MDC and ZANU-PF were working together in Zvobgo’s Masvingo

Masvingo was a bastion of political cordiality with the mayor Alois Chaimiti of the Movement for Democratic Change boasting of constructive relations between his party and the local Zimbabwe African National Union-Patriotic Front.

ZANU-PF politburo member Eddison Zvobgo had become an outspoken member of his own party by staking out independent positions, opening a window for the MDC alternative.

Locals agreed that the MDC administration had done a commendable job of improving services and tidying up the city.

Full cable:

Viewing cable 03HARARE1955, Masvingo Splinters into Dual Economies

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

UNCLAS SECTION 01 OF 02 HARARE 001955

SIPDIS

SENSITIVE

STATE FOR AF/S

NSC FOR SENIOR AFRICA DIRECTOR JFRAZER

USDOC FOR 2037 DIEMOND

TREASURY FOR OREN WYCHE-SHAW

PASS USTR FLORIZELLE LISER

STATE PASS USAID FOR MARJORIE COPSON

¶E. O. 12958: N/A

TAGS: ECON EINV PGOV ZI

SUBJECT: Masvingo Splinters into Dual Economies

¶1. (SBU) Summary: Despite both an apparent end to the 3-

year drought and relative harmony between local ZANU-PF

and MDC parties, Zimbabwe’s southern Masvingo province

faces tough economic times ahead. Only those with access

to U.S. dollars are doing well. The rest often depend on

outside food assistance and unsustainably cheap basic

services such as education and electricity. End Summary.

¶2. (SBU) That, at least, is our compressed impression

after 2-days interacting with the City of Masvingo’s

mayor, key administrators, NGO reps and, beyond city

limits, some of the Province’s poorer rural inhabitants.

We do not believe life will get much better for small

farmers even with the drought’s passing. Admittedly, the

GOZ’s fast-track land reform seems to have decongested

overcrowded communal areas. Yet existing and resettled

communal farmers lack inputs – and collateral to borrow

for inputs. Most upsettingly, it appears the region is

unraveling into parallel U.S. dollar and local economies.

Clean Streets, Functioning Gas Pumps

————————————

¶3. (SBU) On the surface, Masvingo is a bastion of

political cordiality. Mayor Alois Chaimiti boasted of

constructive relations between his MDC and the local ZANU-

PF, a view seconded by other interlocutors. ZANU-PF

Politburo member Eddison Zvobgo may have undermined his

own party in provincial politics by staking out

independent positions, opening a window for the MDC

alternative. Locals agree the MDC administration has

done a commendable job of improving services and tidying

up the city. Masvingo residents can also buy gas at a no-

wait, well-stocked service station, a rarity in today’s

Zimbabwe. An indigenous EXOR station has successfully

drawn on connections to sell fuel openly at market

prices, about 50 percent above the GOZ-controlled rate.

¶4. (SBU) But Masvingo’s economy is at least as blighted

as those elsewhere in the country. Foreign visitors to

the Great Zimbabwe ruins, a major tourist attraction, are

down from an annual 220,000 in 2000 to a projected 20,000

this year. 5-year old Westview Industrial Park,

Masvingo’s best hope to establish an industrial base, has

yet to attract a single foreign investor.

¶5. (SBU) The man-on-the-street is hurting badly. Over

the past year, prices have risen roughly in lockstep with

an 8-fold devaluation in the Zimdollar (from Z$691 to

5650:US$1). A residential lot that cost Z$300,000 a year

ago now sells for Z$4,000,000. School fees have risen

from Z$1,300 to Z$10,000, leaded fuel from Z$69 to 1,700.

Meanwhile, salaries have merely gone up 2-4 fold. That

means the only people buying real estate, pushing

shopping carts, fertilizing land and filling gas tanks

are those with a USD source – generally through forex-

pegged salaries, export-revenue or remissions. USD-

holders also deal with conventional banks rather than

savings-and-loans, where lines for cash withdrawals have

been interminable.

Comment

——-

¶6. (U) The chasm between USD and local economies is

rapidly broadening, reminiscent of the perpetual duality

under many Soviet-style governments. When the two

economies merge, fatuity abounds. A driver whose

employer dollarizes may earn more than an executive whose

firm does not. Annual tuition at a private Masvingo

school runs US$5, a round of golf just 12 cents. But

visit a Masvingo supermarket and you pay U.S.-level

prices. High inflation (currently 427 percent

annualized) assures that Zimdollar-earners will continue

to lose buying power.

¶7. (SBU) We also observed – and affix as appendage to

this report – that modest forex assistance goes a long

way in this economy. A US$3,500 grinding mill purchased

through the Ambassador’s Self-Help Program saved an

almost 100-year-old school with 456 pupils from pending

closure. US$7,000 brought running water to another rural

school and the surrounding community of 2,000 –

triggering effusive praise from Foreign Minister Stan

Mudenge at last October’s inauguration ceremony.

Sullivan

(14 VIEWS)