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RUEHUJA/AMEMBASSY ABUJA 2139
RUEHAR/AMEMBASSY ACCRA 2480
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RHEHAAA/NSC WASHDC
RHMFISS/EUCOM POLAD VAIHINGEN GE
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RUZEJAA/JAC MOLESWORTH RAF MOLESWORTH UK
RHEFDIA/DIA WASHDC
RUEAIIA/CIA WASHDC

UNCLAS SECTION 01 OF 04 HARARE 001082 
 
AF/S FOR B. WALCH 
ADDIS ABABA FOR USAU 
ADDIS ABABA FOR ACSS 
NSC FOR SENIOR AFRICA DIRECTOR B.PITTMAN 
TREASURY FOR D. PETERS 
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 12-05-2008 
 
----------- 
¶1.  SUMMARY 
----------- 
 
Topics of the week: 
 
-  A Week of Turmoil on Harare's Streets... 
-  Civic Leader Abducted... 
-  MDC Denies Reports of a Deal within Days... 
-  ZANU-PF Conference Not to Discuss Replacing Mugabe... 
-  Odinga and Tutu Speak Out... 
-  Cholera Crisis Continues... 
-  Minister of Health Candid in Asking for Help... 
-  SADC Tribunal Rules in Favor of White Farmers... 
-  New Notes Unveiled and Cash Withdrawal Limits Upped... 
-  Goods Immediately Repriced - Gono Condemns Basic Economics... 
-  Gono Dismisses Senior Managers of Some Local Banks... 
-  ...  While Siphoning Money from Share Transfers 
-  Government Removes Duty on Basic Commodities... 
 
--------------------------------- 
¶2.  Price Movements-Exchange Rate 
and Selected products 
--------------------------------- 
 
Parallel rate for cash rose five-fold to Z$10,000,000:US$1 
 
Check rate shot up to Z$1quintillion:US$1 against inter-bank average 
of Z$100,330:US$1 
 
Bread on the parallel market went up to Z$6,000,000 
 
Sugar rose to Z$45,000,000/2kg 
 
Petrol and diesel rose to Z$4,000,000/liter 
 
----------------------------- 
On the Political/Social Front 
----------------------------- 
 
¶3.  A Week of Turmoil on Harare's Streets...  A surge of military 
riots and civic protests unsettled Harare and other urban centers 
this week as civil society groups demanded relaxed cash withdrawal 
policies and political reform, while soldiers vented their 
frustrations.  On November 27 and 28 and Dec1, soldiers smashed 
storefronts, beat-up bank employees, and clashed with police after 
being denied cash withdrawals by downtown Harare banks.  See Harare 
¶1060.  Meanwhile, the Zimbabwe Congress of Trade Unions (ZCTU) 
staged peaceful protests in the low thousands throughout the 
country, demanding that members be able to access their cash.  Other 
civil society organizations including the National Constitutional 
Assembly collaborated with the ZCTU protest, in addition to staging 
their own demonstration.  Security forces responded by arresting and 
beating numerous activists.  More than 70 ZCTU members were arrested 
throughout the country, with only about 20 released so far. 
 
¶4.  Civic Leader Abducted...  Jestina Mukoko, director of the 
Zimbabwe Peace Project (ZPP), which monitors delivery of food 
assistance and violence throughout the country, was seized from her 
home at 5 AM on December 3 by armed men driving unmarked vehicles. 
Her whereabouts are unknown.  At week's end, a ZPP field officer was 
arrested in Nyanga.  The whereabouts of 14 MDC officials and a baby 
abducted in Banket in Mashonaland West on October 30 are still 
unknown. 
 
¶5.  MDC Denies Reports of a Deal within Days...  South African 
spokesman Themba Maseko announced yesterday that ZANU-PF and the MDC 
would sign Amendment 19 within days, paving the way for a new 
 
HARARE 00001082  002 OF 004 
 
 
government.  Our information is to the contrary.  There are still 
issues within the draft Amendment 19 agreed to by negotiators last 
week in South Africa that need to be resolved by the 
principals-Zimbabwean president Robert Mugabe, and MDC presidents 
Morgan Tsvangirai and Arthur Mutambara.  Tsvangirai is outside of 
Zimbabwe with no planned return, so it is uncertain when these 
discussions could take place.  Furthermore, an MDC official told us 
that the MDC would not agree to officially publish Amendment 19-and 
begin the 30 day public comment period-until outstanding issues such 
as the allocation of ministries had been resolved.  See Harare 
¶1073. 
 
¶6.  ZANU-PF Conference Not to Discuss Replacing Mugabe...  Replacing 
Mugabe is one issue that will not be discussed at ZANU-PF's annual 
conference scheduled for December 10-14.  ZANU-PF spokesman and 
political commissioner Elliot Manyika explained that only a full 
ZANU-PF congress could discuss leadership changes under party rules. 
 The next full congress will be held at the end of 2009. 
 
¶7.  Odinga and Tutu Speak Out...  After a meeting with MDC leader 
Morgan Tsvangirai in Nairobi on Thursday, Kenyan foreign minister 
Raila Odinga told the BBC that "Power-sharing is dead in Zimbabwe 
and will not work with a dictator who does not really believe in 
power sharing."  Odinga added, "It's time for African governments to 
take decisive action to push him out of power."  Also on Thursday, 
South African Archbishop Desmond Tutu told a Dutch television 
station with regard to Zimbabwean president Robert Mugabe, "I think 
now that the world must say, "You have been responsible with your 
cohorts for gross violations, and you are going to face indictment 
in the Hague unless you step down."  Tutu went on to say that Mugabe 
should be removed by military force if he did not step down. 
 
¶8.  Cholera Crisis Continues...  On December 4, the UN's Office for 
the Coordination of Humanitarian Affairs reported that they had 
conservatively identified 12,700 suspected cases of cholera leading 
to 571 deaths since the outbreak of the disease.  Other groups 
suggest the fatality number likely exceeds 1,000.  Currently, nine 
out of 10 provinces have been affected, and outbreaks are still not 
under control in multiple locations, including the Harare suburb of 
Budiriro.  The WHO-lead health cluster has been ill-equipped to 
handle the magnitude of the outbreak, but donors and UN agency 
efforts are ramping up.  USAID is in the process of releasing 
additional funding to help combat the cholera emergency in Zimbabwe. 
 These funds will supplement the ongoing US$4 million emergency 
water, sanitation, and hygiene programs that USAID is already 
implementing in Zimbabwe.  USAID has also deployed a team of experts 
to Zimbabwe to work alongside the international community. 
 
¶9.  Minister of Health Candid in Asking for Help...  Minister of 
Health David Parirenyatwa assembled an emergency meeting on December 
3 of senior government officials, donors-including UNICEF, WHO, and 
UNDP-some embassy officials, and NGOs to discuss the worsening water 
delivery and cholera situation.  Parirenyatwa was 
uncharacteristically forthright in admitting the severity of the 
problem and the need for external help.  The minister also asked for 
pledges and surprisingly said that he appreciated ongoing USAID and 
DFID efforts.  The spirit of inclusivity was marred when 
Parirenyatwa asked MDC Secretary for Welfare Kerry Kay to leave. 
The WHO recommended establishing a "command and control center" 
involving donors and local officials. 
 
¶10.  SADC Tribunal Rules in Favor of White Farmers...  On November 
28, the SADC Tribunal meeting in Windhoek made its final ruling in 
the case of Michael Campbell and 77 other white Zimbabweans who had 
their farms seized or were issued eviction orders through the 
government's land reform program.  The ruling stated that the GOZ 
must provide fair compensation for the expropriated properties and 
desist from any further acquisition efforts.  Unfazed by the 
 
HARARE 00001082  003 OF 004 
 
 
judgment, security chief and land-reform architect Didymus Mutasa 
said that the Tribunal must have been "daydreaming" and that 
Zimbabwe would not abide by the ruling. 
 
---------------------------------- 
On the Economic and Business Front 
---------------------------------- 
 
¶11.  New Notes Unveiled and Cash Withdrawal Limits Upped...  The 
Reserve Bank of Zimbabwe (RBZ) introduced new Z$10 million (US$1 at 
today's cash rate of Z$10 million:US$1), Z$50 million (US$5) and 
Z$100 million (US$10) notes on Thursday, December 4, and raised the 
weekly cash withdrawal limits to Z$500 million beginning next 
Friday.  RBZ Governor Gono also declared that beginning December 18, 
employees that produced a pay-slip would be able to withdraw Z$10 
billion a month and after January 12, 2009, their entire paycheck. 
The changes came in response to a petition by ZCTU leaders a day 
after the trade union held protests throughout the country.  The 
upward revision amended Gono's decision to raise withdrawal limits 
to Z$100 million, which was insufficient to satisfy ZCTU. 
 
¶12.  Goods Immediately Repriced - Gono Condemns Basic Economics... 
As the new notes circulated in large quantities throughout Harare 
and other cities, many shopkeepers quickly closed their doors to 
reprice their wares.  The new denominations caused the parallel 
market cash rate to collapse from around Z$2 million to between Z$7 
million and Z$10 million.  Gono's response was to condemn businesses 
for unjustifiably raising the prices of goods each time new currency 
denominations are introduced. 
 
¶13.  Gono Dismisses Senior Managers of Some Local Banks...  Gono 
fired the CEOs and senior managers of CFX Bank, NMB Bank, and ZABG 
for "flouting bank regulations" by issuing new higher denominations 
a day ahead of their officially scheduled release on December 4. 
The RBZ issued a total of Z$80 trillion in new notes to banks on 
December 3, and later that evening a significant portion was already 
in the hands of street money dealers. 
 
¶14.  ...  While Siphoning Money from Share Transfers.  According to 
online newspaper the Zimbabwe Times, Gono and a Harare businessman, 
Mohammed I Mohammed, are using Remo Investment Brokers in Harare to 
siphon millions of U.S. dollars through share transfers into 
Ravenscourt Corporation's account at Habib Bank in London.  Although 
Ravenscourt is reportedly registered in the UK, there are no records 
of its operations in London.  According to the report, Ravenscourt 
won a lucrative contract to import fuel into Zimbabwe, alongside the 
state-owned National Oil Company of Zimbabwe, even though other 
private companies are barred from importing fuel directly. 
 
¶15.  Government Removes Duty on Basic Commodities...  Gono told a 
recent meeting of the National Economic Consultative Forum-a 
consortium of government, the private sector and labor groups-that 
he has scrapped import taxes on basic commodities to increase 
supplies ahead of the Christmas and New Year holidays.  He told the 
meeting that the surrender rate for sales of exported goods to the 
RBZ would be reduced from 25 to 15 percent, and the exchange rate 
shifted to the rate used by the United Nations. 
 
----------------------- 
Gono Quotes of the Week 
----------------------- 
¶16.  Gono's statements this week fluctuated from sympathetic to 
irate to optimistic: 
 
-  "Please have a heart and protect the interest of consumers." 
 
-  "Any manufacturer, wholesaler, retailer or service provider 
caught hiking prices without the approval of the commission will 
 
HARARE 00001082  004 OF 004 
 
 
face the full wrath of the law." 
 
-  "We must not despair, good times are coming.  No winter lasts 
forever...  summer is coming." 
 
 
DHANANI