December 17, 1981
Dear Mr. Chairman:
In accordance with the provisions of Section 720 of the International Security and Development Cooperation Act of 1980, I am submitting the following report on the internal situation in Zimbabwe.
One of the more significant events to take place since the submission of the last Report to the Congress was the unanimous decision handed down by the Zimbabwe Supreme Court which held that the War Victims Act, introduced shortly after independence to replace the Victims of Terrorism Act, was constitutional. The latter Act had been introduced by the former government to encourage commercial farmers to stay in the country by providing compensation in the event they suffered property damage as a result of military action. The new law which provides for relief only in case of death or injury, but not property loss, was enacted because of government's fear of being financially overwhelmed by new claims for compensation -- loss of cattle by peasant farmers for example -- which would have had to be honored under the old Act. This landmark decision was precipitated by a suit in which the plaintiff argued that application of the War Victims Act constituted an unconstitutional acquisition by the government of property (a claim for compensation that had occurred under the old Act) without adequate compensation.
This court case, like the one in which former Cabinet Minister Edgar Tekere was acquitted, again demonstrated the government's resolve to adhere to the Lancaster House Constitution and to the due process of law. Owing to the importance of this case the government selected a renowned South African attorney to represent it in the proceedings.
Some whites will no doubt see the Court's decision as eroding the protection of their property rights. This in turn, will lead to increased speculation on the part of many that the stage has now been set for the government to deprive large land owners of their property and give it to squatters. Any such government action, however, would clearly constitute an unjustifiable extension of the precedent in this case and would directly conflict with explicit constitutional prohibitions against the acquisition and redistribution of land without adequate compensation.
On the economic side the agricultural sector continues to lead the field in terms of output and is followed by construction and retail sales. The government, however, is still faced with a difficult balance of payment situation and foreign exchange deficiencies, and there are still serious shortages of skilled and experienced manpower.
Zimbabwe's banking and financial institutions have repeatedly demonstrated the ability to adapt to changed circumstances. They have continued to do so since independence and the phenomenon is evidenced by the speed with which these institutions have taken advantage of recent opportunities to participate in international arrangements with foreign banks. Mainly because of government's strict management of its external debt and its tight-fisted spending policies, Western banking institutions have come to regard Zimbabwe as one of the more creditworthy countries in Africa. Citibank recently became the second U.S. bank to open an office in Salisbury.
After hitting record lows the Zimbabwe stock market, long considered one of the key indexes of business confidence in the country, is presently enjoying a modest recovery. This development was probably triggered by increases in fuel supplies and the prospects for considerable improvements in economic and commercial relations with South Africa, which continues to be Zimbabwe's main trading partner. The realization by the government that the country has attracted very little foreign investment since independence and the resulting efforts to create a more favorable investment climate could be strong catalysts for restoring investor confidence in the future of private enterprise in Zimbabwe. This in turn, could lead to the long-term recovery of the stock market.
Politically, it appears that post-election euphoria is beginning to wane, and with it, some of ZANU's early popularity. The government's very deliberate and pragmatic approach to land resettlement and the rising cost of living are primarily responsible for much of the criticism being directed at it. The government, believing that it is being judged too harshly, is sensitive to criticism and has shown little tolerance for its critics, Ian Smith and Bishop Abel Muzorewa in particular.
A recently introduced order requiring prior notification to the Minister of Home Affairs of the intent to hold public political gatherings has the potential for seriously restricting the opposition's ability to present dissenting views. The Minister of Home Affairs, acting on the strength of this new measure, recently refused permission for a Muzorewa-sponsored rally to be held in Bulawayo, but granted permission to ZANU - PF and ZAPU, partners in the government coalition, to hold political meetings in Bulawayo on the same day. This order was also recently cited as justification for preventing ZAPU-oriented youth from carrying out a demonstration in support of the anniversary of the Soviet revolution.
These new restrictive measures appear unwarranted unless there is evidence not yet made public that Prime Minister Mugabe's government is being more threatened than it appears to be by opposition politicians. From all outward appearances, the Prime Minister is still firmly in control and the threat of political instability continues to diminish.
Prime Minister Mugabe has continued to take steps to reassure the whites by reaffirming his commitment to reconciliation and by stressing the point that Zimbabwe's brand of socialism would not be built on the basis of destroying the present economic infrastructure, but by preserving that structure. At the same time, however, he does not hesitate to castigate those whites who, according to him, have not changed their negative racial attitudes. His decision to fire Health Minister Herbert Ushewokunze, considered one of the more provocatively radical Cabinet members, has been a significant boost to white morale.
The exercise designed to integrate the two former guerrilla armies and the former Rhodesian forces into a single army, which was organized and directed by the British, has been successfully completed. The entire operation took 18 months and involved approximately 58,000 troops. The success of this operation reflects credit on the British, Prime Minister Mugabe, Joshua Nkomo and the white leadership of the former Rhodesian forces. It has also laid to rest the problem of force amalgamation which was one of the most intractable issues in the Anglo-American and Lancaster House settlement efforts.
Prime Minister Mugabe continues to view a Namibian settlement as an urgent issue, and he has stated publicly that Zimbabwe supports recent Contact Group efforts to bring about independence. Zimbabwe's balanced position on key regional issues is important to us in seeking a Namibian settlement and pursuing other U.S. objectives in Africa.
Note: This is the text of identical letters addressed to Senator Charles H. Percy, chairman of the Senate Foreign Relations Committee, and Representative Clement J. Zablocki, chairman of the House Foreign Affairs Committee.