ZIMBABWE: GROWING POTENTIAL FOR INSTABILITY

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP83S00855R000200090002-3
• Release Decision: RIPPUB
• Original Classification: S
• Document Page Count: 25
• Document Creation Date: December 21, 2016
• Document Release Date: October 31, 2008
• Sequence Number: 2
• Publication Date: December 1, 1982
• Content Type: REPORT

Approved For Release 2008/10/31: CIA-RDP83SO0855R000200090002-3
Directorate of Secret
Intelligence
Zimbabwe: Growing Potential
for Instability
State Dept. review
completed
Secret
ALA 82-10154X
December 1982
131
Approved For Release 2008/10/31: CIA-RDP83SO0855R000200090002-3
 Approved For Release 2008/10/31: CIA-RDP83SO0855R000200090002-3
Approved For Release 2008/10/31: CIA-RDP83SO0855R000200090002-3
 Approved For Release 2008/10/31: CIA-RDP83SO0855R000200090002-3
Directorate of Secret
Intelligence
Zimbabwe: Growing Potential
for Instability
This assessment was prepared by
Office of African and Latin American
may be directed to the Chief, Southern Africa
Division, ALA
Operations and the National Intelligence Council
This paper was coordinated with the Directorate of 25X1
Secret
ALA 82-10154X
December 1982
Approved For Release 2008/10/31: CIA-RDP83SO0855R000200090002-3
 Approved For Release 2008/10/31: CIA-RDP83SO0855R000200090002-3
Zimbabwe: Growing Potential
for Instability
Key Judgments Prime Minister Robert Mugabe's government is facing growing security
Information available and economic problems and rising political unrest. In our view, Mugabe
as of 8 December 1982 must continue his cautious, pragmatic approach to political, social, and
was used in this report.
economic change and withstand South African attempts to subvert his
government if stability is to be preserved. If he fails, we believe that the re-
sulting instability would have serious ramifications for the rest of southern
Africa and for US interests in the region. 25X1
Internally, the key to stability will be how Mugabe deals with his
longstanding nationalist rival Joshua Nkomo and with Nkomo's party, the
Zimbabwe African People's Union (ZAPU), which has its greatest strength
among the country's Ndebele-speaking minority. In our view, Nkomo has
capitalized on growing Ndebele discontent to consolidate his leadership of
ZAPU and enhance his stature as a force with which the government must
come to terms 25X1
Mugabe probably will make an accommodation of some sort with ZAPU
and the Ndebeles eventually, but this may not be feasible until he has
gained greater control over his party, the Zimbabwe African National
Union (ZANU), and the government. If Mugabe fails to reach a reconcilia-
tion, the situation would be likely to worsen. As a worst case, we believe the
alienation of the Ndebeles could lead to the breakup of the Army along
tribal lines, an Ndebele insurrection, and civil war. Mugabe will go to great
lengths to prevent this. 25X1
The recent sabotage of a Zimbabwean Air Force base reflects another
facet of Zimbabwe's security problem.
Zimbabwe also faces an uncertain economic future. The forces supporting
the country's brisk recovery since independence in April 1980 have largely
run their course. We believe that the real rate of growth in GDP-11
Secret
ALA 82-10154X
December 1982
Approved For Release 2008/10/31: CIA-RDP83SO0855R000200090002-3
 Approved For Release 2008/10/31: CIA-RDP83SO0855R000200090002-3
percent in 1980 and 12 percent in 1981-is likely to fall below 3 percent
for 1982 because of the severe world recession, drought, and a dearth of
new foreign investment. Talks are in progress with the International
Monetary Fund for a loan to help pull Zimbabwe through an immediate
balance-of-payments crunch. Such actions can, however, only partially
alleviate Zimbabwe's difficulties. An economic turnaround will depend on
the strength of recovery in the industrialized world and on how the
government manages competing social and economic demands and mount-
ing security problems.
In our view, the US stake in a stable Zimbabwe, open to Western
influence, would be jeopardized if Mugabe were removed from the scene.
We believe that Mugabe's most likely successor, Deputy Prime Minister
Simon Muzenda, would have difficulty maintaining party support and that
a period of substantial ferment and instability would result.
We believe that-left to its own devices-Zimbabwe by and large has the
capacity to manage its problems, but that its prospects for doing so are seri-
ously complicated by South Africa's efforts at destabilization. Mugabe
looks to the West-and particularly to the United States-to get South
Africa to curb such activities. To the extent that he is disappointed on this
score, Western influence in Zimbabwe will suffer, in our view, and a
Zimbabwean rapprochement with Moscow will become more likely.[ I 25X1
Approved For Release 2008/10/31: CIA-RDP83SO0855R000200090002-3
 Approved For Release 2008/10/31: CIA-RDP83SO0855R000200090002-3
Key Judgments
Introduction I
The Press of Problems in 1982 1
Domestic Politics and Security Strains I
Fissures in the Army 2
Factors Slowing Growth 9
Financing Problems 11
Political and Security Issues
The Economy
Evolving Foreign Policy Concerns
Westward-Leaning Nonalignment
12
13
14
14
14
Role Among the Frontline States 15
Relations With Communist States 17
Implications for the United States 17
Approved For Release 2008/10/31: CIA-RDP83SO0855R000200090002-3
 Approved For Release 2008/10/31: CIA-RDP83S00855R000200090002-3
Lake
Tanganyika
Kidnaping ~TAicrbasei
South
Atlantic
Ocean
Saldanha
Boundary representation is
not necessarily authoritative.
Harare
(Salisbury)
yanzanoa
Lilol
Petro leurri
r pipeline
Lake
Nyasa
Approved For Release 2008/10/31: CIA-RDP83S00855R000200090002-3
 Approved For Release 2008/10/31: CIA-RDP83SO0855R000200090002-3
Secret
Zimbabwe: Growing Potential
for Instability
For his first year and a half in office, Prime Minister
Robert Mugabe adopted a conciliatory approach to-
ward Zimbabwe's white minority and his former
black rivals, but since then he has taken a more
repressive tack-trying to weaken minority parties,
detaining dissidents, and paving the way for a one-
party state. We believe that the change in the latter
half of 1981 was due largely to a growing sense
among Mugabe and other leaders of the dominant
party, the Zimbabwe African National Union
(ZANU), that their country was under siege from
South Africa and to pressure on Mugabe from the
ZANU Central Committee to tighten the party's grip
on power. In part it was a reversion to at least some of
the methods of the Ian Smith regime and the models
provided by South African and British colonial laws
25X1 and practices.
For the past several months, Mugabe's government
has been beset by deteriorating security and economic
conditions and rising political unrest. This paper
examines the forces at work in Zimbabwe, assesses
their potential for creating instability, and discusses
the implications for the United States.
Domestic Politics and Security Strains
Zimbabwe's political and security problems are rooted
in the longstanding rivalry between ZANU, the party
that is essentially representative of the country's
Shona-speaking majority, and the Zimbabwe African
People's Union (ZAPU), the party mainly supported
by the Ndebele-speaking minority. The rivalry came
to a head in February this year when Mugabe dis-
missed ZAPU leader Joshua Nkomo from the Cabi-
net. Since then there has been a gradual rise in
banditry, lawlessness, and violence, particularly in the
western third of the country known as Matabeleland,
25X1 where Ndebeles predominate.
Mugabe's rationale for firing Nkomo was a professed
belief that the discovery early this year of large caches
of arms, ammunition, and military equipment on
several ZAPU-owned farms proved that Nkomo had
been plotting a coup. We doubt that Nkomo or ZAPU
were engaged in a coup plot at that time, although we
find plausible Mugabe's claim that soon after
ZANU's sweeping victory in the election in February
1980 Nkomo had tried unsuccessfully to get South
African support for a coup. We believe that the arms
discovered this year had been cached primarily for
defensive reasons-to prepare ZAPU for the contin-
gency of civil war, or at least for a resumption of
violence between former ZAPU and ZANU guerrillas
like that in Bulawayo in November 1980 and Febru-
ary 1981.
Ithe Ndebeles have comet;
to regard the government as a hostile force for reasons
that go beyond the expulsion of Nkomo and two of his
closest colleagues from the Cabinet. The government
also dissolved and seized the property of 13 ZAPU-
controlled companies in February 1982 and subse-
quently has detained growing numbers of ZAPU
members. These include ZAPU's two former top
military leaders-the Deputy Commander of the
Zimbabwe National Army, Maj. Gen. Lookout Ma-
suku, and former ZAPU intelligence chief, Dumiso
Dabengwa-and a ZAPU member of parliament,
Vote Moyo 25X1
tual attack on Mugabe's residence in late June and
the kidnaping of six Western tourists (two Americans,
two Australians, and two Britons) in late July. Both
Approved For Release 2008/10/31: CIA-RDP83SO0855R000200090002-3
 Approved For Release 2008/10/31: CIA-RDP83SO0855R000200090002-3
Zimbabwean History in a Nutshell
Several Shona-speaking subtribes controlled much of
what is now Zimbabwe before the Ndebeles invaded
from South Africa in the 1830s. Better organized and
militarily stronger than the scattered Shona clans,
the Ndebeles established a kingdom of their own in
an area around Bulawayo.
British settlers took control of the country in the
1890s under the auspices of Cecil Rhodes's British
South Africa Company. Southern Rhodesia became a
self-governing British colony in 1923 and was part of
the British-sponsored Central African Federation
from 1953 until 1963. In 1965, the white settler
regime of Ian Smith unilaterally declared Rhodesian
independence. In 1979, after years of civil war and
foreign pressure, Smith transferred at least nominal
power to a black-led government headed by Bishop
Abel Muzorewa. This "internal settlement "-exclud-
ing the black nationalist parties led by Robert
Mugabe (ZANU) and Joshua Nkomo (ZAPU) that
were nominally united as the `Patriotic Front -
failed to gain international recognition.
The Rhodesian conflict finally was settled at the
Lancaster House conference in London in late 1979.
Mugabe and Nkomo agreed to return to the country,
have their forces lay down their arms, and participate
in the country's first truly national election. Because
of ZANU's sweeping victory in the election, Mugabe
became Prime Minister when Zimbabwe formally
gained its independence in April 1980.
ZANU's parliamentary majority of 57 out of 100
seats was sufficient to enable ZANU to govern by
itself, but Mugabe included ZAPU, which had won
only 20 seats, in a coalition government. That coali-
tion effectively ended with Nkomo's dismissal from
the Cabinet in February 1982. There are currently
four ZAPU members in the Cabinet of 34, but they
appear to serve as individuals rather than as ap-
proved representatives of their party.
the kidnaping and the attack were almost certainly
perpetrated by former ZAPU guerrillas, but we doubt
that ZAPU's leadership authorized either act. Even
so, the ZANU-dominated government blames ZAPU
and its leaders for both acts and for the general rise in
dissident activity.
Mugabe and other ZANU leaders have long regarded
Nkomo as the principal obstacle to ZANU's long-
standing goal of a one-party state. Nkomo does not
disagree with ZANU's contention that a one-party
state would be preferable to the existing system in
which the major parties are divided largely along
tribal lines. He insists, however, that any merger of
the parties be on his own terms, ensuring a major role
for himself as well as the Ndebeles.
In our view, Mugabe's calculation that he could
destroy Nkomo politically without alienating the rest
of ZAPU has backfired. Nkomo has tried with some
success to convey the impression that he and ZAPU
have been attacked unfairly, disclaiming any knowl-
edge of the arms caches (not too plausibly, in our
judgment) or (more plausibly) of coup plotting, the
attack on Mugabe's residence, and the kidnaping. By
late August, Nkomo had begun to participate in the
effort to find the missing tourists. We believe that
Nkomo has capitalized on the growing discontent in
Matabeleland to consolidate his leadership of the
party and enhance his stature as a force with which
the government must come to terms if stability is to be
preserved.
Fissures in the Army. The ZANU-ZAPU rift has its
parallel in the Army. Most of the armed dissidents
seem to be former ZAPU guerrillas who have desert-
ed or been demobilized from the Army. The dissidents
have also included active-duty, pro-ZAPU Army per-
sonnel acting on their own. Zimbabwean military
officials estimated in early August that the total
number of dissidents was between 800 and 1,300,
approximately 500 to 700 of whom were in Matabele-
land.
Most of the desertions presumably have come from
the "integrated" battalions-combining former
ZAPU and ZANU guerrillas-that were created
25X1
Approved For Release 2008/10/31: CIA-RDP83SO0855R000200090002-3
 Approved For Release 2008/10/31: CIA-RDP83SO0855R000200090002-3
Figure 2
Percentage of Ndebele and Shona Speakers in Zimbabwe*
Ndebele
(16% of black
population)
Shona
(71% of black
population)
80-100
60-79
50-59
Less than 50
-?- Province boundary
---------- District boundary
Victoria
Falls
'Hwange
(Wankie)
Matab
Nor;
Kwekwe
(Que Que). 1r
Midlan_df
Mat~t be eland `~
So h
Lake
Kariba
f .tv)--C ashonaland
ntraI y --~
J /?
j
/r~"~., M shonaland j j
West M honalandf
j - ?~'~ East
I *Hararealisbu
2 E 1 U R U ttt\\\\\\ f t
.. i Inyrfga.
Gweru
,(Gwelo
h ~ ~ (Fort Victoria)
RA~NGA
~/\I "-(
y
`1M
'+ mtali)
/`- Manicca\and Q'
ctoria
Approved For Release 2008/10/31: CIA-RDP83SO0855R000200090002-3
 Approved For Release 2008/10/31: CIA-RDP83S00855R000200090002-3
after independence under the supervision of British
military advisers. In our view, the integrated battal-
ions are essentially shadow military units, incapable
of combat operations. We believe that in a crisis they
would break up along tribal lines, as three did during
the violence in Bulawayo last year
The bulk of the Army's combat strength-and of the
troops used in the government's antidissident cam-
paign, including the search for the kidnaped tour-
ists-are former Rhodesian soldiers
We believe that the govern-
ment has not sent any of its exclusively ZANU units
into Matabeleland because the Ndebeles almost cer-
tainly would regard such an action as a provocation.
Nkomo has charged that ZANU intends to use the
5th Brigade-the largest all-ZANU unit, trained and
equipped by the North Koreans-as an instrument for
imposing one-party rule
The Army's heavyhanded response to the rise in
dissidence, particularly to the kidnaping of the West-
ern tourists, has exacerbated the unrest. Until the
government ordered greater restraint in the latter part
of August, the Army's harassment of people in Mata-
beleland suggested that it was more bent on punishing
them for suspected collusion with the kidnapers than
on attempting to win their cooperation in locating the
tourists, who still have not been found.
If Mugabe fails to achieve some sort of reconciliation
with Nkomo or accommodation with the rest of
ZAPU (we assess a failure to do either as about a 30-
percent probability), tensions and fissures in the Army
will increase. If worse comes to worst (an outcome we
see as no more likely than 1 chance in 10), we believe
Table 1
Zimbabwe's Armed Forces a
Army
Former Rhodesian forces
Elite units (led by.about 100 whites)
1st Parachute
1st Commando
Mounted infantry
7,450
4,300
1,150
1,000
500
1,100
550
3,150
5,600
5,000
600
22 integrated battlions
22,000
ZANU
11,000
ZAPU
11,000
7,200
Air Force
1,600
Traditional flying, technical, and support roles
900
Whites
700
Blacks
200 b
Security Regiment (all ZAPU)
700
Police
16,000
Paramilitary units
3,500
Former Rhodesian police support unit
1,500
Special support unit c
2,000
Former Rhodesian police
9,500
Whites
2,000
Blacks
7,500
Police intelligence it (ZIMPOLIS) c
3,000
that the alienation of the Ndebeles would lead to the a Estimated.
breakup of the whole Army along tribal lines. Because b Includes only a few pilots.
that almost certainly would lead to insurrection in c One of two new all-ZANU units created and evidently controlled
by Home Minister Herbert Ushewokunze.
go to great lengths to prevent it.
Sabotage in the Air Force. The sabotage of the
Zimbabwean Air Force's Thornhill base near Gweru
(formerly Gwelo) on 25 July reflects another facet of
25X1
25X1
25X1
25X1
Approved For Release 2008/10/31: CIA-RDP83S00855R000200090002-3
 Approved For Release 2008/10/31: CIA-RDP83SO0855ROO0200090002-3
Secret 25X1
25X1
25X1
25X1
25X1
the country's security problem.' The swiftness and The Air Force, the last preserve of whites in the
efficiency of the saboteurs in gaining access to their Zimbabwean armed forces, has been damaged severe-
AL--i
plausible explanation is that the saboteurs were white
Zimbabwean Air Force officers operating in collusion
with former Rhodesian Air Force personnel currently
working for South African military intelligence.
If the remaining approximately 700 25X1
whites in the Air Force lose the confidence of the
government and/or their own confidence in it-as
now seems likely-it is difficult to see how it can
recover as an effective fighting force. Because there
are only a few black pilots in the Air Force, Harare
may have to turn to expatriate British or other foreign
pilots. 25X1
'According to Zimbabwean officials, the attack damaged or de-
stroyed much of Zimbabwe's air defense capability:
? One of four new Hawker Hawk trainer-light attack aircraft was
destroyed, the other three damaged.
? Eight of the Air Force's aging fleet of 13 Hawker Hunter fighter-
bombers were destroyed, and another was damaged.
? One Cessna Skymaster (Lynx) spotter plane was destroyed.
The timing of the sabotage was keyed to the arrival of the Hawks
from the United Kingdom, where they recently had been purchased
for about $20 million.
Approved For Release 2008/10/31: CIA-RDP83SO0855ROO0200090002-3
 Approved For Release 2008/10/31: CIA-RDP83SO0855R000200090002-3
Iq
Next 1 Page(s) In Document Denied
Approved For Release 2008/10/31: CIA-RDP83SO0855R000200090002-3
 Approved For Release 2008/10/31: CIA-RDP83SO0855R000200090002-3
sure on him to act decisively.
Deteriorating Economic Performance
The strains in Zimbabwe's security and political
fabric have developed in the context of a major
economic slowdown. This accumulation of problems is
taxing Mugabe's leadership skills and putting pres-
The forces supporting the country's brisk economic
recovery since independence-the end of the war, the
lifting of international sanctions, high gold prices,
excess productive capacity, pent-up consumer de-
mand, and good rains-have largely run their course.
We believe that the real rate of growth.in GDP-11
percent in 1980 and 12 percent in 1981-is likely to
fall below 3 percent for 1982.
The principal causes of the decline are the severe
world recession and attendant cuts in key Zimbab-
wean mineral earnings; drought and a dearth of new
foreign investment are major contributing factors.
Zimbabwean officials are implementing harsh auster-
ity measures to cope with the foreign exchange
squeeze. Moreover, talks are in progress with the
Approved For Release 2008/10/31: CIA-RDP83SO0855R000200090002-3
 Approved For Release 2008/10/31: CIA-RDP83SO0855R000200090002-3
Secret
25X1
25X1
Table 3
Growth and Fiscal Indicators
Real GDP growth 1.5 11.3 12.2 1.0-3.0
(percent)
Inflation
(percent)
Exports
(million US $)
Imports
(million US $)
Petroleum
(million US $)
1,045 1,446 1,391 1,100
802 1,287 1,476 1,300
215 277 289 300
Current account balance -108 -249 -670 -800
(million US $)
Total medium- and 667 750 1,430 b NA
long-term foreign public
debt (million US $)
Debt service (million 100 150 200 250
US $) b
Foreign exchange 203 280 279 230
reserves
(million US $)
a Projected.
b Estimated.
International Monetary Fund (IMF) for a loan that
would help to pull the country through its immediate
payments crunch.
Factors Slowing Growth. External factors are weigh-
ing heavily on the key minerals sector.
? Gold, traditionally Zimbabwe's most lucrative ex-
port, will earn this year less than half of what it did
in the record year of 1980, according to the US
Embassy in Harare.
? Ferrochrome replaced gold as Zimbabwe's most
valuable mineral export in 1981, but even the major
producers-Union Carbide and Zimbabwe Alloys, a
subsidiary of the South African-based Anglo Amer-
ican Corporation-are struggling because of slug-
gish demand.
? Asbestos prices have increased as production has
shifted to higher grade ores, but the main produc-
er-the Shabani mine of a British-based firm,
Turner Newhall-is having difficulty breaking
even.
? Nickel prices are less than even the largest produc-
ers-Anglo American's Bindura Nickel Corpora-
tion and the Empress mine of another British-based
firm, Rio Tinto-need to make a profit.
? Copper prices are at their lowest level in real terms
since World War II, putting Zimbabwe's copper
industry, including the largest producer-the South
African-owned Mangula mine-on the brink of
insolvency. 25X1
While depressed demand is the primary cause of the
mining industry's troubles, spiraling labor costs, slack
investment, and the emigration of skilled white man-
power have also taken a toll. The industry's wage
scale has risen in line with the general increase in
minimum wages of more than 60 percent since inde-
pendence. Wages will absorb about half of total
company earnings in 1982, compared with just over
one-fourth in 1980, according to the US Embassy in
Harare.) 25X1
Hard times have led the government and the mining
companies to join ranks in trying to shore up the
beleaguered industry, according to the EmbassyE__1
)though the government 25X1
long resisted the companies' pleas for a currency
devaluation, it has shelved further minimum wage
and tax increases and has offered to guarantee loans
to mining operations on the verge of shutting down,
including Rio Tinto's large Empress nickel and Zinca
platinum mines. The most contentious issue that had
divided the companies and the government-the deci-
sion to create a Minerals Marketing Corporation
(MMC) with wide authority-has been resolved, and
the companies are now cooperating in preparing the
MMC to begin selling and shipping operations early
next year. According to the Embassy, the companies
are also taking in stride the government's plans to
Approved For Release 2008/10/31: CIA-RDP83SO0855R000200090002-3
 Approved For Release 2008/10/31: CIA-RDP83SO0855R000200090002-3
Real GDP Growth Inflation Rate
Percent Percent
Mining 5
Agriculture 18
587892 10-82
Secret 10
Tobacco 23
Minerals and Metals 34
Other 43
Approved For Release 2008/10/31: CIA-RDP83SO0855R000200090002-3
 Approved For Release 2008/10/31: CIA-RDP83SO0855R000200090002-3
establish another state-run enterprise-the Mining
Development Corporation (MDC)-to serve as a vehi-
cle for government participation in the mining indus-
try. It will have broad powers to undertake joint
ventures, to purchase shares in existing companies,
and to provide financial help to new or existing mines.
Other key sectors are also in trouble, according to a
recent analysis by Zimbabwe's Reserve Bank. Manu-
facturing production has grown only marginally in
1982, despite strong consumer demand. The slump is
due to several factors: cuts in allocations of foreign
exchange for imports, a shrinking market in South
Africa because of that country's recession, Zim-
babwe's overvalued currency, and uncertainty over
the future of Zimbabwe's longstanding preferential
trade agreement with South Africa.
year, according to the US Embassy.
GDP per Capita, 1981 Real GDP Growth, 1977-81 a
US $ Percent
Non-OPEC
LDC Average
25X1
25X1
25X1
Agriculture-which buoyed the economy's perform-
ance last year with a 50-percent surge in output-is
suffering the effects of drought in certain areas. We
expect cotton to be the crop most affected and cattle
herds to be reduced by up to 500,000 head. It could
take four years to rebuild the herds, according to a
periodical on African economic development. Despite
the drought, a massive corn crop has been delivered
for the second year in a row, partly because sales from
black farmers were nearly double the level of last
Financing Problems. Financing the widening trade
deficit has required heavy short-term foreign borrow-
ing since late last year. As a result, as of mid-1982
Zimbabwe's short-term liabilities exceeded its total
foreign exchange reserves-which Harare maintains
at a level adequate to cover about two months'
imports-by about $30 million
Harare has requested a medium-term IMF loan of at
least $200 million to help cover its payments needs.
According to the US Embassy in Harare
Figure 6
Zimbabwe: Economic Comparisons
Zimbabwe
Zambia
Kenya
Zaire
760 Kenya
620 Non-OPEC
LDC Average
560 Zimbabwe
Zaire
Zambia -3.0
Adult Literacy, 1977 Urban Population, 1980
Percent Percent
Zimbabwe
Zaire
Kenya
Non-OPEC
LDC Average
Debt Service as a Share of Agriculture as a Share of
Exports b, 1980 GDP, 1980
Percent Percent
Non-OPEC
LDC Average
Zambia
Kenya
Zimbabwe
IMF stipulations include:
Devaluing the Zimbabwean dollar. A 20-percent
devaluation was announced on 8 December 1982.
a Average annual.
b Excluding arrears.
Non-OPEC
LDC Average
Non-OPEC
LDC Average
33
Approved For Release 2008/10/31: CIA-RDP83SO0855R000200090002-3
 Approved For Release 2008/10/31: CIA-RDP83SO0855R000200090002-3
? Cutting food subsidies. The IMF would like Zimba-
bwe to eliminate subsidies entirely, but the US
Embassy believes that the government probably will
only reduce them from 4 percent of the budget in
1982 to 2 percent next year.
? Reducing foreign borrowing. Unless the debt is
rescheduled, the debt service ratio, including pay-
ments on short-term debt, is expected to remain at
nearly 25 percent of export earnings over the next
five years.
? Maintaining low ceilings on domestic credit. The
government is already in compliance with this re-
quirement, having kept fairly restrictive monetary
policies.
? Trimming government spending by $325 million
and restricting future annual increases to 25
percent.
? Doubling domestic interest rates to a level exceeding
the rate of inflation, currently 17 percent, in order
to encourage savings for investment.
The Domestic Outlook for 1983
Political and Security Issues
The key to stability, in our view, will be whether
Mugabe remains willing and able to maintain a
moderate, pragmatic course. This will not always be
easy because his power is circumscribed by a need to
be responsive to the ZANU Central Committee,
which collectively tends toward more doctrinaire so-
cialist policies and more radical views.
Much will depend on how Mugabe deals with Nkomo
and his followers. Hardliners in the ZANU Central
Committee may still wish to detain and prosecute
Nkomo, but we believe Mugabe will continue to resist
doing so because that would risk provoking further
violence and polarizing the political climate along
tribal lines. Nkomo and his followers will be watching
carefully how the government handles the treason
trial of ZAPU's former military leaders, Dabengwa
and Masuku, which is scheduled to begin on
10 January 1983.
We believe that Mugabe will have to make an
accommodation of some sort with ZAPU and the
Ndebeles if stability is to be preserved. We think that
eventually he will do so, but this may not be feasible
until he has consolidated greater control over his
party and the government. The alternative to an
accommodation, as we have noted, could ultimately
be insurrection in Matabeleland and probably civil
war, opening the way for further South African and
possibly other foreign meddling.
economic performance.
We believe that the government will continue to rely
on the emergency powers inherited from the Smith
regime to aid in maintaining order and in intimidating
and muzzling political opponents. Though subject to
abuse, particularly by radical antiwhites such as
Home Minister Herbert Ushewokunze, whom Mu-
gabe has fired once from the Cabinet and may fire
again, such tactics are likely to be useful in paving the
way for a one-party state and in containing discontent
over the shortcomings of the regime's social and
In our judgment, Mugabe's removal from the scene
would result in a period of substantial ferment and
instability. His immediate successor most likely would
be Deputy Prime Minister and ZANU vice president
Simon Muzenda. Muzenda is respected as an elder
member of the party who has made few enemies, but
in our view he lacks Mugabe's sophistication and
intelligence. Because Muzenda-unlike Mugabe-is
a member of the largest Shona subtribe, the Karan-
gas, we believe he would have difficulty gaining and
maintaining the support of the non-Karangas in the
party. No Karanga has ever been elected president of
ZANU, probably because of fear among ZANU's
non-Karanga majority that the Karangas would then
dominate the party.
25X1
25X1
25X1
25X1.
Approved For Release 2008/10/31: CIA-RDP83SO0855R000200090002-3
 Approved For Release 2008/10/31: CIA-RDP83SO0855R000200090002-3
The goals of the Zimbabwean "revolution" have
always been fairly amorphous, apart from gaining
political power for the country's black majority, land
reform, and a vaguely defined commitment to "so-
cialism. " Since independence the government has
translated these objectives into a modest reform
program consisting mainly of raising minimum
wages, free health care for the poor, and free primary
education. As a result, the pace of the Zimbabwean
revolution has been far slower than many blacks had
hoped and most whites had feared.
In our view, Zimbabwe's moderate economic policies
are based largely on the advice of Mugabe's Western-
oriented Minister of Finance and Economic Planning,
Bernard Chidzero. So long as black desires remain
unfulfilled, however, Mugabe will be vulnerable to
criticism from those who advocate more rapid and
radical change, such as Home Minister Herbert
Ushewokunze, who is emerging as a popular spokes-
man among the ZANU rank and file.
The measured pace of social change is most evident
with regard to land reform, long considered the
principal objective of the struggle for black rule. So
far, the government has resettled only about 16,000
black families, far short of its goal of resettling
162,000 over the next three years. That goal is
unrealistic because it would require acquisition of
8-12 million of the 16 million hectares owned by
whites, risk sharp cuts in agricultural export earn-
ings, and cost from $300 million to $500 million.
Moreover, it would only accommodate about one-
The Economy
Trying to meet black expectations will be one of the
government's hardest tasks. Economic and social poli-
cies will continue to work at cross-purposes as the
government tries to accommodate private economic
interests while moving in a socialist direction.
fifth of the black families currently living in crowded,
subsistence conditions on the country's so-called
Communal Lands.
The government has threatened to con iscate white
farm land if Western donors do not provide enough
aid to purchase land for resettlement, but there have
been no confiscations thus far. The government has
bought land only from willing sellers at fair market
prices. We believe that the threat of confiscation is
largely bluster to get the British and other Western
donors to provide more money. Zimbabwe's. nearly
5,000 white commercial farmers remain a privileged
class because the government is relying on them to
earn more than one-third of the country's foreign
exchange, produce most of its food, and employ about
400,000 blacks-approximately 40 percent of the
market economy's work force.
Similarly, the government's few business "takeovers"
have been only from willing sellers. Nonetheless,
potential foreign investors remain wary because
Harare has offered them few practical inducements.
The government recently issued some foreign invest-
ment guidelines in an attempt to reduce this problem.
Harare has refused, however, to sign bilateral agree-
ments providing insurance for new foreign investors
because it believes the Zimbabwean Constitution
provides adequate protection against expropriation.
Even so, a US firm, Heinz Foods, recently purchased
a controlling interest-a $15 million investment-in
a local vegetable oil processing firm, which it will
own jointly with the government.
The economy must grow about 6 percent annually just
to keep unemployment, now 20 percent or more, from
rising. The situation is made worse by the demobiliza-
tion of 25,000 to 30,000 men from the Army and by
Approved For Release 2008/10/31: CIA-RDP83SO0855R000200090002-3
 Approved For Release 2008/10/31: CIA-RDP83SO0855R000200090002-3
Pretoria's attempts to repatriate Zimbabwean work-
ers from South Africa in order to counter its own
worsening unemployment.
Maintaining sufficient petroleum supplies will be a
continuing problem. A pipeline for importing petro-
leum products via neighboring Mozambique has been
sabotaged repeatedly by insurgents trained, supplied,
and guided by South Africa. Although rail transship-
ments via South Africa-the only practical alterna-
tive to the pipeline-have kept Zimbabwe's supplies
at adequate levels, dependence on this costlier route
adds to Pretoria's potential leverage over Zimbabwe.
We believe that external and internal factors work
against economic growth much beyond 3 to 4 percent
over the next few years. Even with an IMF accord,
foreign bankers and investors will probably remain
cautious about increasing their commitments in Zim-
babwe. Demand by Western countries for Zimba-
bwe's minerals will improve only slightly in our view,
at least through 1983. An economic turnaround will
hinge not only on recovery in the industrialized world,
however, but on how the government manages com-
peting social and economic demands and its mounting
security problems. Transportation bottlenecks and a
growing shortage of skilled manpower will also act as
internal constraints.
If the government fails to meet these problems prag-
matically, this could lead to a growing exodus of the
country's economically vital white minority of about
175,000-emigration has been fairly steady, in the
range of 1,000 to 1,500 persons per month-and
provide fertile ground for further South African
attempts to subvert the regime
Westward-Leaning Nonalignment
Zimbabwean foreign policy is formally nonaligned,
but Harare looks primarily to the West for aid,
investment, and military assistance. Harare's stron-
gest Western ties are with the British, which reflects
London's historic legacy to the country and the
Thatcher government's role in arranging the settle-
ment that led to black majority rule. The British are
spending about half of their foreign military training
funds in Zimbabwe-there are 90 British military
advisers in the country-
offered to sell Harare several Hawker Hunters to
replace those lost in the sabotage at the Thornhill
base. The British may also step up the delivery of the
four additional Hawker Hawks that Zimbabwe has
ordered.
Zimbabwe's relations with the United States are
good, but the government's socialist principles and
Foreign Minister Witness Mangwende's tendency to
spout radical Third World rhetoric lead Harare to
disagree with Washington on many issues.
The South African Threat
We believe that the main threat to Zimbabwe comes
from South Africa. Although Zimbabwe is stronger
militarily than any of South Africa's other neighbors,
it could mount only a modest defense against South
African military power. Clearly, it is also highly
vulnerable to sabotage and other forms of covert
action
We believe that Zimbabwe's vulnerability to South
African military and other pressure is the reason
Harare has a longstanding policy of denying military
support to anti-South African insurgent groups. Al-
though Mugabe and other Zimbabwean leaders are
committed to the cause of Namibian and South
African liberation, they have limited Harare's autho-
rized support for this goal to political and moral
backing. Zimbabwe has allowed the African National
Congress/South Africa (ANC/SA) and the Pan-Afri-
canist Congress (PAC) to establish unofficial "offices"
in Harare. Mugabe has held back, however, from
allowing the South-West Africa People's Organiza-
tion (SWAPO) to open an office,
25X1
25X1
25X1
25X1
25X1
25X1
25X1
Approved For Release 2008/10/31 : CIA-RDP83SO0855R000200090002-3
 Approved For Release 2008/10/31: CIA-RDP83SO0855R000200090002-3
Secret
25X1
25X1
25X1
25X1
25X1
Pretoria has always been suspicious of Mugabe
Africans tend to interpret Zimbabwe's recent prob-
lems as confirmation that the country is moving
inexorably down the same road that much of the rest
of black Africa has traveled: to deteriorating econom-
ic and social conditions, a one-party state, intertribal
violence, and instability. Although South Africans
sometimes claim that a prosperous, stable Zimbabwe
is in their interest, they tend to react gleefully to every
Because Zimbabwe needs South African economic
cooperation far more than South Africa needs Zimba-
bwe, we believe that Harare is in a weak position to
retaliate against Pretoria. In our view, any attempt to
do so-say, by restricting repatriation of profits to
South Africa, nationalizing South African invest-
ments, defaulting on debts, or expelling South African
nationals-would risk provoking Pretoria to even
stronger measures.
Role Among the Frontline States
Mozambique is Zimbabwe's closest friend in the
region, largely because of the strong support that the
Machel regime gave to ZANU during the last years
of the Rhodesian war. The language of the countries'
joint communiques and other public statements makes
them virtual allies: they have declared that an attack
on one would be regarded as an attack on the other.
There are practical limits, however, to the extent of
Zimbabwean support for Mozambique's security
needs. We believe that Harare is not prepared to
commit its forces to defend the Machel regime be-
cause to do so would almost assure South African
retaliation. The Zimbabwean military has provided
logistic support for Mozambique's armed forces along
the border, however, and the two countries are ex-
changing intelligence and coordinating their military
movements in the border area. Harare also has posi-
tioned its forces in certain areas to prevent the NRM
from using Zimbabwe as a sanctuary. Mugabe recent-
ly sent some troops into Mozambique to meet Ma-
chel's request for help in operating and protecting-the
Beira-Mutare pipeline, but even this essentially defen-
sive step risks provoking South African retaliation.
25X1
For many years Mugabe has looked up to Tanzania's
President Nyerere as the chairman of the Frontline
States, but we believe that he does not fully trust the
governments of Zambia, Angola, or Botswana be-
cause of their support for Nkomo's forces during the
war. He is particularly wary of Zambian President
Kaunda, who allowed Nkomo to use Zambia as his
main base of operations and permitted Moscow and
Havana to use Zambia as a principal conduit for their
the growing number of ZAPU refugees in Botswa-
na-now about 500-could damage bilateral rela-
tions, particularly if the security situation in Matabe-
leland worsens. F_ -1 25X1
As the richest and most centrally located of the
Frontline States, Zimbabwe is likely to play a gradu-
ally increasing role in coordinating the black states'
opposition to South Africa's military and economic
domination of the region and to white minority rule in
South Africa and Namibia. Given the weakness of the
Frontline States relative to South Africa, however, we
believe that for the foreseeable future this effort will
be confined mainly to political maneuvering. Mugabe
is as inclined as other Frontline leaders to play on
Western concerns about the possibility of an increased
Communist role in southern Africa to gain greater
Western economic aid and help in restraining Pre-
toria. 25X1
Approved For Release 2008/10/31: CIA-RDP83SO0855R000200090002-3
 Approved For Release 2008/10/31: CIA-RDP83S00855R000200090002-3
We believe that Zimbabwe's economic dependence on
South Africa is its Achilles's heel. The key to this
dependence is the rail network established initially by
Cecil Rhodes around the turn of the century that
links South African ports with areas as far north as
mineral-rich Shaba Region in southern Zaire. Be-
cause of the shortcomings and/or disruption of alter-
native rail routes through Mozambique, Angola, and
Tanzania, this "southern route"provides the main
transportation net not only for Zimbabwe but for
most of the southern African region.
Mozambique potentially could provide an alternative
route for Zimbabwe; it handled 75 percent of Rhode-
sia's transit trade before the collapse of Portuguese
rule. The Mozambican rail and port network has
deteriorated badly since then, however, and the un-
certain security situation in Mozambique makes it
unlikely that that country will be able to handle
much more of Zimbabwe's trade any time soon.
Moreover, because of the huge amount of capital that
would be required to improve Mozambique's trans-
port facilities and the shortage of skilled Mozambi-
cans to run them, we believe that Zimbabwe will
remain heavily dependent on the South African trans-
port system for at least the next decade.
Over 80 percent of Zimbabwe's foreign trade current-
ly passes through South Africa, and South Africa is
Zimbabwe's single most important trading partner,
according to the US Embassy in Pretoria. Bilateral
trade was enhanced by South Africa's role as a
supplier and middleman throughout the period of
Rhodesia's unilaterally declared independence, 1965-
79, and by the preferential trade agreement that dates
back to 1964. That agreement saves Zimbabwe $40-
75 million in annual foreign exchange earnings and
3,000 or more jobs, according to the US Embassy in
Pretoria, but it also serves Pretoria by reinforcing
Zimbabwe's dependence on South Africa.
South Africa is the largest single foreign investor in
Zimbabwe, accounting for about $1 billion of the
country's total foreign investment of approximately
$3 billion. We estimate that this is also South
Africa's largest concentration of external investment,
perhaps 30 percent of the total. Much of South
African investment in Zimbabwe is disguised to
conceal its true ownership by shifting nominal control
to London subsidiaries with different names and non-
South African boards of directors.
South Africa also has been Zimbabwe's leading
creditor. Pretoria provided the Smith and Muzorewa
regimes with most of the aid needed to keep the
economy running and to finance the increasingly
costly Rhodesian war. Much of this aid was in the
form of grants and soft loans, but, by the time of the
Lancaster House settlement, we estimate that the
official debt had reached at least $500 million.
Harare is continuing to make payments on these
loans and is also honoring its private commercial
Approved For Release 2008/10/31: CIA-RDP83S00855R000200090002-3
 Approved For Release 2008/10/31: CIA-RDP83SO0855R000200090002-3
Secret
25X1
25X1
25X1
25X1
25X1
debt to South Africa of about $500 million. Pretoria
offered to make an additional official loan shortly
after Zimbabwean independence, but we doubt that
the Mugabe government accepted such a loan.
In our view, Pretoria generally seeks to use its
economic leverage for political ends, providing incen-
tives for Zimbabwe to have a nearly "normal" politi-
cal/diplomatic relationship with South Africa or,
failing that, to induce Zimbabwe at least to maintain
political contact. Zimbabwe has a trade mission in
Johannesburg, and South Africa has one in Harare.
A few Zimbabwean Cabinet ministers have held a
number of unpublicized meetings with South African
Zimbabwe's economic dependence also provides Pre-
toria with a powerful coercive weapon. When applying
the stick rather than the carrot, Pretoria usually tries
to mask its intent. Pretoria explained the withdrawal
of its locomotives from Zimbabwe last year on
economic grounds, and it also tried last year to
justify its attempts to repatriate Zimbabwean work-
ers by claiming that Harare had indicated it wanted
them back, according to the US Embassy in Pretoria.
Such explanations enable Pretoria to make plausible
denials to foreign critics, but they do not fool Harare
and probably are not intended to do so.
Relations With Communist States
Mugabe is anxious to maintain Zimbabwe's non-
aligned credentials, but always with special regard for
those states-North Korea, China, Romania, Yugo-
slavia, and Bulgaria-that gave the greatest support
to ZANU during the war. The North Koreans have
special status because they have about 135 military
25X1
25X1
Zimbabwe's relations with the Soviet Union are cool.
We believe that Mugabe distrusts Moscow because of
its superpower status and its past support for Nkomo.
Mugabe did not agree to diplomatic relations until
February 1981 and did so then perhaps as a gesture of
conciliation toward Nkomo in the wake of the vio-
lence in Bulawayo. Although Zimbabwe subsequently
allowed the Soviets to establish an embassy
to set
25X1
a permanent trade mission, and he has dragged his
feet on Moscow's request to negotiate a trade agree-
Implications for the United States
We believe that Zimbabwe's intrinsic importance lies
in its potential for leading the Frontline States in their
opposition to South Africa, its role as a nexus for
major transport routes through southern Africa, and
its mineral resources. In our view, Zimbabwe is
important to the United States mainly because insta-
bility there would further unsettle the southern Afri-
can region. To the extent that the United States has a
Mugabe has rebuffed Soviet 25X1
-
Approved For Release 2008/10/31: CIA-RDP83SO0855R000200090002-3
 Approved For Release 2008/10/31: CIA-RDP83SO0855R000200090002-3
stake in a stable Zimbabwe, open to Western influ-
ence, this interest generally has been well served, in
our view, under,Mugabe's pragmatic leadership and
probably would be in jeopardy if he were to lose
power.
Zimbabwe probably will not realize its potential as a
center for Western investment in southern Africa
until the conflict between South Africa and the black
states of the region is resolved. Nevertheless, Zimba-
bwe has advantages over its neighbors that may
eventually enable it to play such a role-vigorous
commercial agriculture, a sizable and relatively diver-
sified manufacturing sector, vast and varied mineral
deposits, skilled managers and technicians, and a
well-educated black middle class. In the meantime,
these attributes make Zimbabwe an attractive base
for businesses and other international organizations
seeking to relocate their regional headquarters from
South Africa to a black African state.
We believe that-left to its own devices-Zimbabwe
by and large has the capacity to manage its problems,
but that its prospects for doing so are seriously
complicated by South Africa's efforts at destabiliza-
tion. Mugabe looks to the West-and particularly to
the United States-to get South Africa to curb such
efforts. To the extent that he is disappointed on this
score, Western influence in Zimbabwe will suffer and
a Zimbabwean rapprochement with Moscow will be-
come more likely. In our view, the chance of such a
rapprochement is now less than 10 percent, but the
odds could rise sharply if Pretoria becomes actively
involved in supporting Nkomo or other formidable
antigovernment forces.
Approved For Release 2008/10/31: CIA-RDP83SO0855R000200090002-3
 Secret
Approved For Release 2008/10/31: CIA-RDP83SO0855R000200090002-3
Secret
Approved For Release 2008/10/31: CIA-RDP83SO0855R000200090002-3