Biti released, Williams and Mahlangu not

Movement for Democratic Change secretary-general Tendai Biti and legislator Eric Matinenga were released on bail a day before the presidential elections run-off but Women of Zimbabwe Arise leaders Jenni Williams and Magodonga Mahlangu remained at Chikurubi Prison pending their High Court hearing.

Biti was arrested on 12 June and was to face four charges including treason.

MDC leader Morgan Tsvangirai had insisted that the release of Biti was a prerequisite for negotiations.

Williams and Mahlangu were arrested while marching to the Zambian embassy in protest against the increasing violence in the run-up to the presidential elections run-off.

They also wanted to thank Zambia for speaking out on the Zimbabwe crisis.

Full cable:

Viewing cable 08HARARE554, ZIM NOTES June 27, 2008

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E.O.12958: N/A

TAGS: PGOV PREL ASEC PHUM ECON EAGR EFIN EMIN ZI

SUBJECT: ZIM NOTES June 27, 2008

—————

¶1. SUMMARY

—————

Topics of the week:

– MDC Pulls Out of Election Run-Off

– Tsvangirai Takes Refuge in Dutch Embassy

– Fallout from Raid on Opposition IDPs

– Biti and Matinenga Released from Jail

– As Abductions, Beatings, and Unlawful DetenQQ s@f62Qx

– Mining Sector Top Forex Earner

——————————————— ———-

¶2. Price Movements-Exchange Rate and Selected Products

——————————————— ———-

Parallel rate for cash more than doubled again to Z$18 billion:US$1

against inter-bank average of Z$10.6 billion:US$1

Bank transfer rate doubled to Z$3.9 trillion:US$1; official rate:

Z$$30,000: US$1

Bread more than doubled on the parallel market to Z$8 billion vs.

controlled price of Z$400 million

Sugar trebled to Z$25 billion/2kg vs. controlled price of Z$8

million/2kg

Cooking oil doubled to Z$15 billion/750ml vs. controlled price of

Z$9.3 million/750ml

Petrol and diesel climbed to Z$17 billion/liter vs. controlled price

of Z$60,000/liter

—————————–

On the Political/Social Front

—————————–

¶3. MDC Pulls Out of Election Run-Off… MDC president Morgan

Tsvangirai announced on June 20 that he would not participate in the

run-off election due to ongoing violence which made an election

impossible. Nevertheless, the GOZ decided to proceed with the June

27 election.

¶4. Tsvangirai Takes Refuge in Dutch QmQp>cn}of the chancery. See Harare

¶548.

¶5. Fallout from Raid on Opposition IDPs… MDC supporters and

their families displaced by political violence remain homeless in

Harare following the June 23 raid on opposition headquarters’

Harvest House in which 30 people were seized by police and over

2,000 fled. Hundreds of IDPs have since sought refuge at NGO

offices, churches, and the U.S. and South African embassies. On

June 25, an estimated 300 IDPs were allowed onto the South African

Embassy grounds after armed riot police arrived outside the mission.

They were allowed to spend the night and remain on the site today.

¶6. Despite the ban on NGO operations, informal networks amongst

civil society actors, UN organizations and diplomatic missions are

attempting to provide aid to the many IDPs requesting shelter, food

HARARE 00000554 002 OF 003

and supplies. However, formalized, systematic and coordinated

assistance, including a lead UN agency and a centralized reception

center, remains unavailable, severely impacting those who are still

in danger of seizure by GOZ security forces. International

organizations appear to fear the repercussions of publicly assisting

opposition aligned IDPs. See Harare 533.

¶7. Biti and Matinenga Released from Jail… The high court granted

MDC Secretary General Tendai Biti bail on June 26 after his arrest

on June 12 on four counts, including treason. Tsvangirai had said

on June 25 that Biti’s release was a prerequisite to negotiations.

MDC MP-elect Eric Matinenga was also released on bail on the same

day. WOZA’s Jenni Williams and Magodonga Mahlangu, however, remain

in Chikurubi women’s prison pending their high court hearing on July

¶3. See Harare 512 and 532.

¶8. …As Abductions, Beatings, and Unlawful Detentions Continue…

Mayemureyi Munhuri, the MDC Senator-elect for Chimanimani, and her

husband were abducted at gunpoint from their home on June 24. She

was one of 33 abducted in Manicaland province that day. Abednico

Bhebhe, MP-elect for Nkayi, and Robert Rabson, Senator-elect for

Nkayi, have been detained without charges in Nkayi since June 18, as

police ignore a court order demanding they be brought to court.

Lawyer Ernest Jena, who represents MDC activists, was abducted from

his office in Bindura by suspected ZANU- PF members on the morning

of June 23; his whereabouts are unknown. Magistrate Felix Mawadza

was beaten up by youths in ZANU- PF garb as he walked out of a

supermarket in Bindura on June 23. His “crime” was to have granted

bail to MDC supporters charged with politically motivated violence.

A local NGO has released two reports documenting post-election

violence: http://www.kubatana.net/html/archive/hr/

080519zpp.asp?sector=HR

and

http://www.kubatana.net/html/archive/hr/

080625zpp.asp?sector=HR

¶9. Criticism of Zimbabwe Grows… The SADC troika of Tanzania,

Angola, and Swaziland met on June 25 and issued a communique

criticizing the GOZ’s plans to proceed with the June 27 election.

At his 90th birthday party in London, Nelson Mandela condemned the

“tragic failure of leadership” in Zimbabwe. The British Foreign

Office took the unusual step of revoking the knighthood Mugabe had

received in 1994. In another symbolically important move, Cricket

South Africa, a long time defender of Zimbabwe, finally broke ties

with the Zimbabwe Cricket Union on June 23. The England and Wales

Cricket Board also broke ties and canceled a tour by the Zimbabwean

team set for next year.

¶10. Making Ends Meet (or not) as a Civil Servant… A ministry

director with a doctoral degree in his highly technical agricultural

specialty and decades of work experience allowed us a peek at his

June pay stub: He took home Z$23 billioQ|7Q&+|hicle for Z$700

million, which was less than US$1 dollar at the time. He survives

on consultancy work in South Africa and Zambia but admitted that his

greatest regret was not having emigrated years ago.

————————–

Economic and Business News

————————–

¶11. Manufacturing Sector Totters On As Conditions Worsen…

Zimbabwe’s manufacturing sector is gasping to keep afloat in the

face of foreign exchange shortages, hyperinflation and constant

power outages. Although exporting firms benefited from the partial

liberalization of the foreign exchange market, complementary

measures to sustain the reform effort have not followed. Indeed,

HARARE 00000554 003 OF 003

firms have raised concerns over their inability to increase prices

in line with rising costs; the National Incomes and Pricing

Commission (NIPC) refuses to entertain any requests for price

reviews. In fact, it made several new entries this week to the list

of price-controlled items. A contact at the Confederation of

Zimbabwe Industries told us that some firms, strategizing over their

future, had taken a wait-and-see attitude, hoping for an improvement

after the election. The bottom line is how much longer firms are

prepared to produce at a loss.

¶12. Stock Exchange Roars… The Zimbabwe Stock Exchange (ZSE)

continues to defy the gloom that otherwise characterizes the

economy, as investors hunt for bargains in the face of little or no

other viable investment opportunities. The precipitous fall in the

external value of the Zimbabwe dollar has also spurred the market.

Moreover, money market rates yield ludicrously negative real

returns, and the poor macroeconomic environment has made it

virtually impossible to engage in capital investment. The ZSE is

the only place where returns have outpaced the rate of inflation.

The benchmark industrial index has risen by 767,687 percent since

the beginning of this year and by a whopping 36,396,356.9 percent on

a y-o-y basis to June 25, 2008. The mining index’s y-o-y rate of

growth is even higher at 77,919,460.8 percent. These rates are well

above estimates of around 4 million percent inflation for mid-June

¶2008. As long as macroeconomic fundamentals remain weak, activity

on the ZSE will continue pushing the local bourse into uncharted

territory.

¶13. Mining Sector Top Forex Earner… Mining earned Zimbabwe US$1

billion in 2007 and contributed about 6 percent to GDP; it is the

source of more than 30 percent of all foreign currency inflow. The

six largest earners from 2001-2007 were, in descend)Mm>QOjSQS.

¶14. Zimplats Shuts Down… After a gang of youth militia last week

forced its way onto the mine grounds and compelled workers to march

and chant ZANU-PF slogans, Zimbabwe Platinum Mines shut down its

operations at Ngezi in the run-up to the election. Its Selous

metallurgical plant remains open. A member of the Board of

Directors told us that the company was reviewing its multi-million

dollar expansion plan.

MCGEE

(13 VIEWS)