Zimbabwe- a nation of filthy rich and filthy poor

The government had created a “parasitic agrarian bourgeoisie” that demanded even more government handouts without a commensurate rebound in agricultural output with the end result being a population with a very few who were filthy rich and the masses who were filthy poor.

This was said by the then president of the Zimbabwe National Chamber of Commerce Luxon Zembe as he lamented lack of progress in the government implementing recommendations that business had made to revamp the economy.

Zembe said the middle class had been decimated.

Industry and Trade Minister Obert Mpofu said all the chamber’s concerns were being addressed but refused to provide details.

Full cable:

Viewing cable 06HARARE800, BUSINESS CONGRESS UNDERSCORES GOZ’S ECONOMIC

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RUCNDT/USMISSION USUN NEW YORK 1482

C O N F I D E N T I A L SECTION 01 OF 02 HARARE 000800

SIPDIS

SIPDIS

AF/S FOR B. NEULING

SENIOR AFRICA DIRECTOR C. COURVILLE

E.O. 12958: DECL: 07/07/2015

TAGS: ECON PGOV PREL ZI

SUBJECT: BUSINESS CONGRESS UNDERSCORES GOZ’S ECONOMIC

INEPTITUDE

Classified By: Ambassador Christopher Dell for reasons 1.5 b/d

——-

Summary

——-

¶1. (SBU) The Zimbabwe National Chamber of Commerce,s (ZNCC)

annual congress, which brought together private and public

sector participants in late June to address Zimbabwe’s

economic decline, was a dismal failure that highlighted in

particular the GOZ,s inability to consider needed economic

reforms. Outgoing ZNCC President Luxon Zembe opened the

congress by noting that economic conditions had worsened

since last year’s meeting but that none of last year’s

recommendations to government had been acted upon. In

response, government participants offered stale assertions

that western sanctions were the actual cause of the decline

and promised &economic salvation8 under the GOZ’s latest

turnaround package. In a moment of pure symbolism, the

organizers ended the planned three-day conference a day early

due to lack of funds. End Summary.

——————————————–

ZNCC Faults Government for Worsening Economy

——————————————–

¶2. (SBU) Opening the congress on June 28, Zembe recalled the

economic problems and policy recommendations that the ZNCC

had discussed at its meeting last year. Rhetorically asking

the roughly 150 participants what had changed in the past

year, Zembe replied that economic conditions had only

worsened. Government had not responded to the Chamber’s

numerous recommendations, which had included liberalizing the

exchange rate and providing security of land tenure.

¶3. (SBU) The GOZ instead had created in Zembe,s words a

“parasitic agrarian bourgeoisie” that demanded ever-more

government handouts without a commensurate rebound in

agricultural output. The end result was a population with a

very few who were filthy rich and where the masses were

filthy poor. The middle class had been decimated. Zembe

said he still had hope that the government’s National

Economic Development Priority Program (NEDPP), of which he

and other Chamber officials were members, could facilitate a

turnaround, but cautioned against expectations of quick

gains, especially if the government failed again to initiate

needed reforms.

——————————

GOZ Offers Excuses, Platitudes

——————————

¶4. (SBU) In response, the few government officials who

attended the congress dodged Zembe’s critique and offered

vague assurances that they were working to improve the

business environment. Industry and Trade Minister Obert

Mpofu claimed unconvincingly that all of the concerns raised

by the Chamber’s outgoing president were being addressed by

NEDPP, although he refused to provide details. Attempting to

echo these assurances, Deputy Minister of Economic

Development Samuel Undenge recounted the work of yet another

GOZ economic revival plan, Vision 2020. (N.B. Providing an

apt commentary on the GOZ’s series of failed turn around

plans, newly elected ZNCC President Marah Hativagone thanked

Undenge for reminding the business community that Vision 2020

was still in existence.)

¶5. (SBU) The assorted government officials, finding

themselves unable to respond to the pointed economic

questions posed by ZNCC members, retreated to stale

HARARE 00000800 002 OF 002

assertions that U.S. and EU sanctions were to blame for the

decline rather than government policies. Local economist

Eric Bloch eviscerated this claim by noting that Zimbabwe had

a growing trade surplus with both the US and EU, and jokingly

wished that all countries placed similar “sanctions” on

Zimbabwe.

————-

Early Closure

————-

¶6. (SBU) Originally scheduled for three days, organizers

abruptly canceled the last day due to a lack of funds.

Participants had little time to debate recommendations to

government. In the 45-minutes left to them, delegates

developed a “wish list” of outcomes, such as positive real

interest rates, increased foreign investment, and a floating

exchange rate, but offered no solutions on for achieving

those outcomes.

——-

Comment

——-

¶7. (C) One has come to expect nothing less than ineptitude

from government ministers, so their performance was not

surprising. Perhaps more disheartening was the lack energy

emanating from the private sector. Despite Zembe’s initial

volley against the GOZ’s shortcomings, he and other Chamber

participants were at a loss for ideas and appeared inclined

to accept at face value the government’s latest turnaround

effort.

DELL

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