ZIM NOTES 01-16-2009

UNCLAS SECTION 01 OF 03 HARARE 000047 AF/S FOR B. WALCH ADDIS ABABA FOR USAU ADDIS ABABA FOR ACSS NSC FOR SENIOR AFRICA DIRECTOR B.PITTMAN TREASURY FOR D. PETERS STATE PASS TO USAID FOR L.DOBBINS AND E.LOKEN COMMERCE FOR ROBERT TELCHIN SIPDIS E.O.12958: N/A TAGS: PGOV PREL ASEC PHUM ECON ZI SUBJECT: ZIM NOTES 01-16-2009 -------------- ¶1. SUMMARY -------------- Topics of the week: - Tsvangirai to Return, Meet Mugabe... - Conviction Threatens to Expel MDC MP from Parliament... - Still no Resolution on Court Cases... - SADC Tribunal Wrong Says Zimbabwean Supreme Court Justice... - Schools Opening or Not? - New Report on Zim Crisis... - Harare's Water Woes Continue... - Reserve Bank Introduces New Notes... - Harare Declared World's Priciest City for Foreigners... - Health Workers Allowed To Open FCAs... - Dollarization Widens... - World Bank Mission Reports on Private Sector... -------------- ¶2. Price Movements-Exchange Rate and Selected products -------------- Parallel rate for cash shot up to Z$400 billion:US$1 Check rate rose to Z$35 quadrillion:US$1 against inter-bank average of Z$15.33 million:US$1 Bread on the parallel market went up to Z$400 billion Sugar shot up to Z$800 billion/2kg Petrol and diesel rose to Z$480 billion/liter -------------- On the Political/Social Front -------------- ¶3. Tsvangirai to Return, Meet Mugabe... MDC leader Morgan Tsvangirai told a press conference in Johannesburg on Thursday that he will return to Harare this weekend, chair a meeting of the MDC National Executive, and meet with Zimbabwean president Mugabe. Tsvangirai made clear that resolution of outstanding issues between ZANU-PF and the MDC was a condition for MDC passage of Amendment 19 and entry into a government with ZANU-PF. These issues include equitable allocation of ministries, allocation of half of the 10 governorship postions to MDC, joint control of the national security council, equitable allocation of ambassadors and permanent secretaries, rescission of the appointments of Reserve Bank of Zimbabwe governor Gideon Gono and Attorney General Johannes Tomana, and an end to political abduction and a full accounting of those abducted. At this point, it is unlikely ZANU-PF will accede to the MDC's demands. See Harare 38. ¶4. Conviction Threatens to Expel MDC MP from Parliament... A Zimbabwean magistrate convicted an MDC-T MP of forging four signatures nominating her to contest the Chimanimani West constituency seat in last March's parliamentary elections. Lynette Karenyi won the seat by beating out a ZANU-PF candidate, but she now faces expulsion according to portions of the Zimbabwe Electoral Act cited by the magistrate. The MDC-T plans to appeal the ruling in an effort to maintain its slim plurality in the closely-contested House of Assembly. Speaker of the House Lovemore Moyo stated Karenyi would remain in her seat, as Parliament would determine her eligibility to sit. Separately, on January 14 Zimbabwean police detained Meki Makuyana, the MDC MP for Chipinge South in Manicaland. No formal charges have yet been brought against Makuyana. See Harare 40. ¶5. Still no Resolution on Court Cases... Of the 18 abductees who first appeared in court on Christmas Eve, all except two-year-old Nigel Mutemagau remain in custody, pending numerous court hearings HARARE 00000047 002 OF 003 in which the State continues to stall. On January 15, the State admitted three other abduction victims - Lloyd Tarumbwa, Terry Musona and Fanny Tembo - are in "police protective custody." Abductee Bothwell Pasipamire (never brought to court) escaped to South Africa this week and gave details of his detention, including torture, at a press conference. Separately, the MDC mayor of Bindura was charged this week with making death threats against a police officer. Sources tell us the mayor and two others are under investigation for the alleged assassination of Elliot Manyika and alleged assassination attempt of Air Marshall Perence Shiri. ¶6. SADC Tribunal Wrong Says Zimbabwean Supreme Court Justice... In a state of the judiciary speech in Bulawayo, Deputy Chief Justice Luke Malaba declared that the SADC Tribunal lacked jurisdiction in its November 2008 ruling that 77 white farmers had been unconstitutionally and unlawfully dispossessed of their farms. Malaba said that the plaintiffs had not exhausted all legal options available in Zimbabwe, and therefore should not have had their case heard before the Tribunal in Windhoek. The SADC Tribunal considered this point in its ruling, noting that the farmers had filed a petition with the Zimbabwe Supreme Court in March 2007 and no ruling had been made. ¶7. Schools Opening or Not? A great deal of uncertainty surrounds when both government and private schools will open for the new term. Government schools have been ordered to open on January 27, or two weeks later than anticipated because of delays in grading last year's exams (exam markers are demanding payment in forex) and uncertainty as to whether the schools will be authorized to accept school fees in forex. Private schools, which are collecting school fees in forex and which had planned on opening either this week or next week, have been told to follow suit, but according to Embassy sources, a number of them appear intent on bucking the order. ¶8. New Report on Zim Crisis... Physicians for Human Rights released a damning and thorough report this week on the collapse of the health care system. See: http://physiciansforhumanrights.org /library/report-2009-01-13.html -------------- On the Economic and Business Front -------------- ¶9. Harare's Water Woes Continue... Post has prepared an assessment of the degradation of Harare's water infrastructure that has resulted in water stoppages or intermittent supplies to nearly all of Harare. Mismanagement by water parastatal ZINWA, lack of investment, and the departure of many skilled employees are all to blame for the loss of delivery capacity that is fueling the ongoing cholera crisis. See Harare 39. ¶10. Reserve Bank Introduces New Notes... The Reserve Bank of Zimbabwe (RBZ) introduced $100 trillion (US$ 250),$50 trillion (US$ 125),$20 trillion (US$ 50),and $10 trillion (US$ 25) notes to go into circulation today starting with the $10 trillion note. Last week, the RBZ introduced Z$20 billion and Z$50 billion--effective as of January 12, 2009--to coincide with an increase in the monthly cash withdrawal limit from Z$10 billion to a full month's pay with proof of a January pay slip. The change has resulted in a slow-down in banking business, further weakening most banks. ¶11. Harare Declared World's Priciest City for Foreigners... A London-based human resources organization designated Harare as the most expensive city in the world for foreigners based on hard currency prices of a standardized basket of goods. The survey compared 125 consumer goods and services from 270 different locations. Angola's capital Luanda ranked second in the survey, followed by Tokyo. HARARE 00000047 003 OF 003 ¶12. Health Workers Allowed To Open FCAs... Health workers who are authorized to earn foreign currency may now open foreign currency accounts (FCAs) with local banks. The measure is intended to stop the exodus of skilled workers in the sector. The Ministry of Health and Child Welfare said it has budgeted US$1.5 million for January salaries, which are expected to range from US$50 for nurses to US$850 for doctors, though health workers are demanding more. ¶13. Dollarization Widens... Zimbabwe's state-owned fixed line telephone operator TelOne has received authorization to bill clients in foreign currency beginning in February, 2009. The charges, at US10 cents per unit plus a fixed rental of US$20, should improve the parastatal's viability. Meanwhile, the Zimbabwe Electricity Supply Authority (ZESA) has expanded the list of clients billed in foreign currency to include retailers, wholesalers, and manufacturers that are licensed to sell goods and services in foreign currency, as well as NGOs, embassies, and foreign-funded international organizations. ¶14. World Bank Mission Reports on Private Sector... A World Bank team visited Zimbabwe from December 9-13, 2008 to identify the elements of a pre-reengagement work program in private and financial sector development. The program will be financed by the Multi-Donor Trust Fund. The team's assessment by sector of the present situation, short- and medium-term recovery priorities, and next steps, is posted on our intranet site under the Political Economic Documents: http://harare.state.gov/index .cfm?fuseaction=public.display&id= a99f72af-b335-4075-a9c7-e51ec133105b -------------- Quote of the Week -------------- ¶15. At High Court hearings this week dealing with abductions of MDC members and human rights activists, government legal counsel referred to escaped MDC member Bothwell Pasipamire as "globetrotting on an MDC budget." Pasipamire had been abducted and tortured by state agents, but managed to escape to South Africa. MCGEE