Soldiers stole Gono’s chickens

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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R 260850Z JAN 09

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TO RUEHC/SECSTATE WASHDC 3960

RUCNSAD/SOUTHERN AF DEVELOPMENT COMMUNITY COLLECTIVE

RUEHUJA/AMEMBASSY ABUJA 2173

RUEHAR/AMEMBASSY ACCRA 2574

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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:

http://www.hrw.org/en/reports

/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

(23 VIEWS)