian investors had insisted on

investment guarantees before sinking large sums of money into

Zimbabwe. Since the GOZ had been unwilling to provide such

guarantees, no investment had been forthcoming. Ncube

conceded that the delegation’s visit would also amount to

little.

——————————————-

Chinese Limit Aid, Quietly Press For Reform

——————————————-

¶5. (C) ZANU-PF MP Walter Mzembi on October 4 told econoff

that he had just returned from China as part of a GOZ

delegation seeking financial assistance. The Chinese,

however, refused to offer any loans and instead pressed the

Zimbabweans to reform. Mzembi said the message from their

Chinese interlocutors was to follow China,s example and

embark on free market-oriented reforms. The ruling party

legislator said he was impressed with the manner in which

China had “copied the West” and agreed that the GOZ needed to

embrace reforms.

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Comment

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HARARE 00001280 002 OF 002

¶6. (C) For some time, the GOZ has been touting its “Look

East” policy as part of an economic rescue strategy. The

Russian MOU is but the latest example of the government’s

smoke and mirrors that has included several announced but

unexecuted MOUs with investors from the “East.” Instead,

Chinese, Russian, Korean, Indian and other Asian investors,

like investors from the rest of the world, have wisely

avoided the grossly mismanaged Zimbabwean economy in favor of

more reform-minded countries in the region and elsewhere.

Despite GOZ claims to the contrary, the bottom-line is that

the “Look East” policy has failed to attract foreign capital.

This only further scuttles the GOZ’s most recent recovery

plan to bring in US$2.5 billion in investment, which some GOZ

officials have publicly conceded has been a failure.

¶7. (C) Mzembi’s account is the first indication we have seen

that the Chinese Government is pressing Zimbabwe on reforms.

It is a welcome development but would of course have more

impact if the Chinese (and the Russians for that matter) were

to join the international community’s calls for change here.

That said, despite the mutual talk of comradeship and the

political cover China provides the GOZ, neither it nor any

other “Eastern” country will act to bail out the GOZ.

DELL

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