US embassy cable - 03HARARE550

UNCLAS SECTION 01 OF 02 HARARE 000550 
 
SIPDIS 
 
STATE FOR AF/S, DRL 
NSC FOR SENIOR AFRICA DIRECTOR JFRAZER 
 
E. O. 12958: N/A 
TAGS: ECON, ELAB, PGOV, ZI 
SUBJECT:  HARD LABOR: EFFORTS TOWARDS A LIVING WAGE, 
REALISTIC PRICES, AND ECONOMIC RECOVERY 
 
Ref:  Harare 267 
 
SENSITIVE BUT UNCLASSIFIED.  NOT FOR INTERNET POSTING. 
 
1. (SBU)  Summary. Laboff met with labor representatives to 
touch base on issues including the ongoing Tripartite 
Negotiating Forum (TNF) talks and the proposed National 
Economic Recovery Plan (NERP).  The TNF sub-committees are 
currently negotiating minimum wages, with the ball in the 
employers' court -- specific wages were proposed by labor 
and were reported back to employers for their response, with 
counter-proposals expected sometime this week.  Although 
there seems to be consensus within the TNF that price 
controls are ineffective, nobody has assumed the burden of 
announcing their elimination.  Finally, the Zimbabwe 
Congress of Trade Unions (ZCTU) continues to participate in 
the TNF process in an effort to exhaust all possible 
remedies before endorsing any call for mass action. 
However, once this process proves fruitless, those elements 
of the ZCTU who would support a call for mass action believe 
they could mobilize large-scale support.  End summary. 
 
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Twin Pillars:  Higher Wages and ... 
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2. (SBU)  The negotiations regarding minimum wages continue, 
and labor has floated a proposal for three levels (in the 
general range of $20,000 for agricultural workers, $40,000 
for agro-industrial workers, and $60,000 for industrial 
workers), which has not yet been approved.  Reportedly, the 
employers -- concerned about the expenses -- are discussing 
this in terms of viability, and are expected to come back 
with a counter-proposal sometime this week.  If there is 
consensus among the social partners, the proposals will then 
go to the Cabinet for approval.  The GOZ, of course, may 
make a unilateral declaration that the employers' counter- 
proposal is acceptable, regardless of the position taken by 
labor.  However, labor is hopeful that agreement can be 
reached, since there seems to be a combined will to reach 
consensus on minimum wages, with only the actual amount 
outstanding. 
 
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... Higher Prices 
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3. (SBU)  Regarding price controls, the unexpected report is 
that all three "social partners" -- including the GOZ -- 
recognize that price controls are neither working nor even 
necessary.  However, they are too populist a measure for the 
GOZ to publicly abandon.  This is one of the few public 
efforts being made as a concession to the "struggling 
masses," and nobody will accept the unpopular duty of making 
the suggestion to abandon controls outright.  There is 
widespread admission, within the TNF, that price controls 
(if they are maintained) must be tied to the cost of inputs, 
including the cost of labor.  The labor representatives 
suggested that a TNF review board will be tasked with the 
responsibility of reviewing controlled prices on a regular 
basis, and raising them as necessary. 
 
4. (SBU)  Labor is dismissive of any possibility that NERP 
(without addressing the underlying economic discrepancies) 
will ease the economic strains on the average worker.  The 
Zimbabwe Congress of Trade Unions (ZCTU) has previously 
stated that only radical economic changes will have any 
effect on the economy, and thus on the situation of workers. 
Labor is equally uncertain that the TNF will adequately 
address the needs of workers.  Despite this, the ZCTU has 
suggested that its participation in TNF process is necessary 
before it can call -- on an official level -- for support of 
any mass action against the GOZ.  Since up to one-third of 
the ZCTU constituency is pro-Zanu-PF, this faction will not 
support mass action until all other avenues of dialogue have 
proven fruitless.  Of course, many segments of the ZCTU are 
idealistically aligned with the opposition, and some will 
support calls for mass action regardless of their origin. 
 
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Comment 
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5. (SBU)  Comment:  The TNF process continues to chug along, 
although well behind schedule.  Originally, the wage freeze 
was set to run from January through June 2003.  There is 
still no consensus on the level at which wages should be 
frozen, and it is already mid-March.  While the original 
proposal from labor groups suggested that price controls be 
abandoned, it is more likely that the final product will 
simply re-package the retreat from price controls under a 
new name,just as devaluation has become "export support 
mechanism" in GOZ-speak.  Some GOZ officials have already 
begun to rename controls as "price management."  At this 
point, there is working-level agreement on finding a living 
minimum wage and attempting to tie consumer prices to the 
real cost of inputs, including labor.  Whether these goals 
can be reached remains to be seen. 
 
6. (SBU)  Labor also seems committed to  playing out the 
role of committed "social partner" before taking on the role 
of opposition sympathizer.  Given the many direct and 
sometimes personal attacks on the ZCTU by the GOZ over the 
past year, the labor organization seems determined to follow 
each step in sequence.   Although it remains wary of the 
final product, labor seems committed to participating in the 
process.  Negotiating with an arguably illegitimate 
government has its price, however.  As with the Commercial 
Farmers Union (CFU) (reftel), GOZ spin-masters now portray 
ZCTU as having abandoned MDC and foreign interests, falling 
in line behind President Mugabe.  We have no doubt that the 
GOZ uses these negotiations in its often successful attempts 
to convince other African governments that the country's 
political crisis is over. 
 
Sullivan