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Cablegate: Zimbabwe - Agoa Eligibility Review

VZCZCXRO8600
PP RUEHBZ RUEHDU RUEHJO RUEHMR RUEHRN
DE RUEHSB #0814/01 2861415
ZNR UUUUU ZZH
P 131415Z OCT 09
FM AMEMBASSY HARARE
TO RUEHC/SECSTATE WASHDC PRIORITY 5002
INFO RUCNSAD/SOUTHERN AF DEVELOPMENT COMMUNITY COLLECTIVE
RUEHAR/AMEMBASSY ACCRA 3080
RUEHDS/AMEMBASSY ADDIS ABABA 3192
RUEHRL/AMEMBASSY BERLIN 1621
RUEHBY/AMEMBASSY CANBERRA 2455
RUEHDK/AMEMBASSY DAKAR 2824
RUEHKM/AMEMBASSY KAMPALA 3240
RUEHNR/AMEMBASSY NAIROBI 5687
RUCPDOC/DEPT OF COMMERCE WASHDC
RUEATRS/DEPT OF TREASURY WASHDC
RUEAIIA/CIA WASHDC
RUZEJAA/JAC MOLESWORTH RAF MOLESWORTH UK
RHMFISS/EUCOM POLAD VAIHINGEN GE
RHEFDIA/DIA WASHDC
RUEHGV/USMISSION GENEVA 2374
RHEHAAA/NSC WASHDC

UNCLAS SECTION 01 OF 04 HARARE 000814

SIPDIS

AF/S FOR B.WALCH
AF/EPS FOR G.MALLORY
DRL FOR N.WILETT
ADDIS ABABA FOR USAU
ADDIS ABABA FOR ACSS
STATE PASS TO USAID FOR J.HARMON AND L.DOBBINS
NSC FOR M.GAVIN
TREASURY FOR A.IERONIMO
COMMERCE FOR K.BOYD
USTR FOR C.HAMILTON

E.O. 12958: N/A
TAGS: PGOV PREL ASEC PHUM ZI
SUBJECT: ZIMBABWE - AGOA ELIGIBILITY REVIEW

REF: STATE 97769

TPSC SUBCOMMITTEE ON AGOA IMPLEMENTATION COUNTRY ELIGIBILITY
RECOMMENDATIONS
2009 STATE SUBMISSIONS

Country: Zimbabwe
Current AGOA Status: Ineligible

Country Background Summary:

Economic conditions improved in Zimbabwe in 2009 after
opposition parties agreed to join a transitional government
that will revise the constitution and prepare for new
elections. Hyperinflation compelled the GOZ to withdraw the
Zimbabwe dollar from circulation in February. This move and
additional liberalization measures introduced by the
transitional government have boosted the economy, which
should grow this year for the first time in more than a
decade. But President Mugabe's ZANU-PF party retains control
over key GOZ institutions, including the judiciary, the
police, the intelligence service, and the army. These
institutions continue to be involved in human rights abuses.

Comments on Eligibility Requirements

I. Market-Based Economy

A. Major Strengths Identified

With the withdrawal of the Zimbabwe dollar, there are no
longer exchange controls. Tariff cuts have eased
cross-border trade. Though Zimbabwe's physical
infrastructure has deteriorated in recent years, it is still
superior to that of most African countries. The banking
system is sophisticated by regional standards, though many
banks are in need of recapitalization due to the effects of
hyperinflation. Zimbabwe's private sector is remarkably
resilient. Many firms would expand operations if more
financing were available.


B. Major Issues/Problems Identified


-- The political stalemate between ZANU-PF and the
reform-minded Movement for Democratic Change (MDC) leaves key
economic policy questions unresolved.

-- Property rights are insecure following a decade of
government-sanctioned farm invasions. Businesses are
uncertain about how the government may choose to enforce an
"indigenization" law.

-- The World Economic Forum's Global Competitiveness Report
for 2009-2010 ranks Zimbabwe second-to-last out of 133
countries studied.

-- The government lacks the financial resources to restore
basic services. Revenue collapsed during the 2007-08
hyperinflation. It is recovering slowly but still falls far
short of GOZ requirements. The GOZ has defaulted on external
debts and cannot borrow.

-- The central bank has been compromised by years of

HARARE 00000814 002 OF 004


political intervention. It is in need of recapitalization,
reform, and new leadership.

II. Political Reforms, Rule of Law, and Anti-corruption

A. Major Strengths Identified

Formation of the transitional government in February has
created new opportunities for restoration of democratic rule.

B. Major Issues and Problems Identified

-- The GOZ continues to discourage political pluralism by
limiting citizens' rights to freedom of assembly, freedom of
speech, and due process.

-- Security forces harass, beat, and arbitrarily arrest
ZANU-PF opponents, including MDC legislators.

-- The constitution prohibits arbitrary arrest and detention;
however, security forces arbitrarily arrest, detain, and
torture persons.

-- Prolonged pretrial detention remains a problem.

-- In politically sensitive cases, the GOZ can influence or
intimidate judges. Members of the political elite can ignore
adverse court rulings.

-- Corruption is widespread. The GOZ 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 confiscated commercial farms, is not transparent
and is driven by patronage.

III. Poverty Reduction

A. Major Strengths Identified

None

B. Major Problems/Issues Identified

-- President Mugabe's "fast-track land reforms," which have
allowed the violent seizure and uncompensated confiscation of
thousands of commercial farms, have displaced hundreds of
thousands of farm workers. Many rural families have lost
their livelihoods and access to education and health care.

-- Surveys indicate that 1.6 million Zimbabweans -- at least
13 percent of the population -- will lack food security by
the end of 2009.

-- The distribution system of the GOZ's Grain Marketing
Board, which supplies seed and fertilizer to smallholders, is
underfunded and inefficient, hampering food production in
many parts of the country.

IV. Labor, Child Labor, and Human Rights

A. Major Strengths Identified

-- The GOZ has ratified both ILO Conventions 182 and 138.

HARARE 00000814 003 OF 004

-- The law prohibits forced or compulsory labor, including by
children.

-- Under the Labor Relations Amendment Act, 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,
partly through limits on freedom of association and the right
to organize. In some cases, security forces used excessive
force or torture to coerce striking workers to return to work.

-- Unions were denied routine meetings and necessary
consultations with constituents under the Protection of Order
and Security Act (POSA).

-- 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 demolish informal businesses and
evict people from their homes.

-- Prison conditions improved slightly but 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
intimidation and excessive tax burdens.

-- The constitution provides for freedom of assembly;
however, the government restricted this right in practice
through laws such as POSA, which many legal experts believe
to be unconstitutional. POSA does not require permits for
meetings or processions, but it does require 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. Because of
consistent violations of labor rights, in February the ILO
launched a Commission of Inquiry to investigate violations of
ILO Convention 87 and 98, the right to organize and bargain
collectively. Members of the Commission visited Zimbabwe in
April and August and were followed by intelligence officers
on both occasions.


HARARE 00000814 004 OF 004


-- Domestic violence against women, especially wife beating,
continued to be a serious problem and crossed racial, ethnic,
and economic lines. Although a Domestic Violence Act was
passed in 2007, few have been charged under the law.

-- 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, 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. In the
2009 Trafficking in Persons Report, the State Department
ranked Zimbabwe as Tier 3, the lowest possible ranking.

V. International Terrorism/U.S. National Security

A. Major Strengths Identified

-- While the U.S. has a severely strained bilateral
relationship with Zimbabwe, the GOZ 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.
PETTERSON

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