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RUCNSAD/SOUTHERN AF DEVELOPMENT COMMUNITY COLLECTIVE
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RUEHAR/AMEMBASSY ACCRA 1845
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RUAEJAA/JAC MOLESWORTH RAF MOLESWORTH UK
UNCLAS SECTION 01 OF 03 HARARE 000243
SIPDIS
AF/S FOR S.HILL
ADDIS ABABA FOR USAU
ADDIS ABABA FOR ACSS
NSC FOR SENIOR AFRICA DIRECTOR B.PITTMAN
TREASURY FOR J.RALYEA AND T.RAND
STATE PASS TO USAID FOR L.DOBBINS AND E.LOKEN
COMMERCE FOR BECKY ERKUL
SIPDIS
E.O.12958: N/A
TAGS: PGOV PREL ASEC PHUM ECON ZI
SUBJECT: Zim Notes 03-28-2008
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1. The Embassy Harare Political/Economic Section began producing
Zim Notes in July, 2007 to present a perspective on current events
in Zimbabwe. Suggestions are always welcome. If you would like to
receive Zim Notes by email, as well, please contact Frances Chisholm
at chisholmfm@state.gov. Distribution is restricted to U.S.
government employees.
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Price Movements-Exchange Rate and Selected Products
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2. Price Movements-Exchange Rate and Selected products
Parallel rate for cash steady at ZW$42million:US$1; bank transfer
rate: Z$65 million; official rate: ZW$$30,000:US$1
Sugar rose to Z$50 million/2kg vs. controlled price of
Z$8million/2kg
Cooking oil more than doubled to Z$95million/750ml vs. controlled
price of Z$9.3million/750ml
Petrol and diesel rose to Z$60million/liter vs. controlled price of
Z$60,000/liter
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On the Political/Social Front
-----------------------------
3. Zimbabweans Head To The Polls... A poll conducted by the Mass
Public Opinion Institute of Zimbabwe (MPOI) from March 3 to March 10
showed the MDCQs Tsvangirai with about 30 percent support, President
Robert Mugabe with about 20 percent, and Simba Makoni with about 9
percent. Thirty percent declined to state a preference; the
individuals who conducted the poll believe that most of this group
is sympathetic to the opposition. The MPOI poll comports with what
Embassy pre-election teams who visited a number of provinces found:
significant and growing support for Tsvangirai. Countering the MPOI
poll is a poll conducted by Joseph Kurebwa, a University of Zimbabwe
lecturer known to be sympathetic to Mugabe. He claims to have
sampled over 10,000 voters between February 15 and March 15 and
found that Mugabe had 56 percent support, Tsvangirai 26 percent, and
Makoni 13 percent. This poll may be an attempt to justify a Mugabe
victory which we believe cannot be achieved without significant
rigging. See Harare 227.
4. Sparse Attendance At Makoni Meeting In Harare... Independent
presidential candidate Simba MakoniQs March 26 meeting in Harare
targeted at women attracted only about 60 people, including SADC
observers and other independent candidates such as Fay Chung.
Makoni responded rather unconvincingly to the audience's questions
on social issues by saying he did not have any answers to their
concerns but as president would work to remove the barriers put in
place by ZANU-PF that prevent people from solving their own
problems. Makoni also argued that he was not a newcomer and had
always spoken out against poor GOZ policies when he was on the
ZANU-PF Central Committee and Politburo.
5. Health Sector Assessment... Dr. Sambe Duale from Tulane
University School of Public Health conducted a rapid assessment of
ZimbabweQs public health system for USAID from March 10-15. The
purpose was to provide an independent view of the current state of
the health care system and formulate recommendations for increased
support for short-term assistance to mitigate the effects of the
current social and economic decline. Despite the difficult and
deteriorating health care delivery environment, the dedication shown
by health care workers to maintain service provision is remarkable.
It is clear, as evidenced by the HIV programs, that little
investments in the system can yield outstanding results. While
health sector human resources, essential drugs, water and
sanitation, immunization, maternal and newborn health, and supply
chain logistics management were all recommended areas of focus,
essential drugs and supply chain delivery would be ripe for rapid
start-up for USAID given current in-country partners and existing
HARARE 00000243 002.2 OF 003
activities.
--------------------------
Economic and Businss News
--------------------------
6. Tighte Monetary Policy... In a move to mop up excess liuidity
that has been averaging Z$4 quadrillion a ay, driven primarily by
high government expenditre associated with the upcoming elections,
the Rserve Bank of Zimbabwe (RBZ) this week increased te term of
excess liquidity management zero-coupo bonds to 90 days from seven
days; hiked statutor reserve requirements on demand deposits for
comercial and merchant banks from 35-40 percent to 50percent; and
increased secured and unsecured accmmodation rates from 1,200
percent to 4,000 percent and from 1,650 percent to 4,500 percent
respectively. It will now be extremely expensive for banks to
borrow from the RBZ in case of shortages on the market. While the
tightening of monetary policy in a hyperinflationary environment is
welcome, these measures, in fact, penalize banks for a crime they
did not commit and increase the fragility of the sector by reducing
banksQ ability to lend profitably to the private sector. The more
prudent measure to counter excess liquidity would have been to
reduce GOZ spending.
7. RBZ Set To Raise Daily Cash Withdrawal Limit... Daily cash
withdrawal limits will rise from Z$500 million to Z$5 billion with
effect on April 4, 2008. The increase will alleviate a cash
shortage on the street that has arisen from the high transactions
demand for cash under hyperinflation. Although banks are currently
receiving all the cash they order from the RBZ, the low withdrawal
limit and consequent shortages slowed depreciation of cash on the
parallel market this week.
8. Civil Servant Salary Increases And An Apparently Hollow Threat
Of Another Price Blitz... The average salary of a civil servant
went up from Z$100 million in December 2007 to Z$500 million on
February 12, and was reportedly revised up again last week to more
than Z$4 billion a month (close to US$100/month). At a rally on
March 21, calling price increases part of a scheme to effect regime
change, President Mugabe threatened the riot act if businesses did
not roll back prices to February 12 levels. The GOZ met with the
business community on March 25 to discuss its Qunjustified price
increases,Q but an official from the Confederation of Zimbabwe
Industries (CZI) told us with relief that a price rollback was not
discussed; the focus was on business abiding by the price control
mechanisms already in place.
9. No Noticeable Increase In Supermarket Stocks... Contrary to our
expectations, and perhaps a sign of just how tight grocery supplies
continue to be, HarareQs supermarket shelves have failed to fill up
in this pre-election week. The aisles are still bare of most
price-controlled goods like fresh meat (except pork), milk, maize
meal, cooking oil, sugar, eggs and flour; bread deliveries arrive
only sporadically.
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Quotes Of The Week
------------------
10. President Mugabe addressing a rally in Bulawayo on March 23:
QYou can vote for them (MDC), but that will be a wasted vote. You
will be cheating yourself as there is no way we can allow them to
rule this country.
11. Independent presidential candidate Simba Makoni addressing a
rally in Chitungwiza on March 20, as reported in The Herald, March
24: QThere are stories that I have some Qbig wigsQ behind my
campaign but I want to make it clear today, I have no so-called Qbig
wigsQ from the ruling party behind my campaign. My Qbig wigsQ are
HARARE 00000243 003.2 OF 003
the people who are going to vote for me...
12. Chorus to the ZANU-PF campaign jingle aired regularly on the
GOZ-owned radio stations:
If you want a farm, Vote ZANU-PF
If you want a business, vote ZANU-PF
For a visionary leader, vote ZANU-PF
For consistent leadership, vote ZANU-PF
13. And Another Rich Pre-Election Week for Cartoons... See the Word
version of Zim Notes for those, and have a safe and quiet weekend.
MCGEE