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RUEHAR/AMEMBASSY ACCRA 2796
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RHEHAAA/NSC WASHDC
RHMFISS/EUCOM POLAD VAIHINGEN GE
RUEHGV/USMISSION GENEVA 2089
RUZEJAA/JAC MOLESWORTH RAF MOLESWORTH UK
RHEFDIA/DIA WASHDC

UNCLAS SECTION 01 OF 03 HARARE 000356 
 
AF/S FOR B. WALCH 
ADDIS ABABA FOR USAU 
ADDIS ABABA FOR ACSS 
NSC FOR SENIOR AFRICA DIRECTOR 
STATE PASS TO USAID FOR L.DOBBINS AND J. HARMON 
COMMERCE FOR ROBERT TELCHIN 
 
SIPDIS 
 
E.O.12958: N/A 
TAGS: PGOV PREL ASEC PHUM ECON ZI
 
SUBJECT: ZIM NOTES 04-30-2009 
 
HARARE 00000356  001.2 OF 003 
 
 
----------- 
¶1.  SUMMARY 
----------- 
 
Topics of the week: 
 
- Continuing Stalemate... 
- Farm Invasions Decreasing... 
- MDC Targets Gono... 
- Teachers Pledge to Strike... 
- The Herald Attacks Eddie Cross... 
- U.S. Volunteer Surgical Team Arrives... 
- HIFA Enlightens Harare Again... 
- Dutch Farmers Win Legal Battle over Farm Seizures... 
- Sugar Crop Falls Further; no Exports to U.S.... 
- Food Prices Continue To Fall... 
- Dollarization Sees Return Of Credit Facilities... 
- Enthusiastic Response to Counterfeit Detection Training... 
 
----------------------------- 
On the Political/Social Front 
------------------------------ 
 
¶2.  Continuing Stalemate...  Principals Robert Mugabe, Morgan 
Tsvangirai and Arthur Mutambara have met five times in the last two 
weeks to deal with outstanding issues.  While agreement has 
reportedly been reached on appointment of governors, permanent 
secretaries, and ambassadors, a number of important issues remain 
unresolved.  These include: continuance in office of Reserve Bank of 
Zimbabwe Governor Gideon Gono and Attorney General Johannes Tomana 
who were appointed by Mugabe in violation of the September 15 
Inter-Party Agreement; the stripping by Mugabe of portfolios from 
Minister of Information and Communications Technology Nelson 
Chamisa; refusal of Mugabe to swear in Roy Bennett as Deputy 
Minister of Agriculture; continuing farm invasions and disruptions; 
and the re-arrest of three MDC officials after a judge had ordered 
them released on bail. 
 
¶3.  Tsvangirai's honeymoon period is coming to an end and there is 
growing impatience on the part of MDC officials and civil society to 
move ahead.  The lead editorial in this week's Zimbabwe Independent 
read, "Progress on reforms much too slow."  At an MDC ministerial 
caucus last week, a number of ministers, led by Chamisa, called on 
Tsvangirai to become more active in seeking resolution of these 
issues.  MDC sources have told us that if no significant progress is 
made at the next principals meeting on Monday, Tsvangirai will hold 
a press conference to place the blame on Mugabe and will then appeal 
to SADC and the AU, as guarantors of the Agreement, to address 
Mugabe's intransigence. 
 
¶4.  Farm Invasions Decreasing...  Trevor Gifford, president of the 
Commercial Farmers' Union, told the Ambassador today that farm 
invasions and disruptions, while continuing, have significantly 
decreased.  Gifford also said he learned that Deputy Prime Minister 
Arthur Mutambara, who led a ministerial delegation last week to 
investigate the problem, tabled a report in Cabinet this week that 
forcefully described the problem and placed responsibility on the 
police for failing to deal with unlawful activity by those seeking 
to take over farms or disrupt farm activities.  Cabinet, which acts 
by consensus, refused to take action to attempt to end these 
unlawful activities and referred the matter to the principals. 
 
¶5.  MDC Targets Gono...  In last week's cabinet meeting, Minister of 
Q5.  MDC Targets Gono...  In last week's cabinet meeting, Minister of 
Finance Tendai Biti, backed by several ZANU-PF ministers allied to 
the Mujuru faction, reportedly called for an investigation into 
Gono's malfeasance at the RBZ.  Other ZANU-PF ministers countered 
that Biti was essentially trying to investigate Mugabe.  After 
heated argument, Biti's effort failed.  Separately, Tsvangirai met 
with Gono to attempt to convince him to step down.  The MDC's next 
step will be to have the House of Assembly authorize a committee 
 
HARARE 00000356  002.2 OF 003 
 
 
investigation of Gono. 
 
¶6.  Teachers Pledge to Strike...  At their 28th national congress 
over the weekend, Zimbabwe's largest and mainstream teachers' union, 
ZIMTA, pledged that given no progress in their remuneration they 
would not return to work for the opening of the second school term 
on May 5.  Civil servants, including teachers, continue to be paid a 
monthly US$100 allowance, which ZIMTA states is insufficient for 
teachers even to pay their own children's school fees.  Minister of 
Education David Coltart responded with a vague statement that he was 
working on a package for them, but he has not announced any 
specifics or confirmation of funding to make a raise a reality. 
Whether government schools will open next week remains anyone's 
guess. 
 
¶7.  The Herald Attacks Eddie Cross...  After publishing a letter by 
MDC-T MP Eddie Cross critical of its coverage of the U.S. and UK 
ambassadors, The Herald began what a senior editor told us would be 
a series of attack articles on the MP.  Today's vitriolic piece 
leads with "Cross: Bitter and irrelevant."  Cross had criticized a 
vicious attack by The Herald on Ambassadors McGee and Pocock in last 
week's paper.  The Herald, surprisingly, published Cross' letter, 
which accused the newspaper of a lack of professionalism and 
flagrant violation of provisions of the Global Political Agreement. 
"When we are through with Cross, he will really be cross," the 
senior editor told us. 
 
¶8.  U.S. Volunteer Surgical Team Arrives...  The U.S.-based 
volunteer medical team, Operation of Hope, arrived in Harare this 
week to provide another round of free surgical services to correct 
cleft and lip palate deformities.  The group will conduct operations 
until May 16 at Harare's private St. Anne's Hospital.  This is the 
team's fifth visit to Zimbabwe.  The group last visited in October 
2008, when it was forced to relocate to St. Anne's from Harare 
Hospital Children's Ward due to inadequate facilities at the 
government institution. 
 
¶9.  HIFA Enlightens Harare Again...  The 10th anniversary edition of 
the Harare International Festival of the Arts (HIFA) opened this 
week under the theme "Enligh10ment." The six-day festival features 
hundreds of shows by dozens of artists from all over the world. 
Once again, the festival is providing a platform for discussion of 
contentious issues, as well as entertainment.  For example, the 
opening show directly attacked the political violence plaguing 
Zimbabwe, including displaying the names of every person killed 
since March 2008.  Other shows tackle abuse of Zimbabwean migrants 
in South Africa and land reform. The U.S. Embassy is represented by 
the Rhythm Road tour of jazz quartet, Helen Sung & NuGenerations. 
 
----------------------------------- 
On the Economic and Business Front 
---------------------------------- 
 
 
¶10.  Dutch Farmers Win Legal Battle over Farm Seizures...  Following 
a six-year battle between 13 Dutch farmers and the GOZ, the 
International Center for the Settlement of Investment Disputes 
QInternational Center for the Settlement of Investment Disputes 
(ICSID) sitting in Paris ruled in the farmers' favor.  In its 
decision of April 22, the Center ruled that the GOZ broke a 
bilateral investment agreement with The Netherlands by seizing the 
farms without providing just compensation.  The ICSID awarded the 
farmers more than 14 million pounds sterling (about US$21 million 
which includes interest) in compensation.  Whether the ruling could 
lead to the seizure of GOZ assets overseas is not yet clear. 
 
¶11.  Sugar Crop Falls Further; no Exports to U.S....  Zimbabwe Sugar 
Sales informed us that it would not supply its raw sugar under 
favorable tariff-rate quotas (TRQ) to the U.S. for the 2008/09 
period due to the shrinking crop size.  The crop will fall to 
286,000 MT this year, according to the sugar company, almost 6% 
 
HARARE 00000356  003 OF 003 
 
 
below last year's production.  The decline is due to the overall 
state of the economy, price controls on sugar in the local market, 
unavailability of inputs, electric power shedding, and rail and road 
transport bottlenecks.  Zimbabwe earned US$16.7 million in sugar 
exports to the U.S. in 2006 and US$5.8 million in 2007, according to 
the U.S. Department of Commerce's TradeStatsExpress. 
 
¶12.  Food Prices Continue To Fall... An independent survey showed 
that food prices fell by 2.4% in April. 
 
¶13.  Dollarization Sees Return Of Credit Facilities... The 
improvement in the retail business environment ushered in by 
dollarization has also brought about the return of credit facilities 
which had been suspended in 2007 following the introduction of price 
controls and hyperinflation.  Most leading retailers are now 
offering credit facilities with generous terms like a 25% deposit, 
interest free, and three months to pay. 
 
¶14.  Enthusiastic Response to Counterfeit Detection Training...  The 
United States Secret Service (USSS) Attach and Special Investigator 
from Embassy Pretoria provided training this week in Harare to 
members of the American Business Association of Zimbabwe and the 
Bankers Association of Zimbabwe on the security features of valid 
U.S. denominations.  Due to overwhelming interest and the recent 
legalization of the use of the USD, the USSS team intends to return 
to conduct additional sessions.  Training the business community and 
maintaining relationships is essential for Post to track the 
prevalence of counterfeit U.S. currency, as the police do not report 
counterfeit currency usage to the Embassy. 
 
 
MCGEE