Tsvangirai insisted he should be head of government

Talks between the Zimbabwe African national Union-Patriotic Front and the Movement for Democratic Change broke down in August 2008 after MDC leader Morgan Tsvangirai insisted that he should be head of government and ZANU-PF leader Robert Mugabe wanted to retain power over the security forces and Foreign Ministry.

Tsvangirai and Mugabe both had to present their cases to the Southern African Development Community which was to meet in South Africa.

Full cable:

Viewing cable 08HARARE699, ZIM NOTES 8-15-2008

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ZNR UUUUU ZZH

R 181351Z AUG 08

FM AMEMBASSY HARARE

TO RUEHC/SECSTATE WASHDC 3305

RUCNSAD/SOUTHERN AF DEVELOPMENT COMMUNITY COLLECTIVE

RUEHUJA/AMEMBASSY ABUJA 2041

RUEHAR/AMEMBASSY ACCRA 2214

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RUEHRL/AMEMBASSY BERLIN 0865

RUEHBY/AMEMBASSY CANBERRA 1610

RUEHDK/AMEMBASSY DAKAR 1968

RUEHKM/AMEMBASSY KAMPALA 2389

RUEHNR/AMEMBASSY NAIROBI 4821

RHEHAAA/NSC WASHDC

RHMFISS/EUCOM POLAD VAIHINGEN GE

RUEHGV/USMISSION GENEVA 1482

RUZEJAA/JAC MOLESWORTH RAF MOLESWORTH UK

RHEFDIA/DIA WASHDC

RUEAIIA/CIA WASHDC

UNCLAS SECTION 01 OF 03 HARARE 000699

AF/S FOR G. GARLAND

ADDIS ABABA FOR USAU

ADDIS ABABA FOR ACSS

NSC FOR SENIOR AFRICA DIRECTOR B.PITTMAN

TREASURY FOR J.RALYEA AND T.RAND

STATE PASS TO USAID FOR L.DOBBINS AND E.LOKEN

COMMERCE FOR BECKY ERKUL

SIPDIS

E.O.12958: N/A

TAGS: PGOV PREL ASEC PHUM ECON ZI

SUBJECT: ZIM NOTES 8-15-2008

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SUMMARY

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¶1. Topics of the Week:

– Talks Break Off…

– Tsvangirai’s Travel to SADC Summit Interrupted…

– French and Swedish Charges Threatened…

– Botswana Deports Zimbabwean Journalist…

– Soaring Inflation…

– Tobacco Deliveries Lagging…

– “Zimbabwe – Beyond Tomorrow”…

——————————————— ———-

¶2. Price Movements-Exchange Rate and Selected Products

——————————————— ———-

Parallel rate for cash shot to Z$950billion ($95 revalued):US$1

Bank transfer soared to Z$2 trillion ($200 revalued):US$1

against inter-bank average of Z$16 (revalued):US$1;

Bread on the parallel market trebled to Z$800 billion ($80

revalued);

Sugar doubled to Z$750 billion (Z$75 revalued)/2kg;

Cooking oil rose to Z$350 billion (Z$35 revalued)/750m;l

Petrol and diesel quadrupled to Z$2.2 trillion (Z$220

revalued)/liter

—————————–

On the Political/Social Front

—————————–

¶3. Talks Break Off… Negotiations between ZANU-PF and the MDC

broke off this week over failure to reach an agreement on the

allocation of executive power. MDC president Morgan Tsvangirai is

insisting he be head of government with full executive power as

prime minister, while Zimbabwean president Robert Mugabe wants to

retain power over the security forces and foreign ministry.

Tsvangirai and Mugabe are both expected to present their cases to

the SADC Summit in South Africa this weekend. With negotiators from

all sides present, it is likely negotiations will resume in South

Africa. See Harare 678 and 676.

¶4. Tsvangirai’s Travel to SADC Summit Interrupted… Zimbabwean

officials seized passports and travel documents of Tsvangirai, MDC

secretary-general Tendai Biti, and MP-elect and MDC shadow foreign

minister Eliphas Mukonoweshuro at the Harare international airport

on August 14 as the trio prepared to travel to South Africa for the

SADC Summit. The documents were returned several hours later and

the three subsequently traveled. With Tsvangirai expected in South

Africa, it does not appear that government actions were directed by

high-level officials. Nevertheless, the incident understandably

ruffled MDC feathers. Biti was quoted by the Zimbabwe Independent

as stating that the talks with ZANU-PF were a “farce and a sham.”

George Sibotshiwe told The Independent that the incident reflected

ZANU-PF’s lack of sincerity. See Harare 684.

HARARE 00000699 002 OF 003

¶5. French and Swedish Charges Threatened… Apparent ZANU-PF

officials threatened the French and Swedish Charges d’Affaires who

were at the Rainbow Towers Hotel in Harare Tuesday evening to

ascertain the status of the negotiations. The officials told the

Charges they could not be present in the hotel, site of the

negotiations, since they were not journalists, and demanded they

leave. To avoid escalating the situation, the diplomats left. The

officials followed them to their cars, swore at them, accused them

of imperialistic meddling, and threatened to beat them. To

emphasize their point, they kicked the cars before the two Charges

drove away. The French and Swedish embassies plan to send a

diplomatic note protesting the incident; typically, the GOZ does not

respond to such protests.

¶6. Botswana Deports Zimbabwean Journalist… Botswana last week

deported Caesar Zvayi, a Zimbabwean journalist who had been employed

for several months as a media studies lecturer at the University of

Botswana. Before beginning work in Botswana, Zvayi had been the

Political and Features editor for The Herald, the Zimbabwean

government mouthpiece, where he had been an unabashed Mugabe

supporter and critic of the U.S. His deportation was apparently the

result of protests from journalists within Botswana who were

critical of his unbalanced journalistic stance at The Herald.

President Mugabe’s Spokesperson, George Charamba, condemned the

deportation. He described Zvayi as a “fearless writer” and said he

was free to return home and “do what he does best.”

———————————-

On the Economic and Business Front

———————————-

¶7. Soaring Inflation… With inflation estimated at over 40

million percent and ever-rising transactions demand for cash, the

Reserve Bank of Zimbabwe (RBZ) raised the daily cash withdrawal

limit from Z$200 (US$5.70) to Z$300 (US$8.57) on August 8. Today

the new limit is worth only US$3.16 thanks to the unprecedented rate

of depreciation of the Zimbabwe dollar on the parallel cash market

from Z$35 to Z$95:US$1 in one week. Demand for foreign exchange

continues to far outstrip supply, fueled, in particular this week,

by the RBZ itself. Our bank contacts told us that RBZ runners had

been out in full force buying up forex in Harare’s informal cash

market.

¶8. Tobacco Deliveries Lagging… Growers have delivered only 36.3

million kg of tobacco to Harare’s auction floors, down from 53.7

million kg at the same time last year. It appears the largest

growers are holding back some crop in expectation that the deeply

undervalued inter-bank exchange rate at which they are paid will

improve if there is a political breakthrough. Even with late

deliveries, this year’s crop of the country’s top agricultural forex

earner could be considerably lower than the official estimate.

While the GOZ continues to put the crop at 75 million kg, merchants

have told us that production could be as low as 55 million kg.

Production peaked at over 200 million kg before fast-track land

reform.

¶9. “Zimbabwe – Beyond Tomorrow”… The American Business

Association of Zimbabwe’s (ABAZ) annual BFIF-supported “Just

Business” economic forum will take place on August 21.

International speakers are flying in to address economic reform and

recovery in Zimbabwe. Among the presenters are Dr John Panzer of

the World Bank, Dr Mbui Wagacha of the African Development Bank and

Prof Caio Megale of Sao Paulo, Brazil. This year, representatives

of USAID’s Southern African Global Competitiveness Hub in Gaborone,

Botswana will discuss the potential benefits of AGOA eligibility to

Zimbabwe’s exporters. The Trade Hub reps will also hold breakaway

workshops specifically on textile and apparel exports to the U.S.

under AGOA, and on the export of processed and semi-processed food.

HARARE 00000699 003 OF 003

MCGEE

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