Air Zimbabwe was pondering charging in foreign currency

Air Zimbabwe was toying with charging its air fares in foreign currency way back in 2003 but the national airline was never allowed to resulting in people flying to London for as little as US$25.

This was at the height of fuel shortages in the country with the United States embassy reporting that fuel queues were growing longer and at times stretching for up to 4km.

The embassy said some workers’ salaries had been so eroded that a monthly salary could not buy a single disposable razor from South Africa.

Full cable:

Viewing cable 03HARARE1070, Economy Slides Further

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This record is a partial extract of the original cable. The full text of the original cable is not available.

291400Z May 03

UNCLAS HARARE 001070

SIPDIS

SENSITIVE

STATE FOR AF/S and AF/EX

NSC FOR SENIOR AFRICA DIRECTOR JFRAZER

USDOC FOR 2037 DIEMOND

PASS USTR FLORIZELLE LISER

TREASURY FOR ED BARBER AND C WILKINSON

STATE PASS USAID FOR MARJORIE COPSON

¶E. O. 12958: N/A

TAGS: ECON ETRD EINV PGOV ZI

SUBJECT: Economy Slides Further

¶1. (SBU) Summary: Zimbabwe’s free-falling economy has

taken a turn for the worse. Fuel, electricity and even

bank notes are becoming scarcer. Business leaders who

laid hopes on the GOZ’s economic reform process a few

months ago are increasingly joining the Movement for

Democratic Change (MDC)’s call for a “final push.” End

Summary.

De-Industrialization Continues

——————————

¶2. (SBU) Incredible as it sounds, Harare’s fuel lines

have grown longer, often reaching 4 kilometers. In many

rural areas, motorized transport is dying out, leaving

Zimbabweans to hike as far as 30 kilometers for food

purchases or donations. There are workers whose monthly

salary will not cover a single disposable razor from

South Africa. The Reserve Bank lacks funds for imported

ink and paper to print new bank notes. Several banks

have stopped servicing cash withdrawals. Others are

limiting withdrawals to US$ 35 or stacks of Z$ 50 notes

(worth about 2 U.S. cents each/bring a shopping cart).

Even parastatal Air Zimbabwe is toying with no longer

accepting newly-worthless Zimdollars.

¶3. (SBU) Other than the export and financial sectors,

which are still above-water, the business community is in

deep despair. Even the GOZ’s relaxing of most price

controls last week failed to inspire optimism.

Businessmen cite the GOZ’s corruption, botched

normalization of fuel prices and inability to rescue an

imploding infrastructure. (The

Transportation/Communications PermSec told us most of the

National Railway of Zimbabwe’s locomotives are sidelined

due to lack of spare parts.) Business reps now consider

the GOZ incapable of guiding economic reform and are

gradually joining the MDC’s calls for a “final push” that

would end Robert Mugabe’s 23-year rule.

Comment

——-

¶4. (SBU) This seems to represent a sea change in business

attitudes over the past months. The latest 65 percent

devaluation of the Zimdollar was a painful blow for many,

who have now abandoned hope that the GOZ can liberalize

economics but ignore politics. While they would not

welcome additional 2-3 day stayaways, businessmen seem

willing to swallow even an indefinite stayaway if it ends

this ordeal.

Sullivan

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