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Cablegate: Zim Notes 12-19-2008

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RR RUEHBZ RUEHDU RUEHJO RUEHMR RUEHRN
DE RUEHSB #1136/01 3541102
ZNR UUUUU ZZH
R 191102Z DEC 08
FM AMEMBASSY HARARE
TO RUEHC/SECSTATE WASHDC 3848
RUCNSAD/SOUTHERN AF DEVELOPMENT COMMUNITY COLLECTIVE
RUEHUJA/AMEMBASSY ABUJA 2147
RUEHAR/AMEMBASSY ACCRA 2508
RUEHDS/AMEMBASSY ADDIS ABABA 2631
RUEHRL/AMEMBASSY BERLIN 1124
RUEHBY/AMEMBASSY CANBERRA 1900
RUEHDK/AMEMBASSY DAKAR 2255
RUEHKM/AMEMBASSY KAMPALA 2680
RUEHNR/AMEMBASSY NAIROBI 5108
RHEHAAA/NSC WASHDC
RHMFISS/EUCOM POLAD VAIHINGEN GE
RUEHGV/USMISSION GENEVA 1781
RUZEJAA/JAC MOLESWORTH RAF MOLESWORTH UK
RHEFDIA/DIA WASHDC
RUEAIIA/CIA WASHDC

UNCLAS SECTION 01 OF 04 HARARE 001136

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

SIPDIS

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

SUBJECT: ZIM NOTES 12-19-2008

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

This is the last edition of Zim Notes in 2008. We will resume
publication on January 2. Topics of the week:

- Constitutional Amendment 19 Gazetted...
- Allegations of MDC Paramilitary Camps in Botswana Refuted...
- PF ZAPU Reemerges...
- New Attorney General Appointed...
- Shiri Survives Alleged Assassination Attempt...
- Auto Accident Injures Prominent War Vet...
- Still No UNSC Response to Zim Crisis...
- Cholera continues to ravage communities...
- Aussies roll out new sanctions...
- More Abductions and Journalists Threatened...
- Tear Gas in the City...
- Passports Elusive, Pricey, Easy to Forge...
- Back to the Billions...
- Stockbrokers Get Ultimatum...
- $900 Million Ought to Do It...
- ZESA Exporting Electricity to Namibia?
- ZINWA to Start Billing Some Customers in Forex...

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

Parallel rate for cash rose seven-fold for the second consecutive
week to Z$500,000,000:US$1.

Check rate is steady at Z$10 quadrillion:US$1 against inter-bank
average of Z$925,825:US$1.

Bread on the parallel market rose six-fold to Z$500,000,000.

Sugar rose fifteen-fold to Z$1,500,000/2kg.

Petrol and diesel rose six-fold to Z$100,000,000/liter.

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

3. Constitutional Amendment 19 Gazetted... On Saturday December
13, constitutional amendment 19 was gazetted (published officially,
beginning a 30-day period for public comment), without the consent
and agreement of the MDC. The MDC-T vowed to not allow Parliament
to vote on the amendment until outstanding issues, including the
allocation of ministries and governorships, are resolved.
Nonetheless, South African President Kgalema Motlanthe told a press
conference on December 17 that he hoped an inclusive government
would be in place "this week." MDC Secretary General Tendai Biti
responded that he didn't know what Motlanthe was talking about. See
Harare 1127.

4. Allegations of MDC Paramilitary Camps in Botswana Refuted...
SADC confirmed receiving a GOZ dossier on alleged paramilitary camps
in Botswana. The MDC has strongly denied the existence of such
camps and accused ZANU-PF of using the allegations as a trumped-up
pretext for initiating a new violence and intimidation campaign
against it. Botswana has also derided the GOZ claims. On
Wednesday, South African President Motlanthe told journalists he and
SADC disbelieved the allegations.

5. PF ZAPU Reemerges... PF ZAPU held a conference in Bulawayo last

HARARE 00001136 002 OF 004


weekend and announced the end of the 1987 Unity Accord. The party
elected one-time ZANU-PF Home Affairs Minister Dumiso Dabengwa as
its interim president pending a congress next year. ZANU-PF, which
still maintains the allegiance of vice president Joseph Msika and
ZANU-PF chair John Nkomo, rejected the split and stated that the
ZANU-ZAPU alliance continues. Dabengwa has indicated that PF ZAPU
will support the MDC in its opposition to ZANU-PF. Ironically,
Zimbabweans will still "celebrate" National Unity Day on December
22; the holiday was established in 1997 to commemorate the 1987
accord. See Harare 1131.

6. New Attorney General Appointed... President Mugabe appointed
Johannes Tomana as Zimbabwe's new Attorney General. The MDC
immediately criticized the appointment as evidence of bad faith on
the part of ZANU-PF in implementing the September Global Political
Agreement. According to the Agreement, all senior government
appointments should be made as a result of agreement between the
President and Prime Minister. The new Attorney General replaces
acting AG Justice Bharat Patel who assumed his interim position
after the dismissal of Sobusa Gula-Ndebele, who reportedly performed
his job in an independent manner. Tomana has been a strong ZANU-PF
supporter. As deputy attorney general, he advised the government in
the run-up to the June election that it was legal to detain MDC
officials and supporters without trial, and he ordered magistrates
to deny bail in all political violence cases.

7. Shiri Survives Alleged Assassination Attempt... Air Force
Marshall Perence Shiri was reportedly shot in the arm when his
vehicle was attacked on December 13 near his farm in Shamva. The
Government described the alleged assassination attempt as evidence
of a "build-up of terror attacks targeting high-profile persons."
Three Bindura MDC councilors have allegedly been arrested in
connection with the shooting, although none have been charged or
granted access to legal council. See Harare 1128.

8. Auto Accident Injures Prominent War Vet... According to The
Herald, Vice President of the Zimbabwe National Liberation War
Veterans' Association, Joseph Chinotimba, was involved in a car
accident in Harare last week and is recovering at a private
hospital. Chinotimba helped orchestrate the infamous farm grabs
that began in 2001. Police are investigating the cause of the
accident.

9. Still No UNSC Response to Zim Crisis... In a UN Security
Council meeting on December 15, the UNSC reviewed a written report
by The Elders and heard from UNSG Ban Ki-Moon on the continuing
humanitarian crisis. South Africa and others blocked efforts by the
U.S. and UK to ramp-up the UN response to the Zimbabwe crisis.

10. Cholera continues to ravage communities... The USG has pledged
an additional US$6.2 million and sent a disaster response team to
Zimbabwe. Over three-quarters of the districts in the country are
now affected by cholera. The ongoing epidemic has resulted in 20,896
suspected cases and 1,123 deaths since August, according to the
United Nations. The World Health Organization continues to plan on
a worst-case scenario of 60,000 cases. To date, more than 5% of
those afflicted have died from the disease. See Harare 1129 and
1134.

11. Aussies roll out new sanctions... Australia added 75 new
Zimbabweans to its financial and travel sanctions list this week.
The list of names is not yet public. See Canberra 1285.

12. More Abductions and Journalists Threatened... Zimbabwean
journalist Shadrack Andrisson Manyere was abducted on December 13
and is still missing. Lawyers petitioned the high court to order
the police to investigate his whereabouts. Just hours after his
abduction, police went to his home and took his computer. Police

HARARE 00001136 003 OF 004


continue to deny holding him. The MDC published a list on Thursday
of 30 abductees since October 29, with the most recent picked up on
December 17. Post is working to confirm the details of these
abductions. In a column on December 13, Nathaniel Manheru (the pen
name of Mugabe's spokesman George Charamba) wrote a vitriolic
article that threatened to expel journalists and accused several by
name of working with an American "lady intelligence officer" -
evidence of an alleged spying plot. See Harare 1121.

13. Tear Gas in the City... Riot police used tear gas to break up
two protest marches this week in Harare. Tear gas was also used to
break up a brawl at ZANU-PF headquarters in the wee hours of
December 16 when a fight broke out between supporters of Mining
Minister Amos Midzi and Deputy Transportation Minister Hubert
Nyanhongo. The two were vying for ZANU-PF chairmanship for Harare
Province. Nyanhongo won the contested election. See Harare 1132.

14. Passports Elusive, Pricey, Easy to Forge... With Zimbabwean
passport fees skyrocketing (currently US $650 for urgent
processing), more and more are turning to illegal vendors to obtain
the valued documents. See Harare 1133.

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

15. Back to the Billions... Approximately five months after the
Reserve Bank of Zimbabwe (RBZ) lopped 10 zeroes off its currency,
the RBZ unveiled new one, five, and 10 billion Zimbabwean dollar
notes on December 19. The new denominations followed an increase in
cash withdrawal limits from Z$500 million once a week to Z$10
billion once a month when presenting a pay-slip. Economic analysts
estimate that due to the 27 new denominations introduced in 2008,
money supply growth could be nearing 500 million percent annually.

16. Stockbrokers Get Ultimatum... The Zimbabwean securities
commission gave stockbrokers until December 19 to provide the
government with audited statements of their net worth before
allowing them to resume trading activities. Defaulting stockbrokers
may be shut down or placed under judicial management. The Zimbabwe
Stock Exchange has been closed for nearly three weeks following
central bank allegations of rampant unfunded trading on the
exchange.

17. $900 Million Ought to Do It... Mishek Sibanda, chief secretary
to President Mugabe, announced on December 16 that it would cost US
$900 million to revive Zimbabwe's battered manufacturing sector.
The plan was crafted by a team of technocrats who estimated that
even as capacity has fallen, current manufacturing utilization rates
are only around 10 percent.

18. ZESA Exporting Electricity to Namibia? Namibian press reported
that as part of a deal between Namibia's state-owned energy utility
NamPower and Zimbabwean utility company ZESA, ZESA had increased its
electricity exports to Namibia in August from 120 to 150 megawatts.
The exports are in lieu of repaying a US $40 million loan from
NamPower to refurbish the Hwange plant.

19. ZINWA to Start Billing Some Customers in Forex... In a first
for a state-owned utility, the water utility company ZINWA has been
granted a license to bill export businesses and NGOs in foreign
currency. Bills to non-exporting corporations and the mass consumer
market will remain in Zimbabwe dollars. The license is intended to
allow ZINWA to purchase essential supplies such as water treatment
chemicals and repair pipes that leak as much as half of all pumped
water.

------------------

HARARE 00001136 004 OF 004


Quotes of the Week
------------------

20. "Just as I was being dragged to the UN Security Council to be
put on the sanctions list, I was offered a job by the World Bank as
senior vice president with the full blessings of none other than
George Bush himself" - Gideon Gono, claiming that Ambassador McGee
offered him the job during an August 2008 meeting, in his new book,
Zimbabwe's Casino Economy: Extraordinary Measures for Extraordinary
Challenges (available locally for a mere US$42).

21. "The call for an election is an honest submission that ZANU-PF
is an illegal regime, [and] the June 27 election was illegal. For
the first time, we [applaud] ZANU-PF for acknowledging that they are
not legitimate." - MDC Secretary General Tendai Biti on December
17.


DHANANI

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