VZCZCXRO4675
PP RUEHDU RUEHJO RUEHMR
DE RUEHSB #0310/01 0691244
ZNR UUUUU ZZH
P 101244Z MAR 06
FM AMEMBASSY HARARE
TO RUEHC/SECSTATE WASHDC PRIORITY 9738
INFO RUCNSAD/SOUTHERN AFRICAN DEVELOPMENT COMMUNITY
RUEHUJA/AMEMBASSY ABUJA 1150
RUEHAR/AMEMBASSY ACCRA 0982
RUEHDS/AMEMBASSY ADDIS ABABA 1154
RUEHBY/AMEMBASSY CANBERRA 0414
RUEHDK/AMEMBASSY DAKAR 0774
RUEHKM/AMEMBASSY KAMPALA 1208
RUEHNR/AMEMBASSY NAIROBI 3552
RUEHFR/AMEMBASSY PARIS 0980
RUEHRO/AMEMBASSY ROME 1608
RUEHBS/USEU BRUSSELS
RUEHGV/USMISSION GENEVA 0553
RHEHNSC/NSC WASHDC
RUCNDT/USMISSION USUN NEW YORK 1365
RUEKJCS/JOINT STAFF WASHDC
RUEHC/DEPT OF LABOR WASHDC
RUEATRS/DEPT OF TREASURY WASHDC
RUEKDIA/DIA WASHDC//DHO-7//
RUCPDOC/DEPT OF COMMERCE WASHDC
RUFOADA/JAC MOLESWORTH RAF MOLESWORTH UK//DOOC/ECMO/CC/DAO/DOB/DOI//
RUEPGBA/CDR USEUCOM INTEL VAIHINGEN GE//ECJ23-CH/ECJ5M//

UNCLAS SECTION 01 OF 03 HARARE 000310 
 
SIPDIS 
 
SIPDIS 
 
AF/S FOR B. NEULING 
NSC FOR SENIOR AFRICA DIRECTOR C. COURVILLE 
STATE PASS TO USAID FOR M. COPSON AND E.LOKEN 
TREASURY FOR J. RALYEA AND B. CUSHMAN 
COMMERCE FOR BECKY ERKUL 
 
E.O. 12958: N/A 
TAGS: ASEC ECON EFIN ELAB ETRD PGOV PHUM ZI
SUBJECT: ZIMBABWE - INPUT FOR 2006 REPORT ON AGOA 
 
REF: STATE 026707 
 
¶1. Zimbabwe continues to fall short of AGOA,s qualifying 
criteria.  Post,s input for the annual AGOA report (reftel) 
follows: 
 
------- 
Economy 
------- 
 
¶2.  The government has an interventionist approach to the 
economy and Zimbabwe is generally unwelcoming to foreign 
investment.  Private sector confidence is waning in the face 
of poor governance and the erosion of property rights.  The 
government has sanctioned seizures of privately owned 
agricultural land without compensation, and changed the 
constitution in 2005 to transfer ownership of expropriated 
agricultural land to the government without recourse to the 
courts.  Subsidies provided by the Reserve Bank of Zimbabwe 
(RBZ) in the form of cheap or even free foreign exchange for 
fuel, grain, and electricity are the main driver of 
inflation, which surpassed officially 600 percent in January 
2006 (but unofficially was well in excess of 1000 percent). 
There was no progress in 2005 in privatizing parastatals, and 
the number and size of price controls is unabated. 
 
¶3.  The RBZ continues to control exchange rates at 
unrealistic levels, ensuring scarcity of legitimate forex and 
fuelling a parallel market in which the value of the Zimbabwe 
dollar continued to plummet in 2006.  Among numerous barriers 
to trade are exchange requirements for exporters and high 
duties for importers.  Zimbabwe,s IMF voting rights remain 
suspended and the GOZ has shown no political will to 
implement the comprehensive package of macroeconomic policies 
and structural reforms required for their restoration and to 
become eligible for IMF financing. 
-------- 
Politics 
--------- 
 
¶4.  The ruling ZANU-PF party applies increasingly repressive 
tactics to perpetuate its rule.  The opposition and civil 
society operate in an environment of state-inspired 
intimidation.  Following a parliamentary election in March 
2005, which international observers deemed neither free nor 
fair, the ruling party now controls enough seats to change 
the country's constitution at will.  The next national 
elections are due in 2008, but the government has publicly 
contemplated extending President Mugabe,s term until 2010. 
 
¶5.  Government efforts to influence and intimidate the 
judiciary have seriously eroded the rule of law.  The 
government and ruling elite have ignored numerous adverse 
judgments, including especially with respect to the taking of 
private property, and senior officials have reiterated 
publicly that court orders that are not politically 
acceptable to the ruling party will not be honored. 
 
¶6.  There is widespread corruption in government, including 
the ongoing redistribution of expropriated commercial farms 
to ruling party elite, privileged access to limited foreign 
exchange and fuel, and the distribution of new housing plots 
to mostly civil servants, security forces, and ruling party 
supporters.  In 2005 the government enacted an 
Anti-Corruption Act, which established a government-appointed 
 
HARARE 00000310  002 OF 003 
 
 
Anti-Corruption Commission; however, it includes no members 
from civil society or the private sector.  The government 
also established the Ministry of State Enterprises, 
Anti-Monopolies, and Anti-Corruption to investigate and raise 
awareness about corruption, but government officials and 
police lack sufficient political backing to effectively 
investigate the corruption.  Instead the government 
prosecutes individuals selectively, focusing on those who 
have fallen out of favor with the ruling party and ignoring 
transgressions by favored elite. 
 
----------------- 
Poverty Reduction 
----------------- 
 
¶7.  The government maintains several programs that ostensibly 
provide food or basic services to the poor.  However, 
implementation of these programs is often influenced by 
politics, with areas represented by the opposition 
disadvantaged.    Moreover, the programs had minimal effect 
compared to the general thrust of the government,s economic 
policies, which have caused most Zimbabweans to grow 
progressively poorer over the past six years.  The 
government,s Operation Murambatsvina, or &Drive out the 
Trash,8 destroyed the homes and livelihoods of hundreds of 
thousands of Zimbabweans in 2005.  Human development 
indicators that were once among the best in sub-Saharan 
Africa have deteriorated sharply and Zimbabwe now lies in the 
bottom 30 of 177 countries in the world.  Zimbabwe has not 
finalized a Poverty Reduction Strategy Paper. 
 
------------------ 
Human Rights/Labor 
------------------ 
 
¶8.  The government's human rights record is among the worst 
in the world.  Operation Murambatsvina was the most serious 
of many violations in 2005.  In its aftermath, the government 
compounded the suffering by blocking the efforts of NGOs to 
provide emergency relief. 
 
¶9.  Security forces selectively harass, beat, and arbitrarily 
arrest opposition supporters and critics within human rights 
organizations, the media, and organized labor.  The 
government has strengthened laws restricting freedom of 
assembly, speech, and press. 
 
¶10.  The government is a signatory to ILO conventions 29 and 
105 and conventions protecting worker rights, although the 
world body recently designated Zimbabwe as a "notorious 
country" for its continued attempts to limit workers' right 
to organize and hold labor union meetings.  The government 
has stepped-up harassment of the Zimbabwe Congress of Trade 
Unions (ZCTU) and its leadership, and threatened to eliminate 
the ZCTU.  It has taken steps to marginalize the traditional 
unions and the formal labor dispute resolution mechanism. 
 
¶11.  The growing rate of unemployment has reduced the number 
of children employed in the formal sector, but informal child 
employment has increased as more children work to fill the 
income gap left by ill, unemployed, or deceased relatives. 
The minimum age for light work, other than apprenticeship or 
work associated with vocational education, is 15 years.  The 
government has ratified ILO conventions 138 and 182.  There 
is no compulsory education, and the government's commitment 
 
HARARE 00000310  003 OF 003 
 
 
to children's rights and welfare is weak. 
 
DELL