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RHEFDIA/DIA WASHDC

UNCLAS SECTION 01 OF 04 HARARE 000184 
 
SIPDIS 
 
AF/S FOR S.HILL 
ADDIS ABABA FOR USAU 
ADDIS ABABA FOR ACSS 
NSC FOR SENIOR AFRICA DIRECTOR B.PITTMAN 
TREASURY FOR J.RALYEA AND T.RAND 
STATE PASS TO USAID FOR L.DOBBINS AND E.LOKEN 
COMMERCE FOR BECKY ERKUL 
 
SIPDIS 
 
E.O.12958: N/A 
TAGS: PGOV PREL ASEC PHUM ECON ZI
 
SUBJECT: Zim Notes, March 7, 2008 
 
 
¶1.  The Embassy Harare Political/Economic Section began producing 
Zim Notes in July, 2007 to present a perspective on current events 
in Zimbabwe.  Suggestions are always welcome. If you would like to 
receive Zim Notes by email, as well, please contact Frances Chisholm 
at chisholmfm@state.gov. Distribution is restricted to U.S. 
government employees. 
 
¶2. Price Movements-Exchange Rate and Selected products: 
Parallel rate for cash: ZW$25million:US$1; bank transfer rate jumped 
to: Z$38-40million; official rate: ZW$$30,000:US$1 
Sugar soared to Z$28million/2kg vs. controlled price of 
Z$8million/2kg 
Cooking oil climbed to Z$38million/750ml vs. controlled price of 
Z$9.3million/750ml 
Petrol and diesel inched up to Z$32million/liter vs. controlled 
price of Z$60,000/liter 
 
----------------------------- 
On the Political/Social Front 
----------------------------- 
 
¶3.  Makoni Launches Campaign...  Simba Makoni launched his campaign 
at a rally in Bulawayo March 1, reportedly attended by about 10,000 
people.  At the rally, Dumisa Dabengwa, a ZANU-PF Politiburo member 
and former liberation fighter and lieutenant to Joshua Nkomo, became 
the first high-ranking ZANU-PF officials to defect publicly to 
Makoni.  His move away from the ruling party threatens to destroy 
the Unity Accord signed by ZANU-PF and Nkomo's PF-ZAPU in 1987 that 
united the two liberation movements and ended a period of 
post-independence unrest.  See Harare 175. 
 
¶4.  Mugabe Has Narrow Lead In Public Opinion Poll...  A sampling of 
1000 prospective voters in a poll conducted by the Mass Public 
Opinion Institute of Zimbabwe showed President Robert Mugabe with 30 
percent support and challengers Morgan Tsvangirai and Simba Makoni 
with 28 percent and 12 percent respectively.  Thirty percent 
declined to indicate a preference.  The poll was conducted between 
February 22 and 26 (before Dabengwa endorsed Makoni) and covered all 
provinces with the exception of Mashonaland Central.  Accurate 
polling is difficult in Zimbabwe and Makoni's popularity may be 
understated in the survey.  Again, see Harare 175. 
 
¶5.  Through The Looking Glass In Harare...  On March 6, Foreign 
Minister Mumbengegwi briefed heads of mission from western countries 
on developments related to March 29 elections, beginning with the 
ZANU-PF decision in February 2007 to harmonize presidential, 
legislative and local elections, and extending up to the planned 
announcement of results.  The Minister predicted that the Zimbabwe 
Election Commission would complete its tabulation swiftly and report 
results within 12-24 hours of the closing of polls.  Mumbengegwi's 
remarks were a paean to Zimbabwean democracy: 
     Resident diplomats must be "the first to agree" that 
     Zimbabwe is a "star performer" on human rights. 
    "No one can honestly argue that the political playing 
     field is uneven." 
     The Mbeki process was a "complete success." 
     In Zimbabwe "we never, ever ambush the opposition." 
    "All the concerns expressed by the opposition have been 
     addressed to their full satisfaction." 
     With Zimbabwe's electoral practices, "there is no 
     chance of rigging." 
    "We always have peace and tranquility after our 
     elections because the people have confidence in the 
     process." 
 
¶6.  Stunned, the two dozen diplomats present did not join in when 
MFA staff applauded the Minister.  The only question for him 
concerned the identity of foreign election observation missions 
invited by the Ministry; Mumbengegwi replied that 14 organizations 
 
HARARE 00000184  002 OF 004 
 
 
had been invited on the basis of reciprocity and impartiality; he 
ignored the request to identify them. 
 
¶7.  Election Observers: The Herald reported March 7 that all 13 SADC 
states have been invited to observe the election, along with 
Senegal, Algeria, Egypt, Kenya, Nigeria, Ghana, Libya, Uganda, 
Ethiopia and Sudan, plus China, India, Malaysia, Indonesia and Iran, 
Brazil, Jamaica, Venezuela and Nicaragua, the African Union, COMESA, 
NAM, ECOWAS, the Pan African Parliament, the Economic Community of 
Central African States and the East African Community.  Among the 
invited sub-regional organizations are the ACP states, the 
Association of South East Asian Nations, MAGREB Union, Community of 
Portuguese Language Countries and the Inter-Governmental Authority 
on Development.  The December 12 Movement is the only Liberation 
Movement invited. Diplomats accredited to Zimbabwe may also 
observe. 
 
¶8.  GOZ Press Goes on Attack...The government mouthpiece The Herald 
carried on Thursday and repeated Friday a series of full-page 
attacks on the MDC, Simba Makoni, and the U.S. and UK this week, 
portraying the opposition candidates as puppets of the West.  One 
page carried a reproduction of a London Citigroup invitation to meet 
Makoni advisor Nkosana Moyo for a fundraising lunch.  Another 
reproduced U.S. Executive Order 13288 extending targeted sanctions 
under the headline "SANCTIONS ARE REAL-In case you do not know, this 
is what George Bush did to your country only this Tuesday, 4th March 
2008."  The bottom of the page admonished "VOTE ZANU PF to punish 
and forever silence puppet sanctions-mongers."  A third page 
referenced a possible UK ban on the Zimbabwean cricket team visiting 
England this summer:  "They tell you sanctions are 'smart,' 
'targeted' or even non-existent."  Below pictures of four renowned 
Zimbabwean athletes (two white and two black), the text continues, 
"These sports people and ordinary Zimbabweans will tell you they are 
not."   Again, the ad ends with a call to "VOTE ZANU PF to defeat 
puppets, Bush, Brown, and their sanctions." 
 
¶9.  State Broadcaster Says It's Ready To Provide Fair & Balanced 
Election Coverage...  In radio and television news bulletins on 
March 6 that exclusively featured ZANU PF campaign rallies, Zimbabwe 
Broadcasting Corporation (ZBC) CEO Henry Muradzikwa said ZBC, the 
sole legal national public broadcaster, has a mandate to ensure that 
all political players are given a platform to inform the electorate 
on their manifestos and other political programs, and ZBC will 
afford contesting candidates and parties equal and fair access to 
radio and television. 
 
¶10.  Simba Goes High Tech...  Presidential contender Simba Makoni 
has established a website: 
http://www.simbamakoni.co.zw or http://www.smakoni.com 
 
¶11.  More White Farmers To Join SADC Tribunal Challenge...  A group 
of 70 white farmers will file a joint application at the Southern 
African Development Community (SADC) Tribunal in Windhoek 
challenging the seizure of their farms by the GOZ.  The Tribunal 
ruled in December that the government should stop evicting William 
Campbell from his farm pending determination of the legality of 
Zimbabwe's fast-track land reform; the Tribunal is expected to hear 
Campbell's challenge on March 26.  A ruling declaring land reform 
illegal would have far reaching consequences, opening the floodgates 
to thousands of damage claims by dispossessed white farmers. 
Furthermore, and as importantly, such a ruling would set a 
significant precedent, possibly triggering a spate of similar cases 
from other aggrieved farmers in the SADC region. 
 
¶12.  Zim Activist Scores Another Award...  Amnesty International USA 
will honor Betty Makoni, director of Girl Child Network (GCN), with 
an award for her work as a defender of women and girls' rights.  The 
former school teacher from the high-density Harare suburb of 
Chitungwiza has been an active and critical voice for the rights of 
 
HARARE 00000184  003 OF 004 
 
 
girls and young women in Zimbabwe - and around the world.  Since its 
inception in 1998 as a club of nine high school girls, GCN has grown 
into a network of 500 girls' clubs in 49 of Zimbabwe's 58 districts 
that serves 30,000 girls, raises community awareness, and lobbies 
the government to protect the rights of the girl child.  Makoni's 
courage and tenacity in the face of death threats, intimidation and 
arrests has helped dismantle the link between culture and violence 
against girls in Zimbabwe. 
 
¶13.  Diarrheal Disease On The Rise...  Among the confirmed cholera 
figures presented at this week's Inter-Agency Standing Committee 
(IASC) Coordination Meeting on Health were 20 deaths and 162 cases 
alone in the Mudzi District of Mashonaland East near the Mozambique 
border.  Ten further fatalities were reported in three other areas. 
Deteriorating sanitation conditions and inadequate supply of clean 
water are contributing significantly to the rise of diarrheal 
disease, and the formal healthcare system is, in many locations, 
unable to respond satisfactorily to the situation.  USAID's Office 
of Foreign Disaster Assistance (OFDA) has supported 
prevention-focused water, sanitation, and hygiene initiatives 
throughout the country since late 2007, and contingency supplies 
from this program are now being deployed and utilized in several 
affected areas.  A coordinated effort emerging from the IASC is 
responding adequately to the situation. 
 
-------------------------- 
Economic and Business News 
-------------------------- 
¶14.  GOZ Report Confirms Maize Deficit...  In a First Round Crop 
Assessment Report, a joint team from the Ministry of Agriculture, 
Operation Maguta, the Famine Early Warning Systems Network 
(FEWSNet), the Food and Agriculture Organization (FAO) and the 
Meteorological Office concluded that persistent rains, a general 
shortage of fertilizer, late planting, inadequate fuel supplies, low 
maize prices and late grain payments would all factor into a smaller 
crop than expected this year, forcing Zimbabwe, once again, to 
import food.  Only 14% of the maize crop was planted early; 60% of 
the crop was planted by communal farmers and 3% by large-scale 
commercial farmers.  The fertilizer industry supplied only 7% of the 
targeted amount of basal fertilizer needed and 10% of the required 
top dressing.  Of the major crops, ground nuts appear to be having 
the best season with 50% more area planted than planned and the crop 
in generally fair to good condition.  A follow-on assessment will 
calculate crop yield estimates. 
¶15.   German Printer Filling Soaring Demand For Banknotes...  The 
Sunday Times of London reported that German printer Giesecke & 
Devrient is supplying the GOZ with Z$170 trillion/week worth of 
banknotes (about US$7 million/week at the street rate), "bankrolling 
the regime," in the words of one local banker.   See Harare 162. 
¶16.  *Nevertheless, Zim Dollar's Decline Slows...  The pace of 
depreciation of the local currency on the parallel market slowed 
somewhat this week as cash shortages re-emerged.  The demand for 
cash appears to be outstripping supply as inflation soared above 
300,000% in February by some private sector estimates.  The cash 
rate has held fairly steady for the last three days at around Z$25 
million:US$, while the bank transfer rate fell more sharply from 
Z$31 million:US$ on Monday to Z$38-40 million today, reflecting the 
growing cash shortage.  In addition, the Reserve Bank of Zimbabwe 
(RBZ) appears to be less active in the market, adding to the decline 
in demand for foreign exchange. 
 
¶17.  Stock Market Soars...  The Zimbabwe Stock Exchange scaled new 
heights this week with most counters registering significant gains, 
underpinned by surpluses on the money market, lack of profitable 
alternative investments, and rising inflation, given the prevailing 
high money supply growth.  Market capitalization surpassed Z$100 
quadrillion (US$2.5 billion) and the benchmark industrial index is 
up 310% since early January notwithstanding some recent profit 
taking. 
 
HARARE 00000184  004 OF 004 
 
 
 
¶18.  Hotel Group To Expand...  Leading local hotel group Zimsun 
Leisure with 22 hotels, lodges and casinos throughout Zimbabwe, 
announced plans to build three more hotels in Harare, a five-star 
hotel in Beitbridge and new hotels in Mutare and Nyanga.   With its 
sights set on becoming Africa's biggest hotel operator, Zimsun is 
rebranding to the name Africasun.  The tourism sector is widely 
believed to be best poised of all sectors for a fast turnaround 
"when things come right." 
 
¶19.  But, For Now, Zimbabwe Earns Low Ranking On Travel & Tourism 
Competitiveness Index...  The World Economic Forum's Travel & 
Tourism Competitiveness Report 2008 ranked Zimbabwe 117th out of 130 
countries reviewed.  It ranked Zimbabwe at the absolute bottom of 
the heap in the availability of qualified labor, which we find 
exaggerated, and it placed the country favorably on price 
competitiveness, which we find odd in light of the industry's steep 
non-resident rates and highly unfavorable official exchange rate. 
 
¶20.  Barclays Expands Branches/Retail Customers...  Barclays opened 
11 new branches (buying 8 of the properties) in 2007 bringing the 
total number of branches to 38, and expects to continue expanding 
aggressively in 2008.  Its retail customer base rose 54% in 2007 
from 119,000 to 183,000.  Analysts commented that the bank is 
poising itself to crank up earnings quickly "when the environment is 
conducive." 
 
MCGEE