VZCZCXRO9361
RR RUEHBZ RUEHDU RUEHJO RUEHMR RUEHRN
DE RUEHSB #0903/01 2801401
ZNR UUUUU ZZH
R 061401Z OCT 08
FM AMEMBASSY HARARE
TO RUEHC/SECSTATE WASHDC 3530
INFO RUCNSAD/SOUTHERN AF DEVELOPMENT COMMUNITY COLLECTIVE

UNCLAS SECTION 01 OF 03 HARARE 000903 
 
AF/S FOR B. WALCH 
AF/EPS FOR ANN BREITER AND GABRIELLE MALLORY 
USTR FOR CONNIE HAMILTON 
 
SIPDIS 
 
E.O.12958: N/A 
TAGS: ETRD ECON XA ZI
SUBJECT:  ZIMBABWE - AGOA ELIGIBILITY REVIEW 
 
REF: STATE 85086 
 
TPSC SUBCOMMITTEE ON AGOA IMPLEMENTATION COUNTRY ELIGIBILITY 
RECOMMENDATIONS 2007 
STATE SUBMISSIONS 
 
Country:  Zimbabwe 
Current AGOA Status:  Ineligible 
 
Country Background Summary:  The political and economic situation 
deteriorated further in Zimbabwe in 2008 as special interest groups 
dictated policy at the expense of the greater good.  Opposition 
parties won more votes than the ruling party in March parliamentary 
elections, but no candidate achieved a majority in the presidential 
election, necessitating a run-off.  Opposition parties boycotted the 
run-off election in June as a result of intimidation and violence 
against the electorate by the ruling party which made a fair 
election impossible.  The economy contracted further under draconian 
price controls and misguided monetary and fiscal policies, and more 
economic activity shifted into the informal sector. 
 
Comments on Eligibility Requirements 
 
¶I. Market-Based Economy 
 
¶A. Major Strengths Identified 
 
None 
 
¶B. Major Issues/Problems Identified 
 
- As a result of gross government mismanagement of the economy, the 
role of markets weakened steadily and the country's economic outlook 
is bleak. 
- The World Economic Forum's Global Competitiveness Report 2007-2008 
ranked Zimbabwe 129 out of 131 countries studied. 
- A persistent and widening budget deficit and a highly 
accommodating monetary policy stance led to the prevailing 
hyper-inflationary environment.  The official exchange rate was 
infrequently adjusted and consequently heavily overvalued in real 
terms, depressing exports and stimulating activity on the parallel 
market. 
- The Reserve Bank of Zimbabwe was also deeply engaged in 
loss-making quasi-fiscal activity.  Financing this activity fuelled 
money supply growth and inflation.  Negative real interest rates 
distorted savings and investment patterns. 
- Unemployment in the formal sector is estimated at over 90 
percent. 
- The continued deterioration of macroeconomic conditions, lack of 
rule of law, high foreign exchange surrender requirements on 
exporters, a widening parallel market exchange rate premium, 
shortage of foreign exchange, and pervasive shortages of food, fuel, 
electric power, and other basics rendered Zimbabwe's investment 
climate highly unattractive. 
 
II. Political Reforms/Rule of Law/Anticorruption 
 
¶A. Major Strengths Identified 
 
None 
 
¶B. Major Issues/Problems Identified 
 
- The GOZ continued its attacks on political pluralism through the 
use of repressive legislation to prevent freedom of assembly and 
demonstrations against the government. 
- The ruling party also has proposed legislation dealing with the 
interception of communications and counterterrorism that legal 
experts caution could be used against regime opponents. 
- Politically, the opposition party operates in a climate of 
intimidation and repression.  Security forces harass, beat, and 
arbitrarily arrest perceived opposition supporters. 
- The constitution prohibits arbitrary arrest and detention; 
however, some laws effectively weakened this prohibition, and 
security forces arbitrarily arrested and detained persons 
repeatedly. 
- Prolonged pretrial detention remained a problem. 
- In politically sensitive cases, the judiciary, especially the 
higher courts, showed indications of being politically influenced or 
intimidated.  Political elites frequently ignore adverse court 
holdings. 
- Official corruption is widespread.  The Government of Zimbabwe 
prosecutes corruption selectively, focusing on individuals who have 
fallen out of favor with the ruling party. 
- The government's allocation of resources, such as new homes and 
formerly white-owned commercial farms, has been nontransparent and 
driven by patronage. 
 
III. Poverty Reduction 
 
HARARE 00000903  002 OF 003 
 
 
 
¶A. Major Strengths Identified 
 
None 
 
¶B. Major Problems/Issues Identified 
 
- National assessments show that the yield of the staple maize crop 
from the 2008 harvest was the lowest on record. As a result, it was 
estimated that two million Zimbabweans were food insecure from July 
through September 2008 in both urban and rural areas. 
- The GOZ banned NGO field operations for nearly three months in 
2008, which prevented the distribution of food to vulnerable 
people. 
- The distribution system of the Grain Making Board (GMB), which has 
a statutory monopoly on all imported grains, is extremely 
inefficient, leaving many parts of the country without consistent 
access to grains.  Moreover, the GMB is subject to political 
manipulation at the local level. 
- All in all, current trends indicate that poverty is on the 
increase in both rural and urban areas. 
 
IV. Labor, Child Labor, and Human Rights 
 
¶A.  Major Strengths Identified 
 
- The GOZ has ratified both ILO Conventions 182 and 138. 
- The law prohibits forced or compulsory labor, including by 
children. 
- Under the Labor Relations Amendment Act (LRAA), child labor is 
punishable by a fine and two years imprisonment. 
- In October 2007, the GOZ enacted the Domestic Violence Act, which 
criminalizes domestic violence and provides enhanced protection for 
victims of abuse. 
 
¶B.  Major Issues/Problems Identified 
 
- Despite official recognition of worker rights, the government 
continued to exert heavy pressure on labor unions - limiting their 
freedom of association and the right to organize. 
- Unions were denied routine meetings and necessary consultations 
with constituents under the draconian Protection of Order and 
Security Act (POSA). 
- Forced child labor occurred and child labor remains a problem due 
to worsening macroeconomic conditions. 
- The government's human rights record remained very poor. 
- Although the constitution prohibits such practices, security 
forces tortured, raped, and otherwise abused persons.  There 
continued to be reports that police used excessive force in 
apprehending and detaining criminal suspects. 
- In moves that echoed the 2005 Operation Restore Order, which 
destroyed the homes and businesses of over 700,000 people, the GOZ 
continued to periodically demolish informal businesses and evict 
people from their homes. 
- Prison conditions remained harsh and life threatening. 
- The constitution provides for freedom of expression, but 
legislation limits this freedom in the "interest of defense, public 
safety, public order, state economic interests, public morality, and 
public health." Independent newspapers face unwieldy tax burdens and 
intimidation. 
- The constitution provides for freedom of assembly; however, the 
government restricted this right in practice through laws such as 
POSA, which many legal experts believed were unconstitutional. POSA 
does not require permits for meetings or processions, but it 
requires that organizers notify the police of their intentions to 
hold a public gathering seven days in advance. Failure to do so 
results in criminal prosecution as well as civil liability. 
- Although the constitution provides for freedom of association, the 
government restricted this right in practice for political 
organizations. In 2008, Zimbabwe was one of two countries the ILO's 
Applications and Standard Committee criticized regarding 
implementation of ILO Convention 87, which deals with freedom of 
association. 
- Domestic violence against women, especially wife beating, 
continued to be a serious problem and crossed racial, ethnic, and 
economic lines. 
- The government's commitment to children's rights and welfare 
remained weak. The government has a National Plan of Action for 
Orphans and Vulnerable Children (NPA for OVC), which was completed 
in 2004 but has not been fully implemented. It is designed to ensure 
that orphans and vulnerable children are able to access education, 
food, health services, and birth registration and are protected from 
abuse and exploitation, but activities set out in the plan were 
insufficiently funded. 
- There are no laws to prohibit specifically trafficking in persons. 
There were reports that the country was both a point of origin and a 
transit path for trafficking. 
 
¶V.  International Terrorism/U.S. National Security 
 
HARARE 00000903  003 OF 003 
 
 
 
¶A.  Major Strengths Identified 
 
- While our relationship with the GOZ is severely strained, the 
government does not engage in actions specifically meant to support 
international terrorism or undermine U.S. national security; it has 
also been cooperative on counter-terrorism issues. 
 
¶B.  Major Issues/Problems Identified 
 
- Most senior GOZ officials regularly attempt to undermine U.S. 
foreign policy interests through false attacks at high-profile 
international fora. 
 
DHANANI