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Cablegate: Zim Notes November 9, 2007

VZCZCXRO2705
RR RUEHBZ RUEHDU RUEHJO RUEHMR RUEHRN
DE RUEHSB #1011/01 3131021
ZNR UUUUU ZZH
R 091021Z NOV 07
FM AMEMBASSY HARARE
TO RUEHC/SECSTATE WASHDC 2116
RUCNSAD/SOUTHERN AF DEVELOPMENT COMMUNITY COLLECTIVE
RUEHUJA/AMEMBASSY ABUJA 1767
RUEHAR/AMEMBASSY ACCRA 1649
RUEHDS/AMEMBASSY ADDIS ABABA 1780
RUEHRL/AMEMBASSY BERLIN 0397
RUEHBY/AMEMBASSY CANBERRA 1057
RUEHDK/AMEMBASSY DAKAR 1406
RUEHKM/AMEMBASSY KAMPALA 1837
RUEHNR/AMEMBASSY NAIROBI 4265
RHEHAAA/NSC WASHDC
RHMFISS/EUCOM POLAD VAIHINGEN GE
RUEHGV/USMISSION GENEVA 0903
RUFOADA/JAC MOLESWORTH RAF MOLESWORTH UK
RHEFDIA/DIA WASHDC

UNCLAS SECTION 01 OF 03 HARARE 001011

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 9, 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$1.5million:US$1
Official exchange rate: ZW$30,000:US$1

Black market sugar price Z$/2kg vs. controlled price of
Z$82,000/2kg
Cooking oil Z$ /2 liters vs. controlled price of Z$250,000/750 ml

-----------------------------
On the Political/Social Front
-----------------------------
Turmoil in the MDC - Controversy over the MDC's dissolution of its
Women's Assembly continues to roil. President Morgan Tsvangirai
claims the decision was made because of mismanagement by Assembly
chair Lucia Matibenga. Matibenga and her allies within the party
counter that the action was without foundation and
extra-constitutional, and is an example of Tsvangirai's dictatorial
behavior. Civil society women's groups have not surprisingly lined
up to support Matibenga. Regardless of which side is right, the MDC
has at least been temporarily weakened at a time it should be
concentrating on preparing for next year's elections. See Harare
1004.

Mobile Voter Registration Still Unsatisfactory - The Zimbabwe
Electoral Support Network (ZESN) has concluded that the same
problems that afflicted a mobile registration exercise between June
and August are still present in a mobile registration drive that
began on October 26 and will continue until November 15. Due to a
lack of publicity, people are unaware of when and where they can
register. Political parties have not been involved in creating
awareness of the registration opportunity. For logistical reason,
people have been unable to acquire IDs necessary for registration.
On the positive side, ZESN reported that the registration process
has been peaceful and there has been an absence of intimidation.

Attorney General Arrested - Attorney General Sobusa Gula Ndebele was
arrested on allegations of abuse of office on Tuesday. Ndebele
allegedly assured former NMBZ Holdings deputy managing director
James Mushore, who fled Zimbabwe in 2004 while facing charges of
externalizing foreign currency, that he would not be prosecuted if
he returned to the country. Mushore did in fact return in September
and is still in custody after being arrested. Ndebele, who is
associated with the Mujuru faction and is considered an honest
prosecutor, last year unsuccessfully tried to prosecute his boss,
Justice Minister Patrick Chinimasa, for obstruction of justice for
allegedly trying to dissuade witnesses from testifying in an assault
trial against Security Minister Didymus Mutasa.

WOZA continues with its campaign - calling for an end to political
violence - Women of Zimbabwe Arise staged another peaceful
demonstration in Harare on November 6, to protest the "continued
harassment of and violence against human rights activists at the
hands of the Zimbabwe Republic Police." More than 250 members
reportedly took part in this demonstration at Parliament and were
arrested by the police riot squad who beat a number of women with
baton sticks. 98 members were detained for 7 hours at Harare Central
before being released. Unusually, the police asked the WOZA members
to state their grievances and to notify the police in advance of any
future protests.

Magistrates and Prosecutor's strike cripples the judicial sector -
The National Association of Magistrate's called for a nationwide
strike last week giving the GOZ an ultimatum of Friday November 2,

HARARE 00001011 002 OF 003


to meet its wage demands - or face labor action from the group. By
Monday November 5, most junior magistrates at the local and
provincial level had heeded the call in Harare and Mutare and
stopped going to work. The lowest paid magistrate earns about $ 20
million a month, (US$16 on the parallel market). The strike will
further damage a judicial system already crippled by a lack of
resources.

--------------------------------------------- ----
On the Economic and Business front
--------------------------------------------- ----
"Mother of all Seasons" - But Is There Enough Seed*? - The local
production of seed for this planting season is arguably well below
the national requirement. The local supply of seed maize has
historically been 35,000 metric tons - sufficient to plant for 1.4
million hectares. However, the GOZ is aiming to put 2 million
hectares under maize production this season, pushing the seed
requirement to 50,000 metric tons, according to the seed houses.
With regard to small grains, the Commercial Farmers Union (CFU) and
the Agriculture Coordination Working Group under FAO leadership
maintain that sorghum is in very short supply with stocks estimated
at 1,400 metric tons against a national requirement of 4,000 metric
tons. Moreover, the amount of soy bean seed available is just 8,400
metric tons, which is sufficient to plant an area of about 84,000
hectares, yet the GOZ is targeting 120,000 hectares this season. The
CFU also estimates that ground nut seed is in short supply and there
is no sunflower seed at all in the country. Whether Zimbabwe will be
able to produce the oil seed needed to alleviate the acute cooking
oil shortage depends primarily on the ability to import seed. In
view of the perennial foreign currency shortages, Reserve Bank
Governor Goon's "mother of all agricultural seasons" could be a
mother of all disappointments. Only cotton and tobacco seed are said
to be in adequate supply for the targeted land area this summer.

National Social Security Authority (NSSA) To Raise Pension Payouts -
How Far Will The Money Go? - In oral evidence presented to the
Parliamentary Portfolio Committee on Public Service, Labor and
Social Welfare, NSSA acting Director of Finance and Investment James
Matiza announced that with effect from 2008 NSSA will increase its
monthly minimum pension payouts from Z$250,000 (US$0.21 on the
parallel market) to Z$10,000,000 (US$8.33), with the highest paid
pensioner receiving Z$23 million (US$19.17), up from Z$350,000
(US$0.29). While the increases appear high in nominal terms, by the
time they reach the pensioners' purses, hyperinflation will likely
have eroded it all away.

Private Sector Estimates of Inflation Surge - See Harare 1003 for an
overview of the latest private sector estimates of inflation - deep
in 5-digit territory.

Prices Continue To Soar on the Zimbabwe Stock Exchange (ZSE) -
Activity on the ZSE has been high in recent months with almost all
counters registering significant price increases. Both the
industrial and mining indices have risen to dizzying heights, thanks
to a number of factors. The introduction of the concessionary
BACOSSI facility has depressed interest rates on the money market
resulting in investors opting for the stock market. In addition,
numerous companies have been churning out impressive interim and
end-of-year results in nominal terms at least, although in real
terms, many of them have registered significant declines. The mining
index has also benefited from the upswing in prices of most metals,
including gold, platinum and chrome, even though Zimbabwe on the
whole has hardly benefited due to its poor investment climate.

Reserve Bank Governor Gono Shelves Plans To Introduce New Currency -
Gono told the state-controlled Sunday Mail that a new currency would
not be launched any time soon. See "Quote of the Week" below for
more color. We assume he meant no new bearer cheques either any
time soon. How long Gono can go without introducing new notes to

HARARE 00001011 003 OF 003


help business cope with the hyperinflation accounting problem of
billions, trillions and quadrillions is unclear.


DHANANI

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