VZCZCXRO7361
PP RUEHBZ RUEHDU RUEHJO RUEHMR RUEHRN
DE RUEHSB #0217/01 0750937
ZNR UUUUU ZZH
P 160937Z MAR 07
FM AMEMBASSY HARARE
TO RUCNSAD/SOUTHERN AFRICAN DEVELOPMENT COMMUNITY PRIORITY
RUEHC/SECSTATE WASHDC PRIORITY 1252
INFO RUCNSAD/SOUTHERN AFRICAN DEVELOPMENT COMMUNITY
RUEHUJA/AMEMBASSY ABUJA 1518
RUEHAR/AMEMBASSY ACCRA 1376
RUEHDS/AMEMBASSY ADDIS ABABA 1522
RUEHBY/AMEMBASSY CANBERRA 0784
RUEHDK/AMEMBASSY DAKAR 1148
RUEHKM/AMEMBASSY KAMPALA 1577
RUEHNR/AMEMBASSY NAIROBI 3981
RUEHFR/AMEMBASSY PARIS 1345
RUEHRO/AMEMBASSY ROME 2005
RUEHBS/USEU BRUSSELS
RUEHGV/USMISSION GENEVA 0658
RHEHAAA/NSC WASHDC
RUCNDT/USMISSION USUN NEW YORK 1739
RUEKJCS/JOINT STAFF WASHDC
RUEHC/DEPT OF LABOR WASHDC
RUEATRS/DEPT OF TREASURY WASHDC
RHEFDIA/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 000217 
 
SIPDIS 
 
SIPDIS 
 
AF/S FOR S. HILL 
AF/EPS FOR J. POTASH 
NSC FOR SENIOR AFRICA DIRECTOR B. PITTMAN 
STATE PASS TO USAID FOR M. COPSON AND E.LOKEN 
TREASURY FOR J. RALYEA AND T.RAND 
COMMERCE FOR BECKY ERKUL 
ADDIS ABABA FOR USAU 
ADDIS ABABA FOR ACSS 
 
E.O. 12958: N/A 
TAGS: ETRD ELAB PHUM PGOV ZI
SUBJECT: ZIMBABWE - INPUT FOR 2007 PRESIDENT'S REPORT ON 
AGOA 
 
REF: STATE 22438 
 
¶1. Zimbabwe continues to fall far short of AGOA's qualifying 
criteria.  Post's input for the 2007 President's Report on 
AGOA (reftel) follows: 
 
------------------------------ 
Market Economy/Economic Reform 
------------------------------ 
 
¶2. The Zimbabwean Government (GOZ) pays lip service to 
Marxist economic principles.  Over the past 10 years the GOZ 
has increasingly used ideology to mask growing official 
corruption.  Zimbabwe has become a forbidding place to invest 
for foreigners and Zimbabweans.  Private sector confidence 
has collapsed as property rights have been seriously eroded 
and the rule of law ignored.  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. 
 
¶3. The GOZ's disastrous fiscal and monetary policies have 
also contributed to the country's economic collapse.  The IMF 
estimates the government's budget deficit at more than 50 
percent of GDP.  The A major part of the deficit is the 
result of off-budget subsidies provided by the Reserve Bank 
of Zimbabwe (RBZ) to corrupt and mismanaged parastatals.  The 
main driver of inflation, which surpassed 1700 percent 
officially in February 2007 (private sector calculations are 
nearly double that rate) is the government's profligate 
monetary policy, which is the government's only means of 
covering the deficit.  Inflation appears poised to increase 
exponentially.  The IMF predicted that inflation would hit 
5000 percent by the end of 2007, however, it may reach that 
mark before the year's mid-point. 
 
¶4. The RBZ has kept the foreign exchange rate fixed since 
July 31, 2006 despite the country's hyperinflation, 
undermining what is left of the country's export sector.  The 
scarcity of forex has fueled a parallel foreign exchange 
market in which the RBZ is the main actor.  RBZ purchases of 
forex with local currency are the main factor driving the 
accelerating fall in value of the Zimbabwean dollar, which 
also appears poised to depreciate exponentially. 
 
¶5.  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 regain eligibility for 
IMF lending.  The country has stopped servicing its large 
external debt and is falling ever further into arrears. 
 
--------------------------------------------- -- 
Political Pluralism/Rule of Law/Anti-Corruption 
--------------------------------------------- -- 
 
¶6. The government, dominated by President Robert Mugabe and 
the ruling ZANU-PF party since independence, has resorted to 
 
HARARE 00000217  002 OF 003 
 
 
brute force to perpetuate its rule.  The opposition and civil 
society operate in an environment of state-sponsored 
intimidation and violence.  In March, 2007 the government 
moved to ban all rallies and demonstrations in contravention 
of Zimbabwe's constitution.  The government used deadly force 
to break up an opposition prayer meeting subsequently 
arresting 50 opposition leaders, who were then beaten while 
in custody. 
 
¶7.  Presidential elections are scheduled for 2008.  Recent 
elections have been stolen by the government and the ruling 
ZANU-PF party, which has relied on its total control of the 
electoral machinery to perpetrate fraud.  In addition, the 
government and ruling party have heavily tilted the playing 
field against the opposition by closing independent news 
media and by manipulating the distribution of food 
assistance. 
 
¶8.  Following the 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.  Despite announcing plans to 
leave office in 2008, Mugabe and his loyalists have proposed 
amending the constitution to extend his current term until 
¶2010.  Opposition to the extension has been widespread, 
including within the ruling party.  In response, Mugabe has 
threatened to run again for a full presidential term in the 
2008 elections. 
 
¶9. Government efforts to influence and intimidate the 
judiciary have seriously eroded independence and undermined 
the rule of law.  The government and ruling elite have 
ignored numerous adverse judgments, including those related 
to the taking of private property.  Additionally, senior 
government officials and police have willfully defied court 
orders that are not politically acceptable to the ruling 
party. 
 
¶10. The corruption in government has become endemic, 
including the redistribution of expropriated commercial farms 
to the ruling party elite, privileged access to foreign 
exchange and fuel, and the distribution of new housing plots 
primarily to civil servants, security forces, and ruling 
party supporters.  The government-appointed Anti-Corruption 
Commission includes no members from civil society or the 
private sector and it has yet to register any notable 
accomplishments.  The Ministry of State Enterprises, 
Anti-Monopolies, and Anti-Corruption lacks sufficient 
political backing to carry out its anti-corruption mandate. 
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 
----------------- 
 
¶11. The government maintains several programs that ostensibly 
provide food or basic services to the poor.  However, the 
 
HARARE 00000217  003 OF 003 
 
 
programs are grossly under funded and their implementation is 
often influenced by politics, with areas represented by the 
opposition disadvantaged.  Moreover, the government's 
economic policies have caused most Zimbabweans to grow 
progressively poorer over the past seven years.  Human 
development indicators that were once among the best in 
sub-Saharan Africa have deteriorated sharply.  Zimbabweans, 
for example, now have the world's lowest life expectancy and 
face acute food shortages this year.  Zimbabwe has not 
finalized a Poverty Reduction Strategy Paper. 
 
----------------- 
Labor/Child Labor 
----------------- 
 
¶12. Zimbabwe has ratified all eight of the ILO core 
Conventions, including ILO Convention 183 on the minimum age 
and ILO Convention 182 on the worst forms of child labor. 
The government, however, lacks the commitment and resources 
necessary to effectively enforce labor standards.  Moreover, 
it frequently uses repressive laws and intimidation to limit 
workers' right to organize and hold labor union meetings. 
 
¶13.  The government has stepped-up harassment of the Zimbabwe 
Congress of Trade Unions (ZCTU) and its leadership.  In 
September 2006, for example, police arrested and severely 
beat several senior leaders of ZCTU for their role in 
planning a peaceful demonstration for better wages and 
working conditions.  The government also has taken steps to 
marginalize the traditional unions and the formal labor 
dispute resolution mechanism. 
 
¶14. The ongoing economic crisis severely impedes the 
government's ability to address its child labor problems. 
Several international donors have committed multi-year 
funding to support social programs aimed at orphans and other 
vulnerable children but the scale the assistance is 
insufficient to alleviate the problem.  Zimbabwe has, for 
instance, the highest percentage of orphans in the world. 
 
¶15.  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. 
Children work in agriculture, street vending, and as domestic 
servants.  There are reports that an increasing number of 
girls are involved in prostitution, especially in border 
towns.  Primary education is compulsory, however, it is not 
free and an increasing number of Zimbabwean children have 
fallen out of the education system.  The government's 
commitment to children's rights and welfare remains weak. 
DELL