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R 270709Z JUL 09
FM AMEMBASSY HARARE
TO RUEHC/SECSTATE WASHDC 4755
RUCNSAD/SOUTHERN AF DEVELOPMENT COMMUNITY COLLECTIVE
RUEHUJA/AMEMBASSY ABUJA 2358
RUEHAR/AMEMBASSY ACCRA 2957
RUEHDS/AMEMBASSY ADDIS ABABA 3074
RUEHRL/AMEMASSY BERLIN 1503
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RUEHDK/AMEMBASSY DAKAR 2704
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RUEHNR/AMEMBASSY NAIROBI 5565
RHEHAAA/NSC WASHDC
RHMFISS/EUCOM POLAD VAIHINGEN GE
RUEHGV/USMISSION GENEVA 2252
RUZEJAA/JAC MOLESWORTH RAF MOLESWORTH UK
RHEFDIA/DIA WASHDC

UNCLAS SECTION 01 OF 03 HARARE 000613 
 
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 07-24-2009 
 
HARARE 00000613  001.2 OF 003 
 
 
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¶1.  SUMMARY 
----------- 
 
Topics of the week: 
 
- Launch of Organ for National Healing, Reconciliation, and 
Integration... 
- Senate Passes Biti's Budget... 
- MDC Gets Ambassadors... 
- Zaka North MP Convicted... 
- Civil Servants Get 50% Raise... 
- Foul Play in Death of Manicaland MP? 
- AG Tomana Refuses to Budge... 
- Zimbabwe: Still Failing... 
- Month-on-Month Inflation Rises in June... 
- Demutualization of Zimbabwe Stock Exchange (ZSE) Begins... 
- Hwange Colliery Company Limited (HCCL) Repairs Dragline... 
- Zimbabwe-South Africa Investment Agreement Soon... 
 
----------------------------- 
On the Political/Social Front 
------------------------------ 
 
¶2.  Launch of Organ for National Healing, Reconciliation, and 
Integration...  President Mugabe, Vice-President Tsvangirai, and 
Deputy Prime Minister Mutambara, representing their respective 
parties, addressed the initial public meeting of the Organ which was 
called for by the Global Political Agreement.  The launch is 
intended to mark the beginning of three days dedicated to national 
healing as well as a longer process.  Civil society organizations 
boycotted the event as they continue to call for an independent body 
to investigate human rights abuses and reparations for victims. 
 
¶3.  Senate Passes Biti's Budget...  The Senate passed the Finance 
and Appropriations Bills, giving legal credence to Finance Minister 
Tendai Biti's budget presented last week.  The new bills eliminated 
the duty on basic commodities, which will hopefully increase 
production, and raised taxes on tobacco, beer, and wine.  In 
addition, the bills scrapped duties on imported newspapers, 
telephones, computers, and printers.  Econet wireless has already 
announced reduced cellphone prices reflecting the elimination of the 
import duty. 
 
¶4.  MDC Gets Ambassadors... Hebson Makuvise, who has been named as 
one of five new MDC ambassadors, paid a courtesy call on the Charg 
on Thursday.  A childhood friend of Prime Minister Morgan 
Tsvangirai, Makuvise went into exile in London in 2001 and 
represented the MDC in the UK and with Europe.  He returned to 
Zimbabwe for the first time the day before Tsvangirai's February 
inauguration and was interrogated at the airport for five hours 
before being released.  Makuvise will be posted to Germany.  MDC-T 
will also have ambassadorships in Australia, Sudan, and Nigeria; 
MDC-M's sole ambassadorship will be in Senegal.  Makuvise also 
confirmed that new governors will assume office on September 1. 
 
¶5.  Zaka North MP Convicted...  Ernest Mudavanhu (MDC-T) was 
convicted on July 21 for abusing subsidized farming inputs.  Harare 
magistrate Olivia Mariga sentenced him to two years in prison, with 
six months suspended for good behavior.  Mudavanhu filed an appeal 
on Thursday.  He is the fifth MDC MP convicted of a crime in recent 
months.  This conviction is the latest in an apparent effort to pick 
off MDC members of parliament in preparation for possible 
Qoff MDC members of parliament in preparation for possible 
by-elections that could increase ZANU-PF's numbers in parliament. 
 
¶6.  Civil Servants Get 50% Raise...  Public Service Minister Eliphas 
Mukonoweshuro (MDC-T) announced this week that civil servants, who 
had threatened to strike over low wages, will now receive monthly 
pay averaging US$150, up from the US$100 they have been receiving 
since February.  They will also again receive health insurance. 
 
HARARE 00000613  002.2 OF 003 
 
 
Reactions are mixed, with many civil servants and union leaders 
continuing to clamor for higher wages. 
 
¶7.  Foul Play in Death of Manicaland MP?  ZANU-PF's MP for Mutare 
North, Charles Pemhenayi, was buried this week after dying in a car 
accident on a rural road in mountainous Nyanga on July 17.  After 
initially asserting that foul play was not suspected, police now 
report that a car sped away when police first arrived on the 
accident scene to investigate the deadly crash.  The MP's wife and 
son suffered minor injuries in a separate car accident on Tuesday on 
their way to Pemhenayi's funeral. 
 
¶8.  AG Tomana Refuses to Budge...  In an interview this week, 
Attorney General Johannes Tomana reasserted the legitimacy of his 
appointment as the government's top prosecutor.  He made the 
statements responding to criticism from Finance Minister Tendai Biti 
and Minister of Information Communication Technology Nelson Chamisa 
who accused Tomana of being "divisive" for refusing to release the 
passport of MDC treasurer Roy Bennett.  Tomana was appointed by 
President Robert Mugabe without consultation with Morgan Tsvangirai 
and Arthur Mutambara as called for by the Global Political 
Agreement; his presence in the government continues to be a point of 
contention with the MDC. 
 
¶9.  Zimbabwe: Still Failing...  In its annual ranking of failed 
states, Foreign Policy Magazine placed Zimbabwe second, just after 
Somalia.  Zim scored perfect 10s for Human Flight and Economic 
Decline.  The full list is at: http://www.foreignpolicy.com/ 
articles/2009/06/22/2009_failed_states_ 
index_interactive_map_and_rankings. 
 
----------------------------------- 
On the Economic and Business Front 
---------------------------------- 
 
¶10.  Month-on-Month Inflation Rises in June...  Following five 
months of deflation since January 2009, the country recorded a 
month-on-month inflation of 0.6 percent in June primarily due to a 
rapid increase in prices of non-food products which rose by 1.45 
percent.  Prices of food and non-alcoholic beverages actually fell 
by 1.26 percent in June compared to a decline of just 0.84 percent 
in May 2009. 
 
¶11.  Demutualization of Zimbabwe Stock Exchange (ZSE) Begins... 
Following the Finance Minister's mid-year fiscal policy review 
statement on the demutualization of the ZSE, the Chief Executive 
Officer of the bourse is now busy producing a document outlining the 
processes to be followed in forming a company.  He believes that the 
ZSE will be demutualized by end of August 2009, thereby unlocking 
value by allowing more shareholders to invest on the local bourse. 
 
¶12.  Hwange Colliery Company Limited (HCCL) Repairs Dragline... 
According to a report in the Herald (July 23, 2009), HCCL has 
finished some interim repairs to its dragline but more work still 
needs to be done to the supporting equipment used together with the 
dragline in coal mining.  All repair works are expected to be 
completed by the third week of August, paving the way for increased 
Qcompleted by the third week of August, paving the way for increased 
coal output at the company. 
 
¶13.  Zimbabwe-South Afric Investment Agreement Soon...  At a 
breakfast seminar organized by business to discuss the fiscal review 
statement, the Minister of Finance assured stakeholders that the 
long-awaited Bilateral Investment Protection Agreement with South 
Africa would be concluded within a few weeks. Failure to conclude 
the agreement has been blamed for the low take-up of investment 
opportunities in Zimbabwe by South African businesses who expressed 
concern over guarantees on security of investments during a visit in 
April 2009. 
 
----------------- 
 
HARARE 00000613  003.2 OF 003 
 
 
Quote of the Week 
----------------- 
 
¶14.  "We are slowly liberating ourselves from the era of economic 
fascism and economic hedonism.........  We have a duty to rise above 
the mediocrity of subjectivities and the sterility of conflict.  We 
have a duty to ignore the long sulk of godfathers.  Zimbabwe is too 
valuable a dream to be squandered." -- Finance Minister Tendai Biti, 
delivering his mid-term budget statement. 
 
 
DHANANI