Zimbabwe riskiest investment destination?

Zimbabwe was ranked the riskiest investment destination in 2009 along with Afghanistan by United States credit rating company Dun and Bradstreet, according to one of the cables released by Wikileaks.

The report cited "economic, political, commercial, external, and political Insecurity".

The company has offices in Zimbabwe and provides a wide range of services.

 

Full cable:

 

Viewing cable 09HARARE699, ZIM NOTES 08-28-2009

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Reference ID

Created

Released

Classification

Origin

09HARARE699

2009-08-31 10:26

2011-08-30 01:44

UNCLASSIFIED

Embassy Harare

VZCZCXRO4821

RR RUEHBZ RUEHDU RUEHJO RUEHMR RUEHRN

DE RUEHSB #0699/01 2431026

ZNR UUUUU ZZH

R 311026Z AUG 09

FM AMEMBASSY HARARE

TO RUEHC/SECSTATE WASHDC 4859

RUCNSAD/SOUTHERN AF DEVELOPMENT COMMUNITY COLLECTIVE

RUEHUJA/AMEMBASSY ABUJA 2372

RUEHAR/AMEMBASSY ACCRA 3000

RUEHDS/AMEMBASSY ADDIS ABABA 3115

RUEHRL/AMEMBASSY BERLIN 1544

RUEHBY/AMEMBASSY CANBERRA 2378

RUEHDK/AMEMBASSY DAKAR 2745

RUEHKM/AMEMBASSY KAMPALA 3163

RUEHNR/AMEMBASSY NAIROBI 5608

RHEHAAA/NSC WASHDC

RHMFISS/EUCOM POLAD VAIHINGEN GE

RUEHGV/USMISSION GENEVA 2291

RUZEJAA/JAC MOLESWORTH RAF MOLESWORTH UK

RHEFDIA/DIA WASHDC

UNCLAS SECTION 01 OF 04 HARARE 000699

 

AF/S FOR B. WALCH

ADDIS ABABA FOR USAU

ADDIS ABABA FOR ACSS

NSC FOR SENIOR AFRICA DIRECTOR

STATE PASS TO USAID FOR L.DOBBINS AND J. HARMON

COMMERCE FOR ROBERT TELCHIN

 

SIPDIS

 

E.O.12958: N/A

TAGS: PGOV PREL ASEC PHUM ECON ZI

 

SUBJECT: ZIM NOTES 08-28-2009

 

-----------

1. SUMMARY

-----------

 

Topics of the week:

 

- Zuma Visits Zimbabwe, Discusses GPA...

- Elections When?...

- Mutambara Speaks Out...and is Slammed...

- KP Chair's Visit Stir Controversy...

- Mugabe Seeks Health Care in Dubai...

- Deputy Youth Minister's Trial Begins...

- Richard Hove Dies...

- Doctors Strike Ends...

- Cholera Reports Not True...

- ...But H1N1 Reports Are...

- Villagers Beat Up Policeman...

- Leaving on a Jet Plane - Twice...

- Afreximbank Gives Loans to Farmers...

- Too Little Too Late for Commercial Farmers...

- Zimbabwe "Riskiest" Investment Destination...

 

-----------------------------

On the Political/Social Front

------------------------------

 

2. Zuma Visits Zimbabwe, Discusses GPA... South African president

Jacob Zuma arrived in Harare on Thursday, his first visit to

Zimbabwe since he took office. He met privately with Zimbabwean

president Robert Mugabe, attended a State dinner hosted by Mugabe,

and then met late into the night, separately, with Prime Minister

Morgan Tsvangirai and Deputy Prime Minister Arthur Mutambara. He

will meet today jointly with the three principals, as well as Vice

President Joice Mujuru and Deputy Prime Minister Thokozani Khupe.

According to MDC sources, Zuma is raising the outstanding issues of

the continuing presence of Reserve Bank governor Gideon Gono,

Attorney General Johannes Tomana, Mugabe's refusal to appoint MDC

governors and Roy Bennett as deputy minister of agriculture, and

selective prosecutions. Zuma has told the MDC that if he is unable

to move Mugabe on these issues, he will support placing them on the

agenda of the SADC Summit in Kinshasa in early September. ANC

secretary-general Gwede Mantashe has been quoted in the independent

press in Harare as saying Zuma will be more vocal that former South

African president Thabo Mbeki in attempting to curb Mugabe's

"deviant behavior," but we have not yet seen any evidence to that

effect.

 

3. Elections When?... The Global Political Agreement (GPA) signed

last September provides for an 18 month process to draft a new

constitution, followed by a national referendum on the consttution.

The GPA says nothing about elections. At the time of formation of

the inclusive government in February, a widespread assumption was

that the government would be transitional; instead of the next

elections taking place in 2013, as they would under the current

constitution, many believed that a new constitution would pave the

way for new elections and an end to the transitional government in

2010 or 2011. For the past several months, it has seemed that

ZANU-PF was dragging its feet on the constitutional process to avoid

the prospect of elections--as things stand now, there is no question

they would lose reasonably fair elections. But it increasingly

appears that the MDC also would be content to allow an election date

to slide. Noting this, the semi-independent The Financial Gazette

(Reserve Bank governor Gideon Gono has an interest but the paper is

Q(Reserve Bank governor Gideon Gono has an interest but the paper is

often critical of the government and ZANU-PF) in an editorial in

Thursday's edition noted lack of progress in fulfilling the GPA and

called for limiting the lifespan of the government to two years with

elections to immediately follow.

 

4. Mutambara Speaks Out...and is Slammed... At a government

ministerial retreat last weekend, Deputy Prime Minister Arthur

 

HARARE 00000699 002 OF 004

 

 

Mutambara stated that last year's elections (won by President Robert

Mugabe after Prime Minister Morgan Tsvangirai withdrew because of

ZANU-PF-led violence against the MDC) were fraudulent. Most ZANU-PF

ministers present walked out. Since, the State media has been on a

campaign against Mutambara. An op-ed in Wednesday's The Herald

entitled "Mutambara must grow up" took him to task and quoted

ZANU-PF Minister of Justice Patrick Chinimasa as saying his party

would not participate in any meeting at which Mutambara had a role.

The same op-ed also praised Tsvangirai's growing composure as a

leader. Mutambara has been somewhat of a loose cannon. He has

criticized the west and called for a lifting of sanctions. He has

also urged ZANU-PF to comply with the Global Political Agreement. At

the Global 2009 Dialogue in Kampala in July, he incurred the ire of

ZANU-PF by suggesting that Zimbabwe's "brand" needed acceptance by

the west and by CNN, BBC, and Skynews.

 

5. KP Chair's Visit Stir Controversy... Bernard Esau, the Namibian

serving as the Kimberley Process Certification Scheme Chair, was in

Zimbabwe last week claiming to represent a KP team on a routine

mission. International diamond industry members closely followed his

comments, with some in India rejoicing in Esau's statements that

Zimbabwe "won't be suspended," while industry watchdogs have decried

Esau's behavior. This week The Herald ran a long editorial pointing

out that the KP is "not legally binding." The editorial continued,

"the attempt to try and portray its army as a rogue force that is

brutalizing its citizens to get diamonds mined for free can only be

believed by the gullible who are the willing victims of Western

propaganda" The KP team that visited Zimbabwe in late June has not

yet issued its final report, making Esau's visit and public comments

highly unusual. See The Herald's tirade in full:

http://allafrica.com/

stories/200908241430.html

 

 

6. Mugabe Seeks Health Care in Dubai... This week President Mugabe

made a quick trip to Dubai. While his office reports he was on

holiday, many believe he was receiving medical care. In the past he

has often traveled to Malaysia for treatment of his suspected

prostate cancer. During his brief absence, rumors raged that he was

extremely ill, but he has assumed a full schedule since his return.

 

 

7. Deputy Youth Minister's Trial Begins... The trial of Thamsanqa

Mahlangu (MDC-T), who stands accused of stealing the $40 cellphone

of war veteran Joseph Chinotimba, began this week. Unlike other

recent prosecutions of MDC-T MPs, we're told there may be substance

to the charge.

 

8. Richard Hove Dies... ZANU-PF Senator and Politburo member

Richard Hove died of natural causes this week at age 77. Hove was

also chairman of the board of ZB Bank, which was added to the

Treasury Department's sanctions list last year.

 

9. Doctors Strike Ends... A three-week long strike by junior

physicians demanding higher pay at five central hospitals has ended.

Qphysicians demanding higher pay at five central hospitals has ended.

Senior physicians at affected hospitals disapproved of the actions

by the junior physicians. The impact of the strike on the health

sector was minimal; central hospitals continued to function and

receive patients.

 

10. Cholera Reports Not True... This week the local and

international press initially reported that a cholera outbreak had

occurred in a village near the southeastern town of Chipinge. The

local office of the World Health Organization responded quickly and

determined that the symptoms were not consistent with cholera and

stool samples came back negative. Health officials suspect the

illnesses were caused by food poisoning.

 

11. ...But H1N1 Reports Are... Zimbabwe's first five

locally-contracted cases of H1N1 have been confirmed. The cases were

 

HARARE 00000699 003 OF 004

 

 

identified in a school in the eastern city of Mutare. All patients

were treated and recovered, and their contacts were followed for a

week after exposure

 

 

12. Villagers Beat Up Policeman... A group of villagers assaulted

two policemen with logs in a village near the southern town of

Chiredzi this week. One officer lost six teeth in the beating. The

two officers had intervened when they thought the villagers were

buying meat from a stolen animal. Five of the villagers were

arrested and are expected to face attempted murder charges.

 

-----------------------------------

On the Economic and Business Front

----------------------------------

 

13. Leaving on a Jet Plane - Twice... Despite the looming collapse

of Air Zimbabwe, President Mugabe continues to commandeer planes for

personal use. On August 18, he grabbed Air Zim's Boeing 737 for a

SADC meeting in Namibia. The next day h seized a Boeing 767 for a

private visit to Dubai. On both occasions the airline had to cancel

scheduled flights, losing income necessary to meet its financial

obligations that include foreign debt of USD 78 million. That

includes USD 50 million owed to China for the purchase of two small

aircraft.

 

14. Afreximbank Gives Loans to Farmers... In testimony to the

parliamentary budget committee, Finance Minister Biti said the

African Export Import Bank had made a commitment to provide USD 30

million to local banks for on-lending to farmers during the 2009-10

agricultural season. This is a change from the past when farmers

were given free inputs financed by the printing presses of the

Reserve Bank of Zimbabwe.

 

15. Too Little Too Late for Commercial Farmers... The main

architect of Zimbabwe's indigenization law, Paul Magwana of ZANU-PF,

spoke at an investment conference this week and was asked to compare

indigenization with land reform. Magwana commented that land reform

was a "revolutionary" program and "erroneous." It had backfired and

caused Zimbabwe to lose its agricultural capacity and its status as

a "breadbasket." Mangwana is one of the three chairs of the

Parliamentary Select Committee on the Constitution. Land reform is

considered sacrosanct by ZANU-PF, and it is noteworthy that Mangwana

made these comments publicly. While his belated insight is welcome,

it will do nothing to restore farm output from commercial farmers

who still face harassment and threats from land invaders.

 

16. Zimbabwe "Riskiest" Investment Destination... Citing

"economic, political, commercial, external, and political

insecurity," a recent Dunn and Bradstreet survey ranked Zimbabwe as

the "riskiest" (along with Afghanistan) country for investment.

 

-----------------

Quotes of the Week

-----------------

 

17. "Nobody, and I must stress this emphatically, nobody wants to

be removed from power. Power is so sweet that no one wants to leave

it.... So if you continue to remind me that I am writing my own

removal from power, the chances of me voting for a new Constitution

Qremoval from power, the chances of me voting for a new Constitution

will be diminished. This is across party lines." - ZANU-PF MP and

Constitutional Committee Co-Chair Paul Mangwana, in The Zimbabwe

Times, August 23, 2009.

 

18. "Cde Mugabe is the head of the government of the Republic of

Zimbabwe. He is the President of this country. He is the man who

chairs our cabinet. He is the one who tells all of us, including the

Prime Minister, what should be done." Minister of State for

Presidential Affairs Didymus Mutasa (ZANU-PF) speaking to ZBC-TV on

Wednesday August 26, 2009.

 

HARARE 00000699 004 OF 004

 

 

 

 

DHANANI

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