TRIPARTITE NEGOTIATING FORUM YIELDS LITTLE

C O N F I D E N T I A L HARARE 000077 SIPDIS SIPDIS AF/S FOR BNEULING NSC FOR SENIOR AFRICA DIRECTOR C. COURVILLE USDOC FOR ROBERT TELCHIN TREASURY FOR J. RALYEA, B. CUSHMAN PASS USTR FOR FLORIZELLE LISER STATE PASS USAID FOR MARJORIE COPSON USDOL FOR ROBERT YOUNG US MISSION GENEVA FOR JOHN CHAMBERLAIN E.O. 12958: DECL: 12/31/2009 TAGS: ELAB PGOV PREL ECON ZI SUBJECT: TRIPARTITE NEGOTIATING FORUM YIELDS LITTLE REF: HARARE 08 Classified By: Charge d'Affaires a.i. for reason 1.4 b/d ¶1. (U) The GOZ-controlled Herald newspaper reported in its headlines on January 20 that the Tripartite Negotiating Forum (TNF) had agreed to a Prices and Income Stabilization Protocol. The article noted, however, that the major sticking point of tying wages to the Poverty Datum Line remained unresolved and will be addressed by a technical committee. The three social "partners" - labor, business, and the GOZ- agreed to meet again on February 3 with little prospect for meaningful progress. ¶2. (SBU) Employers Confederation of Zimbabwe (EMCOZ) Director John Mufukare confirmed to PolOff on January 20 the substance of the Herald article, but called the headline misleading. Mufukare admitted that the technical committee was established merely to avoid the immediate appearance of deadlock; the social partners in fact had failed to agree on any substance. ¶3. (SBU) Zimbabwe Congress of Trade Unions (ZCTU) Information Officer Mlamleli Sibanda told PolOff on January 20 that the ZCTU concurred with Mufukare,s assessment. Sibanda summed up the situation: The GOZ and ZCTU agree that wages should be tied to the Poverty Datum Line (currently set at Z$17.5 million/month or about US$175/month at the interbank market rate for a family of six or US$140/month at the parallel market rate),but EMCOZ claimed that they could not operate at such levels and wanted the sectoral collective bargaining committees to set wages sector by sector, as has long been the custom. -------------- Comment -------------- ¶4. (SBU) Comment: Ironically, the GOZ is adopting a populist approach and siding rhetorically with the ZCTU against EMCOZ, even as it actively seeks to undermine ZCTU's leadership (ref A). Complicating negotiations is a dysfunctional hyperinflationary environment in which what is too much for management quickly becomes too little for labor. More fundamentally poisonous to this effort, though, is the fundamental and comprehensive inability of the GOZ to contemplate, much less deliver, what President Mugabe derides as "textbook economics." In this environment the TNF negotiation exercise offers no prospect for substantive agreement and will amount to little more than a public relations exercise by its participants for the foreseeable future, or as one leading local economist put it, the TNF is a "damp squib." DELL