VZCZCXRO1273
RR RUEHBZ RUEHDU RUEHJO RUEHMR RUEHRN
DE RUEHSB #0119/01 0440957
ZNR UUUUU ZZH
R 130957Z FEB 09
FM AMEMBASSY HARARE
TO RUEHC/SECSTATE WASHDC 4044
RUCNSAD/SOUTHERN AF DEVELOPMENT COMMUNITY COLLECTIVE
RUEHUJA/AMEMBASSY ABUJA 2202
RUEHAR/AMEMBASSY ACCRA 2633
RUEHDS/AMEMBASSY ADDIS ABABA 2755
RUEHRL/AMEMBASSY BERLIN 1232
RUEHBY/AMEMBASSY CANBERRA 2024
RUEHDK/AMEMBASSY DAKAR 2380
RUEHKM/AMEMBASSY KAMPALA 2804
RUEHNR/AMEMBASSY NAIROBI 5232
RHEHAAA/NSC WASHDC
RHMFISS/EUCOM POLAD VAIHINGEN GE
RUEHGV/USMISSION GENEVA 1925
RUZEJAA/JAC MOLESWORTH RAF MOLESWORTH UK
RHEFDIA/DIA WASHDC
RUEAIIA/CIA WASHDC

UNCLAS SECTION 01 OF 03 HARARE 000119 
 
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 02-13-2009 
 
----------- 
¶1.  SUMMARY 
----------- 
 
Topics of the week: 
 
- Tsvangirai and Deputies Sworn Into Government... 
- Tsvangirai Picks Fill New Ministerial Posts... 
- While Mugabe Resorts to the Usual Suspects... 
- National Security Council Bill Passed... 
- Little Progress for Detainees... 
- Cholera on the Decline?... 
- White Farmers Report Numerous Summons... 
- Update on Arrested USAID Employee... 
- Civil Servants Promised US$100 Vouchers... 
- Banking Sector Still Struggling... 
- RBZ Staff Ordered to Put Squeeze on Shopkeepers... 
- Duty-Free Status On Basic Commodities Extended... 
- Keep Sanctions on, Business Leaders Tell Ambassador... 
- Poor Outlook for Grain Crops... 
- No Diamond Megadeal in Sight... 
- Requiem for the Zimbabwe Dollar... 
 
----------------------------- 
On the Political/Social Front 
------------------------------ 
 
¶3.  Tsvangirai and Deputies Sworn Into Government...  MDC president 
Morgan Tsvangirai assumed the office of Prime Minister after being 
sworn in by President Mugabe on February 11.  Also sworn in were his 
deputies Thokozani Khupe of the MDC-T and Arthur Mutambara of the 
MDC-M.  The ceremony was attended by the leaders of South Africa, 
Mozambique, and Swaziland, AU chairman Jean Ping, former South 
African president Thabo Mbeki, SADC executive secretary Tomaz 
Salomao, as well as numerous diplomats and other dignitaries. 
Following the ceremony, Tsvangirai held a rally attended by an 
estimated 20,000 MDC-T supporters at a Harare stadium.  Among the 
highlights of his speech was a promise to pay all civil servants, 
soldiers, teachers, and health personnel in forex by the end of the 
month.  He also stressed the importance of immediately freeing 
political detainees and establishing a cooperative relationship with 
ZANU-PF.  See Harare 111. 
 
¶4.  Tsvangirai Picks Fill New Ministerial Posts...  Morgan 
Tsvangirai named 14 people to fill the ministerial and deputy 
ministerial posts he was granted under the power-sharing agreement. 
His most significant appointments included MDC negotiator and lawyer 
Tendai Biti as Finance Minister, and Giles Mutsekwa to co-chair the 
Home Affairs ministry.  An interesting development was naming white 
farmer and long-time ZANU-PF adversary Roy Bennett Deputy Minister 
of Agriculture.  See Harare 107. 
 
 
¶5.  While Mugabe Resorts to the Usual Suspects...  Mugabe prepared 
to reappoint many of the members of his old Cabinet that he referred 
to last year as "the worst one he has ever had."  While he had not 
yet assigned the individuals to specific ministerial or deputy 
ministerial posts, the list of 39 people released on February 12 
included such ZANU-PF stalwarts as Emmerson Mnangagwa, Nicholas 
Goche, Dydimus Mutasa, Joseph Made, Sydney Sekeramayi, and David 
Parirenyatwa.  These individuals have been integrally involved in 
some of the country's most disastrous economic, social, and 
humanitarian policies. 
Qhumanitarian policies. 
 
¶6.  National Security Council Bill Passed...  Parliament passed 
legislation on February 10 creating a National Security Council 
(NSC) whose responsibility it will be to review national security 
policies and "direct appropriate action."  The NSC legislation 
 
HARARE 00000119  002 OF 003 
 
 
passed both the House of Assembly and the Senate easily and awaits 
President Mugabe's signature before becoming law.  The legislation 
was amended from an earlier draft produced by the MDC-T to include 
the service chiefs as well as leading government figures.  The 
function of the NSC as stated in the legislation appears to be more 
oversight-based than operational.  Mugabe will chair the council and 
all decisions will be based on consensus.  See Harare 117. 
 
¶7.  Little Progress for Detainees...  Despite assurances that 
Tsvangirai would not be inaugurated until political prisoners were 
released, about 29 remain in custody.  Encouragingly, on February 12 
three detainees--including Jestina Mukoko--were granted access to 
medical care at Avenues Clinic, where they remain.  On Tsvangirai's 
first day as Prime Minister, he visited Chikurubi Maximum Security 
Prison and met with detainees for about 45 minutes.  Separately, 
eight WOZA women and two ZLHR lawyers were arrested on February 10 
and held for 48 hours before being released on bail.  Three were 
beaten by an officer; all 10 face charges of disturbing the peace 
and are due to reappear in court on March 4.  See Harare 115. 
 
¶8.  Cholera on the Decline?...  As of February 12, cholera has 
caused more than 3,500 deaths out of nearly 73,400 reported cases, 
according to the UN World Health Organization (WHO).  Promisingly, 
between February 1 and 7, WHO reported a 15 percent decrease in new 
cholera cases and a 35 percent decrease in cholera deaths compared 
to the previous week.  The decrease in cases and deaths reversed a 
trend of steady increases in weekly new cholera cases through the 
end of January.  However, WHO noted that the current decreases may 
result from a lack of reporting from several districts. 
 
¶9.  White Farmers Report Numerous Summons...  The Commercial Farmers 
Union (CFU)-a body that represents the interests of the remaining 
commercial farmers as well as past evicted farmers-reported that 
approximately 40 white farmers received summons demanding they 
appear in court for violating orders to vacate their properties. 
The CFU tells us the Attorney General gave instruction to 
prosecutors to commence and complete as many land cases as possible 
before the end of February.  The CFU suspects an effort to take as 
many farms as possible prior to a possible shift in land policy as a 
result of the new government. 
¶10.  Update on Arrested USAID Employee...  On February 12, USAID 
driver Frank Muchirahondo-arrested on January 22 on dubious charges 
of involvement in the attempted assassination of Air Force Chief 
Shiri-appeared before the magistrate's court in Bindura.  Because 
the prosecution was not prepared to respond to the defendant's 
complaints about abuse suffered while in police custody, the court 
hearing was postponed until February 19.  The judge ordered the 
prosecution to be prepared to address the defendant's complaints on 
Qprosecution to be prepared to address the defendant's complaints on 
February 19 and to hand over to Frank's lawyer the State's paperwork 
summarizing charges.  The Mission is working with USAID/GC and DOJ 
to determine how to fund continued legal representation for Frank. 
 
 
----------------------------------- 
On the Economic and Business Front 
---------------------------------- 
 
¶11.  Civil Servants Promised US$100 Vouchers...  Acting Minister of 
Finance Chinamasa announced February 13 that all civil servants 
would get vouchers worth US$100 later this month.  He said the 
vouchers will be securitized, tradable, and redeemable for goods in 
participating shops or for cash.  It conflicts with Tsvangirai's 
promise to pay civil servants in foreign currency by the end of 
February.  The Bankers' Association of Zimbabwe told us its members 
will redeem the vouchers at a discount because of uncertainties 
surrounding the underlying securities, given the dire shortage of 
foreign currency in the country. 
 
 
HARARE 00000119  003 OF 003 
 
 
¶12.  Banking Sector Still Struggling...  Dollarization has brought 
some relief to the banking sector, where local currency revenue no 
longer covered rising foreign currency costs.  But problems related 
to foreign currency shortages, the introduction of statutory 
reserves on foreign currency accounts, and ceilings on lending rates 
still undermine profitability at most banks.  See Harare 118. 
 
¶13.  RBZ Staff Ordered to Put Squeeze on Shopkeepers...  An RBZ 
employee told us that much of the bank's 12,000 staff had been 
ordered out onto the streets to pressure shopkeepers to buy a 
license to trade in hard currencies.  The mood is grim at the RBZ, 
where salaries have gone unpaid, CIO presence is pervasive, and the 
cafeteria is now serving only cabbage and greens. 
 
¶14.  Duty-Free Status On Basic Commodities Extended...  To augment 
the supply of goods on the local market, government this week 
extended duty-free status on most imported basic commodities to June 
30, 2009.  Prices of most commodities held steady this week, helped 
by the formation of an inclusive government. 
 
¶15.  Keep Sanctions on, Business Leaders Tell Ambassador...  At a 
luncheon hosted by Ambassador McGee this week, heads of the major 
business associations called on the U.S. to keep sanctions in place 
to force the new government to implement sensible policies. 
Ambassador McGee advised the group on the prerequisites for our 
re-engagement with the GOZ.  For their part, the businessmen 
promised to help set up the checks and balances necessary to avoid 
the abuse of power by government ever again. 
 
¶16.  Poor Outlook for Grain Crops...  Zimbabwe's 2008 winter wheat 
harvest is forecast at the lowest level since independence-38,900 
MT, according to the USDA's Zimbabwe Grain and Feed Quarterly 
Update.  The GOZ estimates a maize planting area this season of 
about 890,000 hectares, with production at last season's low level 
of 400,000 MT.  South Africa dispatched seed and fertilizer worth 
around R300 million (about US$32 million), according to the report, 
mostly arrived past the optimum planting date. 
 
¶17.  No Diamond Megadeal in Sight...  A megadeal to sell the mineral 
rights to the disputed diamond deposit near Mutare and quickly fill 
the GOZ's forex coffers has apparently stalled.  See Harare 110. 
 
¶18.  Requiem for the Zimbabwe Dollar...  The Z$100 trillion note 
appeared on the street in very limited circulation ths week-it 
presents a huge problem in making change.  In addition, hardly any 
shops accept the local currency. 
 
----------------- 
Quote of the Week 
----------------- 
 
¶19.  "As Prime Minister I make this commitment that, as from the end 
of this month, our professionals in the civil service, every health 
worker, teacher, soldier and policeman will receive their pay in 
foreign currency until we are able to stabilize the economy." -- 
Morgan Tsvangirai speaking at a MDC rally in Harare following his 
QMorgan Tsvangirai speaking at a MDC rally in Harare following his 
swearing in on February 11. 
 
¶20.  "The job is the worst in the world but I will have to look the 
job in the eye and I have no doubt that I will be equal to the task 
and will prevail." -- Tendai Biti referring to his nomination as 
Minister of Finance on February 11. 
 
 
DHANANI