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FM AMEMBASSY HARARE
TO RUEHC/SECSTATE WASHDC 3946
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RUEHUJA/AMEMBASSY ABUJA 2170
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RUEHGV/USMISSION GENEVA 1850
RUZEJAA/JAC MOLESWORTH RAF MOLESWORTH UK
RHEFDIA/DIA WASHDC
RUEAIIA/CIA WASHDC

UNCLAS SECTION 01 OF 03 HARARE 000047 
 
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 ROBERT TELCHIN 
 
SIPDIS 
 
E.O.12958: N/A 
TAGS: PGOV PREL ASEC PHUM ECON ZI
 
SUBJECT: ZIM NOTES 01-16-2009 
 
----------- 
¶1.  SUMMARY 
----------- 
 
Topics of the week: 
 
- Tsvangirai to Return, Meet Mugabe... 
- Conviction Threatens to Expel MDC MP from Parliament... 
- Still no Resolution on Court Cases... 
- SADC Tribunal Wrong Says Zimbabwean Supreme Court Justice... 
- Schools Opening or Not? 
- New Report on Zim Crisis... 
- Harare's Water Woes Continue... 
- Reserve Bank Introduces New Notes... 
- Harare Declared World's Priciest City for Foreigners... 
- Health Workers Allowed To Open FCAs... 
- Dollarization Widens... 
- World Bank Mission Reports on Private Sector... 
 
--------------------------------- 
¶2.  Price Movements-Exchange Rate 
and Selected products 
--------------------------------- 
 
Parallel rate for cash shot up to Z$400 billion:US$1 
Check rate rose to Z$35 quadrillion:US$1 against inter-bank average 
of Z$15.33 million:US$1 
Bread on the parallel market went up to Z$400 billion 
Sugar shot up to Z$800 billion/2kg 
Petrol and diesel rose to Z$480 billion/liter 
 
----------------------------- 
On the Political/Social Front 
----------------------------- 
 
¶3.  Tsvangirai to Return, Meet Mugabe... MDC leader Morgan 
Tsvangirai told a press conference in Johannesburg on Thursday that 
he will return to Harare this weekend, chair a meeting of the MDC 
National Executive, and meet with Zimbabwean president Mugabe. 
Tsvangirai made clear that resolution of outstanding issues between 
ZANU-PF and the MDC was a condition for MDC passage of Amendment 19 
and entry into a government with ZANU-PF. These issues include 
equitable allocation of ministries, allocation of half of the 10 
governorship postions to MDC, joint control of the national security 
council, equitable allocation of ambassadors and permanent 
secretaries, rescission of the appointments of Reserve Bank of 
Zimbabwe governor Gideon Gono and Attorney General Johannes Tomana, 
and an end to political abduction and a full accounting of those 
abducted. At this point, it is unlikely ZANU-PF will accede to the 
MDC's demands.  See Harare 38. 
 
¶4.  Conviction Threatens to Expel MDC MP from Parliament... A 
Zimbabwean magistrate convicted an MDC-T MP of forging four 
signatures nominating her to contest the Chimanimani West 
constituency seat in last March's parliamentary elections. Lynette 
Karenyi won the seat by beating out a ZANU-PF candidate, but she now 
faces expulsion according to portions of the Zimbabwe Electoral Act 
cited by the magistrate. The MDC-T plans to appeal the ruling in an 
effort to maintain its slim plurality in the closely-contested House 
of Assembly. Speaker of the House Lovemore Moyo stated Karenyi would 
remain in her seat, as Parliament would determine her eligibility to 
sit. Separately, on January 14 Zimbabwean police detained Meki 
Makuyana, the MDC MP for Chipinge South in Manicaland. No formal 
charges have yet been brought against Makuyana.  See Harare 40. 
 
¶5.  Still no Resolution on Court Cases... Of the 18 abductees who 
first appeared in court on Christmas Eve, all except two-year-old 
Nigel Mutemagau remain in custody, pending numerous court hearings 
 
HARARE 00000047  002 OF 003 
 
 
in which the State continues to stall. On January 15, the State 
admitted three other abduction victims - Lloyd Tarumbwa, Terry 
Musona and Fanny Tembo - are in "police protective custody." 
Abductee Bothwell Pasipamire (never brought to court) escaped to 
South Africa this week and gave details of his detention, including 
torture, at a press conference. Separately, the MDC mayor of Bindura 
was charged this week with making death threats against a police 
officer. Sources tell us the mayor and two others are under 
investigation for the alleged assassination of Elliot Manyika and 
alleged assassination attempt of Air Marshall Perence Shiri. 
 
¶6.  SADC Tribunal Wrong Says Zimbabwean Supreme Court Justice... In 
a state of the judiciary speech in Bulawayo, Deputy Chief Justice 
Luke Malaba declared that the SADC Tribunal lacked jurisdiction in 
its November 2008 ruling that 77 white farmers had been 
unconstitutionally and unlawfully dispossessed of their farms. 
Malaba said that the plaintiffs had not exhausted all legal options 
available in Zimbabwe, and therefore should not have had their case 
heard before the Tribunal in Windhoek. The SADC Tribunal considered 
this point in its ruling, noting that the farmers had filed a 
petition with the Zimbabwe Supreme Court in March 2007 and no ruling 
had been made. 
 
¶7.  Schools Opening or Not?  A great deal of uncertainty surrounds 
when both government and private schools will open for the new term. 
Government schools have been ordered to open on January 27, or two 
weeks later than anticipated because of delays in grading last 
year's exams (exam markers are demanding payment in forex) and 
uncertainty as to whether the schools will be authorized to accept 
school fees in forex. Private schools, which are collecting school 
fees in forex and which had planned on opening either this week or 
next week, have been told to follow suit, but according to Embassy 
sources, a number of them appear intent on bucking the order. 
 
¶8.  New Report on Zim Crisis... Physicians for Human Rights released 
a damning and thorough report this week on the collapse of the 
health care system. See: http://physiciansforhumanrights.org 
/library/report-2009-01-13.html 
 
---------------------------------- 
On the Economic and Business Front 
---------------------------------- 
 
¶9.  Harare's Water Woes Continue... Post has prepared an assessment 
of the degradation of Harare's water infrastructure that has 
resulted in water stoppages or intermittent supplies to nearly all 
of Harare. Mismanagement by water parastatal ZINWA, lack of 
investment, and the departure of many skilled employees are all to 
blame for the loss of delivery capacity that is fueling the ongoing 
cholera crisis.  See Harare 39. 
 
¶10.  Reserve Bank Introduces New Notes... The Reserve Bank of 
Zimbabwe (RBZ) introduced $100 trillion (US$ 250), $50 trillion (US$ 
125), $20 trillion (US$ 50), and $10 trillion (US$ 25) notes to go 
into circulation today starting with the $10 trillion note. Last 
week, the RBZ introduced Z$20 billion and Z$50 billion--effective as 
of January 12, 2009--to coincide with an increase in the monthly 
cash withdrawal limit from Z$10 billion to a full month's pay with 
proof of a January pay slip. The change has resulted in a slow-down 
in banking business, further weakening most banks. 
 
¶11.  Harare Declared World's Priciest City for Foreigners... A 
London-based human resources organization designated Harare as the 
most expensive city in the world for foreigners based on hard 
currency prices of a standardized basket of goods. The survey 
compared 125 consumer goods and services from 270 different 
locations. Angola's capital Luanda ranked second in the survey, 
followed by Tokyo. 
 
HARARE 00000047  003 OF 003 
 
 
 
¶12.  Health Workers Allowed To Open FCAs... Health workers who are 
authorized to earn foreign currency may now open foreign currency 
accounts (FCAs) with local banks. The measure is intended to stop 
the exodus of skilled workers in the sector. The Ministry of Health 
and Child Welfare said it has budgeted US$1.5 million for January 
salaries, which are expected to range from US$50 for nurses to 
US$850 for doctors, though health workers are demanding more. 
 
¶13.  Dollarization Widens... Zimbabwe's state-owned fixed line 
telephone operator TelOne has received authorization to bill clients 
in foreign currency beginning in February, 2009. The charges, at 
US10 cents per unit plus a fixed rental of US$20, should improve the 
parastatal's viability. Meanwhile, the Zimbabwe Electricity Supply 
Authority (ZESA) has expanded the list of clients billed in foreign 
currency to include retailers, wholesalers, and manufacturers that 
are licensed to sell goods and services in foreign currency, as well 
as NGOs, embassies, and foreign-funded international organizations. 
 
 
¶14.  World Bank Mission Reports on Private Sector... A World Bank 
team visited Zimbabwe from December 9-13, 2008 to identify the 
elements of a pre-reengagement work program in private and financial 
sector development. The program will be financed by the Multi-Donor 
Trust Fund. The team's assessment by sector of the present 
situation, short- and medium-term recovery priorities, and next 
steps, is posted on our intranet site under the Political Economic 
Documents: http://harare.state.gov/index 
.cfm?fuseaction=public.display&id= 
a99f72af-b335-4075-a9c7-e51ec133105b 
 
----------------- 
Quote of the Week 
----------------- 
 
¶15.  At High Court hearings this week dealing with abductions of MDC 
members and human rights activists, government legal counsel 
referred to escaped MDC member Bothwell Pasipamire as "globetrotting 
on an MDC budget." Pasipamire had been abducted and tortured by 
state agents, but managed to escape to South Africa. 
 
 
MCGEE