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Cablegate: Zim Notes 5-16-2008

VZCZCXRO6064
RR RUEHBZ RUEHDU RUEHJO RUEHMR RUEHRN
DE RUEHSB #0440/01 1371032
ZNR UUUUU ZZH
R 161032Z MAY 08
FM AMEMBASSY HARARE
TO RUEHC/SECSTATE WASHDC 2908
RUCNSAD/SOUTHERN AF DEVELOPMENT COMMUNITY COLLECTIVE
RUEHUJA/AMEMBASSY ABUJA 1962
RUEHAR/AMEMBASSY ACCRA 1978
RUEHDS/AMEMBASSY ADDIS ABABA 2099
RUEHRL/AMEMBASSY BERLIN 0648
RUEHBY/AMEMBASSY CANBERRA 1376
RUEHDK/AMEMBASSY DAKAR 1733
RUEHKM/AMEMBASSY KAMPALA 2155
RUEHNR/AMEMBASSY NAIROBI 4586
RHEHAAA/NSC WASHDC
RHMFISS/EUCOM POLAD VAIHINGEN GE
RUEHGV/USMISSION GENEVA 1239
RUZEJAA/JAC MOLESWORTH RAF MOLESWORTH UK
RHEFDIA/DIA WASHDC
RUEAIIA/CIA WASHDC

UNCLAS SECTION 01 OF 03 HARARE 000440

AF/S FOR S.HILL
ADDIS ABABA FOR USAU
ADDIS ABABA FOR ACSS
NSC FOR SENIOR AFRICA DIRECTOR B.PITTMAN
TREASURY FOR D.PETERS 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 EAGR EFIN ZI

SUBJECT: ZIM NOTES 5-16-2008

-------------
1. SUMMARY
-------------

Topics of the week:

- Moving Toward Presidential Runoff Date
- Ambassador Highlights Violence
- Police Storm Anglican Church During Communion
- Let Me See Your "Movement Permit"
- Labor Leaders Still Detained
- Zimbabwe Ranks 186th Of 195 Countries In Press Freedom
- Hackers Make Political Statements
- Zimbabwe Makes Arrears Payment To AfDB
- Official Rate Of Inflation On The Up
- New Z$500 Million Note
- Zimbabwe Temporarily Removes Duty On Basic Commodities
- USDA Reports Dismal Maize Crop
- Volumes Down But Outlook Up At Delta

------------------------------
Price Movements-Exchange Rate
and Selected products
------------------------------

2. Parallel rate for cash diverged at ZW$275 million:US$1 from
inter-bank average of Z$250 million:US$1
Bank transfer rate: Z$320 million; official rate: ZW$$30,000:US$1

Sugar rose to Z$500 million/2kg vs. controlled price of Z$8
million/2kg

Cooking oil is steady at Z$700 million/750ml vs. controlled price of
Z$9.3 million/750ml

Petrol and diesel rose to Z$560million/liter vs. controlled price of
Z$60,000/liter

-----------------------------
On the Political/Social Front
-----------------------------

3. Moving Toward Presidential Runoff Date... Invoking powers of
the Electoral Act, the Zimbabwe Electoral Commission (ZEC) announced
this week that the presidential runoff election will be held within
90 days of May 2-the date on which ZEC announced the presidential
election results. This means that the runoff must be held on or
before July 31, 2008. The government-controlled The Herald
announced today that an actual date would be set within the next
day.

4. Ambassador Highlights Violence... Over the last week the
Ambassador publicly highlighted the ongoing ZANU-PF-directed
campaign of violence-the most significant crisis facing Zimbabwe
today. He visited a local hospital where approximately 40 victims
were being treated, wrote a letter to The Herald decrying the
violence (it was published on May 12), and visited a torture camp
and rural hospitals on May 13. Demonstrating that it has felt the
effects of this high-profile campaign, the Ministry of Foreign
Affairs summoned the Ambassador on May 14 and presented him with a
diplomatic note accusing him of interfering in Zimbabwe's internal
affairs. See Harare 432.

5. Police Storm Anglican Church During Communion... On May 11,
officers entered the Anglican cathedral in Harare and beat
parishioners as they lined up to receive communion; it was the third
consecutive week of disrupted services presided over by the popular

HARARE 00000440 002 OF 003


Rev. Paul Gwese. The disruptions stem from the ongoing dispute
between ZANU-PF stalwart Bishop Kunonga and the more popular Bishop
Bakare. Allegedly, Bishop Kunonga has labeled Bishop Bakare's
followers as members of the MDC. An embassy FSN was injured in the
melee.

6. Let Me See Your "Movement Permit"... Residents in
violence-ridden areas of Mudzi South and Mutoko South in Mashonaland
East province are now required to carry a "movement permit" to leave
or re-enter their rural areas. Movement in these areas is tightly
controlled according to witnesses who gave evidence to Embassy
officials. Details contained in the permit include Name, ID Number,
Ward, Village and ZANU-PF membership card sireal (sic) number.
Samples of movement permits that we saw are signed by war veterans
and include their names and national ID numbers.

7. Labor Leaders Still Detained... Zimbabwe Congress of Trade
Union (ZCTU) leaders Wellington Chibebe and Lovemore Matombo
continue to await their bail hearing after their May 6 arrest for
"inciting people to rise against the government and reporting
falsehood about people being killed." The AFL-CIO President
condemned the arrests this week as a violation of international
labor law.

8. Zimbabwe Ranks 186th Of 195 Countries In Press Freedom... In
Freedom House's annual Freedom of the Press Report, Zimbabwe ranked
near the very bottom of the list-worse than China and Iran. Its
score of 89 (of a possible 100) was based on the government's
continued hostility towards journalists and independent media
outlets and the legal framework that inhibits press freedom. The
report specifically decried Zimbabwean law that prohibits
publication of "inaccurate" information, restrictions on independent
newspapers, the jamming of foreign radio signals, and violence and
death threats against journalists.

9. Hackers Make Political Statements... All headlines on one day's
electronic edition of The Herald this week were switched to
"Gukurahundi," which means "wipe out the chaff." Gukurahundi was
the name of the campaign waged by the Mugabe regime in the mid 1980s
against perceived opposition in the Matabeleland and Midlands
provinces. It cost an estimated 20,000 lives. This week's Financial
Gazette also got hacked. Headlines led with "Mugabe Must Go! Free
Zim!"

---------------------------
Economic and Business News
---------------------------

10. Zimbabwe Makes Arrears Payment To AfDB... According to a
revised press release posted on the African Development Bank (AfDB)
website on May 12 and confirmed by a source within the RBZ, Zimbabwe
paid US$500,000 to the African Development Bank and US$150,000 to
the African Development Fund on April 14, 2008. An earlier AfDB
press release, strongly refuted by the RBZ, had put the payment at
US$700 million. Zimbabwe is about US$ 1.4 billion in arrears to the
International Financial Institutions.

11. Official Rate Of Inflation On The Up... According to an
unnamed Ministry of Finance official quoted in today's The
Independent, the official year-on-year rate of inflation rose from
165,000% in February to 355,000% in March 2008. The official is
also said to have hinted that the figure could change as the Central
Statistical Office (CSO) was still trying to come up with the right
consumer basket. Notwithstanding this, credible private sources
estimate the rate of inflation to be close to one million percent.
The price of The Herald, on the other hand, increased to Z$200
million this week, up from Z$10,000 a year ago, which works out to a

HARARE 00000440 003 OF 003


rate of nearly two million percent.

12. New Z$500 Million Note... The Reserve Bank of Zimbabwe (RBZ)
introduced yet another new bearer check, the Z$500 million note
(about US$2) on May 15, 2008, hardly a week after introducing Z$100
million and Z$250 million notes. The RBZ also announced the
introduction on May 20 of new "agro checks" in denominations of Z$5
billion, Z$25 billion and Z$50 billion to be used by agro-based
enterprises for the purchase of goods and services by farmers. Like
the current bearer checks, the agro checks are set to expire in
December 2008. Hyperinflation will most likely have pushed most of
these notes out of the market by then, as has been the case with
bearer checks issued over the last two years.

13. Zimbabwe Temporarily Removes Duty On Basic Commodities... In
what appears to be an attempt to lure the public to vote ZANU-PF as
the economy sinks further, the GOZ suspended duty on some imported
basic commodities for personal use over the next 90 days. Only last
month, duty became payable in forex at the much more expensive
inter-bank exchange rate. The temporary removal of duty was
ostensibly designed to boost supply while capacity utilization
improves following foreign exchange reforms.

14. USDA Reports Dismal Maize Crop... 2007/08 maize production was
about 470,000 MT, or only 27% of Zimbabwe's national requirement,
according to a quarterly update on grain and feed in Zimbabwe,
published by the USDA FAS Global Agriculture Information Network.
Zimbabwe will need to import over 1.2 million MT of maize to cover
the anticipated deficit.

15. Volumes Down But Outlook Up At Delta... Brewing giant Delta
Corporation reported beverage volumes down 24% over the previous
reporting year as disposable income shrank and supplies of maize,
barley malt, electricity and bottle caps thinned out. However, this
investor favorite, regarded as a "blue chip" among Zimbabwe's
publicly listed companies, enjoys no gearing, a strong cash flow and
solid brands, leading analysts to recommend a long-term buy.

MCGEE

© Scoop Media

 
 
 
 
 
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