US embassy cable - 04HARARE279

UNCLAS HARARE 000279 
 
SIPDIS 
 
DEPT FOR AF/EPS DKRZYWDA 
DEPT PLS PASS USTR W. JACKSON 
TREASURY FOR OWHYCHSHAW 
 
E. O. 12958: N/A 
TAGS: ETRD, PREL, ZI 
SUBJECT: Input for President's 2004 AGOA Report on 
Zimbabwe 
 
Ref: State 28997 
 
Post's input for the President's 2004 Report on AGOA to 
Congress follows: 
 
a. AGOA Trade and Investment: n/a 
 
b. Market Economy/Economic Reform: Since the late-1990s, 
the Government has approached the economy through broad 
interventionism, with parastatals serving as monopolistic 
middlemen for products such as tobacco and grain.  Over 
the course of 2003, however, the Government relaxed 
certain onerous restrictions and price controls. 
Nonetheless, it still maintains many barriers to trade - 
including high duties for importers and exchange 
requirements for exporters.  It is paying only a small 
portion of its international arrears, which have reached 
nearly US$ 2 billion.  Inflation reached 600 percent by 
year end, and the savings rate has dropped from 12 to 4 
percent since 2000.  The Government did not make progress 
privatizing inefficient parastatals in 2003. 
 
c. Rule of Law/Political Pluralism/Anti-Corruption:  The 
opposition political party operates in a climate of 
intimidation and repression.  The GOZ is prosecuting the 
opposition leader for treason, a crime that carries the 
death penalty.  Over the past year, the GOZ has removed 
Harare's elected mayor and shut down for prolonged 
periods the only non-government daily newspaper.  During 
the country's high-profile land redistribution, the GOZ 
has ignored rule-of-law and due process. 
 
d. Poverty Reduction:  While the GOZ maintains several 
programs that provide food or basic services to the poor, 
these have had minimal effect compared to the general 
thrust of GOZ economic policy, which has caused most 
Zimbabweans to grow progressively poorer over the past 6 
years.  Many Zimbabweans take home but a fraction of 
their 1997 real wages.  Income taxes kick in at a monthly 
salary of US$3.  Electricity and fuel are heavily 
subsidized but difficult to come by.  Controls have 
failed to keep prices in check.  An acute cash shortage 
made it difficult for lower-income Zimbabweans to access 
money in their accounts during most of 2003. 
 
e. Labor/Child Labor/Human Rights:  Despite official 
recognition of worker rights, the government continues to 
exert heavy pressure on labor unions, limiting their 
freedom of association and right to organize.  Unions 
have been denied routine meetings and necessary 
consultations with constituents under the draconian 
Protection of Order and Security Act(POSA).  Senior 
members of the Zimbabwe Congress of Trade Unions (ZCTU) 
have been arrested on spurious charges, some of them 
later reporting physical abuse while in police custody. 
 
Sullivan