ZIM NOTES 04-03-09

UNCLAS SECTION 01 OF 04 HARARE 000285 SIPDIS AF/S FOR B. WALCH ADDIS ABABA FOR USAU ADDIS ABABA FOR ACSS NSC FOR SENIOR AFRICA DIRECTOR MICHELLE GAVIN TREASURY FOR D. PETERS STATE PASS TO USAID FOR LDOBBINS AND JHARMON COMMERCE FOR BECKY ERKUL E.O.12958: N/A TAGS: PGOV PREL ASEC PHUM ECON EFIN ZI SUBJECT: ZIM NOTES 04-03-09 -------------- ¶1. SUMMARY -------------- Topics of the week: - WhereQs the Money - QTsvangirai Blasts West - New Mercedes for All - Parliament forms Committees - QBlowQ to U.S. Sanctions - Journalist Abducted in Gweru - Anglican Church Feud Boils Over - No QHell HoleQ Here - Exam Council Corruption - Labor Struggles - Two Staffdels on Their Way - Family Planning Contributing to Health Success - King of Pop Supports GOZ - Scoping Mission for Donor-GOZ Needs Assessment - Prices Falling for the Masses - Biti Gets Tough with Tax Evaders - A Whiff of Recovery on Local Exchange - Deloitte Mired In Controversy - Quote of the Week -------------- On the Political/Social Front -------------- ¶2. WhereQs the Money... SADC last week in Swaziland approved an economic recovery plan of US$10 billion for Zimbabwe and agreed that US$2 billion was needed urgently. SADC will next look to donors. Concretely, South Africa agreed to provide US$30 million over three months for budgetary support and a US$50 million line of credit. See Harare 278 ¶3. QTsvangirai Blasts WestQ... On his first day back in the office following bereavement leave after the tragic death of his wife Susan, Prime Minister Morgan Tsvangirai said he saw Qno reason why everyone should doubt [ZimbabweQs] reforms.Q The Herald twisted his words into a negative blast at U.S. sanctions. A headline on Friday in the inside of The Herald declared QWest doesnQt want Govt to succeed,Q and again attacked the U.S. on sanctions. ZANU-PF, through its mouthpiece The Herald, has apparently declared at least a temporary truce with its partner in government, and is focusing its ire on the West and the U.S. in particular. ¶4. New Mercedes for All... Education Minister David Coltart is the lone MDC minister to turn down a new US$50,000 E280 Mercedes Benz. This comes despite years of MDC criticism of government expenditures on luxury vehicles. Finance Minister Tendai Biti told the press this week that the vehicles were purchased last year but never distributed. Separately, Reserve Bank Governor Gideon Gono told parliamentarians this week that their second-hand vehicles will be replaced with new cars as soon as Minister Biti Qgets money. Senate president Edna Madzongwe (ZANU-PF) proposed that new MPs be given priority. ¶5. Parliament forms Committees... This week parliament finalized several important committee structures, including the legal committee, responsible for reviewing constitutionality of proposed legislation and the portfolio committees, which serve as an oversight mechanism on the executive. Additionally, Parliament constituted a select committee on the constitution, which will direct the constitutional draft process. See Harare 281 ¶6. QBlowQ to U.S. Sanctions... This week John Bredenkamp, a businessman on the EU and OFAC sanctions lists who has backed the Qbusinessman on the EU and OFAC sanctions lists who has backed the HARARE 00000285 002 OF 004 regime, won an interim order from the High Court in Johannesburg preventing South AfricaQs Standard Bank from shutting down his accounts. The bank tried to close them citing concerns about its own reputation and that clients might think that Standard BankQs accounts Qcould be used to facilitate unlawful or unethical acts. ¶7. Journalist Abducted in Gweru... Kudzai Musengi, a freelance journalist, was abducted on March 31 and held for 24 hours by unknown assailants. He had been working on a story about land invasions in the area when he was abducted. He was driven into the bush where he was interrogated and threatened. He was eventually released near his home. ¶8. Anglican Church Feud Boils Over... The contentious relationship between the head of the Anglican Church in Harare, Bishop Sebastian Bakare, and his deposed and excommunicated predecessor, former Bishop Kunonga, became violent on March 28 when police disrupted Anglican services and wounded a bystander with an errant shot. Police used tear gas and riot police to prevent Bakare supporters from holding services at Anglican churches, in support of KunongaQs claim that those properties now belonged to him. While KunongaQs diocese has abandoned him, he retains strong ties to Police Commissioner Chihuri, who has directed his department to support Kunonga. The two Home Affairs ministers met with both men this week and, while expressing dismay at the heavy-handed police action, deferred the matter to the Attorney GeneralQs office. See Harare283 ¶9. No QHell HoleQ Here... South Africa-based SABC-TV3 aired QHell HoleQ this week, a horrifying documentary on prison conditions across Zimbabwe. Footage, taken over three months using smuggled cameras, showed overcrowded, filthy prison cells, starvation among prisoners, and interviews with prisoners who described appalling conditions and bodies left rotting for days in prison cells. In response, Justice Minister Patrick Chinamasa said, QSABC is lying. We do not allow cameras into our prisons. We have made investigations and found out that the footage is not from Zimbabwe. Prison officials where the footage was taken are now reportedly under investigation for Qcompromising state security. Nevertheless, the government recently agreed to allow the International Committee of the Red Cross to assist with improving prison conditions. ¶10. Exam Council Corruption... Education Minister Coltart has uncovered corruption in the marking of O and A level exams by the Zimbabwe Schools Examination Council (ZIMSEC). He found ghost markers and irregularities that will cause further delays both in the payment of markers and in the release of the long overdue 2008 exam results. ¶11. Labor Struggles... Unemployment, dwindling wages, conflicting laws, splinter unions, and internal squabbles have eroded the Zimbabwe Congress of Trade UnionQs influence. For a detailed QZimbabwe Congress of Trade UnionQs influence. For a detailed analysis see Harare 275 and 276. ¶12. Two Staffdels on Their Way... Over the next two weeks post will host congressional staff delegations from the Senate Foreign Relations Committee and from the House Committee on Foreign Affairs. ¶13. Family Planning Contributing to Health Success... Preliminary results from a yet-to-be-released study indicate that ZimbabweQs maternal mortality rate is now about 715 per 100,000 births, about 2,700 deaths annually. This is an increase from a 2005/2006 survey, and constitutes an increase of about 30% since 2000. Interestingly, the new data show that only 6% of maternal deaths are due to post-abortion complications Q 4 to 5 times lower than in other developing countries in Africa. Since the number and timing of HARARE 00000285 003 OF 004 pregnancies affect the reproductive health risks for women, it may well be that high levels of contraceptive prevalence in Zimbabwe are contributing to the low numbers of abortions and post-abortion complications, without which the maternal mortality rate in Zimbabwe could well have been 24% higher. The same data indicates perinatal mortality in Zimbabwe is 29 per 1,000, about 10,800 infant deaths per year. Other developing countries with similar child mortality rates often have perinatal mortality of around 40 or 45. The reduced rate in Zimbabwe may also be related to high levels of contraceptive use. In sum, the 58% prevalence of modern contraceptive use among married women in Zimbabwe appears to be saving lives. If so, USAIDQs continuing investments in family planning are a significant contributor to that preventive health success story. ¶14. King of Pop Supports GOZ... On April 1, the government mouthpiece The Herald reported that Michael Jackson was coming to Zimbabwe to sustain the QmomentumQ from last weekQs Tourism Stakeholders Conference, confirm Zimbabwe as a safe tourist destination, and donate money to Zimbabwe. On April 2, the newspaper confirmed it was all an April FoolQs joke. -------------- Economic and Business News -------------- ¶15. Scoping Mission for Donor-GOZ Needs Assessment... The World Bank, AfDB, UNDP, and the EC, in coordination with the Ministry of Finance, will undertake a scoping mission from April 6-17 to lay the groundwork for a sectoral-based needs assessment in May. The mission will clarify the role of the donors and government in the needs assessment, agree on a timeline and framework, identify team composition, and establish key sectors and priorities to be reviewed. The needs assessment will cover six sectors, including economic growth, social protection, infrastructure, agriculture recovery, basic services, and government. As a joint donor-GOZ effort, it will be the basis for recovery and development programs. ¶16. Prices Falling for the Masses... With the introduction of dollarization, PricewaterhouseCoopers has resurrected its monthly cost of living survey. For February 2009, it determined a 14.44% drop in the monthly cost of living for low-income earners. For high-income earners the index actually rose 7.62%, driven by increases in domestic employee salaries, telephone bills, school fees, and vehicle maintenance. ¶17. Biti Gets Tough with Tax Evaders... In his review of the 2009 Budget, Finance Minister Biti directed the Zimbabwe Revenue Authority to strictly enforce tax laws including seizure of assets of tax evaders and auctioning them to recover lost revenue. Stiff penalties are intended to instill discipline among tax payers who had grown accustomed to evading taxes in recent years. ¶18. A Whiff of Recovery on Local Exchange... The Zimbabwe Stock Exchange recorded its first notable increase in volume this week QExchange recorded its first notable increase in volume this week since re-opening two months ago. Market capitalization (shares times their price) recovered to US$1.588 billion after having hit a low of US$1.275 billion in mid March. ¶19. Deloitte Mired In Controversy... At an Extraordinary General Meeting of wireless provider Econet last week, auditor Deloitte appears to have inflated the total ballots cast while disregarding key proxy votes. The irregularity boosted the vote in favor of a resolution to enter into a US$93.9 million installment sale agreement with Econet Wireless Global, a Strive Masiyiwa investment vehicle. Threats of suits and countersuits abound. Econet/Masiyiwa is also a key shareholder in the disastrous merger last year of Kingdom Bank and Meikles Africa which has also ended up in the HARARE 00000285 004 OF 004 courts over allegations of misdoings. ¶20. Quote of the Week: QI have not bought any cars for anyone... We either had to leave them to rot or sell them, and get half their value. It was cheaper to keep them. It was a matter of practicality.Q --Finance Minister Tendai Biti on the ministersQ Mercedes Benzes. MCGEE