Ray told Mangoma sanctions were not keeping investors out of Zimbabwe

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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C O N F I D E N T I A L SECTION 01 OF 02 HARARE 000989

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STATE PASS TO USAID FOR J. HARMON AND L. DOBBINS

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E.O. 12958: DECL: 12/21/2019

TAGS: PGOV ECON EINV ZI

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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