United States ambassador to Zimbabwe Charles Ray said sanctions were not keeping investors out of Zimbabwe because they could manage economic and security risks. “What keeps them away is political risk”.
Ray was speaking to the then Economic Planning Minister Elton Mangoma whom he described as a talented politician with a good grasp of what it should take to put Zimbabwe’s economy back on the rails.
The ambassador said Mangoma was not as eloquent or animated as Tendai Biti, his colleague at the Finance Ministry, but he shared with Biti a no-nonsense view of economic policy that was consistent with United States government interests.
“If the transitional government can achieve a little more transition, Mangoma and Biti will be the right ministers in the right places at the right time,” Ray said.
Mangoma said the inclusive government was facing difficulties but the government was determined to overcome them.
“The transition and change we are in are absolutely irreversible,” Mangoma said. “It’s just a question of the speed of reforms. We are capable of doing much more than our history shows.”
Full cable:
Viewing cable 09HARARE989, AMBASSADOR’S MEETING WITH PLANNING MINISTER MANGOMA
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Reference ID |
Created |
Released |
Classification |
Origin |
VZCZCXRO1508
OO RUEHBZ RUEHDU RUEHMR RUEHRN
DE RUEHSB #0989/01 3550721
ZNY CCCCC ZZH
O 210721Z DEC 09
FM AMEMBASSY HARARE
TO RUEHC/SECSTATE WASHDC IMMEDIATE 5241
INFO RUCNSAD/SOUTHERN AF DEVELOPMENT COMMUNITY COLLECTIVE
RUEHAR/AMEMBASSY ACCRA 3222
RUEHDS/AMEMBASSY ADDIS ABABA 3333
RUEHRL/AMEMBASSY BERLIN 1757
RUEHBY/AMEMBASSY CANBERRA 2591
RUEHDK/AMEMBASSY DAKAR 2960
RUEHKM/AMEMBASSY KAMPALA 0021
RUEHNR/AMEMBASSY NAIROBI 0023
RUEAIIA/CIA WASHDC
RUZEJAA/JAC MOLESWORTH RAF MOLESWORTH UK
RHMFISS/EUCOM POLAD VAIHINGEN GE
RHEFDIA/DIA WASHDC
RUEHGV/USMISSION GENEVA 2494
RHEHAAA/NSC WASHDC
C O N F I D E N T I A L SECTION 01 OF 02 HARARE 000989
SIPDIS
AF/S FOR B.WALCH
DRL FOR N. WILETT
ADDIS ABABA FOR USAU
STATE PASS TO USAID FOR J. HARMON AND L. DOBBINS
NSC FOR MICHELLE GAVIN
E.O. 12958: DECL: 12/21/2019
SUBJECT: AMBASSADOR’S MEETING WITH PLANNING MINISTER MANGOMA
Classified By: Ambassador Charles A. Ray for reason 1.4 (b) and (d).
¶1. (C) SUMMARY: Ambassador made a courtesy call on Minister
for Economic Planning and Investment Promotion Elton Mangoma
on December 18. As one of the ministers brought into the
government by the Movement for Democratic Change, Mangoma has
an important voice on economic policy. He said the
medium-term plan now being developed by his ministry would
“liberate the economy.” Mangoma agreed that political risk
was the real obstacle to investment. He gave a positive view
on negotiations over implementation of the Global Political
Agreement (GPA) but said there was still no compromise on the
appointments of the attorney general and central-bank
governor. END SUMMARY.
—————-
Medium-Term Plan
—————-
¶2. (C) In response to Ambassador’s query on the GOZ’s
development of a medium-term plan (MTP) for economic policy,
Mangoma said there was a consensus “across the political
divide” in support of the economic policies the transitional
government had put in place. ZANU-PF ministers had come to
accept the necessity of the multi-currency arrangement that
was put in place in March. Beyond this, Mangoma said,
everyone understood “the country is broke.” One purpose of
the MTP would be to “liberate the economy from a broke
government.”
¶3. (C) Mangoma said the MTP would outline policies designed
to “open up economic infrastructure to the private sector.”
There are urgent priorities in the power sector, roads,
railways, and water supply. State-owned enterprises in these
and other sectors would have to find a way to get by without
government support or yield to private enterprises. There
would be no subsidies, Mangoma said: “They must stand on
their own or fail.”
——————
Investment Climate
——————
¶4. (C) Noting that the transitional government had made great
strides on economic policy, Ambassador said policy on paper
was not enough. For an economy so entirely dependent on
foreign-direct investment (FDI) to rebuild itself, it was
essential that the GOZ give investors reasons to have
confidence. “Sanctions do not keep investors out of
Zimbabwe,” Ambassador said, “and investors can manage
economic and security risks. What keeps them away is
political risk.” Mangoma agreed with this, adding “Rule of
law is important.” He said it would be impossible to change
the behavior of everyone in the government, so at times it
would be necessary to bring international influence to bear.
Mangoma cited the role of the Kimberley Process in bringing
more transparency to Zimbabwe’s diamond industry. “We have
difficulties,” Mangoma said, “but we are determined to
overcome them.”
¶5. (C) Mangoma said the Zimbabwe’s new investment treaty with
South Africa was a good example. “Even if it’s just a piece
of paper, it was a major achievement” to get ZANU-PF
ministers to agree to it. “The transition and change we are
Qministers to agree to it. “The transition and change we are
in are absolutely irreversible,” Mangoma said. “It’s just a
question of the speed” of reforms. “We are capable of doing
much more than our history shows.”
————————–
GLOBAL POLITICAL AGREEMENT
————————–
HARARE 00000989 002 OF 002
¶6. (C) In response to Ambassador’s question about the state
of negotiations over implementation of the GPA that led to
the transitional government, Mangoma said, “I am one of the
negotiators, and we are meeting again today. We have agreed
on most of the issues, and we should also be able to put a
timeline to what we have agreed on.” Mangoma added that so
far there was no agreement on the appointment of the attorney
general and governor of the central bank.
——-
COMMENT
——-
¶7. (C) Mangoma is a talented politician with a good grasp of
what it will take to put Zimbabwe’s economy back on the
rails. He is not as eloquent or animated as Tendai Biti, his
colleague at the Finance Ministry, but he shares with Biti a
no-nonsense view of economic policy that is consistent with
USG interests. If the transitional government can achieve a
little more transition, Mangoma and Biti will be the right
ministers in the right places at the right time. END COMMENT.
RAY
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