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R 071403Z JUN 07
FM AMEMBASSY HARARE
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INFO RUCNSAD/SOUTHERN AFRICAN DEVELOPMENT COMMUNITY
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RUEHKM/AMEMBASSY KAMPALA 1678
RUEHNR/AMEMBASSY NAIROBI 4086
RUEHFR/AMEMBASSY PARIS 1447
RUEHRO/AMEMBASSY ROME 2105
RUEHBS/USEU BRUSSELS
RHMFISS/JOINT STAFF WASHDC
RUEHGV/USMISSION GENEVA 0745
RHMFISS/HQ USEUCOM VAIHINGEN GE
RUFOADA/JAC MOLESWORTH RAF MOLESWORTH UK
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RHEHAAA/NSC WASHDC
RUCNDT/USMISSION USUN NEW YORK 1839
UNCLAS SECTION 01 OF 06 HARARE 000504
SIPDIS
SENSITIVE
SIPDIS
AF/S FOR S. HILL
NSC FOR SENIOR AFRICA DIRECTOR B. PITTMAN
ADDIS ABABA FOR USAU
ADDIS ABABA FOR ACSS
E.O. 12958: N/A
TAGS: PGOV PHUM PREL ZI
SUBJECT: "MAKE A PLAN" MENTALITY CUSHIONS POPULATION,
REGIME FROM ECONOMIC FREEFALL
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Summary
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1. (SBU) As their country's economic decline continues to
gather speed, Zimbabweans of all walks of life have
increasingly adopted creative coping mechanisms, captured
succinctly in the phrase "make a plan" that is now on
everybody's lips. These plans are innumerable, but they can
be grouped into three broad categories; belt-tightening,
income augmentation, and external support. "Make a plan"
strategies are perfectly rational short-term responses by
average Zimbabweans seeking to weather the crisis. However,
these strategies are individualist and often distract
Zimbabweans from efforts to take collective actions to press
the GOZ to reform. In fact, "making a plan" provides a
safety valve that indirectly reduces pressure for the
necessary reforms that will ultimately turn Zimbabwe's
economy around. Zimbabweans' individual coping mechanisms
may, over time, prove incapable of keeping pace with the
scale of Zimbabwe's collapse, at which point Zimbabweans may
have less to lose by abandoning their individual strategies
in favor of more collective action. Nonetheless,
Zimbabweans' ability to a plan8 will continue in the
near term to have the unintended consequences of cushioning
Robert Mugabe's regime from the full brunt of the economic
crisis that its policies have created. End Summary.
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Keeping Up Appearances Amid Economic Meltdown
---------------------------------------------
2. (SBU) Confronted by a decade of GOZ economic
mismanagement that has gnawed away at Zimbabwe's productive
base, triggered hyperinflation, and left increasing numbers
of families below the poverty line, Zimbabweans from all
economic and social corners struggle to maintain the quality
of life they enjoyed in the 1980s and early 1990s. The
struggle to make ends meet is so widespread and persistent
that Zimbabweans have even coined a phrase for it ) "make a
plan." For example, individuals will "make a plan" to find
scarce sugar or fuel, to scrape together enough money to pay
for school fees, and ) in the most extreme case ) to
abandon Zimbabwe altogether in hopes of a better life
elsewhere. The phrase dates back to the era of international
sanctions against Rhodesia, but has taken on new importance
in the past decade. Zimbabweans' spirit of ingenuity and
perseverance has given birth to innumerable coping
mechanisms, which blossom and wither in line with the GOZ's
erratic policies. In consultation with local academics, we
have grouped the types of coping strategies used in Zimbabwe
into three broad categories; belt-tightening, income
augmentation, and external support.
3. (SBU) These strategies are nearly universal in Zimbabwe,
but are most pronounced in urban areas, where denser
populations and higher levels of general economic activity
make them more effective. Additionally, rural areas )
especially the traditional and overpopulated communal lands
) had to a large extent been outside Zimbabwe's economic
boom of decades past. Instead, occupants of these areas live
a largely subsistence and cashless lifestyle ) the main
exception being cotton production, which annually floods some
communal lands with cash that is quickly spent before it
loses its value. A form of coping itself, subsistence
farming has made the rural areas somewhat more immune to the
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economic decline than the urban areas. For instance, in
economies built on barter ) such as in the communal areas -
hyperinflation is less of a problem since the relative prices
of the goods to be exchanged tend to rise in near lockstep.
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Cutting to the Economic Bone
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4. (SBU) In a rational response to financial stress,
Zimbabweans have looked hard at their spending patterns and
begun to prioritize expenditures, saving for those deemed
vital, substituting for necessities, and sacrificing the
expendable. For white-collar Zimbabweans in the private
sector, these sacrifices are somewhat superficial and
primarily center on foregoing foreign vacations and
entertaining less; for instance, party invitations asking
guests to bring their own food as well as drinks have become
common. While the children of white-collar parents still
largely pursue higher education abroad, they are increasingly
forgoing European schools in favor of the closer and more
affordable South Africa universities.
5. (SBU) At the other end of the economic scale, sacrifices
become more serious and often entail cutbacks on basic
expenditures such as food, education, and hospital care.
Even many middle-income Zimbabweans make due on two meals a
day or less of low-quality maize-meal porridge, often with
only "green meat" ) i.e., vegetables. Euphemistically
referring to consumers buying less meat, a recent report by
the GOZ taskforce on reviving agriculture noted that
"consumer resistance on meat products is now evident." As
the market for meat has dwindled, the demand for cheaper
sources of protein, primarily the sardine-like fish kapenta
harvested from Lake Kariba, has ballooned.
6. (SBU) The process of belt-tightening is in many ways a
new experience for many Zimbabweans, who up to a decade ago
enjoyed a relatively affluent way of life. Zimbabweans of
all economic classes often remark that they are now employing
belt-tightening strategies that were once unthinkable; for
example, a mining executive recently remarked to econoff that
the trade in second-hand clothing, once unthinkable to proud
Zimbabweans who turned their noses to the common African
practice, was now booming.
7. (SBU) Marketing data supplied to us by retail companies
clearly show consumers changing their spending patterns to
cope with dwindling real paychecks. Zimbabwean spirits
manufacturer African Distillers told us that consumers over
the past several years had moved away from premium brands of
cane spirit ) a rum-like alcohol popular among lower-income
groups ) to more affordable brands. In fact, the distiller
noted that since 2004 six new budget brands of cane spirits
had hit the market. The shifting consumption pattern had
badly damaged the company's premium brand which in 2002
captured 77 percent of the market, but only 22 percent in
2006-2007.
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Boosting Incomes ) By Whatever Means
------------------------------------
8. (SBU) Failing to make ends meet even after trimming
expenditures, many Zimbabweans have found second jobs or )
more common ) developed informal income-generating schemes
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to cover their shortfalls. The decline of formal sector
economic output has created a glut of labor capacity, often
freeing workers to pursue their own private enterprises while
still working for their regular employers. For example, one
of our legal contacts told us that a judge recently halted
trial proceedings so that he could negotiate the sale of
chickens over his mobile phone. Meanwhile, those without
formal sector jobs have been largely absorbed into the
informal economy, which continues to be comparatively robust.
9. (SBU) Many of these income generating schemes are benign,
but University of Zimbabwe (UZ) political studies chairman
Eldred Masunungure warned poloff that others are more harmful
in both the near and longer term. Some these schemes hinge
on theft, especially petty crimes, such as office workers
gradually stealing and selling supplies purchased by their
employers. These practices result in loss of income to the
employer and loss of productivity to the company. Such
coping strategies have in many ways made everyday living a
criminal act, putting Zimbabweans on a slippery slope of
lawlessness, according to Masunungure.
10. (SBU) In the longer term, Masunungure cautioned that
such "acceptable" theft and corruption can lead to the decay
of Zimbabwe's morals and social cohesion, which ultimately
would make economic revival all the more difficult.
Zimbabwe's youths were especially prone to seeking short-term
economic gratification and get-rich-quick schemes. As an
example, Masunungure noted that more and more students were
leaving the University believing that education was no longer
the means to upward economic mobility, a major social shift
in Zimbabwe where education historically has been greatly
valued.
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Cushioned By Globalization
--------------------------
11. (SBU) Zimbabweans have also leveraged their country's
regional location and international ties to weather the
current economic downturn. As an indication of their extreme
desperation, an estimated quarter or more of Zimbabwe's 12
million people have left the country and, according to a 2005
survey by the International Organization for Migration (IOM),
half of them for economic reasons. Suggesting that this flow
has increased in recent years, IOM data show that South
African authorities currently deport about 15,000 illegal
Zimbabweans each month, up from about 4,000 per month in
2004.
12. (SBU) Research by University of Zimbabwe professor Lloyd
Sachikonye indicates that remittances of both money and goods
from the diaspora to family members still in Zimbabwe is a
vital coping strategy for at least half of the population.
Sachikonye told poloff that emigration is a rational response
to the economic crisis and that families often elect to send
an adult-aged son or daughter into the diaspora ) many times
on a rotating basis ) as a means of financial and material
support. Hinting at the scale of these inflows, Zimbabwe's
largest Western Union affiliate told us that it disbursed
about US$5 million in the first quarter of this year, with an
average transaction of about US$300. (Note. We understand
that first quarter inflows are typically lower than other
times of the year, as remittances usually peak ahead of
Christmas. Additionally, Western Union figures do not
capture remittances carried by returning or visiting members
HARARE 00000504 004 OF 006
of the diaspora, which are probably substantial due to the
GOZ's erratic and unpredictable regulation of money transfer
agencies. End note.) Additionally, several internet
companies allow diaspora members to purchase groceries, fuel,
and other consumer goods that are then accessible by vouchers
to family members in Zimbabwe.
13. (SBU) Zimbabwe's proximity to South Africa and other
neighboring countries with growing retail bases offers
Zimbabweans the opportunity to make short excursions abroad
to buy needed consumer goods for personal use or resale in
Zimbabwe. The cross-border trade in basic consumer goods has
boomed in near lockstep with declining production in
Zimbabwe. While lower-income Zimbabweans are observed in the
hundreds crossing Zimbabwe's borders daily loaded with
consumer goods, even middle and upper-class Zimbabweans make
the sojourn to shopping "meccas" within easy driving distance
of the border, such as Francistown (Botswana), Lusaka
(Zambia), Chimoio (Mozambique), and Louis Trichardt and
Polokwane (South Africa). Poloff, who first made the
shopping trek to Polokwane in January 2006, noted on his most
recent trip in April 2007 the proliferation of grocery and
automotive parts stores and Zimbabwe-registered vehicles
along the route.
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Coping Mechanisms Buttress GOZ
------------------------------
14. (SBU) UZ professors Masunungure and Sachikonye
separately agreed with poloff's assertion that these "make a
plan" strategies were individualist responses to the on-going
crisis. When faced with massive economic upheaval and the
breakdown of traditional communal supports, Zimbabweans
employ these strategies to create their own safety nets and
to ensure their near-term survival. However, the two
professors also agreed that, while perfectly rational, these
individual responses make Zimbabwean culture more atomistic
and come at the expense of collective action, such as mass
protests, which in the longer-term would stand a better
chance to push for reform and ensure an economic rebound.
15. (SBU) By creating a safety net that cushions Zimbabweans
from the brunt of the economic downturn, "make a plan"
strategies indirectly mitigate the pressure on the GOZ to
reform. Pointing to many of his former students, Masunungure
noted that the highly-motivated individuals who have since
left Zimbabwe for higher paychecks elsewhere would otherwise
be the ones most likely to agitate for political change. Of
those remaining, Sachikonye asked how an individual who
spends 95 percent of his time fending for himself could even
contemplate joining a mass struggle ) especially an
opposition movement that does not directly focus on bread and
butter issues. The middle class ) which in other countries
had often been the driving force for democratization ) has
all but disappeared, and the remaining vestiges are largely
co-opted by the regime or focused on "make a plan"
strategies. In contrast to Bob Marley's mantra, Masunungure
agreed with poloff that ) at least in Zimbabwe - a hungry
man was a docile man, not an angry man.
16. (SBU) Masunungure said the GOZ, while aggressively
clamping down on the political sphere, has cleverly allowed
most economic activity to continue unabated, which encouraged
these coping strategies to flourish. The only exception to
the hands-off economic policy occurred when political
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interests trumped the economic, such as the invasion of
white-owned commercial farms and the unleashing of Operation
Restore Order as a way to punish urban opposition supporters,
according to Masunungure. The GOZ has also found ways to
exploit these coping strategies, primarily by allowing
remittances to flow which the GOZ then buys on the parallel
market, as a means to augment its patronage network.
17. (SBU) Masunungure agreed with poloff's observation that
-whether intentional or not - the GOZ-induced economic
meltdown has paradoxically solidified the ruling party's
control at least in the near term. By destroying,
distracting, and co-opting the private sector, the ruling
party has reinforced the loyalty of members otherwise
inclined the leave the party. Would-be detractors are faced
with the choice of remaining in the party or struggle
financially due to their loss of patronage and inability to
find meaningful private sector employment. Confirming this
view, ZANU-PF MP and businessman David Butau told poloff that
the only way to safeguard his budding business empire was to
suck up to the ruling party. Although the resources that
ZANU-PF distributes as perquisites have dwindled, Masunungure
noted that patronage is surprisingly resilient and that
intangibles, chiefly a license to loot, were perhaps more
important than farms or other assets.
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Comment
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18. (SBU) As ex-Information Minister Jonathan Moyo once
creatively commented, the GOZ has normalized the abnormal.
Shortages or the outright disappearance of basic commodities
have now become the norm, even a source of jokes, and as a
result most Zimbabweans no longer question these
abnormalities. The GOZ-orchestrated economic decline has
transformed a once-sophisticated economy into a more
rudimentary, barter-based economy in which savvy or
well-connected Zimbabweans either get out or get rich
quickly, while the vast majority desperately attempt to tread
water. While there does not appear to be a "tipping point"
at which the economy "collapses" or stops completely,
Zimbabwe appears to have crossed a milestone at which the
informal economy has become more important to most
Zimbabweans than the formal economy, with all the lost tax
revenue, oversight, and respect for the rule of law that
comes with such a transition.
19. (SBU) The ascendancy of the informal economy and the
corresponding rise of individual coping mechanisms has
cushioned the GOZ from the full brunt of its own economic
mismanagement, as "make a plan" strategies have deflected
Zimbabweans' energies away from more collective, mass efforts
to bring about lasting economic and political reform. At the
same time, however, even the Zimbabwean gift for "making a
plan" may not keep pace with the scope of the country's
economic and infrastructural decay. A day may come when
Zimbabweans may have less to lose by abandoning their
individual coping strategies in favor of greater collective
action. Nonetheless, the perseverance of these coping
strategies suggests that ZANU-PF is not at imminent risk of
losing its hold on power as the energies of an otherwise
restless population continue to be targeted toward basic
survival. All the while, Zimbabwe edges closer to the
unfortunate African economic mean of simply tottering along.
While perhaps the majority of Zimbabweans are not ZANU-PF
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supporters, the economic implosion has forced average
Zimbabweans to become indirect supporters of the system that
keeps ZANU-PF in power.
20. (SBU) The above analysis is not meant to imply that
ZANU-PF is prospering; as the economy continues to crumble,
so too are its sources of regime-saving patronage. As with
the general populous, ZANU-PF also engages in coping
mechanism to survive. While these coping mechanisms ) such
as printing money and seizing productive assets ) work for
the moment, these strategies are also pushing Zimbabwe's
economy toward the inevitable day of reckoning. We will
address more fully the GOZ's short-sighted coping strategies
and their likely outcome septel.
DELL