VZCZCXRO9449
RR RUEHBZ RUEHDU RUEHJO RUEHMR RUEHRN
DE RUEHSB #0417/01 1301035
ZNR UUUUU ZZH
R 091035Z MAY 08
FM AMEMBASSY HARARE
TO RUEHC/SECSTATE WASHDC 2883
RUCNSAD/SOUTHERN AF DEVELOPMENT COMMUNITY COLLECTIVE
RUEHUJA/AMEMBASSY ABUJA 1959
RUEHAR/AMEMBASSY ACCRA 1970
RUEHDS/AMEMBASSY ADDIS ABABA 2092
RUEHRL/AMEMBASSY BERLIN 0641
RUEHBY/AMEMBASSY CANBERRA 1369
RUEHDK/AMEMBASSY DAKAR 1726
RUEHKM/AMEMBASSY KAMPALA 2148
RUEHNR/AMEMBASSY NAIROBI 4579
RHEHAAA/NSC WASHDC
RHMFISS/EUCOM POLAD VAIHINGEN GE
RUEHGV/USMISSION GENEVA 1231
RUZEJAA/JAC MOLESWORTH RAF MOLESWORTH UK
RHEFDIA/DIA WASHDC
RUEAIIA/CIA WASHDC

UNCLAS SECTION 01 OF 03 HARARE 000417 
 
AF/S FOR S.HILL 
ADDIS ABABA FOR USAU 
ADDIS ABABA FOR ACSS 
NSC FOR SENIOR AFRICA DIRECTOR B.PITTMAN 
TREASURY FOR D.PETERS AND T.RAND 
STATE PASS TO USAID FOR L.DOBBINS AND E.LOKEN 
COMMERCE FOR BECKY ERKUL 
CIA WASHDC 
 
SIPDIS 
 
E.O.12958: N/A 
TAGS: PGOV PREL ASEC PHUM ECON EAGR EFIN ZI
 
SUBJECT: ZIM NOTES May 9, 2008 
 
 
------------- 
¶1.  SUMMARY 
------------- 
Topics of the week: 
 
- It's Official, MDC Tops ZANU-PF In Presidential Poll 
- Recount Of Parliament Vote Confirms Initial Results 
- MDC Reconciliation 
- Violence Continues 
- More Violent Farm Invasions 
- Ambassador Hosts Meeting On Violence 
- SADC Investigates Violence 
- Veterans Of The Liberation War Get Six-Fold Allowance Raise 
- Editor Arrested 
- Swedish Aid Worker Declared Persona Non Grata 
- Zimbabwe Dollar In Tail Spin In Liberalized Market 
- New Higher Notes Issued 
- Kingdom Meikles Shares Tradable on Zimbabwe and London Exchanges 
 
------------------------------ 
¶2.  Price Movements-Exchange Rate 
and Selected products 
------------------------------ 
 
Parallel rate for cash converged with the inter-bank average at 
ZW$210 million:US$1; 
Bank transfer rate: Z$260 million; official rate remained at 
ZW$$30,000:US$1 
 
Sugar fell again to Z$300 million/2kg vs. controlled price of 
Z$8million/2kg 
 
Cooking oil doubled to Z$700 million/750ml vs. controlled price of 
Z$9.3million/750ml 
 
Petrol and diesel more than doubled to Z$400million/liter vs. 
controlled price of Z$60,000/liter 
 
----------------------------- 
On the Political/Social Front 
----------------------------- 
 
¶3.  It's Official, MDC Tops ZANU-PF In Presidential Poll...  After 
an unprecedented delay of over one month, the Zimbabwe Electoral 
Commission's (ZEC) Chief Elections Officer declared on May 2 that 
Morgan Tsvangirai (MDC-T) had received 47.9% of the presidential 
vote, incumbent Robert Mugabe (ZANU-PF) 43.2%, Independent Simba 
Makoni 8.3%, and Independent Langton Towungana 0.6%.  He further 
stated that as no candidate had secured a majority of the total 
votes cast, there would be a runoff election between the two top 
vote getters on a date still to be announced by the ZEC.  The 
Commission has the power to extend the period in which a runoff must 
take place.  Suggesting that the ruling party is unsure whether 
Mugabe can win a runoff, Deputy Information Minister Bright Matonga 
said it could be put off for up to a year.  Our best information is 
that a date will be announced in the next 10 days and that a runoff 
election will be set within 40 days. 
¶4.  Recount Of Parliament Vote Confirms Initial Results...  The ZEC 
announced last week there were no changes to the winners of House of 
Assembly and Senate seats as a result of the recount in 23 
constituencies.  The convening of Parliament, however, will have to 
await declaration of the winner of the presidential election as the 
new Parliament only forms once the president is sworn in. 
¶5.  MDC Reconciliation...  In the wake of an agreement by the 
Tsvangirai and Mutambara factions of the MDC to unite in support of 
Tsvangirai in a runoff election, both factions have agreed that 
Mutambara faction bigwigs Gibson Sibanda, Welshman Ncube, and Paul 
 
HARARE 00000417  002 OF 003 
 
 
Themba Nyathi will stand as united MDC candidates in three 
by-elections to be held at a date to be set by the ZEC.  All three 
MDC members ran in the March 29 elections and lost to Tsvangirai 
faction candidates.  The by-elections are necessitated by the deaths 
of candidates before the March 29 election. 
¶6.  Violence Continues...  ZANU-PF-perpetrated violence continues 
unabated, principally in rural areas.  There is documentation of 
over 700 victims who have been treated, over 200 who have been 
hospitalized and 20 deaths as a result of the violence.  Actual 
figures are much higher. 
¶7.  More Violent Farm Invasions...  The Commercial Farmers' Union 
informed us of a dozen new farm invasions in the past seven days, 
predominantly in Chegutu and Norton in Mashonaland West province, 
within an hour's drive of Harare.  In half of the cases, the farmer 
was forced off his property.  All the affected farmers in Chegutu 
had been given interim relief by the SADC Tribunal in Windhoek, but 
it is not being respected and police are providing no protection. 
 
¶8.  Ambassador Hosts Meeting On Violence...  Ambassador McGee hosted 
a meeting this week with SADC ambassadors and representatives to 
discuss the growing violence in Zimbabwe.  He showed a video, 
produced by the Solidarity Peace Trust, which contains statements of 
violence victims as well as graphic images, and led a discussion on 
ending the violence.  The Ambassador also visited a local hospital, 
along with several EU ambassadors and the Angolan ambassador, and 
talked with patients.  He has invited EU and SADC ambassadors to 
accompany him next week to rural areas where violence has occurred. 
See Harare 408. 
 
¶9.  SADC Investigates Violence...  The leader of the South African 
contingent of SADC's election observation delegation, Ambassador 
Kingsley Mamabolo, stated this week in South Africa that a runoff 
election could not credibly be held now because of the escalating 
violence.  While Mamabolo did not ascribe blame of the violence, his 
report to South African president Thabo Mbeki resulted in the 
dispatch of a team of retired South African generals to Zimbabwe to 
further investigate the violence.  The group has met with a 
cross-section of Zimbabweans, including ZANU-PF, MDC, religious 
leaders, and civil society.  Mbeki is expected in Harare today for 
talks with Mugabe. 
 
¶10.  Veterans Of The Liberation War Get Six-Fold Allowance Raise... 
The Standard reported on May 4 that the GOZ had raised war veterans' 
monthly allowances from Z$1.6 billion to Z$9 billion.  The weekly 
newspaper added, for comparison's sake, that a teacher earns Z$6.4 
billion, or roughly US$32, a month.  In this context most teachers 
aligned to the Progressive Teachers' Union of Zimbabwe are calling 
for a strike to get a minimum monthly salary of Z$18 billion. 
 
¶11.  Editor Arrested...  Davison Maruziva, editor of the independent 
The Standard newspaper, was arrested and charged with false 
statements prejudicial to the state and contempt of court.  The 
charges stem from an article written by Arthur Mutambara and 
published in The Standard last month.  It criticized Mugage and the 
government, and questioned Mugabe's right to remain in office. 
Police have indicated charges will also be brought against 
Mutambara. 
 
¶12.  Swedish Aid Worker Declared Persona Non Grata...  The GOZ this 
week notified the Swedish Cooperative Center, a Swedish 
non-governmental organization, that it was cancelling the visa and 
work permit of the Center's Country Director.  The notification came 
in the form of a letter signed by Didymus Mutasa, Minister of State 
for National Security, Lands, Land Reform and Resettlement in the 
President's Office, rather than from immigration.  No reason for the 
action was given.  The Cooperative Center is engaged in rural 
development and nutrition in Gokwe and Gweru in Midlands province. 
 
HARARE 00000417  003 OF 003 
 
 
 
-------------------------- 
Economic and Business News 
--------------------------- 
 
¶13.  Zimbabwe Dollar In Tail Spin In Liberalized Market...  The 
Zimbabwe dollar fell sharply following the partial liberalization of 
the exchange rate last week (see Harare 00416).  The week opened 
with the currency trading at Z$160 million:US$1 in the banks.  By 
mid week, the cash rate on the parallel market had begun to converge 
with the new inter-bank rate at around Z$200 million:US$1.  Given 
the prevailing high year-on-year inflation rate in April of one 
million percent for high income earners (according to a widely 
respected private sector report), and low foreign financial inflows, 
the Zimbabwe dollar is set to continue depreciating until exports 
start responding favorably to the new exchange rate and to the new 
foreign currency surrender requirements. 
 
¶14.  New Higher Notes Issued...  As inflation soars and the demand 
for transaction balances increases, the Reserve Bank introduced new 
Z$100 million (roughly 50 US cents) and Z$250 million notes this 
week, just over a month after releasing a Z$50 million note. 
 
¶15.  Kingdom Meikles Shares Tradable on Zimbabwe and London 
Exchanges... Kingdom Meikles Africa Ltd announced this week that the 
Reserve Bank had granted approval for full fungibility status to all 
of its shares registered on the London register and listed on the 
London Stock Exchange.  This means, in theory at least, that shares 
bought in local currency on the Zimbabwe Stock Exchange may be sold 
for Sterling on the London Stock Exchange and vice versa.  As with 
similarly fungible Old Mutual shares, the devil lies in the detail, 
especially in regard to obtaining Exchange Control approval from the 
Reserve Bank for the transaction. 
 
 
MCGEE