Six armed soldiers reportedly stole 175 chickens at one of Reserve Bank governor Gideon Gono’s farms.
The soldiers – who had not been paid on time – told the farm manager Gono owed them money.
Meanwhile, Gono was reportedly trying to entice foreign investors to establish mining operations in Chiadzwa where he said the government could generate as much as US$1.2 billion per month in diamond royalties.
Full cable:
Viewing cable 09HARARE54, ZIM NOTES 01-23-2009
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|
Reference ID |
Created |
Released |
Classification |
Origin |
VZCZCXRO4841
RR RUEHBZ RUEHDU RUEHJO RUEHMR RUEHRN
DE RUEHSB #0054/01 0260850
ZNR UUUUU ZZH
R 260850Z JAN 09
FM AMEMBASSY HARARE
TO RUEHC/SECSTATE WASHDC 3960
RUCNSAD/SOUTHERN AF DEVELOPMENT COMMUNITY COLLECTIVE
RUEHUJA/AMEMBASSY ABUJA 2173
RUEHAR/AMEMBASSY ACCRA 2574
RUEHDS/AMEMBASSY ADDIS ABABA 2696
RUEHRL/AMEMBASSY BERLIN 1187
RUEHBY/AMEMBASSY CANBERRA 1965
RUEHDK/AMEMBASSY DAKAR 2320
RUEHKM/AMEMBASSY KAMPALA 2745
RUEHNR/AMEMBASSY NAIROBI 5173
RHEHAAA/NSC WASHDC
RHMFISS/EUCOM POLAD VAIHINGEN GE
RUEHGV/USMISSION GENEVA 1863
RUZEJAA/JAC MOLESWORTH RAF MOLESWORTH UK
RHEFDIA/DIA WASHDC
RUEAIIA/CIA WASHDC
UNCLAS SECTION 01 OF 04 HARARE 000054
AF/S FOR B. WALCH
ADDIS ABABA FOR USAU
ADDIS ABABA FOR ACSS
NSC FOR SENIOR AFRICA DIRECTOR B.PITTMAN
TREASURY FOR D. PETERS
STATE PASS TO USAID FOR L.DOBBINS AND E.LOKEN
COMMERCE FOR ROBERT TELCHIN
SIPDIS
E.O.12958: N/A
TAGS: PGOV PREL ASEC PHUM ECON ZI
SUBJECT: ZIM NOTES 01-23-2009
———–
¶1. SUMMARY
———–
Topics of the week:
– Talks Remain Deadlocked…
– Zimbabwe Courts Foreign Diamond Investors…
– Zimbabweans Turn to Satellite TV to Watch U.S. Inauguration…
– (Dis)Grace Punches Photographer…
– Cholera Continues…
– Budget to Consider Dollarization…
– Lawyers Threatened…
– Activists Launch Hunger Strike…
– Soldiers Steal Gono’s Chickens…
– WOZA Trial Begins…
– Passport Fees Continue to Climb Beyond Reach…
– Court Cases Plod Along…
– Zimbabwe’s Inflation Monster Rages on…
– The Zimbabwe Dollar Falls Sharply with the Release of Higher
Denomination Notes…
– ZINWA Starts Billing Companies in Foreign Currency…
– Stock Exchange to Dollarize…
———————————
¶2. Price Movements-Exchange Rate
and Selected products
———————————
Parallel rate for cash skyrocketed to between Z$4 and Z$15
trillion:US$1 (NOTE: The cash rate is fluctuating widely depending
on the Zimbabwean dollar denominations used. END NOTE.)
Check rate rose to Z$35 quadrillion:US$1 against inter-bank average
of Z$30,577,532:US$1
Bread on the parallel market went up to Z$15 trillion
Sugar shot up to Z$45 trillion/2kg
Petrol and diesel rose to Z$15 trillion/liter
—————————–
On the Political/Social Front
—————————–
¶3. Talks Remain Deadlocked… After 12 hours of SADC-sponsored
talks in Harare this week, no progress was made toward a
power-sharing agreement between ZANU-PF and the MDC. The parties
remain deadlocked over MDC demands for an equitable allocation of
ministries, a fair share of governorships, a fair share of senior
appointments, a jointly-administered national security council, and
the rescission of the appointments of the Reserve Bank governor and
the Attorney General. SADC will hold an Extraordinary Summit in
Pretoria on January 26 to consider the issue. See Harare 48.
¶4. Zimbabwe Courts Foreign Diamond Investors… An RBZ-leaked
report discusses governor Gono’s plan to entice foreign investors to
establish mining operations in the conflict-ridden diamond fields of
Chiadzwa. The report’s wildly optimistic forecast is that the GOZ
could generate as much as US$1.2 billion per month in diamond
royalties. Realistically, Chiadzwa could prove to be a temporary
source of forex. See Harare 49. Meanwhile, the military is
initiating efforts to displace as many as 25,000 residents from
their homes in Chiadzwa to control the area and provide the military
with village-based housing. See Harare 51.
¶5. Zimbabweans Turn to Satellite TV to Watch U.S. Inauguration…
HARARE 00000054 002 OF 004
Zimbabwe’s only TV station, ZBC, showed an old movie on January 20
rather than the U.S. presidential inauguration. Although some
believe the blackout was designed to prevent Zimbabweans from seeing
the peaceful transfer of power; others told us privately that no one
at ZBC had “the guts” to put it on the schedule. In defiance,
Zimbabweans flocked to restaurants and private homes – any place
they could find a satellite TV. To date, ZBC has not shown any
inauguration footage, including in newscasts. Many here believe
Obama’s offer to “extend a hand if you are willing to unclench your
fist” was directed specifically at Mugabe. Notably, that quote was
excluded from official newspaper reports on the inauguration.
¶6. (Dis)Grace Punches Photographer… While her bodyguards held
him, First Lady Grace Mugabe repeatedly punched London Sunday Times
photographer Richard Jones in the face outside her luxury Hong Kong
hotel on January 15. According to the medical report, Jones suffered
cuts and bruises caused by the First Lady’s heavy diamond rings.
Police are investigating using the hotel’s video footage. An
Australian tourist said she was “screaming, completely crazy.” Known
as “Disgrace” by many, the First Lady reportedly took US$92,000 from
the Reserve Bank to finance her luxury vacation; her entourage’s
Hong Kong hotel stay reportedly cost more than US$2,500 per night.
On January 16, she left Hong Kong to continue her vacation in
Malaysia.
¶7. Cholera Continues… In the most recent update for January
11-17, the WHO reported 6,466 new cases, 420 deaths, and a case
fatality rate of 6.5 percent. Cumulative suspected cases now total
more than 50,000, with 2,773 deaths as of January 22. The
establishment of the WHO-managed cholera control center and the
deployment of Bangladeshi diarrheal disease experts have improved
reporting and response to the outbreak. In addition, Human Rights
Watch released a new report this week calling on the AU to intervene
in the government-created and perpetuated crisis. See the full
report, “Crisis without Limits: Human Rights and Humanitarian
Consequences of Political Repression in Zimbabwe,” at:
/2009/01/21/crisis-without-limits-0
¶8. Budget to Consider Dollarization… The Zimbabwe Independent
reported on January 23 that Acting Finance Minister Patrick
Chinamasa will introduce a proposed budget in the parliament on
Thursday including dollarization. Taxes and duties would be payable
in forex and forex payments for school fees would be allowed.
Because of the lack of sufficient forex, coupons with U.S. dollar
equivalents would be issued to civil servants and would be
redeemable at specified shops.
¶9. Lawyers Threatened… Bulawayo members of Zimbabwe Lawyers for
Human Rights (ZLHR) were threatened by unidentified men on January
¶19. The men claimed ZLHR is working to destabilize the government by
representing MDC bandits and criminals and blamed ZLHR for sanctions
against members of ZANU-PF.
¶10. Activists Launch Hunger Strike… On January 21, the Save
Zimbabwe Now campaign in Zimbabwe and South Africa launched a hunger
strike aimed at pressuring SADC and Mugabe to resolve the political
crisis in Zimbabwe. Fifty-five religious leaders and activists
including Desmond Tutu and Graca Machel are participating in the
21-day protest, although Machel is not fasting.
¶11. Soldiers Steal Gono’s Chickens… Six armed soldiers reportedly
stole 175 chickens at one of Reserve Bank governor Gideon Gono’s
farms. Soldiers – who had not been paid on time – told the farm
manager Gono owed them money.
¶12. WOZA Trial Begins… Women of Zimbabwe Arise (WOZA) leaders
Jenni Williams and Magodonga Mahlangu faced trial in Bulawayo on
HARARE 00000054 003 OF 004
January 22 for disturbing the peace during WOZA protests on June 19,
2004 and October 16, 2008. Their lawyer argued the charges should be
dropped based on Supreme Court precedent that one cannot be charged
for disturbing the peace in connection with a peaceful
demonstration.
¶13. Passport Fees Continue to Climb Beyond Reach… Even
Zimbabweans with the means to travel are facing serious difficulties
getting assports, now only available with U.S. dollars. A pssport
now costs US$670 for an adult and US$420 or a child.
¶14. Court Cases Plod Along… On Jnuary 16, magistrates referred
Jestina Mukoko’s ase to the Supreme Court to examine the
constituionality of her arrest. On the same day, bail for the seven
alleged police station bombers was denie in the High Court.
However, Justice Karwi becam the third judge to rule all seven
should be grated access to a private health facility. On Tuesda,
Mukoko was unexpectedly taken to a private hospital, only to be
taken back to prison hours later, with the IV still in her arm.
Others have not been granted the medical access dictated by court
orders. Although the High Court reinforced a lower court order
granting bail to two abductees, Pascal Gonzo and Tawanda Bvuma, they
remain in prison. Separately, three white men who were arrested on
January 6 remain in Chikurubi maximum security prison. The trio
faces charges of training insurgents at a camp just outside Harare.
As in other recent terrorism cases, the men were forced to give
videotaped statements without a lawyer present. Although the State
did not have enough evidence to present its case in their initial
hearing on January 23, the judge granted the State two more weeks to
investigate while the men remain at Chikurubi.
———————————-
On the Economic and Business Front
———————————-
¶15. Zimbabwe’s Inflation Monster Rages on… Although the GOZ has
not released inflation figures for nearly half a year, a survey done
by the Delegation of the European Commission to Zimbabwe, using a
food basket of 18 products for low-income earners, put the
year-on-year rate of inflation in 2008 at 41 quadrillion percent. As
astronomical as the figure is, it is only a shadow of the 486
heptillion percent calculated by a highly regarded private sector
source that has tracked inflation here for years.
¶16. The Zimbabwe Dollar Falls Sharply with the Release of Higher
Denomination Notes… The introduction of the ten trillion dollar
note on January 16 resulted in another massive drop in the value of
the local currency. Due to the lack of low denominated notes,
different exchange rates have emerged for low and high notes. The
ten trillion dollar note fetches the least advantageous rate for the
Zim dollar seller. The exchange rate fell from Z$800 billion on
January 16 to between Z$4 trillion and Z$15 trillion:US$ by January
23, depending on denomination.
¶17. ZINWA Starts Billing Companies in Foreign Currency…
Government anticipated that the Zimbabwe National Water Authority
(ZINWA) would raise as much as US$20 million per month when the
parastatal received permission in December, 2008 to bill companies
in foreign currency. Businesses, however, are calling the new forex
tariff of US$1 per cubic meter excessive and seeking a substantial
reduction in the charges in line with regional best practice of
around US30 cents per cubic meter.
¶18. Banks Call for Dollarization of Sector to Survive… The
beleaguered banking sector is calling for the dollarization of the
sector in line with the rest of the economy. While banks’ income is
in nearly worthless Zimbabwe dollars, their costs are increasingly
U.S. dollar-denominated. Hardly any lending is taking place given
HARARE 00000054 004 OF 004
the harsh operating environment and the collapse of the productive
sectors of the economy. Most banks are closing branches and sending
employees on leave to cut costs.
¶19. Stock Exchange to Dollarize… On a related note, stockbrokers
and investors, too, are pushing for the dollarization of the
Zimbabwe Stock Exchange (ZSE) to pave the way for resumption of
trading. Trading was suspended on November 21, 2008 to dampen
inflation that was being partly driven by paper wealth created on
the ZSE. According to the Financial Gazette newspaper, ZSE
stakeholders, including government, agreed in principle on January
16, 2009 to dollarize, subject to resolution of knotty issues
including valuation of the listed companies to determine floor
prices, and exchange control issues.
——————
Quotes of the Week
——————
¶20. “I was celebrating with the rest of the world, but at the same
time my own celebration of this landmark inauguration was marred by
my sense of sorrow and frustration that this kind of democratic
process cannot happen in my own country. I nearly wept. I don’t do
that easily.” — Exiled Zimbabwean journalist Geoffrey Nyarota on
the U.S. presidential inauguration
¶21. “It’s how you treat your own citizens, that’s where your
legitimacy comes from…This is a lesson to our region. We came
together to liberate ourselves, but now [we see] that power can
pervert you to become precisely the opposite of what led you to
become a freedom fighter.” — Graca Machel, former First Lady of
Mozambique, wife of Nelson Mandela, and Elder, speaking at the
launch of the Save Zimbabwe Now hunger strike in Johannesburg on
Jan
MCGEE
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