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Cablegate: Zim Notes April 17, 2008

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RR RUEHBZ RUEHDU RUEHJO RUEHMR RUEHRN
DE RUEHSB #0345/01 1081543
ZNR UUUUU ZZH
R 171543Z APR 08
FM AMEMBASSY HARARE
TO RUEHC/SECSTATE WASHDC 2802
RUCNSAD/SOUTHERN AF DEVELOPMENT COMMUNITY COLLECTIVE
RUEHUJA/AMEMBASSY ABUJA 1928
RUEHAR/AMEMBASSY ACCRA 1933
RUEHDS/AMEMBASSY ADDIS ABABA 2055
RUEHRL/AMEMBASSY BERLIN 0618
RUEHBY/AMEMBASSY CANBERRA 1332
RUEHDK/AMEMBASSY DAKAR 1689
RUEHKM/AMEMBASSY KAMPALA 2111
RUEHNR/AMEMBASSY NAIROBI 4542
RHEHAAA/NSC WASHDC
RHMFISS/EUCOM POLAD VAIHINGEN GE
RUEHGV/USMISSION GENEVA 1190
RUZEJAA/JAC MOLESWORTH RAF MOLESWORTH UK
RHEFDIA/DIA WASHDC
RUEAIIA/CIA WASHDC

UNCLAS SECTION 01 OF 04 HARARE 000345

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
CIA WASHDC

SIPDIS

E.O.12958: N/A
TAGS: PGOV PREL ASEC PHUM ECON ZI

SUBJECT: ZIM NOTES April 17, 2008

-------------
1. SUMMARY
-------------
Topics of the week:
- Still No Election Results, Court Rebuffs Opposition Demand
- Post-Election Violence Spreads, One Confirmed Death
- Scores of Opposition Arrested
- An Analytic Note On Violence
- Opposition "Stay-In" a Flop
- UN Security Council Deliberates Over Zimbabwe
- USAID, UN, And NGOs Planning For Potential Emergency Response-
- Court rules in favor of journalists
- Public Blames ZANU-PF And Sanctions For Dire State Of Economy
- The Indigenization and Economic Empowerment Bill Apparently In
Effect
- Tax Man Backs Down
- Heavy Industry Down
- Cotton Season Underway
- The High Cost of Travel (or of Emigration)


------------------------------
2. Price Movements-Exchange Rate
and Selected products
------------------------------
Parallel rate for cash shot to ZW$82million:US$1; bank transfer
rate: Z$105 million; official rate: ZW$30,000:US$1

Sugar more than doubled to Z$200 million/2kg vs. controlled price of
Z$8million/2kg

*Cooking oil nearly doubled to Z$200 million/750ml vs. controlled
price of Z$9.3million/750ml

Petrol and diesel soared to Z$120 million/liter vs. controlled price
of Z$60,000/liter

-----------------------------
On the Political/Social Front
-----------------------------
3. Still No Election Results, Court Rebuffs Opposition Demand...
Almost three weeks since elections, the Zimbabwe Electoral
Commission (ZEC) has yet to release the results of the presidential
ballot. In addition, the High Court on April 14 dismissed, with
costs, an MDC appeal to compel ZEC to release the results. It also
deferred a ruling that would put a stop to the ZEC's plans to
recount results in 23 constituencies - 16 of which the opposition
had won. At an April 14 press conference, the MDC reiterated its
position that it had defeated Mugabe outright and would not
participate in a runoff nor would it recognize a recount.

4. Post-Election Violence Spreads, One Confirmed Death...
Opposition parties and human rights groups have reported a massive
surge in political violence orchestrated by regime insiders,
including cabinet ministers and senior military and police officers.
Soldiers, police, war veterans, and youth militia have been
deployed primarily, but not exclusively, to rural areas to
intimidate the electorate and punish opposition supporters ahead of
an anticipated second round of voting for the presidency. The
public has been forced to attend daily ZANU-PF rallies throughout
Mashonaland East and West, Masvingo, and Manicaland provinces
(formally ZANU-PF strongholds where the opposition has made
significant gains) to hear threats of more violence and a return to
"war" if they do not support Mugabe. Civil society members,
particularly those who acted in election observations, are also the
target of intimidation and violence.


HARARE 00000345 002 OF 004


Since March 29, a total of 176 victims of post-election violence
have required medical treatment - including 43 new cases in last 48
hours. More than 30 of these victims have required hospitalization
for serious injuries. Injuries range from deep tissue damage as a
result of prolonged beatings with blunt objects to fractures and
abrasions; several of the victims exhibit multiple fractures to the
hands and arms typical of defensive injuries. There has been one
confirmed death of an MDC-Tsvangirai party activist beaten by
ZANU-PF supporters. The pattern of attacks and escalating rhetoric
is similar to campaigns unleashed in 2000 and 2002. See Harare
331.

As of last weekend, 31 white commercial farmers had been driven off
their farms since the elections out of 128 farms under varying
degrees of siege, according to the Commercial Farmers' Union.
Seventeen of the 31 abandoned farms are located in Centenary in
Mashonaland Central province.

5. Scores of Opposition Arrested... Zimbabwe Lawyer for Human
Rights (ZLRH) reported today that at least 99 opposition members and
supporters had been arrested or reported missing in the past 48
hours - most in Harare, but some in the Bindura and Mt. Darwin areas
as well. Initial reports indicate that suspected central
intelligence officers identifying themselves as plain clothes police
took many of the individuals from their homes. Family members have
reported other opposition activists missing. ZLHR lawyers have been
camped out at Harare Central police station for the past two days
trying to identify and gain access to the detainees.

6. An Analytic Note On Violence... As noted above, violence has
surged. We do not see a situation similar to Kenya occurring. The
violence is systematic, controlled, and orchestrated at the highest
levels of ZANU-PF and is targeted against regime opponents. Unlike
in Kenya, it is not ethnic in nature and is not spontaneous. We see
no evidence of the opposition planning to respond violently; in fact
the opposition MDC has continued to preach non-violence.

7. Opposition "Stay-In" a Flop... The MDC attempted an organized
"stay-in," urging regime opponents to stay at home until election
results were announced. The action was poorly organized and many
people were unaware of it. Even among people who were aware of it,
there were few supporters; most people are just concerned with
getting by and finding food on a day to day basis. Business has
continued as usual in Harare.
8. UN Security Council Deliberates Over Zimbabwe... In a summit
convened on April 16 by the present chair of the UN Security Council
- South Africa - to discuss how the UN and AU can act to further
peace and security, UN Secretary-General Ban Ki-Moon said, "The
government and its supporters must desist immediately from violence
and intimidation, act with restraint, respect human rights, and
allow the electoral process to continue unfettered." US Ambassador
to the UN Zalmay Khalilzad expressed the grave concern of the United
States about the escalating politically-motivated violence
perpetrated by security forces and ruling party militias that target
opposition supporters in rural areas. Under headlines "Hands off
Zim, UN told," The Herald reported today that Tanzanian President
Kikwete assured the summit that "SADC was taking care of the
situation in Zimbabwe."
9. USAID, UN, And NGOs Planning For Potential Emergency Response...
With violence escalating, humanitarian organizations are readying
plans for a potential rapid response. The UN Country Team Crisis
Group is meeting daily, and the UN Inter-Agency Standing Committee
(IASC) is meeting weekly. The IASC Contingency Plan is up-to-date,
and an Emergency Relief Supply and Capacity Matrix maps out
humanitarian organizations, resources, and vulnerabilities in the
country. Strong partners, including the International Organization
for Migration, a consortium of NGOs, and the International Committee

HARARE 00000345 003 OF 004


of the Red Cross, have in-country and regional support capacity to
carry out emergency programs should the need arise. However, their
field presence is currently limited, reducing access to affected
populations and information. Other concerns are lack of Ministry of
Health capacity, the shortage of essential drugs and health care
commodities, and inadequate communications networks. Post will
continue to monitor developments and provide further updates as they
become available. See Harare 343

10. Court Rules In Favor Of Journalists... Harare Magistrate
Gloria Takundwa this week threw out the case against American
citizen journalist Barry Bearak of the New York Times and British
freelance journalist Stephen Bevan. Both had been arrested two
weeks ago and accused of practicing journalism without
accreditation. Their lawyer, Beatrice Mtetwa, a frequent defender
of journalists and media rights in Zimbabwe, argued in a pre-trial
hearing that the case, originally thrown out by the Attorney
General's office the day after the arrests, had no merit, as
practicing journalism without accreditation in Zimbabwe is no longer
illegal under the newly amended Access to Information and Protection
of Privacy Act (AIPPA). Furthermore, journalists can only be
prosecuted on the recommendation of a statutory Media Council which
has not yet been established. After prosecutors failed to show up
to the pre-trail hearing, the Magistrate stated that "the State
dismally failed to prove" its case. She also reprimanded police for
having unlawfully detained the two journalists after the Attorney
General had ruled there was insufficient evidence for a chargeable
offense.

11. Public Blames ZANU-PF And Sanctions For Dire State Of
Economy... A national survey by the Mass Public Opinion Institute
in December, 2007 revealed greater pessimism over the state of the
economy than a year ago and a marked increase in the number of
respondents blaming ZANU-PF for the decline, especially in rural
areas. Urban respondents, on the other hand, blamed "sanctions"
firstly. Remittances played a significant role in paying for food
and healthcare, especially among the aged. The survey found little
support for the government's price blitz but a slight majority of
respondents favored further indigenization of the economy. See
Harare 324. On that note:

--------------------------
Economic and Business News
--------------------------
12. The Indigenization and Economic Empowerment Bill Apparently In
Effect... The Indigenization and Economic Empowerment Bill, which
was officially published after being signed by President Robert
Mugabe last month but without implementing regulations, was
republished today with a statement that it is now in effect. There
are still no implementing regulations, but Mugabe can be expected to
state at tomorrow's independence day celebration that legislation is
now in effect that will give Zimbabweans control over their
resources, and he will undoubtedly use this as campaign propaganda
in a runoff election.

13. Tax Man Backs Down... Following an outcry over punitive new tax
brackets, the GOZ backed down this week and lowered the tax rate on
top earners from 60% back down to 47.5%. In addition, it announced
that income tax would kick in at Z$1 billion (25% rate) annual
earnings, not at the Z$300 million threshold that had triggered a
widespread outcry from labor unions and workers. The minimum wage
for most sectors is Z$2.5 billion (roughly US$33 gross pay/month).

14. Heavy Industry Down... Sales volume at Astra Industries Ltd, an
engineering and construction firm that also manufactures protective
coatings, paints, and steel parts, declined 34% in the six months to
end-February 2008 compared to the same period last year. The steel

HARARE 00000345 004 OF 004


division, however, had 15% higher sales volume mainly due to
GOZ-subsidized farm mechanization projects.
Apex Corporation of Zimbabwe last week announced plans to open a
foundry, its core business, in Kitwe, Zambia. CEO George Khumala
said demand was strong in Zambia and he expected the Zambian
operation to spur exports to the DRC and Malawi. Driving the
decision were the local difficulties in procuring raw materials
(especially pig iron and coke) and electricity, waning local demand,
and the challenge of retaining labor in Zimbabwe. Khumala also
bemoaned the punitive rate of forex retention by the Reserve Bank
and its stranglehold on the company's own earned foreign exchange.

15. Cotton Season Underway... Premature boll splitting of a
sizeable portion of the cotton crop has propelled the cotton season
off to an earlier start than expected, according to Cargill Cotton
Zimbabwe Managing Director Priscilla Mutembwa. She said it could
also result in a reduction in the crop size below the
300,000-320,000 MT that Cargill had anticipated. Seed cotton
production was 260,000 MT in 2006 and 270,000 MT in 2007. Cotton is
a major forex earner for Zimbabwe.

16. The High Cost Of Travel (Or Of Emigration)... The Herald
reported a jump in the fee for an ordinary adult passport from Z$5
million to Z$500 million, while a passport processed within three
working days now costs Z$800 million. The Registrar General's
office, however, told an embassy consular assistant who called
anonymously to confirm the new fees that the cost of an adult
passport issued within five working was now US$220.

MCGEE

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