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Cablegate: Hard Labor: Efforts Towards a Living Wage,

This record is a partial extract of the original cable. The full text of the original cable is not available.

UNCLAS SECTION 01 OF 02 HARARE 000550

SIPDIS

STATE FOR AF/S, DRL
NSC FOR SENIOR AFRICA DIRECTOR JFRAZER

E. O. 12958: N/A
TAGS: ECON ELAB PGOV ZI
SUBJECT: HARD LABOR: EFFORTS TOWARDS A LIVING WAGE,
REALISTIC PRICES, AND ECONOMIC RECOVERY

Ref: Harare 267

SENSITIVE BUT UNCLASSIFIED. NOT FOR INTERNET POSTING.

1. (SBU) Summary. Laboff met with labor representatives to
touch base on issues including the ongoing Tripartite
Negotiating Forum (TNF) talks and the proposed National
Economic Recovery Plan (NERP). The TNF sub-committees are
currently negotiating minimum wages, with the ball in the
employers' court -- specific wages were proposed by labor
and were reported back to employers for their response, with
counter-proposals expected sometime this week. Although
there seems to be consensus within the TNF that price
controls are ineffective, nobody has assumed the burden of
announcing their elimination. Finally, the Zimbabwe
Congress of Trade Unions (ZCTU) continues to participate in
the TNF process in an effort to exhaust all possible
remedies before endorsing any call for mass action.
However, once this process proves fruitless, those elements
of the ZCTU who would support a call for mass action believe
they could mobilize large-scale support. End summary.

------------------------------------
Twin Pillars: Higher Wages and ...
------------------------------------

2. (SBU) The negotiations regarding minimum wages continue,
and labor has floated a proposal for three levels (in the
general range of $20,000 for agricultural workers, $40,000
for agro-industrial workers, and $60,000 for industrial
workers), which has not yet been approved. Reportedly, the
employers -- concerned about the expenses -- are discussing
this in terms of viability, and are expected to come back
with a counter-proposal sometime this week. If there is
consensus among the social partners, the proposals will then
go to the Cabinet for approval. The GOZ, of course, may
make a unilateral declaration that the employers' counter-
proposal is acceptable, regardless of the position taken by
labor. However, labor is hopeful that agreement can be
reached, since there seems to be a combined will to reach
consensus on minimum wages, with only the actual amount
outstanding.

-----------------
... Higher Prices
-----------------

3. (SBU) Regarding price controls, the unexpected report is
that all three "social partners" -- including the GOZ --
recognize that price controls are neither working nor even
necessary. However, they are too populist a measure for the
GOZ to publicly abandon. This is one of the few public
efforts being made as a concession to the "struggling
masses," and nobody will accept the unpopular duty of making
the suggestion to abandon controls outright. There is
widespread admission, within the TNF, that price controls
(if they are maintained) must be tied to the cost of inputs,
including the cost of labor. The labor representatives
suggested that a TNF review board will be tasked with the
responsibility of reviewing controlled prices on a regular
basis, and raising them as necessary.

4. (SBU) Labor is dismissive of any possibility that NERP
(without addressing the underlying economic discrepancies)
will ease the economic strains on the average worker. The
Zimbabwe Congress of Trade Unions (ZCTU) has previously
stated that only radical economic changes will have any
effect on the economy, and thus on the situation of workers.
Labor is equally uncertain that the TNF will adequately
address the needs of workers. Despite this, the ZCTU has
suggested that its participation in TNF process is necessary
before it can call -- on an official level -- for support of
any mass action against the GOZ. Since up to one-third of
the ZCTU constituency is pro-Zanu-PF, this faction will not
support mass action until all other avenues of dialogue have
proven fruitless. Of course, many segments of the ZCTU are
idealistically aligned with the opposition, and some will
support calls for mass action regardless of their origin.

-------
Comment
-------

5. (SBU) Comment: The TNF process continues to chug along,
although well behind schedule. Originally, the wage freeze
was set to run from January through June 2003. There is
still no consensus on the level at which wages should be
frozen, and it is already mid-March. While the original
proposal from labor groups suggested that price controls be
abandoned, it is more likely that the final product will
simply re-package the retreat from price controls under a
new name,just as devaluation has become "export support
mechanism" in GOZ-speak. Some GOZ officials have already
begun to rename controls as "price management." At this
point, there is working-level agreement on finding a living
minimum wage and attempting to tie consumer prices to the
real cost of inputs, including labor. Whether these goals
can be reached remains to be seen.

6. (SBU) Labor also seems committed to playing out the
role of committed "social partner" before taking on the role
of opposition sympathizer. Given the many direct and
sometimes personal attacks on the ZCTU by the GOZ over the
past year, the labor organization seems determined to follow
each step in sequence. Although it remains wary of the
final product, labor seems committed to participating in the
process. Negotiating with an arguably illegitimate
government has its price, however. As with the Commercial
Farmers Union (CFU) (reftel), GOZ spin-masters now portray
ZCTU as having abandoned MDC and foreign interests, falling
in line behind President Mugabe. We have no doubt that the
GOZ uses these negotiations in its often successful attempts
to convince other African governments that the country's
political crisis is over.

Sullivan

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