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R 170858Z AUG 09
FM AMEMBASSY HARARE
TO RUEHC/SECSTATE WASHDC 4812
RUCNSAD/SOUTHERN AF DEVELOPMENT COMMUNITY COLLECTIVE
RUEHUJA/AMEMBASSY ABUJA 2369
RUEHAR/AMEMBASSY ACCRA 2978
RUEHDS/AMEMBASSY ADDIS ABABA 3094
RUEHRL/AMEMBASSY BERLIN 1523
RUEHBY/AMEMBASSY CANBERRA 2357
RUEHDK/AMEMBASSY DAKAR 2724
RUEHKM/AMEMBASSY KAMPALA 3142
RUEHNR/AMEMBASSY NAIROBI 5585
RHEHAAA/NSC WASHDC
RHMFISS/EUCOM POLAD VAIHINGEN GE
RUEHGV/USMISSION GENEVA 2272
RUZEJAA/JAC MOLESWORTH RAF MOLESWORTH UK
RHEFDIA/DIA WASHDC

UNCLAS SECTION 01 OF 03 HARARE 000660 
 
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 08-14-2009 
 
----------- 
¶1.  SUMMARY 
----------- 
 
Topics of the week: 
 
- MDC and Outstanding Issues... 
- New Doctor's Strike a Blow to Healthcare Efforts... 
- Tsvangirai Saluted by Defense Chiefs?... 
- MDC-M Pressures Speaker to Ban MPs... 
- Secretary Clinton Blames Leadership for Zim Collapse... 
- ILO Investigation Begins... 
- UMass Revokes Mugabe's Honorary Degree... 
- Investors Assured of Security of Tenure in - Zimbabwe's Mining 
Sector... 
- Exports Decline... 
- Dollarization Slows Bank Lending... 
- Grain Shortages Predicted By September 2009... 
- Competition Forces the Grain Marketing Board (GMB) to Improve 
Service... 
 
----------------------------- 
On the Political/Social Front 
------------------------------ 
 
¶2.  MDC and Outstanding Issues...  A meeting on August 13 between 
principals President Robert Mugabe, Prime Minister Morgan 
Tsvangirai, and Deputy Prime Minister Arthur Mutambara failed to 
make progress on outstanding Global Political Agreement issues, 
principally the appointments of Reserve Bank of Zimbabwe governor 
Gideon Gono and Attorney General Johannes Tomana, and the failure to 
swear in Roy Bennett as Deputy Minister of Agriculture.  Tsvangirai 
will raise these issues at a ministerial retreat the weekend of 
August 22.   He then plans to urge South African president Jacob 
Zuma to exert pressure on Mugabe when Zuma visits Zimbabwe for an 
agricultural show on August 27.  Tsvangirai will also attempt to 
visit a number of SADC capitals in anticipation of the SADC Summit 
of Heads of State and Government in Kinshasa from September 2 to 
September 8.  Tsvangirai and MDC-T are increasingly concerned about 
Tomana, who they blame for the selective prosecution of MDC-T MPs, 
and they may be willing to strike a deal with Mugabe whereby Gono 
would remain in office and Tomana would go. 
 
¶3.  New Doctor's Strike a Blow to Healthcare Efforts...  Doctors at 
major hospitals in Harare and Bulawayo began boycotting work on 
August 12 to press the cash-strapped government for pay increases. 
The Zimbabwe Hospital Doctors Association that represents all state 
doctors wants them paid a salary of US$1,000 per month plus a US$500 
allowance compared to the US$390 (US$220 of which comes from a 
British relief agency) that they earn now.  The association has 
threatened to extend the strike to all state hospitals across the 
country if their demands are not met. 
 
¶4.  Tsvangirai Saluted by Defense Chiefs?...  Air Force commander 
Perence Shiri and National Army commander Phillip Sibanda appeared 
on Tuesday to break ranks with fellow top commanders by saluting 
Tsvangirai during the Defense Forces Day ceremony.  This potential 
thawing of the frosty relationship between the military and the MDC 
may come in response to last week's first meeting of the National 
Security Council, of which Tsvangirai is a member.  However, some 
reports have suggested that the salute was actually directed at 
retired General Solomon Mujuru who was seated near Tsvangirai, while 
Qretired General Solomon Mujuru who was seated near Tsvangirai, while 
other reports suggest it was merely part of a handshake. 
 
¶5.  MDC-M Pressures Speaker to Ban MPs...  Welshman Ncube, the 
Secretary General of the MDC-M, issued an ultimatum calling on 
Parliamentary Speaker Lovemore Moyo to ban the three MPs that the 
MDC-M leaderhip has expelled from the party for indiscipline. 
Ncube told a news conference in Harare on August 13 that if the 
Speaker fails to declare the House of Assembly seats vacant, the 
 
HARARE 00000660  002 OF 003 
 
 
party will refer the matter to judicial authorities on corruption 
grounds.  The three MPs have been highly critical of party leaders 
including Deputy Prime Minister Arthur Mutambara, who they accuse of 
siding with ZANU-PF in the inclusive government. 
 
¶6.  Secretary Clinton Blames Leadership for Zim Collapse...  During 
a visit to South Africa where Secretary of State Hillary Clinton 
pressed President Jacob Zuma on assuming a more forward role in 
promoting African democracy, Clinton blamed the huge number of 
Zimbabwean migrants in South Africa on leadership failures in 
Harare.  Meanwhile, President Mugabe used this week's burial service 
for the late VP Msika as an opportunity to continue blaming the West 
for Zimbabwe's woes. 
 
¶7.  ILO Investigation Begins...  A delegation appointed by the 
International Labor Organization (ILO) arrived this week to begin an 
official investigation into a 2006 incident in which labor leaders 
were brutally assaulted by police after staging protests against the 
government.  Zimbabwe Congress of Trade Unions (ZCTU) Secretary 
General Wellington Chibebe and others suffered permanent injuries 
from the beatings.  The findings will be presented in Geneva later 
this year. 
 
¶8.  UMass Revokes Mugabe's Honorary Degree...  In a move without 
precedent in the University of Massachusetts' 145 year history, the 
school is revoking an honorary degree bestowed upon President Mugabe 
in 1986.  Mugabe was awarded the honorary Doctorate of Laws degree 
for his "exemplary devotion to social justice."  The revocation 
follows similar moves taken by Michigan State and the UK's Edinburgh 
University last year. 
 
----------------------------------- 
On the Economic and Business Front 
---------------------------------- 
 
¶9.  Investors Assured of Security of Tenure in Zimbabwe's Mining 
Sector...  At the fifth annual mining conference held in 
Johannesburg last week, investors quizzed the Minister of Mines and 
Mining Development over security of tenure and indigenization. 
According to an economist at the Zimbabwe Chamber of Mines, the 
Minister told the conference that the Mining Bill that proposed 51 
percent shareholding was being revised and would be made more 
investor friendly.  The Chamber of Mines proposes lower local equity 
thresholds commensurate with Zimbabweans' ability to finance the 
purchase. 
 
¶10.  Exports Decline...  Official data from the Reserve Bank of 
Zimbabwe shows that the country's total exports declined by 38 
percent from US$752 million in the first six months of 2008 to 
US$476 million during the corresponding period of 2009.  Much of the 
fall was caused by a combination of a poor local operating 
environment and the global financial crisis that reduced demand for 
Zimbabwe's products abroad.  The mining sector accounted for 44 
percent of total exports and tobacco accounted for 26 percent while 
manufactured exports accounted for only 14 percent. 
 
¶11.  Dollarization Slows Bank Lending...  Reserve Bank data also 
Q11.  Dollarization Slows Bank Lending...  Reserve Bank data also 
show that Zimbabwe's banks have significantly scaled back their 
lending following the demise of the Zim dollar.  The banks' average 
loan-to-deposit ratio in the second quarter of the year was just 36 
percent, down from 62 percent during the same period in 2008.  The 
regional average is 79 percent.  Local bankers say one reason for 
the slower pace of lending is that the interbank market disappeared 
along with the Zim dollar due to the local scarcity of widely 
accepted USD-denominated securities to serve as collateral.  Another 
reason, according to the bankers, is that deposits in the banking 
system now turn over more rapidly than before.  These two factors 
have made lending an even riskier proposition for banks. 
 
¶12.  Grain Shortages Predicted By September 2009...  The National 
 
HARARE 00000660  003 OF 003 
 
 
Early Warning Unit (NEWU) said that the majority of the households 
in its June survey are currently able to subsist from their own 
grain production, though these stocks are only expected to last 
until September/October 2009.  The other sources of consumed grain 
identified in the survey were derived from casual labor, with less 
than one percent of the sampled areas indicating food aid and 
remittances as major sources of grain. 
 
¶13.  Competition Forces the Grain Marketing Board (GMB) to Improve 
Service...  Following the liberalization of grain marketing, the 
government owned GMB improved service delivery by paying farmers 
early on a "first come-first served" basis.  As of the end of July, 
the parastatal had paid out US$3 million to farmers for grain 
deliveries.  Since June 2009, the GMB has been dispatching inputs to 
its depots around the country to enable farmers to prepare for the 
coming cropping season early, although the take up by farmers is 
reportedly disappointing. 
 
----------------- 
Quote of the Week 
----------------- 
 
¶14.  "Gentle firmness in the face of anger and intellectual approach 
to matters which inflame the emotions of others are hallmarks of 
quiet integrity." -- University of Massachusetts President David 
Knapp's description of President Mugabe in 1986 after presenting him 
with an honorary degree. 
 
 
DHANANI