Zim Notes November 30, 2007

UNCLAS SECTION 01 OF 04 HARARE 001073

SIPDIS

AF/S FOR S.HILL
ADDIS ABABA FOR USAU
ADDIS ABABA FOR ACSS
NSC FOR SENIOR AFRICA DIRECTOR B.PITTMAN
TREASURY FOR J.RALYEA AND T.RAND
STATE PASS TO USAID FOR L.DOBBINS AND E.LOKEN
COMMERCE FOR BECKY ERKUL

SIPDIS

E.O.12958: N/A
TAGS: PGOV PREL ASEC PHUM ECON ZI

SUBJECT: Zim Notes November 30, 2007


1. The Embassy Harare Political/Economic Section began producing
Zim Notes in July, 2007 to present a perspective on current events
in Zimbabwe. Suggestions are always welcome. If you would like to
receive Zim Notes by email, as well, please contact Frances Chisholm
at chisholmfm@state.gov. Distribution is restricted to U.S.
government employees.


2. Parallel exchange rate: ZW$2,000,000:US$1
Official exchange rate: ZW$30,000:US$1

Sugar on the parallel market jumped to Z$1.2 million/2kg vs.
controlled price of Z$247,000/2kg
Cooking oil on the parallel market Z$5 million/750 ml vs. new
controlled price of Z$440,000/750 ml
Fuel - Z$2.4 million/liter vs. Z$60,000/liter at controlled price
(and scarcer than ever)

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On the Political/Social Front
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Proposed Changes to Electoral Laws Positive, But - The Electoral
Laws Amendment Bill published on Nov. 16 and pending debate in
Parliament proposes to amend the Zimbabwe Electoral Commission Act
and the Electoral Act to provide an improved electoral framework.
Major changes to the electoral law would include: continual
registration of voters (up until the day before candidates are
formally nominated),less restrictive procedural requirements for
voter registration, electronic copies of voter rolls to political
parties, exclusion of security forces from running polling stations,
equal access to state media for editorial time and advertising, and
foreign election observers (although the justice minister may ban
some groups). It is important to note that an improved electoral
law will be significant only if the political atmosphere, which
continues to feature violence and intimidation, is improved; and if
there is time for the opposition to take advantage of the electoral
law and other changes before elections take place.

Police Bash 22 Activists During Mbeki Visit - Some 400 National
Constitutional Assembly (NCA) activists turned out in Harare on Nov.
22 to protest against continuing state-sanctioned political violence
against opposition and civil society activists. The group intended
to intercept the motorcade of South African President Mbeki who was
in town to press for a quick conclusion to the drawn-out mediation
talks between the ruling party and the opposition. Ironically, one
of the key issues still under discussion is the cessation of the
political violence. Maddock Chivasa, NCA spokesperson, told us that
police dispersed the crowd using batons and injuring nine activists
just before Mbeki was to pass by the demonstration. Soon after,
suspected state agents in plain clothes forced 22 NCA members into
minibuses and took them to ZANU-PF provincial offices in Harare
where they were beaten. The activists were turned over to police
later that evening and then eventually released some hours later
after paying a fine. Chivasa reported that all 22 required medical
attention for their injuries; 10 required hospitalization.

Zimbabwe Low On U.N. Human Development Index - The 2007 U.N. Human
Development Index, released this week, put Zimbabwe, DRC and Zambia
at a lower level of development than they enjoyed in 1975. Most
countries have seen their human development index rise over the last
30 years, but in 16 countries it was lower than in 1990. The index
ranks 175 U.N. member countries plus two territories by life
expectancy, education levels and real per capita income.

Senegal's Wade Visits Harare - Senegalese President Abdoulaye Wade
visited Harare on Wednesday and proposed a committee of at least
five heads of state, including South Africa's Thabo Mbeki, to
mediate an improvement of relations between Zimbabwe and the United
Kingdom. Wade was reported as stating that while he did not condone

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President Robert Mugabe's policies, they should be understood in
their historical context. While praising SADC's mediation efforts
under Mbeki, Wade said they were inadequate and that Africa should
do more to help Zimbabwe. For his part, Mbeki said he was unaware
of the visit.

Prelude to the EU-AU Summit - Tomaz Salomao, SADC executive
secretary, said SADC would pull its 14 members out of the EU-AU

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summit, scheduled for December 8-9 in Lisbon, unless European
leaders agreed not to single out Zimbabwe for criticism. Zimbabwe
will most likely be discussed not as a separate agenda item but as
part of a discussion on governance and human rights. Mugabe intends
to attend; UK Prime Minister Gordon Brown has stated he will not.



Zanu PF All Set For Million Men And Women March - Zanu PF has
launched a major media campaign, using radio and TV adverts, to
encourage people to join the million men and women march set for
Friday November 30, 2007, and show support for President Robert
Mugabe's candidacy for 2008. Additional train and bus service is
being provided for marchers coming from out of town, with over 150
buses having reportedly been pledged by private transport owners.
The march is expected to start at 11 am in the center of Harare and
end in Highfield, a low density suburb located approx 12 km out of
town. Although the war veteran's association under the leadership
of Jabulani Sibanda was initially at the forefront of campaign
marches in support of Mugabe, ZANU-PF has appropriated the
organization after various party bigwigs expressed dissatisfaction
with the leadership of Sibanda, who had been expelled from the
party.

WOZA Marks "16 Days Of Activism Against Gender Violence" With
Peaceful Demonstration - On Tuesday 27 November, approximately 1000
members of WOZA marched through central Bulawayo to support the
global campaign 16 Days of Activism Against Violence Against Women."
The group walked for four blocks singing and chanting slogans
before it was stopped by police who told the group the official
government campaign did not begin until the following day. The
marchers dispersed without incident. WOZA leader Jenni Williams
told us that the march was the fourth demonstration in a row WOZA
had managed to stage without arrest. She also said high ranking
police officers were becoming increasingly conciliatory toward WOZA
demonstrators.

UK Lifts Ban on Deportation of Zimbabweans, Appeal Expected - The UK
Embassy confirmed media reports that the UK Asylum and Immigration
Tribunal (AIT) upheld the Court of Appeal's 2006 ruling that
Zimbabweans face no automatic risk of persecution following
deportation. Since 2002, UK Immigration has fought a legal bar on
deporting Zimbabweans who are denied asylum, allowing thousands to
remain indefinitely in the UK without legal basis. The AIT's Nov.
23 decision to lift that ban, however, is unlikely to result in the
immediate resumption of deportations, according to the UK Embassy
Head of Visas David Ashford; UK Immigration officials expect the
decision to be appealed again, almost certainly requiring another
moratorium on deportations. The UK officials don't wish to repeat
the embarrassing scenario of August 2006 when a similar ruling
resulted in only one successful deportation before the moratorium
was imposed. Canada has a similar moratorium on Zimbabwean
deportations resulting from a court case also under appeal; the USG
deports Zimbabweans for all manner of reasons, including failed
asylum applications.

Bulawayo's Water Crisis Deepens - Bulawayo City Council is
decommissioning the Invankuni Dam today, leaving Zimbabwe's second
city with only one supply dam, according to the Chronicle. The
state-owned newspaper reported that water rationing in the city
would spread to the central business district; residential areas

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would receive supplies once a week, and industrial areas twice a
week. See Harare 1051 for details of Bulawayo's water woes.

Zimbabwe's Deteriorating Public Health System - Harare 1047
describes how Zimbabwe's public health care system, once among the
best in Sub-Saharan Africa, is being eroded by mismanagement and
under funding which have led to deteriorating infrastructure, low
public expenditure, and high attrition of human resources. As a
result, the system today is characterized by inadequate staffing,
reduced accessibility by the general population, shortages of
essential drugs and medical supplies, and outdated and poorly
functioning equipment. Many health indicators have worsened, and
while the HIV prevalence rate has declined, Zimbabwe is still home
to one of the worst HIV/AIDS epidemics in the world. The GOZ is
able, but unwilling, to address the current economic and health
crises. While current donor support in the health sector is
primarily focused on HIV and reproductive health, many programs are
designed with intentional spill-over effects to strengthen systems
within the public health sector. Such programs are enabling the
continuation of some basic health care services for an increasingly
impoverished population.

USAID Celebrates World AIDS Day With Award Ceremony - USAID hosted
the 7th Annual Auxillia Chimusora Awards on November 29. The award
celebrates the bravery and leadership of the first woman to publicly
announce her HIV status in Zimbabwe (in 1987),at a time when stigma
was extremely high. The awards, prestigious in the HIV community,
are given to individuals and organizations in the fields of media,
arts, corporate responsibility, orphans and vulnerable children, and
advocacy to recognize leadership in the field of HIV and AIDS and
impact achieved on reducing stigma. While Auxillia Chimusora is
deceased, she was represented at the event by her daughter and other
family members. Ambassador McGee presided over the event, attended
by approximately 400 guests, and was joined in formal remarks by
Minister of Health David Parirenyatwa and USAID Director Karen
Freeman.


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Economic and Business News
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Independent Press Reports New Currency Launch on December 1.- The
Independent reported on November 29 that the RBZ would rollout
"Sunrise II" - introduction of a new currency - on December 1 and
that the changeover would require a minimum of three days instead of
the 48 hours initially suggested. Gono announced last weekend cash
deposit limits of Z$50 million for individuals, Z$200 million for
businesses, and Z$1 billion for wholesalers and other large cash
handlers, effective December 1, unless one can account for the
source of the cash. In spite of the pressure to bank one's cash,
its availability at banks did not improve this week. However, more
cash began to circulate in the informal market, wiping out the
premium at which it had been trading and sharply driving down its
value vis a vis hard currencies.
Z$58 Trillion Cash In Circulation; Is There Hoarding? - Reserve Bank
officials said that about Z$30 trillion of Zimbabwe's total Z$58
trillion cash in circulation was being held outside the banking
system. Using that figure, RBZ Governor Gono lashed out at "cash
barons" for hoarding notes and fuelling the parallel market in
currency and goods. But commentators were quick to note that Z$30
trillion divided among a population of roughly 10 million (on the
high side) averaged out to only Z$3 million per person, hardly a
hoard when it doesn't even suffice to buy a small bottle of cooking
oil on the street in these hyperinflationary times.
Finance Minister Announces Z$7.8 Quadrillion Budget - With
starry-eyed projections of 4 percent growth in 2008 and inflation
falling to 1,978% by December 2008, Finance Minister Samuel
Mumbengegwi announced a Z$7.8 quadrillion "People's Budget"(that's

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Z$7,800,000,000,000,000, or US$3.9 billion at the parallel exchange
rate and about US$260 billion at the official rate) on November 29.
Details and analysis to follow septel.
More Staples Appear In Supermarkets, But At Exorbitant Prices -
Supermarkets appear to be getting more frequent deliveries of bread,
soft drinks, local beer, some chicken and sausages, but the goods
disappear quickly amid consumer uncertainty about supplies. In
addition, the lid appears to be off prices in apparent reaction to
Industry Minister Mpofu's announcement on November 22 that there
would be no repeat of the disastrous price crackdown of the last
months.
Air Zambia Suspends Direct Flights To Harare - On the heels of
British Airway's withdrawal from Zimbabwe last month, Air Zambia
announced suspension of its Lusaka Harare direct flight effective
December 1. Contacts in the industry told us the airline was
operating at a loss on the route, especially due to the high fuel
prices and fluctuations in the Zimbabwe dollar exchange rate.

In the meantime, Air Zimbabwe increased its fares across the board:
roundtrip Harare Johannesburg went from Z$84 million to Z$195
million, Harare Lusaka shot to Z$130 million from Z$54 million, and
a return flight to London now sets a traveler back Z$1.3 billion -
up from Z$600 million a week ago.

Mobile Carriers Raise Tariffs, Too - Econet, Telecel and Net One
announced new rates this week for phone calls and text messages.
Econet's tariffs went up by about 650%; a local text message now
costs Z$11,000 (less than one US cent on the parallel market).
Analysts commented that the tariffs were still very low in real
terms, well below regional comparisons, and, for Econet, below its
own target of about 15 US cents/message. A text messages from
GOZ-owned Net One increased to Z$8,000.

World Bank Concludes Mission, Not Sanguine About GOZ Economic
Stabilization Plan - World Bank Mission Chief Naoko Kojo and the
Acting Country Manager Mungai Lenneiye expressed skepticism to the
diplomatic community on November 29 about the prospects for the
successful implementation of the GOZ's plan, approved by the
cabinet, to introduce a one-year Stabilization and Short-Term
Recovery Program in January. At the conclusion of the two-week
mission, they lamented the lack of cooperation and consensus on the
way forward among the GOZ's competing economic policy institutions:
the RBZ, the Finance Ministry, and the Ministry of Economic
Development. Details to follow septel.

IMF Mission Due in December - IMF staff will visit Zimbabwe December
13-19. The primary purpose of the mission, according to World Bank
Mission Chief Kojo, is data compilation. Embassy Harare is
coordinating a business briefing for the mission by representatives
of the American Business Association of Zimbabwe on day-one of the
visit and Amb will host a debrief for fellow ambassadors on December

18.

McGEE