US embassy cable - 03HARARE2226

UNCLAS HARARE 002226 
 
SIPDIS 
 
NSC FOR JFRAZER 
 
E.O. 12958: N/A 
TAGS: ECON, ELAB, PGOV, ZI 
SUBJECT: NEW HEALTH SALARIES LIKELY TO BREAK THE BANK 
 
REF: HARARE 2146 
 
1. Summary:  Nurses have largely returned to work after 
victory in a strike demanding healthy salary increases (ref). 
 The majority of mid-level and junior doctors continue with 
their simultaneous job action, despite a ruling from the 
Labour Court that their strike is illegal and an order to 
return to work.  There is little doubt that the GOZ will come 
to some compromise with the doctors, if only to stem the 
relentless brain drain that has crippled the healthcare 
industry.  However, these accommodations will further batter 
an embattled budget that cannot sustain these unfunded salary 
increases.  End summary. 
 
2.  Nurses returned to work on Friday, October 31, after a 
brief strike during which they demanded significant increases 
in salary.  The GOZ capitulated (despite the nurses' 
designation as an "essential service" which precluded them 
from striking) and awarded salary increases from a previous 
high of Z$222,967 to Z$1,600,000 (from US$39.46 to US$283) 
per month.  Doctors, who have demanded an increase from 
Z$378,000 to Z$30,000,000 per month, (an increase from 
approximately US$66.90 monthly to US$5,309.73 monthly) remain 
in negotiations with the GOZ. The Labour Court held on 
November 5 that the doctors' strike was illegal and that 
doctors must return to work while pressing their "legitimate 
grievance over their salaries" with the GOZ.  Nevertheless, 
most of the striking doctors have not yet returned to their 
duties.  The Labour Court further ordered a government 
negotiating council to meet with the doctors by Friday, 
November 7.  It is unclear whether the GOZ will obey this 
directive, particularly if it can point to the doctors' 
continuing absence from their posts. 
 
3.  Comment:  The healthcare professionals are clearly 
suffering the same pressures as other Zimbabweans, who are 
struggling over cost-of-living increases which are rapidly 
outstripping the 455% inflation rate.  The nurses' victory in 
the current crisis indicates that the GOZ is aware of its 
need to placate health professionals in an attempt to prevent 
their emigration.  There is, however, no indication of where 
the money allocated to the striking professionals can be 
found.  Labor sources estimate that there are at least 1,000 
nurses and over 6,000 doctors represented by their respective 
professional organizations.  A monthly salary of Z$1.6 
million for each nurse represents a GOZ expenditure of Z$1.6 
billion per month.  If the GOZ meets even half of the 
doctors' demands, a monthly salary of Z$15 million per doctor 
represents over Z$90 billion per month.  The GOZ can, of 
course, simply print more bearers' checks to generate the 
paper to pay such salaries.  However, without the reserves to 
back up such a move, the inflationary pressures may well 
destroy any semblance of balance in the battered economy. 
End comment. 
SULLIVAN