VZCZCXRO6064
RR RUEHBZ RUEHDU RUEHJO RUEHMR RUEHRN
DE RUEHSB #0440/01 1371032
ZNR UUUUU ZZH
R 161032Z MAY 08
FM AMEMBASSY HARARE
TO RUEHC/SECSTATE WASHDC 2908
RUCNSAD/SOUTHERN AF DEVELOPMENT COMMUNITY COLLECTIVE
RUEHUJA/AMEMBASSY ABUJA 1962
RUEHAR/AMEMBASSY ACCRA 1978
RUEHDS/AMEMBASSY ADDIS ABABA 2099
RUEHRL/AMEMBASSY BERLIN 0648
RUEHBY/AMEMBASSY CANBERRA 1376
RUEHDK/AMEMBASSY DAKAR 1733
RUEHKM/AMEMBASSY KAMPALA 2155
RUEHNR/AMEMBASSY NAIROBI 4586
RHEHAAA/NSC WASHDC
RHMFISS/EUCOM POLAD VAIHINGEN GE
RUEHGV/USMISSION GENEVA 1239
RUZEJAA/JAC MOLESWORTH RAF MOLESWORTH UK
RHEFDIA/DIA WASHDC
RUEAIIA/CIA WASHDC

UNCLAS SECTION 01 OF 03 HARARE 000440 
 
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 5-16-2008 
 
------------- 
¶1.  SUMMARY 
------------- 
 
Topics of the week: 
 
- Moving Toward Presidential Runoff Date 
- Ambassador Highlights Violence 
- Police Storm Anglican Church During Communion 
- Let Me See Your "Movement Permit" 
- Labor Leaders Still Detained 
- Zimbabwe Ranks 186th Of 195 Countries In Press Freedom 
- Hackers Make Political Statements 
- Zimbabwe Makes Arrears Payment To AfDB 
- Official Rate Of Inflation On The Up 
- New Z$500 Million Note 
- Zimbabwe Temporarily Removes Duty On Basic Commodities 
- USDA Reports Dismal Maize Crop 
- Volumes Down But Outlook Up At Delta 
 
------------------------------ 
Price Movements-Exchange Rate 
and Selected products 
------------------------------ 
 
¶2.  Parallel rate for cash diverged at ZW$275 million:US$1 from 
inter-bank average of Z$250 million:US$1 
Bank transfer rate: Z$320 million; official rate: ZW$$30,000:US$1 
 
Sugar rose to Z$500 million/2kg vs. controlled price of Z$8 
million/2kg 
 
Cooking oil is steady at Z$700 million/750ml vs. controlled price of 
Z$9.3 million/750ml 
 
Petrol and diesel rose to Z$560million/liter vs. controlled price of 
Z$60,000/liter 
 
----------------------------- 
On the Political/Social Front 
----------------------------- 
 
¶3.  Moving Toward Presidential Runoff Date...  Invoking powers of 
the Electoral Act, the Zimbabwe Electoral Commission (ZEC) announced 
this week that the presidential runoff election will be held within 
90 days of May 2-the date on which ZEC announced the presidential 
election results.  This means that the runoff must be held on or 
before July 31, 2008.  The government-controlled The Herald 
announced today that an actual date would be set within the next 
day. 
 
¶4.  Ambassador Highlights Violence...  Over the last week the 
Ambassador publicly highlighted the ongoing ZANU-PF-directed 
campaign of violence-the most significant crisis facing Zimbabwe 
today.  He visited a local hospital where approximately 40 victims 
were being treated, wrote a letter to The Herald decrying the 
violence (it was published on May 12), and visited a torture camp 
and rural hospitals on May 13.  Demonstrating that it has felt the 
effects of this high-profile campaign, the Ministry of Foreign 
Affairs summoned the Ambassador on May 14 and presented him with a 
diplomatic note accusing him of interfering in Zimbabwe's internal 
affairs.  See Harare 432. 
 
¶5.  Police Storm Anglican Church During Communion...  On May 11, 
officers entered the Anglican cathedral in Harare and beat 
parishioners as they lined up to receive communion; it was the third 
consecutive week of disrupted services presided over by the popular 
 
HARARE 00000440  002 OF 003 
 
 
Rev. Paul Gwese.  The disruptions stem from the ongoing dispute 
between ZANU-PF stalwart Bishop Kunonga and the more popular Bishop 
Bakare.  Allegedly, Bishop Kunonga has labeled Bishop Bakare's 
followers as members of the MDC.  An embassy FSN was injured in the 
melee. 
 
¶6.  Let Me See Your "Movement Permit"...  Residents in 
violence-ridden areas of Mudzi South and Mutoko South in Mashonaland 
East province are now required to carry a "movement permit" to leave 
or re-enter their rural areas.  Movement in these areas is tightly 
controlled according to witnesses who gave evidence to Embassy 
officials.  Details contained in the permit include Name, ID Number, 
Ward, Village and ZANU-PF membership card sireal (sic) number. 
Samples of movement permits that we saw are signed by war veterans 
and include their names and national ID numbers. 
 
¶7.  Labor Leaders Still Detained...  Zimbabwe Congress of Trade 
Union (ZCTU) leaders Wellington Chibebe and Lovemore Matombo 
continue to await their bail hearing after their May 6 arrest for 
"inciting people to rise against the government and reporting 
falsehood about people being killed."  The AFL-CIO President 
condemned the arrests this week as a violation of international 
labor law. 
 
¶8.  Zimbabwe Ranks 186th Of 195 Countries In Press Freedom...  In 
Freedom House's annual Freedom of the Press Report, Zimbabwe ranked 
near the very bottom of the list-worse than China and Iran.  Its 
score of 89 (of a possible 100) was based on the government's 
continued hostility towards journalists and independent media 
outlets and the legal framework that inhibits press freedom.  The 
report specifically decried Zimbabwean law that prohibits 
publication of "inaccurate" information, restrictions on independent 
newspapers, the jamming of foreign radio signals, and violence and 
death threats against journalists. 
 
¶9.  Hackers Make Political Statements...  All headlines on one day's 
electronic edition of The Herald this week were switched to 
"Gukurahundi," which means "wipe out the chaff."  Gukurahundi was 
the name of the campaign waged by the Mugabe regime in the mid 1980s 
against perceived opposition in the Matabeleland and Midlands 
provinces.  It cost an estimated 20,000 lives. This week's Financial 
Gazette also got hacked.  Headlines led with "Mugabe Must Go! Free 
Zim!" 
 
--------------------------- 
Economic and Business News 
--------------------------- 
 
¶10.  Zimbabwe Makes Arrears Payment To AfDB...  According to a 
revised press release posted on the African Development Bank (AfDB) 
website on May 12 and confirmed by a source within the RBZ, Zimbabwe 
paid US$500,000 to the African Development Bank and US$150,000 to 
the African Development Fund on April 14, 2008.  An earlier AfDB 
press release, strongly refuted by the RBZ, had put the payment at 
US$700 million.  Zimbabwe is about US$ 1.4 billion in arrears to the 
International Financial Institutions. 
 
¶11.  Official Rate Of Inflation On The Up...  According to an 
unnamed Ministry of Finance official quoted in today's The 
Independent, the official year-on-year rate of inflation rose from 
165,000% in February to 355,000% in March 2008.  The official is 
also said to have hinted that the figure could change as the Central 
Statistical Office (CSO) was still trying to come up with the right 
consumer basket.  Notwithstanding this, credible private sources 
estimate the rate of inflation to be close to one million percent. 
The price of The Herald, on the other hand, increased to Z$200 
million this week, up from Z$10,000 a year ago, which works out to a 
 
HARARE 00000440  003 OF 003 
 
 
rate of nearly two million percent. 
 
¶12.  New Z$500 Million Note...  The Reserve Bank of Zimbabwe (RBZ) 
introduced yet another new bearer check, the Z$500 million note 
(about US$2) on May 15, 2008, hardly a week after introducing Z$100 
million and Z$250 million notes.  The RBZ also announced the 
introduction on May 20 of new "agro checks" in denominations of Z$5 
billion, Z$25 billion and Z$50 billion to be used by agro-based 
enterprises for the purchase of goods and services by farmers.  Like 
the current bearer checks, the agro checks are set to expire in 
December 2008.  Hyperinflation will most likely have pushed most of 
these notes out of the market by then, as has been the case with 
bearer checks issued over the last two years. 
 
¶13.  Zimbabwe Temporarily Removes Duty On Basic Commodities...  In 
what appears to be an attempt to lure the public to vote ZANU-PF as 
the economy sinks further, the GOZ suspended duty on some imported 
basic commodities for personal use over the next 90 days.  Only last 
month, duty became payable in forex at the much more expensive 
inter-bank exchange rate.  The temporary removal of duty was 
ostensibly designed to boost supply while capacity utilization 
improves following foreign exchange reforms. 
 
¶14.  USDA Reports Dismal Maize Crop...  2007/08 maize production was 
about 470,000 MT, or only 27% of Zimbabwe's national requirement, 
according to a quarterly update on grain and feed in Zimbabwe, 
published by the USDA FAS Global Agriculture Information Network. 
Zimbabwe will need to import over 1.2 million MT of maize to cover 
the anticipated deficit. 
 
¶15.  Volumes Down But Outlook Up At Delta...  Brewing giant Delta 
Corporation reported beverage volumes down 24% over the previous 
reporting year as disposable income shrank and supplies of maize, 
barley malt, electricity and bottle caps thinned out.  However, this 
investor favorite, regarded as a "blue chip" among Zimbabwe's 
publicly listed companies, enjoys no gearing, a strong cash flow and 
solid brands, leading analysts to recommend a long-term buy. 
 
MCGEE