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Cablegate: Zimbabwe - Agoa Eligibility Review

VZCZCXRO9361
RR RUEHBZ RUEHDU RUEHJO RUEHMR RUEHRN
DE RUEHSB #0903/01 2801401
ZNR UUUUU ZZH
R 061401Z OCT 08
FM AMEMBASSY HARARE
TO RUEHC/SECSTATE WASHDC 3530
INFO RUCNSAD/SOUTHERN AF DEVELOPMENT COMMUNITY COLLECTIVE

UNCLAS SECTION 01 OF 03 HARARE 000903

AF/S FOR B. WALCH
AF/EPS FOR ANN BREITER AND GABRIELLE MALLORY
USTR FOR CONNIE HAMILTON

SIPDIS

E.O.12958: N/A
TAGS: ETRD ECON XA ZI
SUBJECT: ZIMBABWE - AGOA ELIGIBILITY REVIEW

REF: STATE 85086

TPSC SUBCOMMITTEE ON AGOA IMPLEMENTATION COUNTRY ELIGIBILITY
RECOMMENDATIONS 2007
STATE SUBMISSIONS

Country: Zimbabwe
Current AGOA Status: Ineligible

Country Background Summary: The political and economic situation
deteriorated further in Zimbabwe in 2008 as special interest groups
dictated policy at the expense of the greater good. Opposition
parties won more votes than the ruling party in March parliamentary
elections, but no candidate achieved a majority in the presidential
election, necessitating a run-off. Opposition parties boycotted the
run-off election in June as a result of intimidation and violence
against the electorate by the ruling party which made a fair
election impossible. The economy contracted further under draconian
price controls and misguided monetary and fiscal policies, and more
economic activity shifted into the informal sector.

Comments on Eligibility Requirements

I. Market-Based Economy

A. Major Strengths Identified

None

B. Major Issues/Problems Identified

- As a result of gross government mismanagement of the economy, the
role of markets weakened steadily and the country's economic outlook
is bleak.
- The World Economic Forum's Global Competitiveness Report 2007-2008
ranked Zimbabwe 129 out of 131 countries studied.
- A persistent and widening budget deficit and a highly
accommodating monetary policy stance led to the prevailing
hyper-inflationary environment. The official exchange rate was
infrequently adjusted and consequently heavily overvalued in real
terms, depressing exports and stimulating activity on the parallel
market.
- The Reserve Bank of Zimbabwe was also deeply engaged in
loss-making quasi-fiscal activity. Financing this activity fuelled
money supply growth and inflation. Negative real interest rates
distorted savings and investment patterns.
- Unemployment in the formal sector is estimated at over 90
percent.
- The continued deterioration of macroeconomic conditions, lack of
rule of law, high foreign exchange surrender requirements on
exporters, a widening parallel market exchange rate premium,
shortage of foreign exchange, and pervasive shortages of food, fuel,
electric power, and other basics rendered Zimbabwe's investment
climate highly unattractive.

II. Political Reforms/Rule of Law/Anticorruption

A. Major Strengths Identified

None

B. Major Issues/Problems Identified

- The GOZ continued its attacks on political pluralism through the
use of repressive legislation to prevent freedom of assembly and
demonstrations against the government.
- The ruling party also has proposed legislation dealing with the
interception of communications and counterterrorism that legal
experts caution could be used against regime opponents.
- Politically, the opposition party operates in a climate of
intimidation and repression. Security forces harass, beat, and
arbitrarily arrest perceived opposition supporters.
- The constitution prohibits arbitrary arrest and detention;
however, some laws effectively weakened this prohibition, and
security forces arbitrarily arrested and detained persons
repeatedly.
- Prolonged pretrial detention remained a problem.
- In politically sensitive cases, the judiciary, especially the
higher courts, showed indications of being politically influenced or
intimidated. Political elites frequently ignore adverse court
holdings.
- Official corruption is widespread. The Government of Zimbabwe
prosecutes corruption selectively, focusing on individuals who have
fallen out of favor with the ruling party.
- The government's allocation of resources, such as new homes and
formerly white-owned commercial farms, has been nontransparent and
driven by patronage.

III. Poverty Reduction

HARARE 00000903 002 OF 003

A. Major Strengths Identified

None

B. Major Problems/Issues Identified

- National assessments show that the yield of the staple maize crop
from the 2008 harvest was the lowest on record. As a result, it was
estimated that two million Zimbabweans were food insecure from July
through September 2008 in both urban and rural areas.
- The GOZ banned NGO field operations for nearly three months in
2008, which prevented the distribution of food to vulnerable
people.
- The distribution system of the Grain Making Board (GMB), which has
a statutory monopoly on all imported grains, is extremely
inefficient, leaving many parts of the country without consistent
access to grains. Moreover, the GMB is subject to political
manipulation at the local level.
- All in all, current trends indicate that poverty is on the
increase in both rural and urban areas.

IV. Labor, Child Labor, and Human Rights

A. Major Strengths Identified

- The GOZ has ratified both ILO Conventions 182 and 138.
- The law prohibits forced or compulsory labor, including by
children.
- Under the Labor Relations Amendment Act (LRAA), child labor is
punishable by a fine and two years imprisonment.
- In October 2007, the GOZ enacted the Domestic Violence Act, which
criminalizes domestic violence and provides enhanced protection for
victims of abuse.

B. Major Issues/Problems Identified

- Despite official recognition of worker rights, the government
continued to exert heavy pressure on labor unions - limiting their
freedom of association and the right to organize.
- Unions were denied routine meetings and necessary consultations
with constituents under the draconian Protection of Order and
Security Act (POSA).
- Forced child labor occurred and child labor remains a problem due
to worsening macroeconomic conditions.
- The government's human rights record remained very poor.
- Although the constitution prohibits such practices, security
forces tortured, raped, and otherwise abused persons. There
continued to be reports that police used excessive force in
apprehending and detaining criminal suspects.
- In moves that echoed the 2005 Operation Restore Order, which
destroyed the homes and businesses of over 700,000 people, the GOZ
continued to periodically demolish informal businesses and evict
people from their homes.
- Prison conditions remained harsh and life threatening.
- The constitution provides for freedom of expression, but
legislation limits this freedom in the "interest of defense, public
safety, public order, state economic interests, public morality, and
public health." Independent newspapers face unwieldy tax burdens and
intimidation.
- The constitution provides for freedom of assembly; however, the
government restricted this right in practice through laws such as
POSA, which many legal experts believed were unconstitutional. POSA
does not require permits for meetings or processions, but it
requires that organizers notify the police of their intentions to
hold a public gathering seven days in advance. Failure to do so
results in criminal prosecution as well as civil liability.
- Although the constitution provides for freedom of association, the
government restricted this right in practice for political
organizations. In 2008, Zimbabwe was one of two countries the ILO's
Applications and Standard Committee criticized regarding
implementation of ILO Convention 87, which deals with freedom of
association.
- Domestic violence against women, especially wife beating,
continued to be a serious problem and crossed racial, ethnic, and
economic lines.
- The government's commitment to children's rights and welfare
remained weak. The government has a National Plan of Action for
Orphans and Vulnerable Children (NPA for OVC), which was completed
in 2004 but has not been fully implemented. It is designed to ensure
that orphans and vulnerable children are able to access education,
food, health services, and birth registration and are protected from
abuse and exploitation, but activities set out in the plan were
insufficiently funded.
- There are no laws to prohibit specifically trafficking in persons.
There were reports that the country was both a point of origin and a
transit path for trafficking.

V. International Terrorism/U.S. National Security

HARARE 00000903 003 OF 003

A. Major Strengths Identified

- While our relationship with the GOZ is severely strained, the
government does not engage in actions specifically meant to support
international terrorism or undermine U.S. national security; it has
also been cooperative on counter-terrorism issues.

B. Major Issues/Problems Identified

- Most senior GOZ officials regularly attempt to undermine U.S.
foreign policy interests through false attacks at high-profile
international fora.

DHANANI

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