Zim will slide into total anarchy if unity govt collapses: Biti

http://www.zimonline.co.za

by Charles Tembo Thursday 26 March 2009

HARARE - Zimbabwe will become a totally failed state in the style of
anarchic Somalia if the country's new unity government collapsed because of
a lack of resources, Finance Minister Tendai Biti said on Wednesday.

Biti said the consequences of the unity government failing were too drastic
including possible bloody civil unrest in the power vacuum created in the
aftermath of government collapse.

"The consequences of it (unity government) not working are drastic, it will
lead to a failure of the state, a collapse of the state and all the civil
unrest that follows the failure of a state," said Biti, during a joint press
briefing in Harare with visiting Norwegian International Development
Minister, Erik Solheim.

"To undo the consequences of a failed state, like Somalia, the cost is more
than US$100 billion, so the little amounts that we are asking are important
to ensure that this democratic experiment succeeds," said Biti.

President Robert Mugabe, his long term rival Morgan Tsvangirai and another
opposition leader Arthur Mutambara agreed to form a power-sharing government
to end a political stalemate after inconclusive elections last year.

The unity government immediately raised hopes Zimbabwe could finally emerge
from its crisis but the reluctance of rich Western countries to provide
financial support to the Harare government has sparked fears it could fail.

Western nations - that continue to give humanitarian aid - insist they want
Zimbabwe's unity government to submit a credible economic recovery
programme, implement genuine and comprehensive political and economic
reforms before they can lift sanctions and provide direct financial support
to Harare.

The United States went further on Monday to demand a new and democratic
constitution in Zimbabwe in 18 months followed by fresh elections before it
could lift sanctions or provide significant support.

Solheim, whose visit follows that of Danish Development Cooperation Minister
Ulla Tornaes who was in Zimbabwe last week reportedly to explore possible
reengagement with Harare, reiterated Western calls that the new government
should first implement reforms before it can get support.

"The international community must engage Zimbabwe and give support but the
international community wants to see democratic development in Zimbabwe, the
release of the remaining political prisoners and the stopping of violence
and illegal farm occupations," Solheim said.

An International Monetary Fund (IMF) delegation that was in Harare for
Article IV consultations made similar calls on Wednesday on the Zimbabwean
government to show commitment to sound policies as well as clear outstanding
debts before the Fund could provide financial and technical support.

"Technical and financial assistance from the IMF will depend on establishing
a track record of sound policy implementation, donor support and a
resolution of overdue financial obligations to official creditors, including
the IMF,'' the Fund said in a statement after a two-week mission to
Zimbabwe.

A summit of southern African leaders in Swaziland next Monday is expected to
call on the United States, European Union and other Western powers to
provide support to Harare as well as lift sanctions against Mugabe and top
officials of his old administration and ZANU PF party.

But analysts do not see this happening any time soon especially as it
continues to look like Mugabe and hardliners in ZANU PF and the military
hold the sway in the unity government.

Zimbabwe says it requires US$2 billion immediately to kick start the economy
and restore basic services such as health and education but says overall
US$5 billion is needed to rebuild the country.

Meanwhile Biti said the government was operating on a monthly deficit of
US$80 million as revenues had dwindled to only US$20 million per month,
which is not enough to pay civil servants allowances of US$100.

"We have a huge fiscal deficit every month. We do not have that money.
People are dying at the rate of 4 000 people per week as a result of the
deficit. We need help," said Biti.

However, the Finance Minister said the government had raised enough hard
cash to pay civil servants this month, adding that long queues experienced
at banks were because banks were still adjusting from using the Zimbabwe
dollar to using foreign currency.

"The money is there in the various banks but the problem which we are having
is the payment system after we moved from using the dead and moribund
Zimbabwe dollar. The banks have not developed a payment system for multiple
currencies, so there are massive delays in transfers," said Biti.

Earlier in the day, scores of disgruntled civil servants attempted to force
their way into Biti's office to complain about failure to get their salaries
from banks but were stopped by security guards at the premises. - ZimOnline

Unity govt needs urgent help to achieve true democracy

http://www.zimonline.co.za

by Farai Mtshaka Thursday 26 March 2009

OPINION: The recently launched Short Term Emergence Recovery Programme
(STERP) has articulated a clear roadmap for Zimbabwe's economic recovery.

STERP has the ingredients and hallmarks of a transformative social and
economic platform. What is needed most urgently is the funding to kick-start
the economy.

The newly formed inclusive government is unable to pay civil service
salaries, let alone restore the dilapidated infrastructure necessary for
social service delivery.

According to Finance Minister Tendai Biti, the Zimbabwean economy is now
sustained by beer and tobacco!

With the economy trapped in a vicious cycle of sustained decline, it is now
beyond doubt that the country is on the verge of becoming a failed state.

The donor community should rescue Zimbabwe from the abyss and give the
inclusive government a fighting chance to avert grim social consequences.

Sadly, many well-meaning critics of President Robert Mugabe and his cronies
often succumb too easily to the temptation to frame the unfolding tragedy
around a few personalities, including Mugabe himself.

This simplistic analysis could have sufficed in the past 10 years when the
architecture of the economic collapse we are witnessing today was ruthlessly
implemented.

The genesis of the current diabolical mess was nurtured by a toxic ideology
driven by coercion and political fundamentalism, and the progressive
"Zanufication" of key state institutions, especially the army, police and
several state-owned enterprises.

Although not entirely perfect, the global political agreement (GPA) seeks to
undo some, if not most, of the damage done to the economy and the social
fabric over the last 10 years. If implemented with foresight and diligence,
the GPA may succeed to pull back the country from the brink.

In as much as Mugabe and his supporters want to believe that he remains the
"power and the glory" of Zimbabwean politics, change is beginning to happen.

Undoubtedly, this is the beginning of the end of Mugabe as the dominant
political force in national politics. There is a new dynamic emerging in the
country, too powerful to be subservient to the whims of an aging despot and
his merry men.

There now exists an opportunity for a paradigm shift in the matrix that has
driven a once prosperous country to the brink. Now is the time to help
reconstruct the country for the good of all Zimbabweans who are surviving on
nothing but hope for the future.

Now is the time to re-examine the different dimensions and strategic intent
of all sanctions. This re-examination has to be undertaken in conjunction
with an objective assessment of the benchmarks set out in the GAP on the one
hand, and the practical steps taken to bring about change in Zimbabwe, on
the other.

The donor community has clearly indicated that they want to see the release
of all political prisoners, a halt to seizures of white-owned farms,
restoration of the rule of law and property rights, as well as a free press.

Reports of continuing political violence and mayhem in some parts of the
country and on some farms have become a convenient excuse for some reluctant
donors. The inclusive government should take urgent steps to address these
concerns.

It is delusional to expect buy-in by the Zimbabweans and the donor community
in the GPA and the inclusive government when there is hardly any change on
the ground. Confidence building measures are simply not yet visible.

For as start, the inclusive government should take urgent steps to rid the
Reserve Bank of Zimbabwe (RBZ) of all corrupt individuals, including the
Governor himself. No sane donor will release funds to an institution reputed
for partisanship and corruption.

As the inclusive government buckles down to implement the GPA, the donor
community should demonstrate readiness to step up to the plate and own up.

The simple truth is that Zimbabwe is broke. It is in no position to honour
its debts to the IMF, the World Bank and the African Development Bank.

Paris Club creditors should urgently consider debt forgiveness under the
enhanced Heavily Indebted Pour Countries Initiative (HIPC).

In addition, punitive sanctions that prohibit the country from accessing
lines of credit should be withdrawn henceforth.

Helping the inclusive government succeed is the surest way to lay the
foundations of a new democratic dispensation in Zimbabwe. - ZimOnline

Refuse collectors paid more than teachers

http://www.thezimbabwetimes.com/?p=13974

March 25, 2009

By Sibangani Sibanda

THIS week, I bought the Sunday Mail. I mention this fact because this was
the first time in more than a decade that I have parted with money to
actually buy Zimbabwe's biggest Sunday paper. I bought it because its
headline said something that is very close to my heart at the moment. The
City of Harare was to "slash" its rates!

This was the best news that I had heard in quite a while.

Last week, Finance Minister, Tendai Biti put paid to any hope that I had
that he would save the Zimbabwe dollar by "freezing" its use - although I do
not know of anyone that was still using it at that point. But apparently,
the very innovative Zimbabwean business community had found a way of "using"
it by submitting all their tax returns in Zimbabwe dollars thus "giving back
unto" our government what belongs to them. Unfortunately, the "un-bookish"
economics of Robert Mugabe and Gideon Gono have come back to bite the
government as much as it is biting the rest of us. They found no use for the
Zimbabwe dollar either.

So, like me, the government of Zimbabwe is starting afresh!

The City of Harare, like all the other quasi governmental service providers
who stopped providing services at about the same time that I stopped buying
the Sunday Mail, had stolen a march on the rest of us. They had not only
started charging us in foreign currency, they had pegged their charges at
rates that suggested that we had to pay a lot of money that we do not have
for services that do not exist!

Needless to say, many of us just ignored their bills.

We simply could not afford them for it is un-Zimbabwean to resist anything
on the flimsy grounds that it is unfair. We waited for them to stop
collecting refuse to "punish" us for our non payment, but, of course they
had long anticipated this and stopped collecting refuse in advance. We
waited for them to disconnect our water supplies - which were cut off long
ago - and then ask us to pay "reconnection fees" so that we get reconnected
to the dry pipe lines.

They also stopped fixing roads and traffic lights, sweeping the streets,
clearing storm drains (which meant that most of the city's roads were
routinely flooded during the just passed rainy season). In short, the city
stopped working, period. The Zimbabwe dollar rates we had been paying had
apparently all been used for salaries and wages!

So, having got used to getting paid for doing nothing, they decided to
increase the charges in foreign currency so that they could pay themselves
more without necessarily improving their service delivery - at least that is
what the Sunday Mail article seemed to suggest. They had "agreed with their
employees on a wage bill that would chew up about 60 percent of revenues
collected". The remaining 40 percent would then be used to cover the backlog
of services required and presumably, the international donor community would
be asked to cover the rest.

Surprisingly, at a time when all other government employees were being asked
to accept well below their market value in salaries, the city was paying its
lowest paid workers - road sweepers and refuse collectors - about three
times what teachers, bank clerks and other professionals were receiving!

This, in my view has been the norm in all semi-governmental bodies and
parastatals. Their charges have largely been based, not on the level of
services provided, but on the salaries that they wished to pay themselves.
Furthermore, there was no attempt to actually manage the organizations by
looking at such things as cost structures and how savings could be made. Nor
were there any attempts to explore other ways of increasing revenue. The
consumer, who really has no choice in the matter, had to be bled dry so that
they could be paid "decent" salaries, which, in the context of Zimbabwe
today, turned out to be pretty indecent.

Many years ago, the City of Harare had liquor outlets throughout the city.
These provided much needed revenue for the city to be able to fulfill all
its obligations without overburdening its rate payers. In the name of
"Privatisation" (or was it "commercialization"), these wee parceled out and
sold to, I suspect, the very well connected. Typically, many of the new
owners of these outlets failed to "organize booze ups in (their) pubs" and
they closed down. Meanwhile, the City had lost a major source of revenue.

Perhaps now the City Fathers - and Mothers - will begin to look at other
ways of raising revenues? I am not holding my breath. They will probably
just blame government for not allowing them to charge "economic" rates and
the city's services will deteriorate even more.

Mutambara blames all on Mugabe

http://www.thezimbabwetimes.com/?p=13988

March 25, 2009

By Raymond Maingire

HARARE - Deputy Prime Minister Arthur Mutambara says President Robert Mugabe's
apparent refusal to honour some of the provisions of last September's unity
deal with his opponents is hardening attitudes towards Zimbabwe in the west.
"The worst type of sanctions we have in our country are sanctions we impose
upon ourselves," Mutambara told parliament Wednesday afternoon.

He was delivering his inaugural address since being sworn in as Deputy Prime
Minister in February this year.

"We impose sanctions on ourselves through corruption, misgovernance,
fraudulent elections and violence. We have done that for the past 10 years
and we are doing it today.

"We have to remove those sanctions we can control and have imposed upon
ourselves. Charity begins at home."

His address was punctuated by cheers from MDC parliamentarians.

Mutambara said Mugabe's refusal to release MDC supporters charged for
plotting a coup on his government and the recent wave of farm invasions by
his supporters all vindicated the west's position on sanctions.

"Right now, land invasions, abductees, disobedience of court orders,
outstanding issues on the agreement, issues of provincial governors,
permanent secretaries and ambassadors have not been settled," he said.

"We must address all the matters that are outstanding. If we don't, we are
imposing sanctions upon ourselves.

"If we don't, we have no moral authority to ask others to lift sanctions.

"Even if there are no farm invasions at all, given the perception of farm
invasions, a perception of violence, a perception of the breakdown of the
rule of law, perception becomes reality.

"You better address and correct that perception. If you do not address that
perception, you are shooting yourself in the foot."

The deputy prime minister however pleaded with the west to remove the
sanctions.

"This is our message to the international community," he said.

"We understand why you are skeptical. We understand why you are hesitating
to lift sanctions. But hear us on this one.

"We are determined as the three political parties to make this agreement
work. This is an irreversible process in our country. We are in this
government to save our people.

"We are determined to address those matters within our control. That is why
I started with sanctions in my control. That's why I started by sanctions I
have imposed on myself."

He appealed to the west not to give Zimbabwe any conditions before they
agree to lift the sanctions saying the delay in their removal was hurting
Prime Minister Tsvangirai's efforts to redress the Zimbabwean economy.

Mutambara said the wait-and-see attitude that has been adopted by the west
was not in the best interest of Zimbabweans.

"If we don't get humanitarian assistance, if we don't get balance of payment
support, this country will collapse and if it collapses the people of this
country will be the victims."

Zimbabwe desperately needs a short-term package of US$2 billion to fund
government operations.

Mutambara continued, "Please, remove any types of sanctions you have imposed
because you are undermining Comrade Tsvangirai, you are undermining the
Prime Minister of Zimbabwe, you are undermining the efforts of Zimbabweans.

"Grant us the common sense; grant us the intelligence to know what is good
for us.

"It's not for America, it's not for Britain to judge our wisdom or lack of
it vis a vis the affairs of our country as long as we take charge of what we
control."

Since 2002, the powerful western nations, led by Zimbabwe's former colonial
power, Britain, have imposed a travel ban to Europe and the United States on
some top government officials and frozen all lines of credit to Zimbabwe.

This followed the disputed 2002 presidential election in which Mugabe beat
his main opponent, Morgan Tsvangirai, leader of the Movement for Democratic
Change (MDC) in controversial circumstances.

More than 100 people, mostly MDC supporters, died at the hands of Mugabe's
militant supporters.

Mugabe, 85, made an impassioned plea last week to the west to remove the
sanctions which he says are hurting ordinary Zimbabweans.

He contends there is no more justification for the extension of sanctions as
his party has agreed to share power with its opponents.

The west is adamant it will not lift sanctions for as long as Zimbabwe is
not willing to implement broad economic and political reforms.

Mutambara placed the blame for the deadlock squarely on Mugabe's
intransigence.

Goods reappear in Zimbabwe shops

4 hours ago

HARARE (AFP) - A man whistles as he picks groceries from the shelves of a
supermarket in Zimbabwe's capital. Another shopper, spoilt for choice,
compares cooking oil bottles while queues form at the tills.

In Zimbabwe, these were simple and almost forgotten luxuries.

For more than a year, supermarket shelves were bare and shops resembled
empty warehouses as the country reeled under an economic crisis that turned
sugar and the staple corn meal into rare commodities.

Now shops are stocking up again, after the government in January agreed to
allow retailers to conduct business in foreign currency.

The government has even stopped printing Zimbabwe dollars, which it once
churned out in trillion-dollar denominations that quickly became worthless
under inflation that independent economists estimated in the quadrillions.

The switch to foreign currency has already started bringing prices down in
US dollar terms, according to official statistics which are being borne out
at the till.

A 10-kilo packet of corn meal used to make a thick porridge called sadza
cost 12 dollars in December, but is now half the price. Two kilos of sugar
cost five dollars then, but is also down by half.

"Things are back to normal," said Simbarashe Mawarire, a manager at a branch
of the retail chain Savemor.

His store had so much trouble obtaining goods last year that it simply
closed off four of its five shelves.

"It's not only business which is now functioning properly. Look at our
politics as well. They said (President Robert) Mugabe and (Prime Minister
Morgan) Tsvangirai would never work together but since February 11 things
have taken a different dimension."

The two rivals formed a unity government last month that remains fraught
with political tensions, but so far they have made a show of common purpose
in efforts to revive the economy, which has contracted more than 45 percent
over the last five years.

The government has loosened price controls and eased import restrictions,
making it easier for retailers to buy and sell goods.

In the past Mugabe had rigidly enforced price controls. In June 2007 he
ordered businesses to slash their prices by half after accusing them of
working with his Western foes to topple his government.

The price blitz was accompanied by violence in grocery stores and led to the
closures of shops, job losses and the shutdown of most factories.

The few shops licensed to sell in foreign currency charged prices about four
times the regional average. Now that all shops are competing under the same
rules, prices are falling.

"Initially retailers were ripping us off, but due to dollarisation this has
removed price distortions that were initially in the market," said Tendai
Muzadzi, an independent Harare-based financial analyst.

"We are moving in the right direction by having prices of goods in foreign
currency as this allows prices of goods to go down. Before that, most shops
had closed half of their wings."

Despite the falling prices, most Zimbabweans still struggle to survive as
most have no income in a country with 94 percent unemployment.

"The selling of goods in shops in foreign currency has now stabilised their
prices," said Kumbarirai Katsande, president of the Confederation of
Zimbabwe Industries (CZI).

"However, what now has to be addressed is the issue of disposable income to
enable people to buy the goods," he told AFP.

As a result of the dollarisation, unions are now demanding pay reviews in
foreign currency.

The government is giving civil servants a monthly allowance of 100 US
dollars, but the Zimbabwe Congress of Trade Unions is demanding 450 dollars
as the minimum monthly salary.

Sweden donates $10 million to Zimbabwe

http://www.thezimbabwetimes.com/?p=14005

March 25, 2009

By Raymond Maingire

HARARE -The Swedish government on Wednesday donated US$10 million towards
current international efforts aimed at alleviating Zimbabwe's crippling
humanitarian situation.

The funds were donated under the auspices of the Swedish International
Development Cooperation (SIDA).

They would be channeled through the 2009 United Nations Consolidated Appeal
Process (CAP) and the Red Cross plus a host of other international
non-governmental organisations.

Swedish Ambassador to Zimbabwe, Sten Rylander said the assistance will help
lessen the current burden on the government's limited budget.

"This assistance comes in the light of the progress that has been made by
the inclusive government in the past few weeks," he said.

He was presenting the donation to Prime Minister Morgan Tsvangirai at the
latter's residence in Harare's middle class Strathaven suburb.

The Swedish diplomat said he was impressed by the current efforts to redress
the country's economy by Zimbabwe's six weeks old unity government.

Rylander said the international community must not, while celebrating the
initial steps of a unity government in Zimbabwe, lose sight of the dire
humanitarian needs of ordinary Zimbabweans.

"As Sweden, we reaffirm our commitment to save lives, alleviate suffering
and maintain human dignity for the benefit of the people in need," he said.

Nearly five million Zimbabweans are in need of food aid while over 4 000
people have succumbed to the outbreak of the cholera disease in a period of
six months. Almost 100 000 have also been affected by the epidemic.

Rylander said ongoing farm invasions by ZanuPF supporters, among other ills,
have cast a negative international image on Zimbabwe, further affecting her
current bid to reverse the world's worst managed economy.

Tsvangirai, who is still recuperating from injuries sustained in this month's
car accident that killed his wife, welcomed the Swedish support in
humanitarian aid.

"Although this may not come as balance of payment support, the donation is
very important to the people of Zimbabwe," he said.

"We have always had confidence with Sweden and the rest of the Scandinavian
countries who have come to support our cause."

The MDC, who said he had not yet resumed his official duties, said he was
very happy with the progress that has been made by the inclusive government.

"As a government, we do not ascribe to lawlessness," he said.

"We now have to earn the confidence of the international community and we
have agreed on a deliberate policy to re-engage the international world,"
said Tsvangirai.

No political prisoners in Zim, says Bob

http://www.thetimes.co.za/

Moses Mudzwiti
Published:Mar 26, 2009

ZIMBABWE President Robert Mugabe yesterday denied his country was holding
political prisoners in its notorious jails.

The 85-year old leader made his remarks after a meeting with visiting
Norwegian Minister of Environment and International Development Erik
Solheim.

Mugabe's partners in the month old inclusive government - the MDC led by
Prime Minister Morgan Tsvangirai - insist political activists are still in
jail.

In recent months Zimbabwe's overcrowded and under-funded prisons have not
been able to feed inmates, resulting in hundreds of deaths.

The Norwegian government is understood to have pressed for the release of
all political prisoners as a precondition for resumption of financial and
developmental aid.

Zimbabwe: Reform Justice System

Requests for asylum by Zimbabweans rise 82%, says UN body

http://www.businessday.co.za

26 March 2009

HOPEWELL RADEBE
Diplomatic Editor

ZIMBABWE had the second-highest number of people seeking asylum in
industrialised countries last year, according to a United Nations (UN)
report released yesterday.

The UN High Commissioner for Refugees (UNHCR) report said the number of
people seeking asylum rose last year for the second year in a row, partly
due to an increase in applications by people from Afghanistan, Somalia and
other countries that were experiencing turmoil or conflict.

It said the countries of origin showing a significant rise in applications
for asylum due to unrest or conflict last year included Afghanistan (up
85%), Zimbabwe (up 82%), Somalia (up 77%), Nigeria (up 71%) and Sri Lanka
(up 24%).

The report, which contains provisional asylum statistics for 51
industrialised countries last year, said about 383000 new asylum
applications were submitted in these representing a 12% increase during
2007, during which there were about 341000 applications.

The UNHCR describes an asylum seeker as an individual who has sought
international protection and whose claim for refugee status has not yet been
determined.

The report has argued that while the number of Iraqi asylum seekers declined
10% last year, Iraqis continued to be "the largest nationality seeking
asylum" in the industrialised world, with 40500 applications submitted last
year.

This is followed by Somalia, Russia, Afghanistan and China.

The report said that the US was still the main country of destination for
asylum-seekers , followed by Canada, France, Italy and the UK. With Sweden,
Germany, Greece, Switzerland and Norway, these 10 countries received 73% of
asylum applications in the industrialised world .

radebeh@bdfm.co.za

'A lot of people who want to stay'

http://www.iol.co.za/

    March 25 2009 at 09:30PM

The registration of Zimbabwean refugees living at the Central Methodist
Church has been completed, the Gauteng local government department said on
Wednesday.

"Currently, we have registered the people [staying at the church] to get
their profile. Once we have the profile we can determine their needs," said
spokesperson Lebogang Tladinyane.

The Office of the UN High Commissioner for Refugees, which organised the
registration, provided tokens for those who would be eligible for
relocation, 2563 in all.

Senior registering officer Andrew Hopkins said only 1800 of those had come
forward for registration.

He could not say why there was a shortfall of about 800 people but
speculated that those who did not register may not be interested in
relocation.

However, he said it seemed that of the 1800 who did register, most were
interested in moving.

Central Methodist Church bishop Paul Verryn said that many of the refugees
living in the church might want to leave.

"There are quite a few who would want something better," said Verryn.

But Verryn also added: "There will be a lot of people who want to stay."

Tladinyane said the relocation would involve those both living in the church
and in the streets around it.

Verryn said the tokens were distributed by having all the Zimbabwean
refugees, including those living on the streets, join those already inside
the church to be given tokens as they exited.

The 800 who did not register would be given another opportunity to do so at
a future date.

Tladinyane said those refugees identified in their profiles as the most
vulnerable, such as unaccompanied children or people with disabilities,
would be the first to be moved to one of six buildings around Johannesburg.

"The priority of the government is to restore order in the area," he said.

The government was still reviewing whether the buildings could accommodate
the refugees and what renovations might be needed in preparation for
habitation.

Tladinyane said he could not yet announce the available buildings until the
review was complete.

However, Verryn said it was his understanding that the buildings would also
be able to accommodate 300 people, far fewer than the 1800 who had
registered.

"The big question is what happens in three months time," said Verryn.
According to the bishop, the buildings marked for habitation by refugees
would only have leases for three months, after which their fate, and that of
the refugees they would house, was unknown. - Sapa

Chiadzwa yields 50 000 carats per week

http://www.thezimbabwetimes.com/?p=13982

March 25, 2009

By Our Correspondent

HARARE- The government is extracting between 50 000 and 60 000 carats of
diamonds per week from Chiadzwa in Manicaland, Mines and Mining Development
Minister Obert Mpofu said Wednesday.

Mpofu told Parliament that the Zimbabwe Mining Development Company (ZMDC)
was hamstrung by a lack of adequate and proper mining equipment to extract
the precious mineral hence the low production levels.

ZMDC is spearheading diamond mining operations in Chiadzwa following the
violent clampdown and flushing out of illegal diamond miners.

"We are exploring diamonds using equipment that is not producing amounts
that we would want to produce," said Mpofu.

"We are currently producing an average of 50 000 to 60 000 carats per week,
which is small compared to the mineral resources that are there."

He was responding to a question from Kambuzuma Member of Parliament Willas
Madzimure during Parliament's question and answer session.

Although he could not give the value of the diamonds mined weekly, Mpofu
told Parliament his ministry was working on a plan to ramp up diamond
production so that proceeds could average US$600 000 per day.

"We would want to realize US$600 000 per day if we get state of the art
mining equipment," said Mpofu.

The mining of diamonds in Chiadzwa is currently at the centre of a probe by
an international team from the United Nation's world diamond regulatory
body, the Kimberley Process.

The UN is investigating reports of mass murder at the hands of soldiers.

The international team, which monitors the trade in "blood diamonds", will
report back on the allegations of killings at Chiadzwa.

Chiadzwa has been the centre of controversy since last October when the army
was called in to disperse thousands of illegal diamond hunters.

The government seized the Chiadzwa diamond operation from British-based
Africa Consolidated Resources in 2007 and set off a diamond rush when it
encouraged locals to help themselves.

In November 2008, Manicaland police disclosed that a joint police and army
crackdown on illegal diamond mining in Manicaland and natural causes had
claimed the lives of 20 people.

The illegal miners were allegedly shot during clashes with the state
security forces or died due to various ailments at the troubled diamond
fields.

Their bodies were said to have been dumped at Mutare Provincial Hospital
mortuary. But on Wednesday Mpofu told Parliament that the police and
soldiers had denied killing miners.

"In our engagements with the police, they assured us that they didn't kill
anyone," said Mpofu. "The police said it was the illegal diamond miners who
killed each other during the scramble."

Nurses sell "free" blood to patients

http://www.thezimbabwean.co.uk


Wednesday, 25 March 2009

Staff members at a government-owned hospital in the city are accused
of selling blood at black market prices as a blood shortage hits the
country.
Workers at Mpilo Hospital in the city told The Zimbabwean that some
staff members, especially nurses, were selling blood to desperate patients.
"There is critical shortage of blood at this hospital and nurses have
taken advantage of the situation and are selling blood to patients at
black-market prices," said one worker.
Patients treated at government hospitals are supposed to get blood for
free.
Anna Nyoni, whose brother was admitted at Mpilo after a road accident
and was in urgent need of blood, told The Zimbabwean that she recently
bought blood for R400 per pint from some nurses at Mpilo.
Mpilo Hospital hit the headlines a fortnight ago after doctors and
other health professionals downed tools in protest over corrupt practices of
the management board.
The doctors said the hospital was operating with thin supplies of
basic health medical implements yet the management was lining its pockets
with scarce foreign currency looted from its coffers.
The doctors demanded a probe into the operations of the management
board in a bid to root out corruption.

RBZ staff - from riches to rags . as dollarization begins to bite

http://www.thezimbabwean.co.uk


Wednesday, 25 March 2009

Serious worker victimization has started at the Reserve Bank of
Zimbabwe (RBZ) Bulawayo, days after employees at the institution downed
tools over no pay since November.
Heavily armed police on Friday barricaded the premises of the RBZ
along Leopold Takawaira Street to bar striking employees from leaving the
building to launch a street protest over pay. One worker was seriously
injured and taken to hospital after armed police pounced on him during the
brawl.
The Central Bank workers had planned to march through the streets of
Bulawayo, denouncing RBZ Governor Gideon Gono for failing to address their
poor pay and working conditions.
According to RBZ workers, Gono, who is a close ally and personal
banker of President Robert Mugabe, has refused to listen to their demands
for salaries in foreign currency that has replaced the hyper-inflated local
currency.
RBZ workers were used to flashy lifestyles when Gono used to surprise
them with allowances when he was printing money with reckless abandon. They
have seen their fortunes wane following the dollarisation of the economy.
Workers have reportedly been subjected to victimization by the
management led by RBZ Bulawayo manager, Cassandra Sibanda, following the
protest that embarrassed Gono.
Sources within the RBZ told The Zimbabwean that management had
embarked on a witch-hunt to flush out workers who instigated the strike
action. Workers committee chairman Witness Mugabe already faces the chop for
rallying workers to protest.
"Sibanda was seen taking down of all the names of those  who
participated in the strike and has forwarded them to RBZ headquarters in
Harare and from our understanding, the management is pushing for the
dismissal of all the organizers of the strike action," said the source.
When The Zimbabwean visited the central branch this week the
institution resembled a funeral session as workers who had been ordered to
report for duty or face dismissal were all showing signs of stress. Sources
say some members of the workers committee were picked up by state agents for
interrogation over the strike action.
The RBZ workers who used to live like Diplomats, driving the latest
flashy cars and frequenting expensive food outlets and hotels for breakfast
and lunch used to move with briefcases and bags full of loads of new notes
Zimbabwe dollar notes while the majority of the Zimbabweans were wallowing
in poverty, sleeping outside banks as they were failing to access their hard
earned money from the bank.

Tobacco plunges to record low

http://www.thezimbabwean.co.uk


Wednesday, 25 March 2009

HARARE - There is no hope that Zimbabwean tobacco, one of the major
foreign currency earners, could this season rejoin blends used by the
world's biggest cigarette makers as the crop is projected to decline for the
ninth year in a row, amid deteriorating quality, a growers' group said this
week.
The crop this year would plunge to an estimated 35 million kilograms,
a 38-year low, officials in the Zimbabwe Tobacco Association in Harare said.
The Tobacco Industry Marketing Board has proposed that the 2009
tobacco-selling season commence on April 29.
Andrew Matibiri, chief executive officer, said the date was awaiting
approval by the Minister of Agriculture, but all three floors had already
been granted licences. Nine contract buyers have been granted the necessary
approval to purchase tobacco.
The country harvested a record 237 million kilograms in 2000, when it
was the world's second-largest exporter. Last year only 45 million kilograms
passed through the auction houses in a grim illustration of the dramatic
collapse of the agricultural sector.
The decline began in 2001, after President Mugabe began seizing
white-owned commercial farms for distribution to Zimbabweans who were
deprived of land during white rule.
Officials claim deliveries slowed last year because of a shortage of
diesel needed to transport the crop to auction houses, said Lovegot
Tengundu, executive director of the Farmers' Development Trust. Growers were
also dissatisfied with the exchange rate being offered for their tobacco,
said Zimbabwe Tobacco Association President Andrew Ferreira. This year
growers would be paid in foreign currency in line with the official
dollarisation that has been approved by government.
While the number of small-scale farmers had increased, less of the
top-quality "lemon tobacco", which is used to flavour cigarettes, was being
grown, he said.
US-based buyers Standard Commercial, Universal and Dimon have
traditionally bought the bulk of Zimbabwe's crop to flavour cigarette brands
such as Marlboro, Benson and Hedges and Camel.
British American Tobacco, the biggest maker of tobacco in Zimbabwe, is
mulling laying off more workers in the country because of the dwindling
crop.
"Nobody wants to start investing if there is a good chance you will be
given 48 hours to get off your farm," said an official. "There is no
security. Farmers are being chased off farms right now. The outlook for the
tobacco sector, which could have helped in raising funds for the inclusive
government, is grim."

Home Link to be revived?

http://www.thezimbabwean.co.uk


Wednesday, 25 March 2009

The broke inclusive government has been urged to revive the collapsed
Home Link scheme to raise funds to bankroll its embattled administration.
Most of the estimated 3.5m Zimbabweans who live and work abroad have
increasingly shied away from sending money through Home Link because it paid
out at the official exchange rate and a large part of the Zimbabwean
Diaspora strongly objected to the Mugabe regime, and did not want to
contribute to its wealth by using the official channel.
The financial behemoth, Home Link, now in the business of selling
cellphone airtime, could play a crucial role in fundraising for the
government which is blighted with massive donor fatigue.
An economic blueprint unveiled last week by Finance minister Tendai
Biti, dubbed STERP, requires an injection of US$5 billion between March and
December 2009, a tough challenge in the face of a biting global financial
crunch and scepticism from the international community over the
sustainability of the inclusive government.
In the absence of international goodwill, the government could
fundraise by reviving Home Link and tapping directly into remittances from
Zimbabweans in the diaspora, who could have a change of attitude given that
there was now an inclusive government in place.
"Homelink can significantly raise part of the US$299,4 million that
minister Biti said he needed to pay civil servants," said an economist.
"Properly administered, Home Link can bankroll Zimbabwe's recurrent
expenditure such as salaries but there are concerns with the people leading
the central bank, that is where there could be problems with remittances
from the diaspora."
Homelink was established by the Reserve Bank in 2004 to assure
increased government control over money transfers as inflation and a
depreciated Zimbabwe dollar led to an ever-burgeoning black market.

Crying out for vengeance … the sufferings of Mbare residents continue

Wednesday, 25 March 2009

Operation Clean-up / ‘Murambatsvina’ James Banda will be 90 years old this year if his identity card is correct. He says he came to this country from Malawi in 1931. He worked for one and the same company for 46 years, mostly as a driver: he must have been a good and reliable worker, or he would not have lasted that long. He married a Zimbabwean woman who gave him eleven children of whom six have died.  When he retired he got his pension as a lump sum. He used it to build three little brick cottages on his premises to be rented out to lodgers. The idea was that the income would support him in his remaining years. It worked well until 2005. Then Operation Clean-up / ‘Murambatsvina’ demolished the cottages. Since then he is destitute, dependent on his children for help. At the moment he is being treated for Tuberculosis. He should eat well, but can only afford one meal a day. His widowed daughter who looks after him asked me for food. It is an outrageous injustice which cries to high heaven for vengeance that a good worker whose labour has sustained our economy for so long should end up as a beggar, having to ask for charity, as if he had never done a day’s work. His work record is such that he deserves a carefree retirement. The ‘high and mighty’ responsible for this outrage should have to answer for it. No “forgiving and forgetting” for them. They should be obliged to come and meet the old man, more of a gentleman than the ‘dishonourable’ ministers who deprived him of his life’s savings. They should see his little house: though the furniture looks a bit worn and faded, the floor is spotlessly clean and shining. They should be told to apologize in front of the heaps of bricks and stones left of the demolished cottages. And pay for the damage from their own pockets. Though the numbers of cholera cases have gone down, cholera is still there. Presumably it will be there as long as the hygienic conditions are so bad. Twice in recent weeks the whole of Mbare was without water for about 36 hours. Again and again women are forced to fetch water in a small stream which is contaminated. Garbage is piling up on roadsides, sewage running along the streets. People keep dying of AIDS. There is still reluctance to get tested for HIV – or is it plain ignorance? When I am asked to visit sick people I find them often in an already alarming state. I ask the workers of our AIDS care centre to go and see what can be done about them. Often it is too late. The next thing we hear is that they have passed away. But this need not really be: there is a growing number of HIV positive people in our community who get the right treatment and are living normal lives. Funerals are financially crippling for many families. Funeral parlours are a thriving business. Instead of coming to the aid of bereaved families with sympathy and compassion, they exploit them mercilessly. The bereaved, sometimes not even able to pay for the body to be removed from the house, come to the parish priest, begging. We cannot help with the huge bills they show us. We have to think of the living first, those who need food, medication and school fees. What we can do is to warn people against the sharks among undertakers. I was delighted last week to see municipal workers clearing away the garbage piled up along Pazarangu Street, opposite Stoddard Hall. At long last something is being done! But then I remembered: there is a state funeral this week. That is why they remember us and our township drowning in muck. It takes a state funeral for them to come and do their duty. Not considerations of public health, not cholera: a “chef” has to be sent on his final journey, nothing less. We are not a socialist, egalitarian society. We are a class society: the “ruling elite” on the one hand, and the majority of ordinary people on the other. They do not remove this poisonous garbage, carrier of disease, for the benefit of us ordinary folk. We don’t count. It is only done for the “chefs”, even dead ones. Did people not join the struggle to do away with such discrimination, then racial, now economic and political? Are we back to what looks like ‘apartheid’? - BY OSKAR WERMTER, SJ MBARE

Implement the agreement - that is all

http://www.thezimbabwean.co.uk


Wednesday, 25 March 2009

Last week, the Minister of Finance, Tendai Biti, made an impassioned
plea for international donor support to rebuild Zimbabwe's shattered
economy.
Sitting right next to him was his biggest problem - Robert Mugabe -
who then made his own grovelling appeal to the international community to
support Biti's efforts.
The first thing that must be done is Mugabe must be told in no
uncertain terms to shut up. For years he has been deliberately provocative
in insulting western leaders and governments - skilfully playing the
anti-colonial and racism cards. That nonsense must stop. The world sees him
increasingly as lunatic and his words mean nothing to them. Such childish
behaviour has no place - when our currency lies abandoned in the gutters and
people are dying needlessly all over the country.
Let's be frank about this - the only countries that can help Zimbabwe
out of the economic mess created by Mugabe and his cronies are the United
State, Britain and the European Union. Nobody else.
We can expect messages of solidarity from the Russians, the Chinese,
the Malaysians and all Mugabe's other "friends"- but nothing more.
Since 1980, Zimbabwe's real friends have always been the west - if
friendship is judged by those who help you when you are down and out.
Millions of pounds and dollars worth of food, medicine and other basics have
poured into our nation from the west, keeping alive hundreds of thousands
who would have otherwise have perished.
And yet Mugabe continued to denounce them at every opportunity - from
funerals to international forums. If he is serious about wanting assistance,
he cannot continue with his hate speech.
Even more importantly though, he needs to be seen to be taking the
necessary steps towards democracy. It is his flagrant abuse of human rights
that got us into this mess in the first place.
In a true democracy there is no room for oppressive laws such as POSA
and AIPPA. There has to be a return to the rule of law, respect for property
rights, an end to the selective prosecution of Zanu (PF) opponents while
ignoring the murders committed by Zanu supporters, etc, etc. In other words,
if they want the targeted travel and financial measures against them to be
lifted, Mugabe and his henchmen only have to implement the terms of their
own power sharing agreement
Once all these things have been put in place there will be no reason
for the west to maintain the targeted measures, erroneously and deceptively
touted as "sanctions" by Mugabe and his friends.

Jestina Mukoko saved by State security Minister

http://www.zimtelegraph.com/

By MIKE MAKOMO
Published: Thursday, March 26, 2009

Jestina Mukoko the director of the Zimbabwe Peace Project (ZPP) that was
abducted at dawn from her Norton home last year was saved from being thrown
into Lake Kariba by Sydney Sekeramayi, the minister of Sate Security who
feared that possible military intervention and international pressure would
further derail the survival plans of Zimbabwe from its economic turmoil,
Zimbabwe Telegraph has heard.
According to a source within the central intelligence organization (CIO),
after all had been done to torture Mukoko to extract information on the
so-called enemies of ZANU PF there was a plot to dump the human rights
activist to the crocodile infested Lake Kariba for her to be devoured.

"The idea was not for her to die a painful death but to ensure that she
would not divulge the horrendous episodes of torture that she endured in the
hands of her captors," said a CIO source.

The source further said that making Mukoko disappear in the mould of the
disappearance of Rashiwe Guzha would then ensure the safety of the
operatives that were in charge of the torture.

Rashiwe Guzha disappeared in the 1990s and her remains were never found.
State security agents are believed to have been responsible for her
disappearance

Most of the abductors are scared of eventually facing charges related to
crimes against humanity given the widespread torture of MDC and Human Rights
activists.

The Joint Operations Command (JOC) was divided on the issue as other members
felt that the disappearance of such a high profile activist could eventually
result in military intervention.

This side felt even SADC could not defend Mugabe and JOC once it was
apparent that Mukoko had been eliminated by the state agents.

Sekeramayi was then said to have intervened following meetings with Prime
Minister Morgan Tsvangirai and President Mugabe to free all the captives who
had been in the dungeons on political grounds.

Sources say Sekeramayi was between a rock (Tsvangirai) and a hard surface
(Mugabe) at first used delaying tactics until he had no option except to
yield to the pressure of Tsvangirai who kept reminding JOC that the
international community is watching.

State Security minister Sekeramayi was not reachable for a comment*

Know Your Ministers: Dzinotyiweyi, Goche

When will I see my daughter?

http://www.sokwanele.com/thisiszimbabwe/archives/3820

We asked a refugee living in Johannesburg, South Africa, to write us
occasional blogs. This is his first.

When I left Zimbabwe in 2002 after being arrested, tortured and charged on
several occasions, including under AIPPA and the POSA, I was advised by the
MDC party that I must leave the country only for my safety.

When I arrived in Johannesburg I had no relatives here, only a letter from
the MDC stating that I am a loyal member of the party. It also mentioned
that NGOs can help me. The response I got from the MDC party in South Africa
was they are a political party not a refugee organisation. This meant they
cannot help me in terms of food, clothes and a place to stay.

I slept on the streets of JHB for a year because I could not find work,
since I had no place to stay. I published my stories in every newspaper only
to get no response from the so-called refugee organisations.

After a year I found a place to stay in a flat without electricity. The
situation in Zim became very difficult both politically and economically and
my two brothers came to join me thinking that it is better in South Africa.
Now we were 13 sharing a room without electricity.

I used to write letters to my family letting them know that South Africa is
more difficult than Zim economically but they did not believe me, that is
why they came.

Where are they now? Back in Zimbabwe. Now I have spent 6 years without
seeing my daughter and mother. Sometime I wake up in the middle of the night
and cry for my only daughter and the whole family.

After the signing of the GNU my hopes came up again only to hear that Roy
Bennett has been arrested and hopes vanished again. I phoned the MDC
Regional Office to confirm if is safe for me to come home. The answer was
NO, not now, you have serious cases which need special attention. No going
home, no hope, to me the GNU means nothing.

When will I see my daughter? Is she learning? How tall is she? Is she alive?
How does she survive? How does she say about me? Does she know she has a
father? When I think of her and ask myself these questions I cannot sleep or
eat.

This entry was posted by SA Refugee on Thursday, March 26th, 2009 at 8:18 am

African Union

http://www.ghanaweb.com/

Thursday, 26 March 2009

the African union seems to be in disarray and cannot put up a united front
on almost any issue. To promote democracy and political stability, the union
has put in place resolution to reject any government that comes to power by
the barrel of the gun. But the chairman of the African Union, an autocrat
who usurped power through a coup d'état is against this resolution and has
voiced his displeasure saying that democracy is an alien concept to the
African and should not imposed on African nations. The African Union is
sending mixed messages to new coup makers. Whilst many African leaders
condemned the junta in Guinea, others like Kaddafi and Senegal have fully
embraced the regime.

What is more, when Robert Mugabe went to the African Union meeting, he
received a standing ovation. Mugabe has been the scourge of his 10 million
plus countrymen. As a result of the political crisis he has unleashed by
brazenly overturning an election result that he lost, Zimbabwe has been
plunged into the worst economic and political chaos since the founding of
that country. Several thousands are starving and dying, and the entire
economy is in complete paralysis. Nevertheless, many in the African Union,
particularly South Africa, continue to support Mugabe. The African Union's
failure to sing with one voice undermines and undoes everything it stands
for and tries to do. And that disharmony is definitely making it impossible
for the African Union to promote political stability and rein in on coup d'états,
which for decades have been the bane of continental progress. Nation after
nation was plunged into political chaos and economic mismanagement by
military juntas.

Senegal

this nation for decades has been the beacon of political stability and
democracy in a region often mired in political chaos and civil wars. It is
therefore disconcerting that the highly respected octogenarian ruler,
Abdoulaye Wade, has led Senegal into economy abyss and political chaos. On
Mr. Wade's watch, corruption has thrived in Senegal and the economy is very
weak, leading to political unrests. The man once the perennial opposition
leader for over two decades and often arrested and brutalized by the
incumbent government at that time is today harassing and arresting political
opponents. And worse, he has sent a clear signal that he is trying to pass
on the mantle of leadership to his son Karim Wade. No wonder his party got
spanked in the just ended local elections.

South Africa

There has been global outrage at South Africa for the last several
months --most notably for its soft treatment of Robert Mugabe in the face of
the gross abuse and torture of his political opponents, plunging his country
into a stage of political anarchy and economic calamity.

But the latest scorn and rebuke at the ex-apartheid nation is the result of
its denial of visa for the Dalai Lama, following threats from South Africa's
major trading partner, China. Even though the African National Congress
vehemently denies any connection to China in its decision to refuse visa to
the venerated Tibetan leader, it is conspicuous that fear of angering China
and hurting its business interest with that Asian economic giant was the
sole consideration.

It is extremely disappointing that a regime that for decades had to rely on
help the international community to topple the racist apartheid regime,
would give fodder to autocrats to oppress their own people. The African
National Congress should be the regime that should be most sympathetic to
groups or leaders fighting oppression. So for the South African regime to be
putting loyalty to Mugabe and business interests to China ahead of assisting
victims of oppression is morally reprehensible and politically dumb. South
Africa has invited the scorn and ire of nations that have supported them in
the past and should be their friends. So pursuing their ill-advised and
imprudent narrow self interest hurts South Africa politically. No wonder
condemnation from the global media and political leaders has been swift and
universal.

Ghana

Reports of unusually high incidents of child labor abuse should be worrying
to the leadership of the country. The future of any nation rests on the
development of its young generation. With so many documented cases of
children out of school and performing economic activities for their parents,
the nation risks losing its potential potent labor force. Law makers must
ensure that the laws on the books against child labor abuse are enforced.

Kenya Still is still reeling from the near civil war caused by election
rigging by the incumbent government; the nation has suffered more setbacks
on two fronts: Corruption is thriving under the unity government of Kibaki
and Odinga, and is threatening to bring Kenya to near economic paralysis.
And worse, Kenya is experiencing a drought that could lead to starvation.
Kenya is on the brink and its leadership must rise to the challenge: first,
the leadership reins in on corruption, and second, it must fully assess the
food situation and call for donor help now than later, if need be.

Nigeria

The huge drop in oil prices is hurting the super eagle nation's revenue. And
worse, Nigeria's failure to rein in on political violence around the oil
producing Nile Delta area is hurting the nation's oil production --Angola
has overtaking Nigeria as the biggest oil producing nation in Africa. To
compound the problem of shrunk revenue for the federal government, Nigerian
banks have also been hit hard by the global financial collapse and have
drastically curtailed lending. In effect, Nigeria risks sinking into a deep
recession, given these outlined problems.

Pentagon Says China's Military Power Grows as Intentions Still Unclear

http://www.voanews.com



By Al Pessin
Pentagon
25 March 2009

The annual Pentagon report on China's military power says China continues to
increase the "pace and scope" of its military modernization, and expresses
concern about a lack of clarity on how Chinese leaders intend to use their
growing capability. But the report also says China is years from being able
to seriously challenge U.S. military power, even in areas fairly close to
China's borders.

The annual report, required by the Congress, says China continues to spend
large amounts of money to upgrade its forces and give them high-technology
capabilities. But the report says it will be well into the 2020 decade
before China will have the ability to sustain substantial forces far from
home. It says the Chinese army compensates for its limited abilities by
investing in what the Pentagon calls "disruptive" technologies, designed to
deny an adversary access to a specific area or to attack an enemy's computer
networks or space-based assets.

The report also says China has increased the quality and quantity of its
strategic nuclear missiles. But it says "there is little evidence that
China's military and civilian leaders have fully thought through the global"
implications of using their nuclear arsenal, or their their anti-satellite
and cyber-warfare capabilities.

The report says China's efforts are changing the Asian military balance and
have implications beyond the region. In particular, the Pentagon report says
China continues to build up its forces along the Taiwan Strait, a
development Press Secretary Geoff Morrell finds confusing.

"The fact that the Chinese continue to build up their arsenal across the
Straits is somewhat confounding, given the fact there has been a lessening
in tensions between the two governments, post the elections in Taiwan," he
said.

The report says China is working to "deter, delay or deny" any U.S.
intervention that might follow a Chinese attack on Taiwan. But it also
indicates China would only invade if its leaders believed they had no other
way to prevent the island from moving toward independence.

The report calls for more transparency in China's defense budget and more
information about its strategic intentions, saying such an approach is "a
responsibility that accompanies the accumulation of national power." The
report says China has made "limited improvements" in that regard.

Spokesman Geoff Morrell says Defense Secretary Robert Gates believes more
transparency and more U.S.-China military contact are the keys to preventing
China's military rise from resulting in conflict.

"We could become adversaries if we allow ourselves to go down that path," he
said. "The key is to prevent that from happening. Enhanced
military-to-military relations, enhanced engagement, more dialogue, greater
transparency is the key to avoiding that path."

China suspended military-to-military contacts with the United States to
protest an arms sale to Taiwan last October. Morrell says in spite of the
incident earlier this month, when five Chinese ships harassed the USNS
Impeccable in international waters in the South China Sea, those contacts
are still set to resume soon.

"There's reason for optimism," said Morrell. "Despite the Impeccable
incident our talks, our military-to-military talks with the Chinese, have
progressed faster and better than the secretary had expected."

The Pentagon report also laments continuing Chinese arms sales to unstable
parts of the world, including Pakistan, Zimbabwe and Sudan.  But the report
welcomes increased Chinese involvement in international humanitarian relief
operations and the anti-piracy effort off the east coast of Africa.

China typically criticizes the annual U.S. report, but Geoff Morrell says
this year's report is more factual than opinionated, partly in order not to
derail efforts to move forward in defense relations.

"This is a very straightforward, fact-based report," he said. "There is
nothing inflammatory or derogatory in it. This is, actually, we hope,
another step in the right direction in terms of fostering greater
cooperation, greater understanding, greater transparency between our two
militaries."

The next step in that process may come next week, when President Barack
Obama has his first meeting with Chinese President Hu Jintao during the G-20
summit in London.