Air Zimbabwe servicing Tehran

It looks like Air Zimbabwe was hobbling all over in 2008 as the country’s economic continued to plunge. It inked a deal with Iran for five weekly flights to Tehran.

The Iranian deal was supposedly representative of the government’s “Look East” policy designed to increase trade between Zimbabwe and Middle Eastern and Asian countries.

Air Zimbabwe had signed anther deal with the Congolese airline to fly to Dubai and Brussels.

Full cable:

Viewing cable 08HARARE1013, ZIM NOTES 11-7-2008

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VZCZCXRO7479

RR RUEHBZ RUEHDU RUEHJO RUEHMR RUEHRN

DE RUEHSB #1013/01 3151320

ZNR UUUUU ZZH

R 101320Z NOV 08

FM AMEMBASSY HARARE

TO RUEHC/SECSTATE WASHDC 3676

RUCNSAD/SOUTHERN AF DEVELOPMENT COMMUNITY COLLECTIVE

RUEHUJA/AMEMBASSY ABUJA 2123

RUEHAR/AMEMBASSY ACCRA 2418

RUEHDS/AMEMBASSY ADDIS ABABA 2538

RUEHRL/AMEMBASSY BERLIN 1038

RUEHBY/AMEMBASSY CANBERRA 1814

RUEHDK/AMEMBASSY DAKAR 2169

RUEHKM/AMEMBASSY KAMPALA 2594

RUEHNR/AMEMBASSY NAIROBI 5022

RHEHAAA/NSC WASHDC

RHMFISS/EUCOM POLAD VAIHINGEN GE

RUEHGV/USMISSION GENEVA 1687

RUZEJAA/JAC MOLESWORTH RAF MOLESWORTH UK

RHEFDIA/DIA WASHDC

RUEAIIA/CIA WASHDC

UNCLAS SECTION 01 OF 03 HARARE 001013

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 BECKY ERKUL

SIPDIS

E.O.12958: N/A

TAGS: PGOV PREL ASEC PHUM ECON ZI

SUBJECT: ZIM NOTES 11-7-2008

———–

¶1. SUMMARY

———–

Topics of the week:

– SADC Extraordinary Summit on Deck…

– Mugabe Congratulates Obama…

– Global Fund “diversion” goes public…

– Cholera Outbreak Continues…

– Civil Service Corruption Rampant…

– WOZA Women Released on Bail…

– Visiting American Surgical Team in Limbo…

– ZBC Bars U.S. Embassy from U.S. Election Panel…

– Government Suspends Duty on Agricultural Inputs…

– RBZ Introduces New Notes and Raises Withdrawal Limits…

– Air Zimbabwe Now Servicing Tehran…

– Zimbabwean Ivory Sold…

– Gold Sector Starts Closing Down Mines…

———————————

¶2. Price Movements-Exchange Rate

and Selected products

———————————

Parallel rate for cash more than doubled to Z$180,000:US$1

Check rate skyrocketed to Z$100 trillion:US$1 against inter-bank

average of Z$770:US$1

Bread on the parallel market rose to Z$250,000

Sugar rose to $360,000/2kg

Petrol and diesel went up to Z$240,000/liter

—————————–

On the Political/Social Frot

—————————–

¶3. SADC Extraordinary Summit on Deck… The SADC extraordinary

summit on Zimbabwe is scheduled to be held on November 9 in

Johannesburg. All 15 SADC heads of states have been invited, but

Tanzania’s Kikwete and Botswana’s Khama are not expected due to

other commitments.

¶4. Mugabe Congratulates Obama… Friday’s The Herald contains a

statement from President Robert Mugabe congratulating Barack Obama

on his victory and expressing desire for improved U.S.-Zimbabwe

relations. An op-ed in Thursday’s The Herald, entitled “Obama’s

victory an inspiration to many,” also congratulated Obama, but

blamed President Bush and sanctions, specified as the Zimbabwe

Democracy and Economic Recovery Act (ZDERA), for Zimbabwe’s economic

predicament. It expressed hope for better relations with the U.S.

and noted that “Our quarrel is with the British.”

¶5. Global Fund “diversion” goes public… The New York Times broke

the story on the Reserve Bank’s “diversion” of over US$7 million

that was donated to Zimbabwe by the Global Fund for AIDS, TB, and

Malaria. On November 6, the government mouthpiece The Herald

declared Zimbabwe would pay the money back within seven days and

quoted Reserve Bank Governor Gideon Gono as saying that only “cheap

minds” would suggest the money was used to buy tractors and TVs for

the judiciary. On November 7 The Herald reported that the RBZ on

November 6 provided the Global Fund with proof the funds had been

repaid. Post is seeking confirmation.

¶6. Cholera Outbreak Continues… A cholera outbreak continues in

the Harare high-density suburb of Budiriro, as the WHO confirmed 210

HARARE 00001013 002 OF 003

cases and 20 deaths as of Wednesday. Harare City Health has agreed

to “super-chlorinate” shallow wells in Budiriro, and an outbreak

taskforce-including UNICEF, WHO, NGO partners, and the GOZ’s Civil

Protection Unit and Ministry of Health-is meeting daily to

coordinate a response. Water is being delivered daily throughout

the suburbs by UNICEF, a robust health and hygiene promotion

campaign is in process, and the Budiriro Polyclinic has been set up

as a cholera treatment center.

¶7. Civil Service Corruption Rampant… Another indication of

Zimbabwean decay is the endemic corruption within the Zimbabwean

civil service, resulting in a near total collapse of government

controls over passports and official documents. Civil servants,

whose salaries have been eroded to practically nothing by

hyperinflation, have become not only susceptible, but dependent on

bribes and kickbacks for basic subsistence. As a result, government

controls over passport applications and civil documents have

disappeared and fraudulent document vendors have become widespread.

See Harare 996.

¶8. WOZA Women Released on Bail… After three weeks in jail, Women

of Zimbabwe Arise leaders Jenni Williams and Magodonga Mahlangu were

granted bail by the High Court on November 4. Leaving jail, they

shared horrific stories of worsening conditions and food shortages

that plague Zimbabwe’s prisons.

¶9. Visiting American Surgical Team in Limbo… The volunteer

medical team providing free cleft lip and palate operations to

individuals with facial deformities is “on temporary hold” due to

failure to procure much-needed medical supplies. Jenifer Trubenbach,

coordinator of Operation of Hope told journalists that the team is

having difficulties procuring drugs locally for conducting the

operations.

¶10. ZBC Bars U.S. Embassy from U.S. Election Panel… The

Zimbabwean Broadcasting Corporation withdrew an invitation to have a

U.S. Embassy official on its televised panel on U.S. elections this

week saying “their equipment needed servicing.” The producer of the

program later told PAS that their CEO was pressured from above not

to go ahead with the program “if a U.S. Embassy official is on

board.” The debate went ahead with local panelists.

———————————-

On the Economic and Business Front

———————————-

¶11. Government Suspends Duty on Agricultural Inputs… In a

desperate move to augment meager local production, the government

announced three statutory instruments suspending import duties on

certain agricultural inputs such as seed, fertilizers, gum shoes and

rain coats. While welcome news for farmers, it may be a case of too

little too late given that the 2008/09 planting season is already

underway.

¶12. RBZ Introduces New Notes and Raises Withdrawal Limits… In

keeping with precedent, this week the Reserve Bank of Zimbabwe

introduced a Z$100,000 note (US$0.56 at the cash rate of

Z$180,000:US$1), a Z$500,000 note (US$2.78) and a Z$1,000,000

(US$5.56) note. The move comes in conjunction with an increase in

daily cash withdrawal limits from Z$50,000 and Z$10,000 to Z$500,000

and Z$1,000,000 for individuals and companies respectively. Given

the prevailing hyper-inflationary environment, the new limits are

likely to become inadequate almost immediately.

¶13. Air Zimbabwe Now Servicing Tehran… According to state media,

Air Zimbabwe has inked a deal with Iran allowing the airline five

weekly flights to Tehran. The Iranian deal is supposedly

representative of the GOZ’s “look east” policy designed to increase

HARARE 00001013 003 OF 003

trade between Zimbabwe and Middle Eastern and Asian countries.

¶14. Zimbabwean Ivory Sold… On November 3, Zimbabwe sold 3.5 tons

of ivory for over US$450,000, with the money purportedly earmarked

for the country’s cash-strapped wildlife authority. Last year, the

Convention on International Trade in Endangered Species (CITES)

ruled that Botswana, Namibia, South Africa and Zimbabwe could sell

some 97 tons of stockpiled ivory to approved Japanese and Chinese

buyers.

¶15. Gold Sector Starts Closing Down Mines… According to the

Chamber of Mines, Zimbabwe’s largest gold mining group, Metallon,

has suspended operations at five of its mines forcing more than

3,500 employees (14% of total gold mining jobs) to go on forced

leave. The sector is short of working capital due to the US$30

million they are owed by the RBZ. According to the Chamber of

Mines, these problems are not unique to gold as Bindura Nickel is

also facing serious problems.

—————–

Quote of the Week

—————–

¶16. “The question is, for how long shall Tsvangirai urinate in our

faces and tell us it’s raining?” Caesar Zvayi, Senior Asst. Editor

for The Herald, November 3, 2008.

DHANANI

(27 VIEWS)