AIR ZIM STRIKE OVER, BUT LITTLE RELIEF EXPECTED FOR

UNCLAS HARARE 000135

SIPDIS

NSC FOR SENIOR AFRICA DIRECTOR JFRAZER
LONDON FOR CGURNEY
NAIROBI FOR PFLAUMER
PARIS FOR CNEARY

E.O. 12958: N/A
TAGS: ECON ELAB EAIR ZI
SUBJECT: AIR ZIM STRIKE OVER, BUT LITTLE RELIEF EXPECTED FOR
OTHER GOVT WORKERS


1. Summary: A GOZ compromise and end to the high-profile
strike by Air Zimbabwe engineers offers little spillover for
other disgruntled government workers. End Summary.


2. Press reports indicate that the four-month strike of Air
Zimbabwe's engineers' has been resolved after the GOZ
"intervened and met their demands." Although Air Zim had
suspended the 140 engineers without pay and benefits, the
terms of the new agreement indicate that the GOZ has acceded
to or exceeded all of the engineers' demands: increases of
the basic salary to Z$200,000 - $430,000 monthly (about
US$135 - $289 at the fluctuating parallel rate),a 15
percent "critical allowance," and full back-pay of all wages
and benefits while the engineers were on strike. Tellingly,
one engineer stated that this was "a good starting point"
which should be open to continuing dialogue, since most of
the gains have already been eroded by inflation.

Comment
--------------

3. While news of the "breakthrough" in the engineers'
strike might suggest a weakening in the GOZ's position
toward labor in general, several factors indicate that this
translates into little relief for domestic sectors. First,
the Air Zim situation is high profile -- the safe operation
of the national airline is a strategic issue. Every time
the safety of Air Zim equipment is called into question, the
GOZ looks bad. Second, the cost of a continued strike was
expensive. The GOZ was reduced to sending the aircraft to
neighboring countries for routine service, or hiring South
African or other regional engineering crews who would simply
refuse to service the aircraft and leave (as did the SA
engineers recently) if pay was not forthcoming. Third, the
money demanded by the relief engineers had to be paid in
forex, since the regional substitutes would not accept
payment in Zim dollars, further straining the forex
situation. All things considered, the cost of meeting the
Air Zim engineers' demands was ultimately cheaper than
limping along without them, even though Air Zim officials
tell us they only need 60 percent of the engineers at
present service levels.


4. It does not seem likely that local employees or local
concerns -- such as the teachers or nurses -- will benefit
from similar considerations. There is less immediate
damage if the educational system in underfunded, and the GOZ
is not sourcing forex in order to pay replacements.
Healthcare workers might benefit more from factors similar
to those affecting the airplane engineers, but not much.
The high-profile PR ploy of bringing in MDs from Cuba does
cost more money than increasing pay for local MDs (pay in
forex along with expensive "home leave" annually),which
could tip the balance for the doctors. However, the GOZ is
not really doing much to replace the other unhappy medical
personnel, such as X-ray techs, lab techs, nurses and
pharmacists.

Sullivan