SADC pushes for government of national unity

The Southern African Development Community was pushing for a government of national unity as a solution to Zimbabwe’s political crisis because it felt that a presidential election runoff would not end the impasse.

Zimbabwe had failed to resolve its political crisis after the results of the 29 March elections were said to be inconclusive though the Movement for Democratic Change’s two factions had won the majority of seats in parliament and Morgan Tsvangirai had beaten President Robert Mugabe though he was reportedly short of an outright win.

MDC-T secretary general Tendai Biti said talk of the government of national unity was a clear indication that ZANU-PF knew that Mugabe would not win a runoff.

There were reports soon after the elections that Mugabe had conceded defeat to the MDC but had been stopped from giving in by his inner circle.

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Viewing cable 08HARARE376, ZIM NOTES April 25, 2008

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SUBJECT: ZIM NOTES April 25, 2008

HARARE 00000376 001.5 OF 003

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¶1. SUMMARY

————-

Topics of the week:

– Signals or Smoke Screen, State-Media Floats Idea of Government of

National Unity

– No End To Post-Election Violence

– Recount Results Trickle In

– UN Human Rights Officials Visit Harare

– Chinese Ship With Arms For Zimbabwe On Its Way Home

– Government Postpones COMESA Summit

– Substantial Salary Increase For Zimbabwe Defense Forces (ZDF)

Personnel

– Don’t Tell The Americans You’re Hungry

– Zimbabwe Dollar In Freefall

– Tobacco Auction Floor Opening Delayed

– Bleak Outlook For Cairns Holdings

– Yet Some Investors See Opportunity

———————————

¶2. Price Movements-Exchange Rate

and Selected products

———————————

Parallel rate for cash shot to ZW$100million:US$1;

Bank transfer rate: Z$140 million;

Official rate: ZW$$30,000:US$1

Sugar more than doubled again to Z$450 million/2kg vs. controlled

price of Z$8million/2kg

Cooking oil again nearly doubled to Z$350 million/750ml vs.

controlled price of Z$9.3million/750ml

Petrol and diesel rose to Z$140 million/liter vs. controlled price

of Z$60,000/liter

—————————–

On the Political/Social Front

—————————–

¶3. Signals or Smoke Screen, State-Media Floats Idea of Government Of

National Unity… In an unexpected development, the

government-mouthpiece The Herald ran an editorial this week by a

well-known pro-government commentator that called for SADC to

mediate negotiations between ZANU-PF and MDC-Tsvangirai (MDC-T) for

a transitional government of national unity (GNU) with President

Mugabe at its head. It also recommended that the “progressive

international community,” represented by the “US/UK establishments,”

act as the third key player in the negotiations. It called on all

stakeholders to recognize and accept that the March 29 elections had

not produced an outright winner in the presidential race and that it

was unlikely that the on-going recount would substantively alter

that position. The editorial disappeared off The Herald’s website

in the course of the day and a government spokesman denied the

government was considering a GNU.

According to reports in the April 25 edition of The Independent,

SADC is pushing for a GNU as a solution to Zimbabwe’s political

crisis, arguing that the anticipated presidential election runoff

expected sometime in May would not end the impasse. MDC-T Secretary

General Tendai Biti said the proposal in The Herald should be seen

as a reflection of ZANU-PF’s thought process, contending that it

showed ZANU-PF knew Mugabe could not win a runoff. There were

reports that soon after the March 29 elections Mugabe realized he

had lost and was close to coming to terms with MDC-T over a GNU and

a transition plan; however, senior regime insiders fearing for their

HARARE 00000376 002.5 OF 003

own future nixed the idea and rolled-out a campaign of violent

retribution to whip the electorate into submission ahead of a second

round of voting. See Harare 0367.

¶4. No End To Post-Election Violence… Gangs of war veterans and

ZANU-PF youth continue a state-sponsored terror campaign in rural

areas; burning homes, beating opposition supporters in public, and

forcing attendance at ZANU-PF rallies. ZANU-PF thugs and some

security forces are also victimizing and intimidating urban

opposition supporters. Over 450 victims have required medical

treatment for injuries related to post-election violence.

Opposition and human rights groups report shortages of critical

supplies and resources necessary to assist the growing population of

internally displaced persons. Post is working closely with other

international donors and partners to assist. See Harare 0359.

¶5. Recount Results Trickle In… A contentious recount of 23

constituencies expected to la3

7Q repeated in recent weeks that it

would not participate or honor a re-run or recount, but its party

polling agents were present at the recount centers, as were SADC and

local election observers. Consensus speculation is that ZANU-PF

called for the recounts in order to pad President Mugabe’s

embarrassingly low support and wrestle control of the House of

Assembly back from the opposition, which won a majority in the lower

house for the first time ever. ZANU-PF needs to swing at least nine

seats back to its side to regain the majority. So far, the recount

has failed to change any of the previously declared outcomes.

Quoting well-placed ZANU-PF sources, The Independent reported on

April 25 that “things were not going according to plan” and that the

recount was now an “exercise in futility.”

¶6. UN Human Rights Officials Visit Harare… On April 24, donors in

Harare met with two visiting representatives of the UN Office of the

High Commissioner for Human Rights (OHCHR), David Johnson, the

Regional Representative for Southern Africa based in Pretoria and

Tsatsu Dawson, the Zimbabwe desk officer at OHCHR Geneva. Dawson

SIPDIS

explained that the GOZ last year refused to agree to the posting of

a Human Rights Officer in Harare, but that OHCHR hoped to use a

series of visits to make a contribution during this difficult

period. The current visit was focused on helping the UN country

team and Human Rights NGOs deal with the situation, which Johnson

referred to as a “burning crisis.” Johnson and Dawson were meeting

with the human rights NGO community and were very interested in the

donor field visits (see Harare 0359). Donors were skeptical about

Johnson’s description of OHCHR efforts to create a government-led

clearing house for human rights complaints. However, they agreed

heartily with his statement that, at the moment, the most urgent

issue in Zimbabwe is the human rights crisis, not the political

situation, and that human rights progress is essential to arrive at

a political solution. UN ResRep Dr. Zacarias, surprisingly, said

many of the right things on the human rights situation here.

¶7. Chinese Ship With Arms For Zimbabwe On Its Way Home… The An Yue

Jiang, which was carrying arms destined for Zimbabwe, is now

returning home, with its cargo, after the shipment was vilified in

the international press and, more significantly, in the region.

¶8. Government Postpones COMESA Summit… Dodging potential

embarrassment, the Ministry of Foreign Affairs announced this week

the postponement of the Common Market for Eastern and Southern

Africa (COMESA) Summit that had been scheduled to take place on May

5-15 in Victoria Falls, due to “the uncompleted electoral process.”

Zimbabwe is about to assume the chairmanship of COMESA.

¶9. Substantial Salary Increase For Zimbabwe Defense Forces (ZDF)

Personnel… ZDF personnel received a substantial real salary

HARARE 00000376 003.5 OF 003

increase in April. A Warrant Officer who had been earning Z$8

billion/month got Z$25 billion. Even in real U.S. dollar terms, the

increase was significant, going from US$190 four weeks ago, using

the parallel exchange rate for cash, to US$250 today for a Warrant

Officer. The Zimbabwe Republic Police did not get any increase.

¶10. Don’t Tell The Americans You’re Hungry… The Operation of Hope

surgical team departed Harare this week after completing 81 free

corrective cleft lip and cleft palate surgeries on its third visit

to Zimbabwe. At a celebration for hospital staff, parents,

patients, and the team, one grateful father told us the hospital

administration had warned parents not to complain to the Americans

about hunger. He also said that he, his wife and infant would stay

on another night at the hospital and depart early the next day

rather than risk a beating at the bus station if they arrived home

at night.

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Economic and Business News

————————–

¶11. Zimbabwe Dollar In Freefall… The Zimbabwe dollar is in another

freefall phase, having dropped from Z$82 million:US$1 cash rate

eight days ago to Z$100 million:US$1 today. The depreciation

largely reflects the dire shortage of foreign exchange on the local

market. We hear repeatedly from exporting companies and NGOs that

the Reserve Bank has raided their Foreign Currency Accounts, most

likely to finance the recent election and associated give-aways.

¶12. Tobacco Auction Floor Opening Delayed… Zimbabwe’s famous

tobacco auction floors failed to open as planned this week,

bedeviled by disagreement between growers and government over the

tobacco support price and arrears to farmers for the foreign

exchange portion of last year’s crop. Farmers said they will not

deliver their crop until the government has met their demands for

payment and guaranteed a viable support price.

¶13. Bleak Outlook For Cairns Holdings… Food sector giant Cairns,

suffering from a negative cash flow, might not be able to meet its

interest obligations, according to asset manager Imara Capital,

commenting on the company’s interim results to February 29. Volume

declined by 38 percent in the period under review, mainly due to

material shortages. Hyperinflation has eroded any benefit the

company got from deeply subsidized BACOSSI funds last year. See

Harare 0365 and 0366 on how some U.S. companies are faring and

Harare 0363 for an overview on coping in the business community.

¶14. Yet Some Investors See Opportunity… In the midst of crisis,

some investors see opportunity here that the risk averse abandoned

long ago. Banking on economic recovery and attracted to Zimbabwe’s

cheap price tags, investors are looking at sectors with

international links or those that will benefit from an increase in

consumer spending. See Harare 0361.

MCGEE

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