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Cablegate: Zim Notes 01-15-2010

VZCZCXRO6451
RR RUEHBZ RUEHDU RUEHJO RUEHMR RUEHRN
DE RUEHSB #0023/01 0190704
ZNR UUUUU ZZH
R 190704Z JAN 10
FM AMEMBASSY HARARE
TO RUEHC/SECSTATE WASHDC 5313
INFO RUCNSAD/SOUTHERN AF DEVELOPMENT COMMUNITY COLLECTIVE
RUEHAR/AMEMBASSY ACCRA 3262
RUEHDS/AMEMBASSY ADDIS ABABA 3373
RUEHRL/AMEMBASSY BERLIN 1796
RUEHBY/AMEMBASSY CANBERRA 2630
RUEHDK/AMEMBASSY DAKAR 3000
RUEHKM/AMEMBASSY KAMPALA 0061
RUEHNR/AMEMBASSY NAIROBI 0063
RUEHGV/USMISSION GENEVA 2531
RUEAIIA/CIA WASHDC
RUEATRS/DEPT OF TREASURY WASHDC
RHEFDIA/DIA WASHDC
RHMFISS/EUCOM POLAD VAIHINGEN GE
RUZEJAA/JAC MOLESWORTH RAF MOLESWORTH UK
RHEHAAA/NSC WASHDC

UNCLAS SECTION 01 OF 03 HARARE 000023

AF/S FOR B. WALCH
ADDIS ABABA FOR USAU
ADDIS ABABA FOR ACSS
NSC FOR SENIOR AFRICA DIRECTOR
STATE PASS TO USAID FOR L.DOBBINS AND J. HARMON
COMMERCE FOR ROBERT TELCHIN

SIPDIS

E.O.12958: N/A
TAGS: PGOV PREL ASEC PHUM ECON ZI
SUBJECT: ZIM NOTES 01-15-2010

HARARE 00000023 001.2 OF 003


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

SADC Meets in Maputo...
Constitutional Process to Resume after Long Delay...
MDC-T Ministers Named in Corruption Probe...
Rash of Farm Invasions in Rusape...
AG Tomana Impeaches Own Witness...
Hitschmann's Lawyer Mahlangu Acquitted...
Students Arrested While Protesting Fees...
Schools Re-open Amid Higher Fees and Threat of Strikes...
Banks Start Lending a Little Longer...
Skills Shortage Jeopardizes Recovery...
Farm Invasions Threaten Tobacco Recovery...
Reserve Bank of Zimbabwe on the Edge...

---------------------------------
On the Political and Social Front
----------------------------------

2. SADC Meets in Maputo...SADC leaders in Maputo for the
inauguration of President Guebuza are meeting to discuss Zimbabwe
and Madagascar. President Mugabe is in attendance. The MDC was
unaware that Zimbabwe would be discussed and no representatives are
present. According to South African President Zuma's office (in a
press statement) the SADC Troika president will brief other SADC
leaders on Zimbabwe. We have no indication that substantive issues
will be raised, but it is concerning that the MDC was unaware that
Zimbabwe would be discussed.

3. Constitutional Process to Resume after Long Delay... After a
six-month hiatus in the constitutional process, on January 11
Minister of Constitutional and Parliamentary Affairs Eric Matinenga
hosted the launch of the consultative phase of Zimbabwe's effort to
draft a new constitution. Aside from minor disturbances, the event
-- attended by 1,000 delegates -- was a success and followed by a
three-day delegate training course. In the next couple of weeks the
thematic committee members will begin 65 days of outreach throughout
Zimbabwe eliciting the public's opinion on 17 constitutional themes.
Political analysts warn that the outreach effort has the potential
to ignite violence and intimidation in ZANU-PF rural strongholds.
See Harare 22.

4. MDC-T Ministers Named in Corruption Probe... According to the
Zimbabwe Independent, citing a senior party source, co- Home Affairs
Minister Giles Mutsekwa, Energy and Power Development Minister Elias
Mudzuri, and Mines Deputy Minister Murisi Zwizwai are facing
internal corruption investigations by the party. Mutsekwa and
Zwizwai have been widely criticized since assuming their posts:
Mutsekwa for working too closely with the ZANU-PF co-minister of
Home Affairs and not curbing police abuses and Zwizwai for
supporting the ZANU-PF line that there has not been widespread
violence in Chiadzwa. The Office of the Prime Minister denied to us
that there was an investigation. Reacting to the Zimbabwe
Independent article, MDC spokesperson Nelson Chamisa called a press
conference today and denied any corruption investigation involving
the named ministers. It is unclear at this time whether there is
substance to the allegations or whether they represent intraparty
Qsubstance to the allegations or whether they represent intraparty
jockeying for position by disaffected MDC members.

5. Rash of Farm Invasions in Rusape... On January 12, a gang of
thugs invaded a farm in Rusape (Manicaland) owned by the South
African Smit family. The invaders tied the two
twenty-something-year-old sons to a tree and beat them before moving
on to another farm. Just last week another South African farming
family was forced to leave their farm in Rusape after a week of
harassment. Christmas morning the Finaughty family was chased off
their Rusape farm. At least four other farming families in Rusape
have been notified that their farms will be seized in the coming

HARARE 00000023 002 OF 003


days. Most of the families are of South African origin, but have
received no protection from the recently signed bilateral investment
pact between South Africa and Zimbabwe. AG

6. Tomana Impeaches Own Witness... The trial of Roy Bennett
resumed on January 12 with AG Johannes Tomana telling the court that
the testimony of his star witness Michael Peter Hitschmann was
damaging the state case because it was inconsistent with statements
made to authorities after his arrest. Hitschmann asked the court to
accept his verbal testimony as the truth; he said his post-arrest
statements were made under torture-which he described. Tomana
admitted that without Hitschmann's torture-induced confessions
linking him with Bennett, the state's quest to convict Bennett was a
lost cause. The trial was adjourned to January 18 when Judge Bhunu
is expected to rule on the admissibility of Hitschmann's post-arrest
statements.

7. Hitschmann's Lawyer Mahlangu Acquitted... AG Johannes Tomana
suffered an embarrassment on January 14 when Magistrate Archie
Wochionga acquitted Histchmann's lawyer Mordecai Mahlangu of
obstruction of justice charges. Wochionga ruled that the facts
before him did not constitute a crime. Tomana ordered Mahlangu's
arrest last year after the latter addressed a letter to the AG
advising that Hitschmann had no evidence against Bennett.

8. Students Arrested While Protesting Fees... Zimbabwe National
Students Union (ZINASU) President Joshua Chinyere, Secretary General
Grant Tabvurei and five other Bindura University students were
arrested on January 14 after staging a demonstration over high
examination fees. Bindura University authorities have since
postponed the examinations due to disruptions caused by the
demonstrators. The arrested students are currently being detained at
Bindura Central Police station waiting to appear before court within
48 hours after their arrest. Student groups described Zimbabwe's
public universities fees of $400-$500 per semester as "extortion"
considering civil servant salaries are around $150 per month.

9. Schools Re-open Amid Higher Fees and Threat of Strikes...
Primary and secondary schools opened for a new school year on
Tuesday, with fees and levies up an average of 50 percent in USD
terms from the first term of 2009. On Wednesday, civil servants,
including teachers, told the government they would go on strike in
14 days unless salaries are increased to US$600 per month, or four
times their current wages. The government rejected the proposal and
offered US$122 for the lowest paid worker and US$236 for the highest
paid. Although teachers, at the urging of their unions, went back to
school, many are refusing to teach until the salary dispute is
resolved.

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

10. Banks Start Lending a Little Longer... As business confidence
improves and bank deposits increase, two Zimbabwe Stock
Qimproves and bank deposits increase, two Zimbabwe Stock
Exchange-listed banks have started extending 180-day loans instead
of the 90-day loans that are generally the norm. According to First
Bank Limited, the increase in the tenure of the loans is in response
to the needs of industry as well as the observed increase in total
deposits from around US$200 million in February 2009 to about US$1.2
billion as of December 2009. Such loans attract interest rates of
between 25 and 30 percent per year depending on the project being
funded. The Confederation of Zimbabwe Industries believes that even
six-month loans are inadequate for the needs of businesses.

11. Skills Shortage Jeopardizes Recovery... According to a report
by the South African-based Center for Development and Enterprise,
Zimbabwe's nascent economic recovery is threatened by a shortage of
skills in a number of disciplines. Zimbabwe's economic meltdown of
recent years resulted in a massive outmigration of skilled labor to

HARARE 00000023 003.3 OF 003


neighboring countries. Most companies are reportedly recruiting
skilled labor from abroad at higher costs in order to attract the
requisite skills.

12. Farm Invasions Threaten Tobacco Recovery... The Zimbabwe
Tobacco Association is casting doubts on Zimbabwe's ability to
achieve the targeted tobacco output of 65 million kilograms this
year primarily because of the on-going invasions of the remaining
white-owned farms, especially in the Rusape district of Manicaland
province. According to a report in the Zimbabwe Tobacco Today
publication, about a third of the 50 farms currently under threat
are major tobacco producers.

13. Reserve Bank of Zimbabwe on the Edge... A report in The
Independent says that the central bank is on the brink of collapse,
weighed down by huge debts and high operational costs arising from
over-employment associated with the period of quasi-fiscal
activities. Because the RBZ can no longer act as lender of last
resort, it is now looking to the Ministry of Finance for funds. We
expect Finance Minister Biti will insist on major reforms at the RBZ
before he cuts any checks.

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

14. "Shut up and stick to business!" -- ZANU-PF co-chair of the
Parliamentary Select Committee on the Constitution, Paul Mangwana,
to war veterans' leader Joseph Chinotimba after veterans attempted
to disrupt a meeting launching the outreach phase of the
constitutional drafting process.


RAY

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