ZIMNOTES 2/12/2010

UNCLAS SECTION 01 OF 03 HARARE 000132 SIPDIS AF/S FOR B. WALSH ADDIS ABABA FOR USAU ADDIS ABABA FOR ACSS NSC FOR SENIOR AFRICA DIRECTOR STATE PASS TO USAID FOR L. DOBBINS AND J. HARMON COMMERCE FOR ROBERT TELCHIN E.O. 12958: N/A TAGS: PGOV PREL ASEC PHUM ZI SUBJECT: ZIMNOTES 2/12/2010 -------------- ¶1. SUMMARY -------------- Civil Service Strike Hits Education Sector... Commissioners to ZEC and HRC Selected... No Progress on Talks... MDC-T Expels 23 Councilors... Diamond Firm Directors Arrested... Newspaper Staff Charged... No Birthday Cake for the Government... "Indigenization" Rules Issued... Resolve Outstanding Issues, Parties Told... Energy Bill to Open up the Sector... Central Bank Approves Credit Bureau... -------------- On the Political and Social Front -------------- ¶2. A government workers strike that began on February 5 led by Zimbabwe's two teachers' unions -- ZIMTA and PTUZ -- resulted in widespread school closures across Zimbabwe. The unions estimate that over 70 percent of their combined membership of approximately 60,000 teachers have joined the labor action to demand higher wages and reduced utility rates. Some government offices have been forced to close as well, including a handful of ministries and the courts, which has delayed several prominent cases including the Bennett trial. Hospitals are functioning normally as doctors and nurses reported to work. The state media has blamed the strike on an MDC failure to meet the needs of workers. See Harare 110. ¶3. Following several weeks of rumors, President Mugabe and PM Tsvangirai appear to have agreed upon chairs to the newly-created Electoral and Human Rights Commissions. Though still not announced by the state press or the government, former High Court Judge Simpson Mtambanengwe (ZEC) and former University of Zimbabwe law professor Reg Austin (HRC) have been offered the positions, according to multiple independent press reports. Discussions with our contacts indicate that both Mtambanengwe and Austin are well regarded by their peers. Mtambanengwe served as a High Court judge for 12 years and is now acting Chief Justice in Namibia and the chair of Namibia's electoral commission. Austin has served as the UN Chief Electoral officer in Cambodia and Afghanistan. ¶4. Despite the return of South Africa's facilitation team on February 8, the resulting two days of talks produced no discernible HARARE 00000132 002 OF 003 results. ZANU-PF appears determined not to give any ground until sanctions are lifted, leaving the MDC with no maneuvering room. The facilitators left on February 11 without making any public statements or giving any indication when they might return. MDC intends to declare a deadlock and appeal to SADC, but is waiting for the Media, Electoral, and Human Rights commissions to be announced before it does so. ¶5. In a move that deprives the party of control of the large town of Chitungwiza, the MDC-T dismissed 23 councilors from the party for corruption, breach of the party's charter, and insubordination. Spokesperson Nelson Chamisa told us that the party took the decision after its investigations implicated the councilors on serious, but unspecified, corruption charges. The councilors will likely remain in office because Local Government Minister Ignatius Chombo (ZANU-PF) said he would not call for an early election to replace the councilors. ¶6. Two South African directors of Canadile Miners, one of two firms extracting diamonds at the Chiadzwa fields, have been arrested on allegations of illegally possessing the precious stones. Komilan Packirisamy and Viyandrakumar Naidoo were arrested in nearby Hot Springs on February 2 after company employees tipped off police that the two had diamonds in their car. Police discovered stones worth an estimated US$28,000 in the vehicle. The other firm granted mining rights, Mbada Diamonds, has also been mired in controversy for airlifting diamonds out of Zimbabwe and for attempting to hold an auction that would have violated the Kimberley Process plan agreed upon by the GOZ in November. ¶7. On February 11, two men were charged with writing and publishing false statements in the January 10 edition of The Zimbabwean under the headline "Mnangagwa plots fight back: talk of new splinter group. " Barnabas Madzimure and Fortune Mutandiro, who work for The Zimbabwean's local distributor, Adquest, were initially arrested and released without charge on January 17 after spending several hours answering questions and producing papers to show that the newspaper had been legally imported. The Zimbabwean's editor, Wilf Mbanga, issued a statement accusing Jonathan Moyo of orchestrating the harassment of the newspaper. ¶8. The inclusive government turned a year old on February 11 with virtually no fanfare. News articles and reports from civil society are evaluating the numerous shortcomings and still-to-be-fulfilled promises of the inclusive government: a land audit; greater media freedom; progress towards a new constitution; new media, human rights, elections, and anti-corruption commissions. Although the economy has improved in the last year, those accomplishments were overshadowed this week by the widespread civil servant strike. -------------- On the Economic and Business Front -------------- ¶9. The Minister of Youth Development, Indigenization, and Economic Empowerment issued regulations this week governing redistribution of business ownership under the 2007 indigenization law. By mid-April businesses must submit plans on how they will transfer a controlling interest to black Zimbabweans. Although Tsvangirai HARARE 00000132 003 OF 003 described the regulations as "null and void", their publication will naturally frustrate efforts to attract foreign investment. See Harare 116. ¶10. The Business Council of Zimbabwe (BCZ) has urged Mugabe, Mutambara, and Tsvangirai to resolve outstanding issues under the Global Political Agreement in order to encourage investment in the country. The BCZ also called for the introduction of realistic and pragmatic indigenization and economic empowerment policies in view of the need to attract capital into the country. The business community also expressed disappointment at the continuing farm invasions. ¶11. The GOZ is drafting an energy bill with tax incentives to attract private investment of over US$2.5 billion in the electricity and fuel sectors. The move is designed to stabilize electricity supply by increasing the country's own internal power generating capacity. ¶12. The Reserve Bank of Zimbabwe has approved the setting up of a Credit Reference Bureau to ease credit risk management. Due to its liquidity constraints, the RBZ has urged banks to fund the bureau themselves. Following the adoption of a multi-currency system in February 2009, banks pressed for the setting up of a centralized credit information center in order to promote the flow of information among lenders. ¶13. Pedzisayi Ruhanya, program manager of the Crisis in Zimbabwe Coalition, an NGO advocating human rights and democratization, told IRIN: "As a transitional government we should have been moving towards a new democratic culture with new institutions, but that has not happened. The constitution-making process has been stalled at each and every opportunity, media reforms have not been undertaken ... [and] the security forces continue to operate from ZANU-PF's armpit as a partisan force." RAY RAY