Biti says Zimdollar not coming back soon

Finance Minister Tendai Biti told delegates to a mining investment conference that the Zimbabwe dollar was not going to make an early return.

He said re-introduction of the national currency would have to wait until the economy could generate sufficient foreign exchange for the country’s needs.

At one point Biti said the dollar was dead and buried and he was “putting a tombstone on the grave of the Zimbabwe dollar”.

Full cable:

Viewing cable 09HARARE754, ZIM NOTES 9-18-09

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SUBJECT: ZIM NOTES 9-18-09

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SUMMARY – Topics of the week

—————————-

– Donors Pledge USD 70 Million to Education

– Constitutional Process Clears One Hurdle

– Hate Speech Intensifies in State Media

– ZBC Exec Blasts Embassy for Visa Refusal

– Another MP Arrested, Released

– Police Bar Labor Union March

– ZANU-PF Youths Beat Teacher

– Farm Attacks Continue

– Peace Returns to Once-Violent Mazowe Central

– Government Takes Control of Meikles Group

– BP and Shell to Exit Zimbabwe

– Zimbabwe Dollar Will Not Make an Early Return

– Another South African Firm Invests in Zimbabwe

– Good News That Isn’t

– New Digs for Gono

– Quotes of the Week

—————————–

On the Political/Social Front

—————————–

¶1. Donors Pledge USD 70 Million to Education… In a September 14

ceremony attended by the Charge and numerous other heads of mission,

the Educational Transition Fund announced it is investing USD 70

million in education. The fund will put textbooks and learning

materials back in schools and guarantee school fees for low-income

children. The initiative will increase the ratio of learning

materials from an estimated one textbook for every ten students to

one book for every two pupils within the next year. The U.S. plans

to contribute USD 1 million and to provide 100 sets of reference

books to secondary schools. Other contributing donors to the fund

that will be managed by UNICEF and the Ministry of Education include

the UK, EC, Sweden, Denmark, the Netherlands, Australia, New

Zealand, and Germany. Although Zimbabwe once had one of the best

education systems in sub-Saharan Africa, examination pass rates have

fallen significantly in recent years and more than half of primary

school pupils do not go on to secondary school.

¶2. Constitutional Process Clears One Hurdle… On September 11,

ParliamentQs Constitutional Select Committee on the Constitution

announced the 17 MPs who will chair individual thematic

sub-committees. The announcements broke a month-long delay as

ZANU-PF had failed to put forward their nominees. The chairs were

divided proportionately based on political party representation.

Next steps include choosing deputy chairs from civil society and

then rounding out the sub-committees with other MPs and civics.

Once completed, each sub-committee will be composed of 70 percent

civics and 30 percent MPs. The sub-committees will conduct

nationwide outreach efforts to elicit public feedback on key

constitutional issues.

¶3. Hate Speech Intensifies in State Media… This week the ZANU-PF

mouthpiece The Herald appeared to spew even more vitriol than usual.

On Tuesday the front page headline QMDC-T wants sanctions to stay

claimed Tsvangirai wants to use Western sanctions as leverage

against ZANU-PF. A page-two article quoted Army Commander Philip

Sibanda telling soldiers that QZimbabweQs detractors are using some

QSibanda telling soldiers that QZimbabweQs detractors are using some

NGOs and pirate radio stations to spread false and hate messages

that will lead to rioting, despondency and eventually cause war.

On Friday spin-doctor Tafataona Mahoso bashed the MDC in an article

entitled QHow MDCs Brought DisasterQ Q claiming that NGOs and MDC

formations have bribed street kids to mount urban riots disguised as

a labor movement. On Thursday the MDC called on the State media to

stop using newspapers to spread dissension and hate.

HARARE 00000754 002 OF 003

¶4. ZBC Exec Blasts Embassy for Visa Refusal… This week, with

Department concurrence, we refused the CEO of the Zimbabwe Broadcast

Corporation a visa to attend UNGA. CEO Happison Muchetere, who has

led ZBCQs anti-MDC and undemocratic programming, read the refusal

letter on TV and criticized the U.S. government for allegedly Qnot

recognizing the inclusive governmentQ and for acting Qholier than

thou.

¶5. Another MP Arrested, Released… Makoni South MP (MDC-T) Pishai

Muchauraya was arrested on September 15 on charges of assaulting his

friendQs maid with a wooden plank and fracturing her arm in the

presence of the police at a police station. The assault allegedly

took place on August 13, but the woman did not file a complaint

until August 21, and her arm was not examined until September 7. On

September 16, Muchauraya was released on free bail. The three

police officers alleged to have witnessed the assault refused to

testify against Muchauraya, as they deny the assault ever took

place. After refusing to testify, the police officers were charged

with failure to protect a complainant in their presence.

¶6. Police Bar Labor Union March… On September 12, police in

Harare defied a court order and barred the Zimbabwe Congress of

Trade Unions (ZCTU) from holding a march commemorating the policeQs

brutality in crushing the unionQs 2006 protest for better working

and living conditions. Heavily armed police cordoned off the road

leading to the venue of the commemoration. Union official Japhet

Moyo said the police action Qconfirms that political freedoms are

still circumscribed.

¶7. ZANU-PF Youths Beat Teacher… A teacher in rural Manicaland

was beaten by a group of ZANU-PF youth for failing to heed the

Zimbabwe TeachersQ Union (ZIMTA) call to go on strike. Teachers

across Zimbabwe have reportedly been threatened or locked out by

ZANU-PF youth, war veterans, and sympathetic headmasters. See

Harare 752.

¶8. Farm Attacks Continue… Attacks on white-owned farms continued

this week. Police detained an Al Jazeera film crew together with

Ben Freeth when they attempted to visit FreethQs farm in Chegutu.

South African citizen Louis Fick reported that thugs led by Reserve

Bank Deputy Governor Edward Mashiringwani overran his farm last

week, refusing to allow farm workers to give food or water to his

pigs and cattle. The police refuse to take action in these cases.

¶9. Peace Returns to Once-Violent Mazowe Central… During a recent

trip to Mashonaland Central, we were pleasantly surprised to see the

tangible improvement in security in a rural area that was wracked by

violence in 2008. See Harare 734.

————————–

Economic and Business News

————————–

¶10. Government Takes Control of Meikles Group… There was more bad

news this week for Zimbabwe’s business climate when the GOZ

intervened in a long-running local business dispute by appointing an

Qintervened in a long-running local business dispute by appointing an

administrator for Kingdom Meikles Limited, a blue-chip Zimbabwean

firm with interests in retail, agriculture, and hospitality.

Kingdom Meikles was about to disentangle itself from an unsuccessful

merger involving businesses owned by the Meikles family and the

Kingdom financial group. Under an anti-corruption statute that

allows the authorities to seize control of assets, the GOZ has

alleged that Kingdom Meikles violated foreign exchange controls

after the 2007 merger. The MDC’s co-minister for Home Affairs,

Giles Mutsekwa, reportedly signed the order, but the MDC later

released a statement criticizing the move.

¶11. BP and Shell to Exit Zimbabwe According to press reports, BP

and Shell will sell their Zimbabwean assets to Engen Petroleum of

HARARE 00000754 003 OF 003

South Africa and KenolKobil of Kenya. The move will be the first

high-profile exit from Zimbabwe by a major foreign investor since

the inclusive government came to power in February this year.

¶12. Zimbabwe Dollar Will Not Make an Early Return Seeking to

encourage foreign investment, Minister of Finance Tendai Biti

assured delegates at this week’s two-day Mining Investment

Conference in Harare that the Zimbabwe dollar will not make an early

return. He said re-introduction of the national currency would have

to wait until the economy can generate sufficient foreign exchange

for the countryQs needs.

¶13. Another South African Firm Invests in Zimbabwe South African

commodities trader and investor Metmar said it had finalized a deal

to buy 40 percent of Zimbabwe Alloys and its subsidiary, Chromecorp

for R450 million. The money will be used to inject much needed

capital to restore the companyQs mining, processing and production

capacities.

¶14. Good News That Isn’t… This week’s Financial Gazette proudly

reported that Zimbabwe has moved up a step in the World Bank’s

rankings of 183 countries on the ease of doing business. Zimbabwe

ranks at 159 this year, just ahead of Afghanistan, and came in at

160 last year. The newspaper helpfully notes that the number of

countries ranked below Zimbabwe has increased by two because the

World Bank’s survey now covers more countries.

¶15. New Digs for Gono… Elsewhere in the press, it was reported

this week that RBZ Governor Gideon Gono has moved into a new

112-room mansion on the outskirts of Harare. The Governor’s new

residence reportedly features an art gallery, a billiard room, a

swimming pool with three islands, and four helipads.

¶16. Quotes of the Week:

“We have not invited these bloody whites. They want to poke their

nose into our own affairs.Q –President Mugabe in his September 11

address to the ZANU-PF youth wing, the day before meeting with a

delegation from the EU.

QWe are not as rough and racist as some people regard us.

–President Mugabe at a Mining Conference on September 16.

QThis country is safe; this country has laws which are still

functioning. I assure you, if you went to someoneQs home and stole

you would certainly be arrested.Q –Minister of Youth,

Indigenization and Empowerment Saviour Kasukuwere addressing at a

Mining Conference on September 16.

PETTERSON

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