NEW HEALTH SALARIES LIKELY TO BREAK THE BANK

UNCLAS HARARE 002226

SIPDIS

NSC FOR JFRAZER

E.O. 12958: N/A
TAGS: ECON ELAB PGOV ZI
SUBJECT: NEW HEALTH SALARIES LIKELY TO BREAK THE BANK

REF: HARARE 2146


1. Summary: Nurses have largely returned to work after
victory in a strike demanding healthy salary increases (ref).
The majority of mid-level and junior doctors continue with
their simultaneous job action, despite a ruling from the
Labour Court that their strike is illegal and an order to
return to work. There is little doubt that the GOZ will come
to some compromise with the doctors, if only to stem the
relentless brain drain that has crippled the healthcare
industry. However, these accommodations will further batter
an embattled budget that cannot sustain these unfunded salary
increases. End summary.


2. Nurses returned to work on Friday, October 31, after a
brief strike during which they demanded significant increases
in salary. The GOZ capitulated (despite the nurses'
designation as an "essential service" which precluded them
from striking) and awarded salary increases from a previous
high of Z$222,967 to Z$1,600,000 (from US$39.46 to US$283)
per month. Doctors, who have demanded an increase from
Z$378,000 to Z$30,000,000 per month, (an increase from
approximately US$66.90 monthly to US$5,309.73 monthly) remain
in negotiations with the GOZ. The Labour Court held on
November 5 that the doctors' strike was illegal and that
doctors must return to work while pressing their "legitimate
grievance over their salaries" with the GOZ. Nevertheless,
most of the striking doctors have not yet returned to their
duties. The Labour Court further ordered a government
negotiating council to meet with the doctors by Friday,
November 7. It is unclear whether the GOZ will obey this
directive, particularly if it can point to the doctors'
continuing absence from their posts.


3. Comment: The healthcare professionals are clearly
suffering the same pressures as other Zimbabweans, who are
struggling over cost-of-living increases which are rapidly
outstripping the 455% inflation rate. The nurses' victory in
the current crisis indicates that the GOZ is aware of its
need to placate health professionals in an attempt to prevent
their emigration. There is, however, no indication of where
the money allocated to the striking professionals can be
found. Labor sources estimate that there are at least 1,000
nurses and over 6,000 doctors represented by their respective
professional organizations. A monthly salary of Z$1.6
million for each nurse represents a GOZ expenditure of Z$1.6
billion per month. If the GOZ meets even half of the
doctors' demands, a monthly salary of Z$15 million per doctor
represents over Z$90 billion per month. The GOZ can, of
course, simply print more bearers' checks to generate the
paper to pay such salaries. However, without the reserves to
back up such a move, the inflationary pressures may well
destroy any semblance of balance in the battered economy.
End comment.
SULLIVAN