Input for President's 2004 AGOA Report on

UNCLAS HARARE 000279

SIPDIS

DEPT FOR AF/EPS DKRZYWDA
DEPT PLS PASS USTR W. JACKSON
TREASURY FOR OWHYCHSHAW



E. O. 12958: N/A
TAGS: ETRD PREL ZI
SUBJECT: Input for President's 2004 AGOA Report on
Zimbabwe

Ref: State 28997

Post's input for the President's 2004 Report on AGOA to
Congress follows:

a. AGOA Trade and Investment: n/a

b. Market Economy/Economic Reform: Since the late-1990s,
the Government has approached the economy through broad
interventionism, with parastatals serving as monopolistic
middlemen for products such as tobacco and grain. Over
the course of 2003, however, the Government relaxed
certain onerous restrictions and price controls.
Nonetheless, it still maintains many barriers to trade -
including high duties for importers and exchange
requirements for exporters. It is paying only a small
portion of its international arrears, which have reached
nearly US$ 2 billion. Inflation reached 600 percent by
year end, and the savings rate has dropped from 12 to 4
percent since 2000. The Government did not make progress
privatizing inefficient parastatals in 2003.

c. Rule of Law/Political Pluralism/Anti-Corruption: The
opposition political party operates in a climate of
intimidation and repression. The GOZ is prosecuting the
opposition leader for treason, a crime that carries the
death penalty. Over the past year, the GOZ has removed
Harare's elected mayor and shut down for prolonged
periods the only non-government daily newspaper. During
the country's high-profile land redistribution, the GOZ
has ignored rule-of-law and due process.

d. Poverty Reduction: While the GOZ maintains several
programs that provide food or basic services to the poor,
these have had minimal effect compared to the general
thrust of GOZ economic policy, which has caused most
Zimbabweans to grow progressively poorer over the past 6
years. Many Zimbabweans take home but a fraction of
their 1997 real wages. Income taxes kick in at a monthly
salary of US$3. Electricity and fuel are heavily
subsidized but difficult to come by. Controls have
failed to keep prices in check. An acute cash shortage
made it difficult for lower-income Zimbabweans to access
money in their accounts during most of 2003.

e. Labor/Child Labor/Human Rights: Despite official
recognition of worker rights, the government continues to
exert heavy pressure on labor unions, limiting their
freedom of association and right to organize. Unions
have been denied routine meetings and necessary
consultations with constituents under the draconian
Protection of Order and Security Act(POSA). Senior
members of the Zimbabwe Congress of Trade Unions (ZCTU)
have been arrested on spurious charges, some of them
later reporting physical abuse while in police custody.

Sullivan