ZIMBABWE SEARCHING FOR ALTERNATIVE SUPPLIER OF

C O N F I D E N T I A L HARARE 000672 SIPDIS AF/S FOR G. GARLAND AF/EPS FOR ANN BREITER NSC FOR SENIOR AFRICA DIRECTOR B. PITTMAN STATE PASS TO USAID FOR L.DOBBINS AND E.LOKEN TREASURY FOR J. RALYEA AND T.RAND COMMERCE FOR BECKY ERKUL ADDIS ABABA FOR USAU ADDIS ABABA FOR ACSS E.O. 12958: DECL: 08/08/2018 TAGS: PGOV ECON ASEC ZI SUBJECT: ZIMBABWE SEARCHING FOR ALTERNATIVE SUPPLIER OF BANKNOTE PAPER REF: A. HARARE 0653 ¶B. VIENNA 01068 ¶C. HARARE 0162 Classified By: Ambassador James D. McGee for reason 1.4 (d) ¶1. (C) Banker James Mushore, who tipped us off in February about the planned media disclosure of German banknote printer Giesecke & Devrient's (G&D) business with Zimbabwe (Ref C), updated emboffs on July 31 on the Reserve Bank of Zimbabwe's (RBZ) pursuit of alternative suppliers of secure paper. He said that Alan Marimbe, head of currency management at the RBZ, and Eliah Mutowo, General Manager of Fidelity Printers, were communicating with potential suppliers in Indonesia, Argentina and Zimbabwe. ¶2. (C) According to Mushore's unnamed contact at Fidelity Printers, Pura Group in INDONESIA had offered to deliver banknote paper within 5-6 weeks of signing a contract. Mushore said an unnamed Argentine had visited Harare and promised the RBZ that an Argentine company could deliver double the quantity of banknotes that G&D had delivered. Mushore said Marimbe and Mutowo had recently traveled to Argentina to investigate the offer but had been denied entry despite the contact's assurances of visa issuance upon arrival. Locally, Mushore said that the RBZ was trying to launch a banknote printing operation at Kadoma Paper Mills but it was "not working out." Mushore also said the RBZ had approached local checkbook printer Celsys about printing banknotes. ¶3. (C) Mushore said that the Swiss company SICPA supplied Fidelity Printers with secure ink, and that Fidelity had abundant ink in stock. Nevertheless, SICPA was allegedly considering setting up an associate company in South Africa to bypass any sales prohibitions that could arise. Mushore added that Fidelity had launched a witch-hunt to trace the source of information leaked to the media about its use of banknote design software from the Austrian company JURA JSP (Ref B). -------------- COMMENT -------------- ¶4. (C) Without its regular source of secure banknote paper, and having issued revalued currency one week ago (Ref A),the GOZ's ability to locate an alternate secure paper supplier in Zimbabwe's hyperinflationary environment is critical. END COMMENT. MCGEE