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FM AMEMBASSY HARARE
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RUCNSAD/SOUTHERN AF DEVELOPMENT COMMUNITY COLLECTIVE
RUEHUJA/AMEMBASSY ABUJA 2191
RUEHAR/AMEMBASSY ACCRA 2611
RUEHDS/AMEMBASSY ADDIS ABABA 2733
RUEHRL/AMEMBASSY BERLIN 1213
RUEHBY/AMEMBASSY CANBERRA 2002
RUEHDK/AMEMBASSY DAKAR 2358
RUEHKM/AMEMBASSY KAMPALA 2782
RUEHNR/AMEMBASSY NAIROBI 5210
RHEHAAA/NSC WASHDC
RHMFISS/EUCOM POLAD VAIHINGEN GE
RUEHGV/USMISSION GENEVA 1903
RUZEJAA/JAC MOLESWORTH RAF MOLESWORTH UK
RHEFDIA/DIA WASHDC
RUEAIIA/CIA WASHDC

UNCLAS HARARE 000099 
 
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 02-09-2009 
 
----------- 
¶1.  SUMMARY 
----------- 
 
Topics of the week: 
 
- MDC Prepares to Enter Government... 
- MDC-T's Biti Appears to Face Charges... 
- ... And Sues The Herald for Defamation... 
- USAID Driver Denied Bail... 
- No Progress in Other Court Cases... 
- Cholera Still Ravaging Zimbabwe... 
- Anglican Church Calls for Mugabe to Step Down... 
- Students Protest... 
- Judge Sues First Lady to Retain Stolen Farm... 
- Journalist Wins Award, Speaks at Syracuse University... 
- Latest Monetary Policy Embraces Market Liberalization, Mostly... 
- High Telecom Charges to Be Reviewed Downward... 
- Fall In US Dollar Prices Set to Reverse... 
- Missed Opportunity in Maize Production... 
- Tobacco Production Decline Also Continues... 
--------------------------------- 
¶2.  Price Movements-Exchange Rate 
and Selected products 
--------------------------------- 
 
The interbank exchange rate depreciated from Z$20:US$1(NOTE: 
revalued Z$ following the removal of 12 zeros on February 9, 2009 
END NOTE)to Z$28.54:US$ in four days this week. 
 
The parallel rate for cash ranged from Z$3-5:US$1 for small notes, 
to Z$40-50:US$ for large notes 
 
----------------------------- 
On the Political/Social Front 
------------------------------ 
 
¶3.  MDC Prepares to Enter Government... MDC president Morgan 
Tsvangirai made clear this week that he will be inaugurated as prime 
minister on February 11.  Amendment 19 was passed unanimously in 
both the House of Assembly and Senate on Thursday.  The parties are 
close to agreement on the allocation of governors.  The Joint 
Monitoring and Implementation Committee, composed of representatives 
of all three parties, has agreed that all abductees should be 
released on bail. Tsvangirai is confident this will happen before 
February 11.  See Harare 79, 85, and 91. 
 
¶4.  MDC-T's Biti Appears to Face Charges... Tendai Biti, MDC- T 
Secretary General appeared in a lower court on February 5 regarding 
charges of treason and making statements likely to cause public 
disorder in connection with a document he allegedly authored in 
March 2008.  On February 6, the magistrate removed the case from 
remand - essentially removing it from the list of cases to be tried. 
 The State retains the option to bring the case to a trial through a 
court summons, which is unlikely. 
 
 
¶5.  ... And Sues The Herald for Defamation... Biti has filed a 
US$500,000 defamation suit against the government-controlled Herald 
newspaper based on a series of articles claiming Biti is plotting to 
oust Morgan Tsvangirai as party president.  One of the accused 
reporters, Mabasa Sasa, told PAS that The Herald refused to retract 
the story on the basis that Biti wanted both the retraction and the 
US$500,000. "We still stand by our stories and we will meet him in 
court," said Sasa. On January 24 The Herald published a story 
stating that Biti had denied the allegations and dismissed two 
stories published in the Herald as false. No date has been set for 
the hearing. 
 
¶6.  USAID Driver Denied Bail... The bail hearing for Frank 
Muchirahondo, the USAID driver wrongfully arrested on January 22 on 
charges of attempted murder of Air Marshal Shiri, took place on 
February 5 after two postponements.  The prosecution argued Frank 
should be denied bail because he was a flight risk due to 
overwhelming evidence, severity of the charge, and because he was 
caught trying to "sneak out" of the country.  On February 6, the 
judge denied Frank bail.  The embassy continues to work for his 
exoneration through a number of political channels.  A USAID USDH 
employee visits Frank daily to bring him food and water and to 
provide him with moral support while demonstrating to authorities 
that his case and safety is being watched very closely. 
 
¶7.  No Progress in Other Court Cases... Jestina Mukoko and other 
abductees again appeared in the High Court this week, seeking bail 
while their constitutional case is pending in the Supreme Court. 
Justice Alphus Chitanyunke ruled that since Mukoko had not yet been 
charged in court, she could not be granted bail.  Mukoko and others 
abductees are due to appear in a lower court on February 9.  The MDC 
has called for their release, but has not made it a condition for 
entering government. 
 
¶8.  Cholera Still Ravaging Zimbabwe... With nearly 68,000 cases and 
3,371 deaths as of February 5, cholera continues to wrack 
communities across Zimbabwe. Although cholera cases continued to 
increase, the number of cholera deaths remained stable, decreasing 
the overall fatality rate from 5.0 to 3.9 percent. Cumulative cases 
now exceed WHO's earlier worst-case projection of 60,000 cases, 
prompting a new projection, now ranging from 81,000 to 115,000 
cases.  Upcoming seasonal floods have the potential to exacerbate 
the outbreak, which could continue for several months.  See Harare 
¶86. 
 
¶9.  Anglican Church Calls for Mugabe to Step Down... Anglican 
leaders meeting in Egypt issued a statement expressing "horror" at 
the continued crisis in Zimbabwe.  They further called on Mugabe to 
step down and on church leaders across Africa to meet with African 
politicians to draw attention to the plight of the Zimbabwean 
people. 
 
¶10.  Students Protest... Following an announcement that students at 
the University of Zimbabwe had just one week to come up with US$400 
for exam fees, students launched a protest on February 3 that 
quickly spread to a nearby residential area.  80 riot police arrived 
on the scene, arresting and beating students.  60 were arrested and 
10 were injured, including one with a broken finger. 
 
¶11.  Judge Sues First Lady to Retain Stolen Farm... The First Lady 
has reportedly grabbed a farm occupied by High Court Judge Ben 
Hlatshwayo for her son from her first marriage. Hlatshwayo himself 
first seized the farm in 2002 from a white family, despite a court 
order preventing him from doing so.  According to press reports, 
Qorder preventing him from doing so.  According to press reports, 
Hlatshwayo is now trying to fight the seizure in court. 
 
¶12.  Journalist Wins Award, Speaks at Syracuse University... 
Zimbabwean journalist Frank Chikowore, who was arrested in 2008 for 
"practicing journalism" without proper accreditation, was honored 
with the 2009 Tully Center Free Speech Award at Syracuse University. 
 The other award went to the New York Times' Barry Bearak, who was 
also arrested in Zimbabwe in 2008 for "presenting himself as a 
journalist." Bearak also lacked government-required accreditation. 
Chikowore stunned students with his stories of the dangers of 
practicing independent journalism in Zimbabwe. 
 
---------------------------------- 
On the Economic and Business Front 
---------------------------------- 
 
¶13.  Latest Monetary Policy Embraces Market Liberalization, 
Mostly... Reserve Bank Governor Gono announced the liberalization of 
the foreign exchange market and the dropping of another 12 zeros off 
the local currency in his Monetary Policy Statement on February 3. 
Worryingly, and contrary to utterances about respect for property 
rights, he revoked with immediate effect the contractual agreements 
with platinum and diamond companies that allow them to maintain 
their earnings offshore, and he appeared to leave the door ajar to 
resume off-budget spending.  The decision to leave the Zimbabwe 
dollar in circulation is futile in light of the public's loss of 
confidence in the currency.  Sovereign debt figures indicate that 
without substantial balance of payments support, Zimbabwe's reforms 
will not succeed. See Harare 77. 
 
¶14.  High Telecom Charges to Be Reviewed Downward... Following the 
permission to charge clients in foreign currency, most mobile phone 
service providers imposed exorbitant charges as high as US35 cents 
per minute.  A Postal and Telecommunications Regulatory Authority of 
Zimbabwe (POTRAZ) official indicated this week that the rates will 
be reviewed downward in view of the public outcry and the budget 
proposal to reduce value added tax on airtime from 22.5% to 15%. 
 
¶15.  Fall In US Dollar Prices Set to Reverse... The recent falling 
trend in the price of most commodities appears to have reversed 
itself since the budget presentation on January 29, 2009.  Retailers 
have begun to ratchet up prices in line with the increase in 
restocking costs that they anticipate as the government seeks to 
augment revenues by raising taxes on imported commodities including 
some basics. 
 
¶16.  Missed Opportunity in Maize Production... Commercial Farmer's 
Union (CFU) grains expert George Hutchison told us this year's maize 
production could have been higher than his estimate of 800,000 MT, 
had the targeted area of 1.2 million ha been planted and supplied 
with the right inputs in a timely manner.  The FAO's Agriculture 
Coordination Working Group reported on January 29 that about 890,000 
ha of maize were planted.  Rainfall has been normal to above normal 
across the country since mid December, and evenly distributed. 
Hutchison estimates maize demand of 1.6 million tons this year, 
including for stock feed, and believes the country will have to 
import some 800,000 MT. 
 
¶17.  Tobacco Production Decline Also Continues... Figures from the 
Tobacco Industry and Marketing Board indicate that tobacco 
production will dip a further 10% this year due to the shrinkage in 
total area planted.  The Reserve Bank reported that tobacco exports 
earned the country US$204 million last year. 
 
--------------------------- 
Economic Tidbit of the Week 
--------------------------- 
 
¶18.  While the hard-currency price of bread is steady at US$1, in 
local currency terms it moved from around Z$10 to Z$200 (new values) 
following the recent economic policy announcements, implying a 
Qfollowing the recent economic policy announcements, implying a 
massive 95% depreciation of the local unit in a week. 
 
----------------- 
Quote of the Week 
----------------- 
 
¶19.  "We are asking for the international community to support this 
agreement, support this Government without equivocation and help us 
try to salvage our country.  It is not for Britain or America to 
judge our agreement.  Your job as America or Britain is to support 
what we try to do.  All the skeptics must now shut up and support 
what Zimbabweans want.  Listen to us as Zimbabweans." -- Arthur 
Mutambara, speaking at the World Economic Forum in Davos, 
Switzerland on January 31. 
 
 
MCGEE