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Cablegate: Zim Notes 11-21-2008

VZCZCXRO7595
RR RUEHBZ RUEHDU RUEHJO RUEHMR RUEHRN
DE RUEHSB #1040/01 3290542
ZNR UUUUU ZZH
R 240542Z NOV 08
FM AMEMBASSY HARARE
TO RUEHC/SECSTATE WASHDC 3730
RUCNSAD/SOUTHERN AF DEVELOPMENT COMMUNITY COLLECTIVE
RUEHUJA/AMEMBASSY ABUJA 2129
RUEHAR/AMEMBASSY ACCRA 2457
RUEHDS/AMEMBASSY ADDIS ABABA 2575
RUEHRL/AMEMBASSY BERLIN 1075
RUEHBY/AMEMBASSY CANBERRA 1851
RUEHDK/AMEMBASSY DAKAR 2206
RUEHKM/AMEMBASSY KAMPALA 2631
RUEHNR/AMEMBASSY NAIROBI 5059
RUEHGV/USMISSION GENEVA 1723
RHEHAAA/NSC WASHDC
RHMFISS/EUCOM POLAD VAIHINGEN GE
RUZEJAA/JAC MOLESWORTH RAF MOLESWORTH UK
RHEFDIA/DIA WASHDC
RUEAIIA/CIA WASHDC

UNCLAS SECTION 01 OF 03 HARARE 001040

SIPDIS

AF/S FOR B. WALCH
ADDIS ABABA FOR USAU
ADDIS ABABA FOR ACSS
NSC FOR SENIOR AFRICA DIRECTOR B.PITTMAN
TREASURY FOR D. PETERS
STATE PASS TO USAID FOR L.DOBBINS AND E.LOKEN
COMMERCE FOR BECKY ERKUL

E.O.12958: N/A
TAGS: PGOV PREL ASEC PHUM ECON ZI
SUBJECT: ZIM NOTES 11-21-2008

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

Topics of the week:

- Still No Political Progress
- Health System Collapses
- While Cholera Crisis Continues
- Over 700 Doctors and Nurses Protest
- Biti Still Faces Treason Charges
- Tsvangirai's Travels Could Land Him in Jail
- Freedom Defenders win awards
- Reserve Bank of Zimbabwe Reads Riot Act to Zimbabwe Stock
Exchange
- Dollarization Gathers Momentum
- Old Mutual Shares Used to Secure Electricity Imports
- Foreign Currency Shops Disappoint
- Quote of the Week

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

Parallel rate for cash shot up to Z$1,000,000:US$1

Check rate is steady at Z$20 quadrillion:US$1 against inter-bank
average of Z$25,593:US$1 (NOTE: Due to the suspension of the
Real-Time Gross Settlement system by the Reserve Bank of Zimbabwe on
October 3, Post will now be reporting on the unofficial check
transfer rate that individuals and entities are using to make
non-cash payments. END NOTE.)

Bread on the parallel market tripled to Z$1,500,000

Sugar rose to Z$3,000,000/2kg

Petrol and diesel rose slightly to Z$1,200,000/liter

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

3. Still No Political Progress... In the wake of the SADC summit
last week, MDC leader Morgan Tsvangirai has been visiting European
leaders to press his case and encourage humanitarian assistance.
Meanwhile, the GOZ has drafted Constitutional Amendment 19 that will
legally reflect the terms of the September 15 signed power-sharing
agreement. Press reports revealed that a draft of the amendment has
been provided to mediator Thabo Mbeki. The MDC-T has made clear
they will not join a new government until all their concerns - that
were not deliberated at the summit - are addressed. See Harare 1037
and Harare 1034.

4. Health System Collapses... Once a model for sub-Saharan Africa,
the Zimbabwean public health system has ceased to function. All
three of Harare's public hospitals are closed, church-related
hospitals struggle to absorb patients fleeing Harare to seek care in
rural areas, and even private clinics struggle to maintain supplies
and staff. For a detailed description of the collapse, see Harare
1039.

5. While Cholera Crisis Continues... Outbreaks continue in two
Harare-area locations while a new upsurge with potentially
widespread consequences is occurring in Beitbridge, the border post
with South Africa. UNICEF reported 1,244 confirmed and 2,590
unconfirmed cases, with a total of 194 confirmed cholera deaths as
of November 18. Medecins Sans Frontieres (MSF) estimated that up to

HARARE 00001040 002 OF 003


1.4 million people are at risk if cholera continues to spread
unchecked across Zimbabwe. The humanitarian community is responding
with water, sanitation, and hygiene initiatives in outbreak areas,
but a collapsing healthcare system has lead to uncommonly high
case-fatality rates.

6. Over 700 Doctors and Nurses Protest... Hundreds of medical
professionals attempted to march from Parirenyatwa Hospital to the
Ministry of Health to present demands for medication and supplies in
hospitals and living wages for health workers on November 18.
Around 70 riot police armed with tear gas and batons arrived at the
hospital and prevented protesters from leaving the parking lot.
After several hours, riot police violently disrupted the protest,
beating some health workers; fortunately, no one was seriously
injured or arrested.

7. Biti Still Faces Treason Charges... On November 18, a court
dropped two of the four charges facing MDC Secretary General and MP
for Harare East Tendai Biti. Charges of Qinsulting the president
and Qcausing disaffection to the armed forcesQ were dropped. Biti
still faces treason charges and charges related to Qmaking
statements likely to cause public disorder.Q His next hearing will
be on December 4.

8. Tsvangirai's Travels Could Land Him In Jail... Morgan Tsvangirai
continues to travel using an Emergency Travel Document (ETD) while
he awaits a passport. Although his current ETD limits his travel to
South Africa and Swaziland, Tsvangirai made arrangements with
European leaders to travel to the EU without a passport. Now, the
Zimbabwean government is reportedly furious that the South Africans
allowed him to fly to Europe. Local press speculation is that if he
violated Zimbabwean laws he will be arrested upon his return to
Zimbabwe.


9. Freedom Defenders win awards... Zimbabwe Lawyers for Human
Rights (ZLHR) is the winner of the Rights & Democracy 2008 John
Humphrey Freedom Award in recognition of its courageous pursuit of
justice for victims of human rights abuses inside Zimbabwe. Women
of Zimbabwe Arise won Amnesty International GermanyQs Human Rights
Award. Jenni Williams and Magodonga Mahlangu, who are still on
bail, were granted permission to travel to Germany to receive the
award. In New York, Lawyer Beatrice Mtetwa received the Committee to
Protect JournalistQs Lifetime Achievement Award. Mtetwa has
represented numerous journalists, including New York Times reporter
Barry Bearak when he was arrested in Zimbabwe earlier this year.

----------------------------------
On the Economic and Business Front
----------------------------------

10. Reserve Bank of Zimbabwe (RBZ) Reads Riot Act to Zimbabwe Stock
Exchange (ZSE)... The RBZ issued a stern warning to the ZSE for its
role in processing bad checks worth up to Z$40 sextillion (US$2
million at the current check rate). The RBZ directed that anyone who
failed to settle at the end of the day would have their accounts
closed and their trading privileges revoked. Consequently, activity
on the ZSE dropped dramatically with the industrial index falling by
58.2 percent on November 19.

11. Dollarization Gathers Momentum... One of the largest fast food
chains in the country is now accepting payment for meals in fuel
coupons which are convertible into foreign currency. The food chain
joins a growing list of companies and private schools that demand
payment for goods and services in coupons. In a related development,
the state-owned Zimbabwe Newspapers Group no longer accepts personal
or bank checks for payment of subscriptions. Only bulk subscriptions
for companies are still payable in checks. However, ordinary
subscriptions are still open to those willing to pay US$10 per

HARARE 00001040 003 OF 003


month.

12. Old Mutual Shares Used to Secure Electricity Imports... The
local press reports that Old Mutual shares, which are registered on
the ZSE, the Johannesburg Stock Exchange (JSE) and the London Stock
Exchange (LSE), are being used as collateral for South African
electricity imports. The RBZ buys shares on the ZSE and transfers
them to the JSE where they are held in the pension fund of South
African utility company Eskom.

13. Foreign Currency Shops Disappoint... Early signs indicate that
the forex licenses sold to some local shops have not generated
enough foreign currency income for retailers. Consequently,
manufacturers are still not generating enough forex to improve their
low capacity utilization rates. The prices of forex-priced goods
have not come down either, while shelves dedicated to selling basic
goods (such as bread) in local currency are empty, leaving the
majority of Zimbabweans without options.

MCGEE

© Scoop Media

 
 
 
 
 
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