US embassy cable - 03HARARE1621

UNCLAS HARARE 001621 
 
SIPDIS 
 
SENSITIVE NOFORN 
 
STATE FOR AF/S, DRL 
NSC FOR SENIOR AFRICA DIRECTOR JFRAZER 
 
E. O. 12958: N/A 
TAGS: ECON, ELAB, PGOV, ZI 
SUBJECT:  LABOR'S ULTIMATUM RUNS OUT, UNSPECIFIED RESPONSE 
YET TO BE ANNOUNCED 
 
 
SENSITIVE BUT UNCLASSIFIED.  NOT FOR INTERNET POSTING. 
 
1.(SBU)  Summary.  The Zimbabwe Congress of Trade Unions 
(ZCTU) declared on July 29, 2003, that it would give the GOZ 
a fourteen-day time period to provide relief from the 
ongoing cash crisis, after which the labor unions would 
respond with unspecified action.  Despite the GOZ's 
unfocused attempts to deal with the symptoms rather than the 
genesis of the problem, the fourteen days passed with the 
situation deteriorating rather than improving.  The 
ultimatum expired on August 12, and the newspaper headlines 
on August 13 and 14 speculated about another ZCTU-led 
stayaway.  But while the ZCTU has clearly committed itself 
to action, it is unclear what shape that action will take. 
The most radical step might be for the ZCTU to call on 
regional allies, such as the Congress of South African Trade 
Unions (COSATU), to increase pressure and force a response. 
End summary. 
 
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NO RELIEF IN SIGHT 
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2. (U)  The cash crisis continues unabated.  Zimbabweans 
continue to queue at banks for as little as Z $5,000 to 
$10,000 per person (US $1 to $2 at current parallel market 
rates).  The GOZ, while announcing improbable remedies -- 
changing the color of the largest banknote (now worth US 
$.10) to persuade more consumers to bank their old money, or 
issuing pseudo-travelers' checks for single-use transactions 
-- seems powerless to resolve the crisis.  Nobody believes 
that the government can replace 2/3 of the banknotes in 
circulation (up to Z $120 billion) within sixty days, and 
some shops are not even accepting the new travelers' checks. 
Given the dominance of the black market in some sectors, 
such as fuel, and the requirement for cash in other sectors, 
such as transport costs, non-cash remedies can only address 
a small part of the problem. 
 
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ZCTU OBLIGED TO FOLLOW THROUGH 
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3. (SBU)  The ZCTU remains concerned about the 
disproportionate impact of the cash crisis on its 
constituency -- those workers still fortunate enough to have 
formal employment, but struggling at the lower end of the 
income scale.  Its attempts to urge the GOZ to resolve the 
problem were improbable at best, but now that the government 
has failed to improve the situation, the ZCTU is compelled 
to act.  Despite headline banners that scream new mass 
action is imminent, the ZCTU remains close-mouthed about its 
plans.  ZCTU officials concede that another futile stayaway 
would be counter-productive, and that more drastic action 
will eventually be necessary.  A meeting of the National 
Council is scheduled for August 23, at which time they will 
decide what action to take, and action is likely to follow 
within a week. 
 
4. (SBU)  One potential wild-card response is for ZCTU to 
call on COSATU to join forces in closing the border posts 
between Zimbabwe and South Africa.  COSATU has indicated 
publicly that it is willing to do so, as it has done in the 
past with Swaziland and Lesotho, but it has stated privately 
to ZCTU officials that it will only do so if invited by 
ZCTU.  Other rumors within the labor circles claim that SA 
president Thabo Mbeki may be willing for COSATU to be the 
"spontaneous" actor in such an endeavor, which will both 
increase pressure on Zimbabwe to put its economic house in 
order, but leave Mbeki with publicly clean hands. 
 
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COMMENT 
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5. (SBU)  The ZCTU leadership is painfully aware that 
continued attempts to call stayaways, particularly when 
there is no resultant improvement, are a waste of 
organization.  The challenge will be for the ZCTU to respond 
with something so effective, and so unexpected, that the GOZ 
will be forced to respond.  Several days of closed borders, 
particularly when Zimbabwe is so critically dependent upon 
road-based trade with SA, could well be the best tactic. 
 
Whitehead