US embassy cable - 03HARARE2365

Disclaimer: This site has been first put up 15 years ago. Since then I would probably do a couple things differently, but because I've noticed this site had been linked from news outlets, PhD theses and peer rewieved papers and because I really hate the concept of "digital dark age" I've decided to put it back up. There's no chance it can produce any harm now.

Identifier:	03HARARE2365
Wikileaks:	View 03HARARE2365 at Wikileaks.org
Origin:	Embassy Harare
Created:	2003-12-09 05:48:00
Classification:	UNCLASSIFIED
Tags:	EINV ETRD ECON EFIN PGOV ZI
Redacted:	This cable was not redacted by Wikileaks.

UNCLAS HARARE 002365 
 
SIPDIS 
 
STATE FOR AF/S 
NSC FOR SENIOR AFRICA DIRECTOR JFRAZER 
USDOC FOR 2037 DIEMOND 
TREASURY FOR OREN WYCHE-SHAW 
PASS USTR FLORIZELLE LISER 
STATE PASS USAID FOR MARJORIE COPSON 
 
E. O. 12958: N/A 
TAGS: EINV, ETRD, ECON, EFIN, PGOV, ZI 
SUBJECT: Govt may ax EPZs 
 
 
1. Summary: Yesterday's Herald suggests the GOZ may 
eliminate export processing zones (EPZs), taking to the 
next level its obliteration of a once-thriving and 
diversified economy.  End summary. 
 
2. The lead article in the State-run Herald's business 
section announces: "EPZs fail to deliver - RBZ [Reserve 
Bank of Zimbabwe]."  In recent weeks, the GOZ has implied 
that firms in EPZs are sheltering foreign exchange from 
Reserve Bank controls.  Although we have not heard 
anything definitive from GOZ sources, the Government 
appears to be laying the groundwork for de-certification 
of EPZs. 
 
3. Comment: EPZ companies continue to do well, since they 
are not subject to the GOZ's mandatory exchange 
requirements and take full advantage of an industrious 
workforce at very low wages.  It is one area of this 
plummeting economy that is even drawing new investment. 
Although GOZ statistics are sketchy, we believe most 
Zimbabwean exports to the U.S. now originate in EPZs.  If 
EPZ companies must comply with present export 
regulations, most will no longer operate competitively. 
 
Sullivan