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Row Over Passports Raises Tensions

http://www.thezimbabweindependent.com


Thursday, 14 August 2008 19:21

THE gulf between President Robert Mugabe and the MDC's Morgan
Tsvangirai widened yesterday after the government briefly seized the
opposition leader and two senior officials' travel documents when they
intended to board a flight to South Africa.

The opposition party said the move demonstrated Mugabe's insincerity
in ongoing talks for a negotiated political settlement.

Tsvangirai's Emergency Travel Document (ETD) and secretary-general
Tendai Biti and secretary for international relations Elphas Mukonoweshuro's
passports were confiscated for four hours by state security agents at Harare
International Airport. Tsvangirai is using an ETD bacause his passport is
yet to be renewed.

No reason was proffered for the seizure.

The three opposition leaders were due to attend a Sadc summit which
opens in Johannesburg today and expected to be dominated by the Zimbabwe
crisis.

South African President Thabo Mbeki - appointed by Sadc to mediate in
the talks between Zanu PF and the two formations of the MDC - will table a
report on the progress of his mediation process.

Biti is the MDC's chief negotiator in the talks, which were adjourned
on Tuesday after differences emerged between Mugabe and Tsvangirai on
power-sharing.

The seizure of the passports took place despite the fact Tsvangirai's
party and the smaller faction of the MDC led by Arthur Mutambara were
invited to attend the Sadc summit, which is expected to deliberate intensely
on a resolution of the Zimbabwe crisis.

Biti said the seizure of the travel documents showed that the talks
with Zanu PF were a "farce and a sham", while Tsvangirai's spokesperson
George Sibotshiwe said the move reflected Mugabe's insincerity in the
negotiations.

"This is simply an attempt to prevent Morgan Tsvangirai from attending
the Sadc meeting, to which he has been invited," Sibotshiwe said. "This is a
demonstration of lack of sincerity on the part of the government of Robert
Mugbae."

The MDC's information department said the travel documents were
released "after four hours". Tsvangirai is now due to leave this morning.

Information minister Sikhanyiso Ndlovu yesterday said he could not
comment on the matter.

Mbeki is today expected to present a report to the Sadc Organ on
Politics, Defence and Security made up of the leaders of Angola, Tanzania
and Swaziland, on the Zimbabwe talks.

The troika would be expected to lay the ground for intense
deliberations on the country's crisis when the 14-nation regional bloc's
leaders meet tomorrow.

The leaders are expected to grill Mbeki, amid the apparent divisions
in Sadc on how to handle the Zimbabwe issue, with Botswana, Zambia and
Tanzania having publicly said they do not recognise Mugabe as the legitimate
president.

Botswana said it would snub the summit in South Africa because Mugabe
was invited - a move diplomatic sources said could escalate the tension
between the diamond-rich country and Zimbabwe.

The sources said there would be attempts by Zimbabwe and its allies in
the region to isolate Botswana.

"There will be a backlash against Botswana," one of the diplomatic
sources said. "Zimbabwe or its allies in the region will propose to move the
Sadc headquarters from Botswana for boycotting the summit."

Zimbabwe, the sources said, was likely to be backed on the proposal by
Namibia, Malawi and Angola, Mugabe's key allies. The proposed host of the
Sadc head office is Namibia.

The stance of other countries on the issue, such as South Africa,
Lesotho, Swaziland, Mozambique and Mauritius was not clear.

South African Foreign minister Nkosazana Dlamini-Zuma on Wednesday
said the host country would be "sad" if Botswana followed through its
threats to boycott the summit.

"Between South Africa and Botswana there is really no problem. The
problem that they may have is not within South Africa's control,"
Dlamini-Zuma said. "It's a problem that South Africa is spending a lot of
time, energy and resources trying to resolve."

By Constantine Chimakure


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Govt Introduces Levy On Generators

http://www.thezimbabweindependent.com


Thursday, 14 August 2008 19:17
THE government has introduced a legal instrument which now makes it an
offence to own a generator either for domestic or industrial purposes
without the approval of the Zimbabwe Electricity Regulatory Commission
(Zerc).

Instrument 103 of 2008 which was gazetted a fortnight ago makes it
mandatory for all household and industrial generators to be inspected and
approved by Zerc for a fee pegged in United States dollars.

Those who flout the regulations risk being fined or jailed for up to
six months.

The statutory instrument reads: "Any person who owns or operates a
standby electricity generator having a generation, transmission,
distribution or supply capacity of less than 100 kilowatts shall, within 120
days, notify the Commission of the fact...and submit together with the
notification the verification and safety inspection fee prescribed in the
second schedule."

The statutory instrument now makes it a requirement for people owning
electricity generators or standby electricity generators generating above
100 kilowatts or those owning two or more electricity generators or standby
electricity generators to apply for a licence.

The statutory instrument comes at a time when generators have become a
necessity due to intermittent power cuts by the sole power producer Zesa.

This has a seen a boom in the trade of generators in most hardware
shops.

"Any persons owning or operating an electricity generator or standby
electricity generator generating, transmitting distributing or supplying
electricity shall be deemed to be an electricity undertaking . . . and shall
apply for the appropriate electricity licence . . . unless he or she
satisfies the commission, by written notification submitted together with
the verification and safety inspection fee prescribed that the generator or
generators are for the sole purpose of his or her household or business,"
reads part of the instrument.

Zerc will levy US$5 and US$20 for verification and safety inspection
for electoral generators below 100 kilowatts and those above respectively.

Individual standby electricity generator owners will be charged an
inspection fee of US$20 while prototype generator owners will be levied
US$100.

The generator users will be required to comply at all times with
public safety standards and to allow access at all reasonable times by the
commissioner's inspectors to the premises on which the electricity is
located to enable them to determine whether the conditions of the permit are
being adhered to.

The introduction of this legal instrument is set to open up space for
companies and individuals to apply for licences to distribute electricity
for household and business purposes as a move to counter erratic power
supplies.

By Lucia Makamure


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Long Wait For Peace Ends In Frustration

http://www.thezimbabweindependent.com


Thursday, 14 August 2008 18:50
THE Sadc-mediated negotiations on the Zimbabwe crisis held in Harare
this week ended in a stalemate over a matter most people thought was
simple - power-sharing.

South African president Thabo Mbeki told journalists on Wednesday that
the talks had adjourned to give MDC leader Morgan Tsvangirai time to
"reflect on the sticking point".

He would then inform the other two principals, President Robert Mugabe
and Arthur Mutambara, the leader of the smaller formation of the MDC, once
he was ready to sign the power-sharing deal.

The nation awaits with bated breath to see whether Tsvangirai will
re-think his position and append his signature to the document that is
believed to be the key to unlocking Zimbabwe's economic recovery prospects.

Away from the political stalemate, it was not business as usual for
companies and people with a direct or indirect interest in the talks.

To start with, hotel staff would testify that this was probably one of
their busiest weeks as they worked overtime to keep their hotel up to
standard and in line with its international reputation as one of Zimbabwe's
five star hotels.

The red carpet rolled out for Mbeki, Mugabe, and Mutambara was their
worst assignment as keeping it clean was a major task. People would trample
it with the dusty shoes. It was a taxing experience as it had to be cleaned
all the time.

Heavily armed police sealed off the 15th, 16th, and 17th floors where
the three principals were housed. Even Tsvangirai's bodyguards were denied
access to those floors despite the fact they were security personnel.

On Sunday, they were taken aback when, as they tried to accompany
their leader to his room, they found armed police in the elevator. They
panicked, wondering what was about to happen to their leader.

"He is fine. We are in charge of security. Go back," came the order.

What could they do given the order save to calm down and head for the
leather sofas closer to the elevators.

It was not only Tsvangirai's security men who pressed the panic mode.
Even some journalists who were closer to the drama for a minute thought
Tsvangirai had been kidnapped. The theory was that Mugabe and his government
had become so desperate for Tsvangirai's signature that he had to be
kidnapped to append it on the agreement before the talks.

One international media correspondent was overheard commenting on the
phone: "The MDC leader was taken hostage as he made his way into his room in
preparation for the signing ceremony. We are not sure what his fate is at
the hands of Mugabe's men. We will keep you updated on this."

The number three seems to have been the in-thing during the
negotiations.

Three principals, three days of negotiating, three different rooms,
three hotel floors, three presidential-guard escort vehicles, 33 backers to
the negotiators and more than 30 journalists from the public and private
media gathered at the venue of the negotiations.

But in the end three was not a lucky number. There was no agreement.

On Sunday, which marked the first full day of negotiation, Mutambara
was the first to arrive at the hotel. Mbeki had spent the night in Harare
after his arrival on Saturday night.

In a departure from his usual self, Mutambara refused to talk to the
media and walked straight to his 15th floor room.

Tsvangirai was the next to drive in. His motorcade, comprising a Mazda
Rustler, the noisiest of all the vehicles in the motorcade, two Nissan
hard-body trucks and a silver-blue Land Cruiser with dark windows. This is
the car that he used for the better part of the talks.

He was whisked away to the elevators en route to his room.

Then came Mugabe in his usual motorcade comprising motorbikes, the
latest Mercedes Benz - Zim 1 - which is his official car, and a cavalcade of
other cars with security personnel.

Mugabe greeted personnel at the hotel's entrance before striding on
the red carpet to the elevators and up to his floor.

Then started the shuffling of papers from one office to the other.

At the reception area, there was a host of journalists and security
details. The waiting game took its toll on the "players" up until they
started complaining to staff from information secretary, George Charamba's
office that they could not stand the hunger any longer.

"Bacossi", "Bacossi", "Bacossi", the journalists shouted, in reference
to Gideon Gono's handouts. Eventually the information officers were forced
to compile a list of all the journalists present for "accounting" purposes.
The impatient scribes were led to the Jacaranda room where the names of
about 60 journalists were called out for tickets to the dining room.

"Now we can wait even until tomorrow morning," exclaimed some
journalists "We have eaten and that makes the situation better. No man can
work on an empty stomach."

Interested parties had to wait until 02.00 hours on Monday for the
negotiators to start appearing on the ground floor of the hotel.

The hope was that a deal had been signed given that the negotiators
had been locked in for over 13 hours. When Mugabe appeared in the hotel
foyer there was a stampede by journalists wanting to hear his comments.

"We are going to rest now. We will continue tomorrow," was all he said
before summoning Patrick Chinamasa and Nicholas Goche, his two foot soldiers
in the talks, into his presidential car.

They were in the car for 15 minutes before he was driven away.

Tsvangirai and Mutambara appeared 45 minutes later carrying the same
message: "We will continue tomorrow after the heroes commemorations." He
didn't look happy.

On Monday, Mugabe at the Heroes Acre revisited the talks saga, saying
he was optimistic that the negotiations would yield results.

There was hope that Tsvangirai would, in the spirit of the
negotiations, appear at the commemorations, but he decided to stay away.
Instead Mutambara turned up much to Mugabe's delight.

Mutambara, while speaking to journalists, said Mbeki would address
journalists in the morning of Wednesday before he left for the Angolan
capital, Luanda, where he was to brief the chairman of the Sadc organ on
politics, defence and security, Josť Eduado Dos Santos on the progress of
the talks.

Journalists were advised that he would address the media before
departing, only for Mbeki to summon a handful of journalists who included a
SABC news crew to address them.

Mbeki told those journalists who arrived in the morning: "I addressed
journalists yesterday. I cannot do so today."

Efforts to trail him to the Harare International Airport yielded no
result as he bade farewell to a few cabinet ministers who accompanied him to
the airport before walking up the staircase to his Inkwazi jet.

It wasn't perhaps "mission failure" just yet. But it certainly seemed
"mission impossible" after Wednesday.

By Nkululeko Sibanda


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Revolt Looms In Mutambara Faction

http://www.thezimbabweindependent.com


Thursday, 14 August 2008 18:47
THE Arthur Mutambara led-MDC faces a revolt within its ranks after its
leader allegedly agreed on all issues under discussion with President Robert
Mugabe during the Sadc-initiated dialogue mediated by South African
President Thabo Mbeki.

It has emerged that the majority of MPs, senators and supporters in
the party structures in Matabeleland are up in arms over the decision by
Mutambara to take sides with Mugabe.

Elected officials in the party said there was no way Mutambara could
have found common ground with Mugabe.

MP-elect for Mangwe, Edward Tshotsho Mkhosi, told the press he would
quit the faction if Mutambara agrees with Mugabe a deal that excludes the
president of the main MDC, Morgan Tsvangirai.

"No, I will not watch history being repeated," he said. "We have seen
Zanu PF's strategy of divide and rule in the past and this time it will not
work, not this time," Mkhosi said.

Khumalo Senator David Coltart also said he would not agree to a deal
between his party's leadership and Mugabe and expressed doubt that the
majority of the executive would support that decision.

An MP from Matabeleland South said if Mutambara sold out, lawmakers
from Matabeleland were prepared to quit the party.

"If what President Mbeki said to reporters after the talks in Harare
is anything to go by then we have a big problem within the party because
there is no way we could be associated with a decision that favours Mugabe,"
the legislator said. "The position on the talks that we had as a party is
similar to that of the Morgan Tsvangirai formation and Mutambara has to
explain to the national council why he decided to take sides with Mugabe."

Mbeki told reporters after the talks were adjourned on Tuesday that
Mugabe and Mutambara had agreed on almost everything while Tsvangirai had a
problem with one item under negotiation.

Another MP from Matabeleland North said Mutambara did not consult the
party on backing Zanu PF's move for Mugabe to retain executive powers in a
unity government.

"People are angry at that decision and they are shocked with Mutambara's
position because the people of this region (Matabeleland) have said they do
not want Mugabe as a leader," said the lawmaker. "The move by Mutambara to
support Mugabe's bid to remain in power is shocking to people from
Matabeleland.

The legislator said Mutambara did not consult widely adding that they
were prepared to defend the people's position even if it means joining the
MDC-Tsvangirai formation.

"The decision by Mutambara to back Mugabe is disgusting and the people
of Matabeleland, which Mutambara claim to represent through the 10
parliamentary seats won in the region, have always said since 1980 that they
are tired of Mugabe. We, therefore, are prepared to cause by-elections in
our constituencies by leaving the party in order to defend the will of the
people," the legislator said. Civic society leaders in Matabeleland also
said the decision by Mutambara to take sides with Mugabe was a betrayal of
the region.

Bulawayo Agenda executive director Gorden Moyo said Mutambara's
decision to embrace Mugabe replicates the 1987 Unity Accord where people
from the region felt betrayed by PF-Zapu.

"Working with Mugabe in any form replicates the 1987 agreement which
led to the submergence of one political party by another and people from
Matabeleland will frown on any attempt by their leaders to work with Mugabe
without the March 29 victors," Moyo said.

"The MDC Mutambara faction is now serving the purpose they were called
for in the talks, which is to play a script that was written before the
talks."

National Constitutional Assembly (NCA) media committee member in
Matabeleland, Justin Ndlovu, said the Mutambara faction by agreeing with
Mugabe was selling out on the wishes of the people of Zimbabwe and said the
faction was finished politically.

"Mutambara's backing of Mugabe is typical of the Bishop Abel Muzorewa's
betrayal under the internal settlement, but the Mutambara faction is
finished and the people of Matabeleland do not forget easily and they will
punish them in future," Ndlovu said. -- Staff Writer/Telegraph.


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Dabengwa Dumps Makoni

http://www.thezimbabweindependent.com


Thursday, 14 August 2008 18:42
FORMER Finance minister Simba Makoni has been dumped by his main
backer in the Mavambo/Kusile/Dawn project, Dumiso Dabengwa, amid claims of a
clash between the two leaders over access to financial resources as well as
vehicles for mobilisation of support.

Dabengwa told the Zimbabwe Independent from Bulawayo on Wednesday that
he was no longer part of Makoni's movement.

"I am no longer part of the Mavambo/Kusile/Dawn movement," Dabengwa
said. "All I did was to assist them set up and drive the campaign for the
presidential campaign. I assisted in the campaign and did achieve my main
goal of ensuring that the process is conducive for the holding of free and
fair elections in the country."

He said he was now pursuing "other plans" in the political landscape,
including the revival of PF Zapu.

"There are other options that I am looking at and I will make my
position clear on these things when the time comes. Some people say I should
revive PF Zapu."

The former PF Zapu intelligence supremo said that it was in his
interest to revive the party.

"Zapu is the one that brought me to where I am today and I will not
dump it. (Vice-President Joseph) Msika said recently that PF Zapu was not
swallowed by Zanu PF and we will prove that it is still alive if the people
approach us to revive it," Dabengwa said.

There have been disclosures of a fierce row between Dabengwa and
Makoni over resource allocation.

Sources told the Independent that the fight could have led Dabengwa to
opt out of the movement as he felt belittled.

"Dabengwa feels he is a senior politician," one of the sources said.
"This business of being made to appear as a political mafikizolo to him is
an insult because he sacrificed his political career for Makoni, yet the
same person he assisted to set up his movement structure is now treating him
badly."

It is said that Dabengwa raised the issue of resources to Makoni, but
the former Sadc executive secretary repeatedly referred him to "officers at
the national office" who were expected to handle his concerns.

"Dabengwa felt that there were resources that were supposed to have
been allocated to Matabeleland and Bulawayo provinces for support
mobilisation and also for the establishment of party structures in
preparation for the main launch.

"Those resources and vehicles were not made available to him on the
basis of the fact that he had to wait for the launch to get them," the
source said.

It is alleged that there were vehicles that were procured for the
general election campaign and were supposed to be allocated to provinces for
the movement's activities, but they were never distributed.

They were parked "at a secret location in Harare".

"These are the cars that Dabengwa had requested and Makoni appeared
not prepared to release them. Funds have not been trickling in as expected
and that is what Dabengwa has been challenging," said the sources.

Contacted for comment, Makoni refused to discuss the matter saying he
was not at liberty to do so.

He referred the Independent to his spokesperson Godfrey Chanetsa who
claimed that there were no differences within the movement.

"All I know is that the Mavambo family is still intact and there is
nothing of that sort. We are working towards the launch of the party and
nothing more," said Chanetsa.

The latest turn of events threatens to scuttle plans to transform the
movement into a new party, which has been christened the National Alliance
for Democracy (NAD).

The expectation is that NAD would contest future elections.

By Nkululeko Sibanda


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'Economy now dollarised'

http://www.thezimbabweindependent.com


Thursday, 14 August 2008 18:39
HAVE you ever paid US$20 for a blood pressure or temperature check? Or
parted with the greenback to have a mandatory medical examination before
being hired by a new employer?

This has become a new way of accessing "efficient and reliable"
medical service in a country whose health delivery system has almost
collapsed.

Specialists in the medical field, property owners as well as
manufacturers and ordinary Zimbabweans have not been spared from this
thriving form of payment that has become common in an economy enduring close
to a decade of recession.

A snap survey by the Zimbabwe Independent has revealed that virtually
all business operations in the country are now charging foreign currency
despite this being illegal.

A number of institutions, ranging from property owners, private
medical institutions to retailers are now "dollarising" services and basic
commodities tendered to the poverty-stricken Zimbabweans whose local
currency is depreciating at an unprecedented rate.

In Harare, most private medical institutions prefer payments in
foreign currency to the local currency. Daily cash withdrawals are now
pegged at $300 and prices are ever changing - sometimes daily or even
hourly.

A private dentist operating in the Avenues area said the high annual
inflation rate, which the government said is over 2,2, million percent,
while independent economists claim to be close to 10 million percent, was
forcing the few remaining health professionals to charge in foreign
currency.

"We have since stopped transacting in the local currency," said the
dentist who requested anonymity. "We have no confidence on the
fast-depreciating dollar. We import most of our equipment and drugs and this
is the only alternative that enables us to restock. More so our employees
face the day to day reality of paying rentals and other services in foreign
currency."

Consultation at the government-owned dental section at Parirenyatwa
Hospital costs $50 billion ($5 revalued), notwithstanding the monetary value
of enduring the long winding queues.

When contacted for comment on this development Health minister David
Parirenyatwa said he was aware of the dual pricing system.

"This is against the law and it's a cause for concern which the
ministry is going to look into," he said.

Dollarisation now also applies to rentals of flats and houses around
Harare which range between US$150 to $300 per month depending on location
and proximity to the city centre.

In most high-density suburbs, which include Warren Park and Kuwadzana,
Dzivaresekwa and Chitungiwza, property owners and some real estate agents
are charging between R100 and R200 for a single room and up to R500 for a
six-roomed house.

Cross boarder traders are now also charging their wares in foreign
currency. A pair of female sandals is being sold at Avondale flea market for
R300 or an equivalent in local currency using the parallel market rates.

Announcing the mid-year Monetary Policy Statement a fortnight ago,
Reserve Bank governor Gideon Gono warned that this trend of dollarisation,
which he described as a "hyper-speculative mode", would paralyse the economy
if not stopped.

Acting Attorney-General, Justice Barat Patel recently said charging
goods and services in foreign currency was in contravention of the country's
Exchange Control Act and warned that perpetrators would face the full wrath
of law.

While exchange control laws prohibit this emerging trend of foreign
currency transacting, economic analysts are divided over the issue. Some
economists said dollarisation would not work in the country, while others
argued that it could be used to increase forex inflows into the nation's
reserves.

Economic analyst Juniors Marire said removing prohibitions from
transacting in foreign currency could "soft land" the economy. He said the
formal inter-bank rate that was introduced by the central bank in April to
promote foreign currency inflows was not yielding much.

"What makes inflows into the formal forex market small is because the
exchange rate was not liberalised fully," he said. "The priority list (the
RBZ foreign currency issuance priority) according to which forex is sold is
tantamount to fixation of the exchange rate."

United States-based currency reformist Steve Hanke, in his paper
prepared for Imara Holdings, said dollarisation and an establishment of a
Currency Board to replace the central bank could improve foreign currency
inflows.

"If official dollarisation goes no further than the use of a foreign
currency, it does not achieve its full potential," he said.

"Combining financial integration with official dollarisation, in which
a leading international or regional currency serves as the anchor currency,
helps a dollarised country to tap into a large and liquid international pool
of funds."

Zimbabwe, according to Hanke, could adopt "randisation" which entails
trading in South African rands. The Southern neighbour is the country's top
trading partner.

South America's emerging giant, Argentina, and quite recently Ecuador
and El Salvador-2000-2001-adopted the dollarisation model to redeem their
erstwhile bartered economies from further collapse.

By Bernard Mpofu/Wongai Zhangazha


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Banks Expected To Meet Capital Requirements

http://www.thezimbabweindependent.com


Thursday, 14 August 2008 18:24
THE recent developments in the ongoing foreign exchange inter-bank
rate could be a reprieve for most banks that are currently raising minimum
capital requirements before the month end amid fears that this could mark
the dearth of activity on the official foreign exchange market, analysts
have said.

At the official rate 15 registered commercial banks were as of
yesterday required to raise about $1,68 quintillion (18 zeros) ($16,8
billion revalued) to meet the capital levels compared to over $10
quintillion using the parallel market cash rate.

Meanwhile impeccable sources who spoke to this paper this week
revealed that newly established commercial bank, TN Financial Holdings has
also managed to raise the mandatory capital requirements.

Last weekend the foreign currency rates plunged to record levels
following the upward review of daily cash withdrawals and speculation about
an imminent collapse on the adjourned inter-party talks seeking a political
solution to the country's decade-long crisis. The official inter-bank rate
however did not respond to this abrupt surge in rates.

Microfinance institutions, which the Reserve bank recently said were
facing "viability problems", could however fail to comply with the US$5 000
(or equivalent on the inter-bank rate) threshold. Official statistics
indicate that more than half of the registered money lending institutions
have already closed.

According to ZB group economist, Best Doroh, most banks will meet the
August 31 deadline despite unprecedented movements on the parallel market.

"The inter-bank rate was not affected by recent movements on the
parallel market," Doroh said. "Unless there are rapid movements on the
inter-bank rate most banks are likely to meet the capital requirements."

Zimbabwe Allied Banking Group,chief economist David Mupamhadzi however
said banks would require more money to meet the capital requirements, which
might affect their liquidity due to increasing parallel market rates.

"The inter-bank rate is going up, but the banks' abilities to mobilise
foreign currency is limited because of higher rates on the parallel market,"
he said.

This disparity in foreign exchange rates, analysts warned marked a
significant decline of foreign currency inflows on the formal market.
Sources said the central bank is now effectively controlling the exchange
rate float as indicated by demands by the bank to get a "justification" on
the opening exchange rates of the day. Before this alleged move the
inter-bank rate was changing at an average of 25% per day against major
currencies but the rate has since changed to about 10%.

"The movements of the dollar on the inter-bank market will be a
reprieve for most banks," said a bank executive who requested anonymity.

"The inter-bank foreign exchange market is now subdued and inactive.
It's almost synonymous with the previous arrangement (fixed rate of US$: $30
000 to the US$).

Although banks don't have balance sheets that match the depreciating
exchange rate, many will cross the line by month end. Treasury bills and
concessionary facilities are some of their major assets although their rate
of return is negligible."

This position according to the bank executive has forced banks to
invest on the property market, although the Reserve bank is on record
accusing financial institutions of investing in "illiquid and speculative
assets."

Efforts to get comment from the Reserve Bank and Bankers Association
of Zimbabwe president, John Mangudya were in vain.

Last month the central bank announced new capital thresholds for
financial institutions indicating that failure by these institutions to meet
the requirements could place them under curatorship or mergers. Merchant
banks and Building societies US$10 million each while Finance houses and
Discount houses US$7,5 million. Asset management companies should raise
US$2,5 million.

By Bernard Mpofu


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Inter-bank Rate Raises Prices Of Goods In Real Terms

http://www.thezimbabweindependent.com


Thursday, 14 August 2008 18:22
WHILE prices in Zimbabwe are influenced by the US dollar because of
inflation, the inter-bank rate which happens to be the only legal way of
pricing in the country has left the country's products costing about five
times more than in other parts of the world.

Most outlets are using the street parallel market rate, which they say
is the fair value as opposed to the "controlled" inter-bank rate.

Some companies are appearing to be using the transfer rate which is
nearly 25 times more than the interbank rate.

The gap between the interbank and parallel markets widened further
yesterday as rates on the parallel market made significant jumps.

Traders on the parallel market were yesterday quoting above $95 --$100
to the US$, up from around $40 to the US$ before the holiday.

On the interbank market, the greenback was trading at $14,5 yesterday
from an average rate of $10 to the US$ on Friday last week.

The South African rand was being quoted at above $9,5 to R1 surging
from between $3-$3, 3 to R1 during the same period while the Botswana pula
surged from $5 to above 11/pula.

As the gap between the interbank and parallel foreign currency market
rates continues to widen, most banking institutions last week virtually
stopping trading in foreign currency for about a week.

When Reserve Bank of Zimbabwe Governor Gideon Gono introduced the
interbank rates in May, banks were offering lucrative rates, resulting in
many people using the banks to change their money.

Gono hoped the announcement would license more institutions to act as
authorised dealers for the foreign currency.

However, the interbank rates started tumbling after the Reserve bank
unearthed corrupt practices among some of the dealers, with Genesis Bank's
licence being suspended for nearly two months.

The Reserve bank said it had carried out investigations into many
banks that were accused of flouting regulations while dealing in foreign
currency. The results of the investigations have however not been made
public.

A number of people have lost their money after trading through the
informal traders.

Following the failure by the country's main parties to sign a deal
that would turn around the economy, market analysts said parallel market
rate was likely to continue rising with price of goods and services
responding the rate.

Arthur Mutambara, the leader of the other faction of the Movement for
Democratic Change (MDC) on Wednesday said the country's political rivals had
"agreement on everything except on one aspect".

"Morgan Tsvangirai has requested time to reflect and consult,"
Mutambara told reporters. "Three times he agreed to this one aspect and
three times he changed his mind."

South African president Thabo Mbeki who is mediating the talks is said
to have said the power-sharing talks could still succeed "soon despite
disagreements over leadership" after failing to secure a deal at marathon
talks.

The Southern African Development Community (Sadc) this week said they
were prepared to assist the region's trouble maker after the signing of MoU
which is expected to come up with feasible economic turnaround package for
the country this week.

Zimbabwe has been accused of holding back regional growth.

Zimbabwe's economic migrants over its borders are straining regional
diplomacy and making the whole neighbourhood look bad for failing to end the
crisis.

While the region's highest inflation is 12,9%, Zimbabwe's inflation is
said to be 2 200 000%. The country is the only one with a negative Gross
Domestic Product.

According to the International Monetary Fund (IMF) Sub-Saharan Africa's
gross domestic product grew almost 90% between 1997 and 2007 in purchasing
power parity terms. Zimbabwe is said to have shrunk by over 30%.

By Paul Nyakazeya


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Property Market Slows Down

http://www.thezimbabweindependent.com


Thursday, 14 August 2008 18:18
THE property market has ground to a standstill since the beginning of
the month as skyrocketing residential prices, high interest rates and
drought in the mortgage market reduced the number of homes changing hands.

Estate agents this week said the prospects of recovery remain weak on
the back of increasing inflationary pressures expected to prevail in the
long-term.

Since the beginning of the year the property market has played second
fiddle to other investment vehicles such as the money market, and the trend
was likely to be maintained with the majority of funds going into equities
and the parallel market.

Should these investments' returns remain firm, funds would be kept
away from the brick and mortar industry.

Property experts said the cumbersome bureaucratic system was likely to
remain in place, with property market transactions taking a long time to
conclude.

Against this background of an inflationary environment, this is
expected to force investors into other forms of investment, as the value of
transactions is changing significantly during the transaction period.

Residential properties remain priced beyond the reach of many
potential buyers. This is worsened by the inability of potential buyers to
access loans as building societies have not been offering mortgage loans.

A medium density house, which cost between $5 000 and $10 000 in
January now costs between $5 million and $12 million (revalued). A standard
three bed-roomed house in the low density areas now costs anything above $14
million from above $10 000 in January.

A standard house in the high density area is being priced between $3
million and $5 million from $600 and $1 500 during the same period.

Rentals for residential properties for medium and low density houses
were pegged between US$200 and US$450. The same properties were being let
for between US$150 and US$350 in January. Low density areas are being let
for anything above US$500.

Property analyst, Matthias Kufandirimbwa, said the amount seems like a
lot of money in local currency but when converted to US dollar terms it
translates to very little.

In a statement on its website Merctrust Real Estate said because the
local currency was depreciating, regular adjustments to the US rate had
resulted in all the houses being sold in millions.

Estate agents said tenants were quoting prices in US dollars to
"retain value on their investments".

The criticism levelled against property companies by some sections of
the market has been the tendency to aggressively push the revaluation gains.

In a statement Masholdings said: "It was accepted that in current
circumstances, the effect of fair value adjustments is disproportionate to
profit generated from turnover.Fair value is determined by the directors and
is based on independent professional valuations of properties taking into
account current market conditions."

For the tenth year running there has been no major developments on the
property market due to the unstable environment. The only notable
construction has been Joina Centre which started in 1999.

Drastic increases in building materials have affected developers'
profits, with some planned developments having to be scrapped.

And those planning to build their own homes are having to
significantly increase their budgets. This has been aggravated by the
soaring price of raw materials such as bricks which now cost $65 000 for 1
000.

By Paul Nyakazeya


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MTAs Fail To Access Forex From RBZ

http://www.thezimbabweindependent.com


Thursday, 14 August 2008 18:17
MOST money transfer agencies have been hit by severe problems in
accessing foreign currency from the Reserve Bank despite official figures
indicating an increase in foreign currency receipts.

This development, analysts warned, could be an indication of the
Reserve Bank interfering with foreign currency inflows to finance
quasi-fiscal undertakings.

According to insiders who spoke to this paper on condition of
anonymity, the central bank is currently not effecting full payments to MTAs
that deposited funds in the central bank's offshore account.

This they said was a deliberate move by the central bank to meet its
"urgent commitments".

Recently the Reserve Bank undertook the National Basic Commodities
Supply Enhancement Programme in an effort to provide cheap basic products
against the backdrop of runaway inflation now estimated to be over 10
million%. Many analysts however doubt its capacity to sustain this
programme.

"Most MTAs have an agreement with the RBZ that enables them to deposit
funds in the central bank's offshore account," said one source.

"The bank through its discretion allocates foreign currency to local
agencies. It often manipulates this arrangement. It is very much possible
that the central bank could temporarily withhold the full payment in order
to meet its urgent commitments."

The recent crash of the local currency over the weekend and the
increase in new wads of $100, the analyst suggested, was also an indication
that "authorities" were buying foreign currency on the parallel market.

This week businessdigest witnessed scores of disappointed customers at
Western Union branches that failed to withdraw their United States dollars
after employees at the agencies reportedly informed them that the agency had
exhausted its daily allocations from the central bank.

"I was here by 4am hoping to be paid my cash," said an irate customer
queuing at Western Union branch along Samora Machel. "I wonder where our
money is going. Only a few connected individuals can access their cash."

Efforts to get comment from either the central bank or any of the
registered MTAs were in vain.

Foreign currency earnings through MTAs have become the source of
income for most Zimbabweans with relatives beyond our borders.

Independent estimates indicate that over three million Zimbabweans are
scattered all over the world significantly contributing to the central bank's
foreign currency current account.

Reserve Bank chief, Gideon Gono recently announced that Homelink Money
Transfer agencies foreign currency receipts recorded a 226% surge following
government's move allowing agencies to pay in foreign currency.

Early this month local authorities closed a Western Union branch in
the central business district reportedly for not meeting "minimum
requirements" of an office amid congestion at the premises.


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Banks Reeling From High Accommodation Rates

http://www.thezimbabweindependent.com


Thursday, 14 August 2008 18:14
BANKS are reeling from high accommodation rates of 8 500% -- secured
and 9 500% -- unsecured by the Reserve Bank which raised the rates to mop up
excess liquidity on the money market.

Banks are paying heavily when they borrow from the Reserve Bank to
cover their daily shortfalls.

The Reserve Bank has also tightened procedures for accessing unsecured
accommodation funds.

Unsecured accommodation is when a bank gets money from the Reserve
Bank to cover its daily shortfalls without tendering security for the loan.

The daily shortfalls happen when there is a mismatch between a bank's
total deposits and withdrawals.

These measures mean that Reserve Bank Governor Gideon Gono is the only
one who can approve accommodation for any bank.

The high policy rates have created a situation whereby banks are now
vulnerable to the continued existence of high expenditures by the government
and the Reserve Bank because any slow down in their fiscal and quasi-fiscal
activities might "shake" banks and their clients.

The Reserve Bank said all motivations for accommodation must be
accompanied by comprehensive applications written by the bank's chief
executive officers fully explaining the origins and justifications for the
shortfall, supported by documentary evidence.

Banks are also facing declining deposits, with some banks being
accused of using depositors money to buy foreign currency on the parallel
market or investing on the stock market.

As of April 31, about 18,62% of depositors' funds held by commercial
banks was said to be locked up in shares and other non-core investments.

The country's five merchant banks had a total 30,17% of depositors'
funds locked in shares.

The four building societies have poured 16,85% of depositors' funds
into shares and other investments.

In a market report Kingdom Financial Holdings Limited described the
Reserve bank accommodation interests rates as "out of synch" with
inflationary trends.

"The rates are too ghastly to contemplate if one takes into account
their effect on bank survival in the event of a money market liquidity
crunch which will force banks to go to the central bank for accommodation,"
the bank said.

What initially started as a cash crisis feeding off an unprepared
monetary authority in rapidly absorbing inflationary pressures through the
introduction of higher denominated bearer cheques or further slashing of
zeros has taken an unexpected twist.

It appears to be the making of unethical banking practices within the
financial services sector.

After mounting pressure from a restless banking public since the onset
of the cash crisis late last year, the Reserve Bank is on record saying it
had over $90 quadrillion in cash uncollected in their vaults because banking
institutions did not have the security to access the money to meet their
customer withdrawal requirements.

Most banks are accused of being 'guilty' of violating provisions of
the Banking Act by investing liquid depositor funds into relatively illiquid
speculative investments that put them at risk in the event of a run on
deposits facilitated by a massive increase in daily withdrawal limits for
individual and corporate account holders.

Banks balance sheet show that they have been engaging in more
lucrative non-core business activities to remain viable.

The manner in which most of these financial institutions structured
their balance sheets now puts their very existence at risk because of the
prohibitive interest payments that they will have to make to the Reserve
Bank for accommodating them against a liquidity crunch.

The ordinary man on the street might be probably cursing banking
institutions for engaging in illicit operations that have caused them so
much discomfort as they cannot access their cash.

Cash shortages will persist as banks have little Treasury Bills (TB)
that they can use as collateral when collecting money from the Reserve Bank
of Zimbabwe.

Treasury Bills are issued at 340% against official inflation of 2 200
000% will compromise their earnings and force them to scale down on the
amounts they have been procuring in cash in relation to deposits.

While the Reserve Bank has kept the accommodation rates very high,
annualised at 1,5 decillion percent (33 zeros), depositors are languishing
with interest rates below 250% per annum.

The Reserve Bank demands 45% of statutory reserves from banks and this
according to officials has seen most financial institutions "hurriedly"
offloading their securities portfolios to improve their liquidity positions.

Banks have been preferring Bankers Acceptances over TB's which no
longer have the "all important liquidity status".

Presently, 30 day Bankers Acceptances are being drawn in the market at
yields around 1 000%, which, when annualised, leave banks raking in returns
of about 147 731%.

These returns are well above the TB returns currentlypegged at 340%.

Banks have had few TBs accumulating on their balance sheets.

By Paul Nyakazeya


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RBZ Compromising Judges

http://www.thezimbabweindependent.com


Thursday, 14 August 2008 19:04
IT boggles the mind that the judiciary, which should be the most
venerable institution in our country can be so desperate as to accept
"donations" from the Reserve Bank clearly in breach of all known
constitutional and ethical principles.

It was reported with great delight by the Herald of August 1 that the
central bank had "donated" a fleet of new vehicles, generators, sets of
plasma screen televisions, and full sets of satellite dishes for the sitting
judges to improve their conditions of service.

The report would shock any jurist who cares about judicial
independence. The "donations" are unlawful and unconstitutional.

Firstly, the Constitution of Zimbabwe states clearly that the
remuneration of judges should be charged on the Consolidated Revenue Fund.

It clearly states in Section 88 (1) that: "There shall be charged upon
and paid out of the Consolidated Revenue Fund to a person who holds the
office of or is acting as Chief Justice, a judge of the Supreme Court, Judge
President of the High Court or a judge of the High Court such salary and
allowances as may from time to time be prescribed by or under an Act of
Parliament."

Parliament passed the Judges' Salaries, Allowances and Pensions Act
[Chapter 7:08] which empowers the president to set the conditions of service
for the judges through a statutory instrument.

The Minister of Finance is required to review salaries, pension
benefits and allowances payable to judges whenever an increase is to be
awarded to persons employed in the public service.

This is obviously an unsatisfactory and unconstitutional delegation of
power by parliament.

It leaves the judiciary susceptible to control by the executive
through financial pressure.

Secondly, there is no relationship between the judges' salaries and
the salaries of civil servants. They perform different functions.

The responsibility to set the remuneration of judges in many
progressive jurisdictions has now been given to commissions or bodies that
are independent of the judiciary, parliament or the executive.

This achieves the necessary protection for judges from possible
influence by the executive through the use of financial means.

Under the current constitution, the central bank is not the custodian
of the Consolidated Revenue Fund. It does not run the treasury
notwithstanding the grand-standing and improper splashing of state funds.
Any payments from the consolidated fund must have statutory or
constitutional permission.

Judges are paid from the treasury specifically because they are
supposed to be independent.

The charge on the consolidated fund ensures that there are funds
always available to remunerate them. Their remuneration must be paid by the
state. This also removes the danger of parties or other over-zealous
entities making payments to judges on shaky philanthropic grounds.

How the central bank and its zealots end up "donating" various luxury
goods and trinkets to the judges is beyond me.

It sets a very dangerous precedent and poses a real threat to the rule
of law, independence of judges and their impartiality. Their independence is
the cornerstone of their impartiality.

It is the international convention that no judge should receive any
payment for his judicial work except as provided for under the necessary
legislation.

In other words, no matter how poorly-paid the judges maybe,
Anglo-American Corporation or the Reserve Bank cannot pay them any salary or
provide them with the necessities of life even if they are desperate.

That responsibility lies with treasury through the existing
constitutional and statutory provisions.

The Latimer House Guidelines of the Commonwealth adopted with the full
participation of Zimbabwe in 1998 provide under judicial funding that:
"Sufficient and sustainable funding should be provided to enable the
judiciary to perform its functions to the highest standards.

Such funds, once voted for the judiciary by the legislature, should be
protected from alienation or misuse. The allocation or withholding of
funding should not be used as a means of exercising improper control over
the judiciary.

Appropriate salaries and benefits, supporting staff, resources and
equipment are essential to the proper functioning of the judiciary. As a
matter of principle, judicial salaries and benefits should be set by an
independent body and their value should be maintained."

It is the responsibility as the law stands of the president and the
minister of finance to ensure that judges are adequately remunerated. Our
judges are not and should never be a charity case.

The salaries and benefits of judges must be set at the right levels
and be known publicly in the same way changes to presidential or ministerial
salaries and allowances are publicly gazetted.

As Justice Francois-Beaudoil of Quebec, Canada observed: "When you are
reduced to begging for a decent salary, how can you be truly independent?"

Judicial office is a matter of great personal and professional
sacrifice. It is very important that the benefits attract the best legal
brains without making it difficult for them to maintain their families, earn
and live a decent lifestyle. The structure of salaries and benefits must
reflect the dignity of the judicial office. As Winston Churchill put it
decades ago:

"Our aim is not to make our judges wealthy men, but to satisfy their
needs to maintain a modest but dignified way of life suited to the gravity,
and indeed, the majesty, of the duties they discharge."

We must make the remuneration of judges attractive so that we can
defeat any temptation to compromising by the judiciary. This will not only
be intended to benefit judges but the greater benefit is to the
administration of justice itself. And yet while there is unanimity that the
conditions of service for judges need improvement, it does not mean that our
judges must resort to luxuries delivered outside constitutional and legal
imperatives. Even then, benefits that appear designed to suit farmers are in
fact obscene. The 4x4 trucks have nothing to do with the judges' ability to
discharge their judicial function.

These so-called "donations" have heavily compromised the independence
of the judiciary. How does a party who has a dispute against the Reserve
Bank or its governor believe that he will receive justice from a judge who
is watching a plasma screen powered by a generator provided by one of the
parties? Judges are not required to be independent only.

They are required to be seen to be independent. Any perception that
judges are in the pocket of one institution or a party to a dispute or that
they have lost their ability to discharge their responsibilities without
fear or favour, further harms the already tattered reputation of our legal
system.

As it stands, all the judges who have received these donations are
disqualified from hearing matters involving the Reserve Bank or its alter
ego, "Our governor".

You would expect those that demand high standards of corporate
governance from bank directors to understand that a lot more is demanded of
judges. The reputation of judges stands or falls on their moral authority.

If this "donation" practice is not nipped in the bud, what stops
accused persons or litigants donating groceries, cigarettes, and sanitary
ware, fertiliser, whisky and farmer boots to the obviously underpaid judges?

The honour and principles of human beings are put at the greatest test
in times of hardship. It is at these times that those who are principled
must suppress the obvious temptation of luxury to uphold and defend the
principles and ethos of our legal order.

It is common in developing countries for judiciaries to receive
donor-funding but that donor-funding is targeted towards the improvement of
the institutions of administration of justice and not for the personal and
family or farming comfort of judges.

The funding is provided for specific projects and the purchase of
books and equipment.

The funding is secured from foreign entities and not from entities
within the jurisdiction of Zimbabwean courts. This ensures that the
independence of judges is not compromised by benefits received from
potential litigants.

The funds are managed in a transparent manner and usually through a
public trust. Proper donations directed at improving the administration of
justice can do wonders.

When not done properly, they pose a serious danger to our
constitutional values.

I therefore call upon the honourable judges to return the "donations"
received from the Reserve Bank.

Any efforts to improve their conditions of service must be done in
terms of the law as currently provided.

It remains for the individual conscience of each judge to guide them
on whether they can serve their oath of office as required by the
constitution while receiving alms from unlawful sources.

Should the learned judges not heed my call to return these unlawfully
received luxuries, it is imperative for the Law Society to take legal action
to protect the independence and integrity of the judiciary.

The only difficulty they will face is that if all the judges have
received these luxuries, none of them will be allowed by law to hear this
matter. This will necessitate the employment of possibly foreign acting
judges to hear the challenge.

These judges will need to be paid in foreign currency.

The Reserve Bank (which has usurped the Minister of Finance's power as
the Exchange Control Authority), who will certainly be one of the defendants
together will all the judges in the case will not be friendly to this cause.

There are too many vivid lessons in history that the corruption of the
legal system is the last act in the destruction of the rule of law,
democracy and human rights. The independence of our judges is the foundation
of our constitution, our rights and our freedom.

It cannot be compromised for personal comfort or political expediency.
Once independent and impartial judges are gone, who will protect us?

By Tererai Mafukidze : A lawyer. He writes in his personal capacity.


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Deal May Land Britain With Dilemma

http://www.thezimbabweindependent.com


Thursday, 14 August 2008 17:26
A ZIMBABWEAN opposition leader, lauded for his brave struggle against
Robert Mugabe, arrives in London on an official visit as the new prime
minister.

Morgan Tsvangirai asks Britain to recognise his government and offer
millions of pounds of aid. He urges the lifting of all sanctions and
declares that Harare's era of isolation is over.

Tsvangirai requests Gordon Brown's help in releasing large sums from
the World Bank and the International Monetary Fund. He returns to Harare and
reports back to his boss --- one Robert Mugabe. After they formed a
"government of national unity", Mugabe stayed on as president and Tsvangirai
became his prime minister. Now Britain faces a cruel dilemma -- recognise
the government (led by Mugabe) and pour aid into its coffers (controlled by
Mugabe), or face the blame for economic catastrophe.

At present, this scenario is pure imagination and fantasy but events
along these lines could unfold in the weeks ahead, confronting the prime
minister and David Miliband, the foreign secretary, with a conundrum. Would
they recognise and fund a new Zimbabwean government that includes Tsvangirai
in a senior position, but keeps Mugabe as president? The talks which opened
at the weekend between the opposition and Mugabe's Zanu PF party could have
this outcome.

President Thabo Mbeki of South Africa is still mediating between the
two sides despite Britain's efforts to sideline him. Senior British sources
believe the talks will probably fail. If so, London will avoid its dilemma.
But what if they do sign a deal? Aside from total failure, there are two
possible outcomes. The MDC wants a shortlived "transitional government"
leading to fresh elections, which Tsvangirai would almost certainly win.

Exactly what role Mugabe would play in this interim administration is
undefined. Tsvangirai has resisted pressure to recognise Mugabe as rightful
president. At his insistence, the two leaders conducted their handshake
inside the neutral venue of a Harare hotel, not in the presidential office
in State House, where Mugabe wanted it.

Tsvangirai's allies robustly declare that he will not serve as the
dictator's subordinate in any coalition government. Instead, Mugabe's role
in a temporary administration before new elections would be as titular,
ceremonial president, with real executive power transferring to Tsvangirai.
If this takes place, few would complain.

Having waged a ruthless struggle to hold power, inflicting untold
suffering on thousands, Mugabe would have to surrender everything at the
negotiating table -- 84-year-old leopards rarely change their spots, this
seems unlikely. Instead, Mugabe will obviously press for the second possible
outcome: a "government of national unity". This would leave Mugabe in
command as president, with Tsvangirai as a prime minister, able to travel
the world, securing aid and diplomatic recognition. London would be his
first stop -- and Brown and Miliband would face their dilemma.

There is a precedent for this. When President Mwai Kibaki of Kenya
lost an election last December, he announced a fake result and stayed in
power, triggering bloodshed that claimed 1 500 lives. The killing only ended
when Kofi Annan, the former UN secretary-general, oversaw the birth of a
unity government.

Kibaki stayed on as president, despite having lost the election. Raila
Odinga, his leading opponent who actually won the poll, became prime
minister. Kenya's cabinet was doubled, so all the politicians who had lost
the election could keep their jobs -- and all the winners could have jobs,
too. Most senior politicians in Kenya now enjoy ministerial office.

If the same unfolds in Zimbabwe, the Foreign Office will have no
grounds for indignation. If prime minister Tsvangirai shows up at Downing
Street, he will doubtless ask: "If this was good enough for Kenya, why not
Zimbabwe too?" -- The Telegraph (UK).

By David Blair


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Comment: Who's The Boss?

http://www.thezimbabweindependent.com


Thursday, 14 August 2008 17:51
August 13 must have been a very sad day for millions of ordinary
Zimbabweans.

It is not difficult to understand why: they had expected the secretive
negotiations between Zanu PF and the two MDC formations to bring them
relief, even if that was only a change of national mood at first.

They expected their leaders to put the national interest before their
own. Widely cognisant of the hunger, unemployment and national despair,
Zimbabweans expected their leaders to work to alleviate this situation.

After almost four days of intense negotiations in the presence of the
chief facilitator in the dialogue, South African president Thabo Mbeki,
Zimbabweans had good reason to believe finally there would be a
breakthrough. Then they were let down over what some may see as petty
leadership squabbles.

We are not fooled by pious talk by either President Robert Mugabe or
MDC-T leader Morgan Tsvangirai about putting the people first. In a
statement he issued after he refused to sign up to what we are told was the
last "sticking point", Tsvangirai said his party had put its "grievances
aside" and reached out to Zanu PF "for the good of the people".

Addressing people who gathered at the Heroes Acre on Monday, Mugabe
also rejected "hollow" agreements which did not fully empower the people.

But looking at the last-minute impasse over the past few days, we are
left in no doubt that none of them has put the people first. The stalemate
is about who wields real executive powers. This is not an academic issue as
it involves responsibility for a raft of government policies. A prime
minister without authority for government policy could see President Mugabe
inflicting further damage on the economy and then blaming his ministers for
any short-comings.

But that doesn't mean the talks should be allowed to break down on an
issue that should have been addressed weeks ago.

Conspiracy theorists may see something sinister about the timing. It
has the ring of a repeat of the debacle on the eve of the G8 meeting and a
sense of revenge for the position South Africa took at the United Nations
Security Council against the imposition of sanctions on Zimbabwe.

It is inevitable that events in Zimbabwe are seen in the context of
the wider international warfare.

The sad thing is that Zimbabweans are the biggest losers in this high
stakes power game.

Mbeki has declared that he is prepared to pursue the process even if
it takes six months to clinch a deal.

For his part Mbeki is immersed in the fevered politics of his own
country where he is facing a formidable challenge from those within his
tripartite alliance and many other forces at play. He is understandably
anxious for a success which will eclipse his perceived propitiation of
Mugabe.

But we reiterate that it is Zimbabweans who must put their own
interests first. It is Zimbabweans who must find a way out of this crisis.
South Africans don't have limitless resources to have their president camped
here for six months to sort out a problem which only calls for commitment
from all parties.

So far that commitment from the leadership has been missing. The
"people first" mantra is completely hollow. What we are witnessing is a
struggle for power in the new dispensation. Understandably Tsvangirai
believes his electoral victory in March entitles his party to a leading role
in any transitional authority. Unless that is cast in stone Mugabe is likely
to go on abusing power to the disadvantage of the country.

He is currently fuelling the fires of inflation by extravagant
handouts to judges, soldiers and civil servants that the economy simply can't
stand. And now he is joined by the two formations of the MDC in agreeing to
a bloated cabinet that will be touted as a national necessity.

Details of the agreements reached 'published yesterday' would suggest
MDC-T negotiators have agreed with Zanu PF on a range of issues which they
can expect their supporters and much of civil society to denounce. It is not
in the country's interests to indulge Zanu PF's spurious claims to be
defending national sovereignty. On the contrary any settlement needs to
ensure they can't damage the fabric of the nation any further.

The confiscation of Tsvangirai's travel document at Harare
International Airport yesterday, albeit temporarily, illustrates the
violation of his freedom of movement that is an everyday hazard in Mugabe's
dictatorship. The current talks are designed precisely to prevent such
abuses.

At the end of the day, if Tsvangirai can secure regional backing for a
process that is not subject to populist reversals his moment of reflection
may prove to have been worthwhile. But, he must be reminded, time is running
out and the economy is in headlong decline, not because of sanctions as
Mugabe fatuously claims, but plain old-fashioned misrule.


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Erich Bloch: Destructive Rule Of Fear

http://www.thezimbabweindependent.com


Thursday, 14 August 2008 17:17
AMONGST the most pronounced causes of Zimbabwe's catastrophic economic
circumstances is that its government, in general, and its economic arms in
particular, endlessly seek to manage and control the country as a whole, its
people,

†and especially its economy, by an endless recourse to dire threats
which provoke (or are intended to provoke) quivering fear amongst all that
are components of the economy.

The governmental authorities clearly have a deep-seated conviction of
their absolute omnipotence, that conviction matched only by a unequivocal
belief that achievement of their objectives is best achieved by never-ending
fulmination against those that government is convinced are deliberately
undermining them.

Without according any consideration whatsoever as to the actual causes
of Zimbabwean ills, and blatantly unwilling even to consider that they
themselves, or their policies, are the causes of the ills, they attribute
total culpability to others. Having done so, they then seek to motivate
changes of actions by the allegedly culpable by unceasing threats to demonic
retribution.

The Concise Oxford Dictionary defines a bull as being one "who uses
strength or power to coerce others by fear", resorting to persecution,
oppression (physically or morally), by threat or superior force. Today, a
more abridged, but markedly more indisputable description, of "bully" would
simply be "Zimbabwean government".

After government set the economy upon its downward, destructive path
by its succumbing to the threatening, bullying demands of war veterans in
1997, yielding to their blackmail demands for compensation and pensions far
beyond the country's means, government not only had to divert from itself
blame for the consequential cataclysmic economic developments, but having
imputed fault to others, then had to strategise to achieve a reversal of the
economic decline. This it did by resorting to other grievously
ill-considered policies and tactics, each of which not only failed to
achieve positive transformation, but massively worsened the state of the
economy. As each measure failed, and intensified the economic collapse,
government unhesitatingly deluded itself that fault lay wholly with others,
and sought to address that by resorting to ever-intensifying, strongly
bullying, and recrimination of the falsely perceived guilty culprits for the
decimation of the economy. It bared its fangs, snarled, growled, bristled
and continuously threatened revenge and reprisals. To a very major extent,
it focused its ire and fury upon much of the international community, and
especially upon the former colonial power, Britain, upon most of the other
countries of the European Union, and upon the USA, and -- of course -- upon
the leaders of those countries.

But it did so devoid of any credibility and, therefore, whilst not
halting its ongoing diatribes against those imaginary enemies, it also had
to find others to blame. Progressively it cast its evil eye upon whites in
general, and particularly upon commercial farmers, industrialists, retailers
and others of the business community, and upon multinationals.

It threatened, with ever-greater intensity, the nationalisation and
expropriation of businesses. It legislated extremely unrealistic, and
greatly oppressive, laws seeking to achieve near total regulation and
control of all facets of the economy, with myopic oblivion to the disastrous
consequences upon the survival and continued operations of the targetted
economic enterprises. Each and every one of its measures proved to be wholly
counterproductive, but government was incapable, or unwilling, to
acknowledge, that the adverse consequences of its excessive regulation were
a direct consequence of that regulation.

Instead, it intensified its castigation of the private sector,
contending deliberate circumvention of the regulation with the deliberate
intent to bring the economy to its knees, to enrich the private sector
stakeholders at the expense, and to the prejudice, of the populace, and to
satisfy the spuriously alleged international masterminds of the economic
Armageddon.

These disastrous actions of government pinnacled when, in June 2007,
the Minister of Industry and International Trade, "Tsunami" Obert Mpofu,
undoubtedly motivated by the president and cabinet, legislated price
controls. This was done with contemptuously blatant indifference to the
proven inability of price controls to address the economic problems, and the
incontrovertible consequences of intensifying those problems. Within days,
the minister created the National Incomes and Pricing Commission (NIPC) to
complement the draconianly destructive constraints upon prices, headed by
one Godwills Masimirembwa.

Immediately, government, strongly reinforced by NIPC's Masimirembwa,
applied intensively bullying threats against any and all who failed to
comply, in the entirety, with the price control laws and NIPC directives,
and reinforced those bullying threats by gargantuanally excessive, punitive
actions against perceived offenders. Businessmen were peremptorily jailed,
and others harshly fined, whilst officials invaded businesses with extreme
aggression, such as to provoke great fear within the business community.

But the results were not to curb and contain prices, and to halt the
spiralling, endlessly surging inflation. Instead, most basic commodities,
essentials, and other goods ceased to be available. And this was not in any
manner as an attempt by business to frustrate government, NIPC and the
legislation's stated intents. It was naught but the inevitable consequence
that businesses could not afford to sell goods without attaining a fair
return on capital employed, for then the businesses could not survive. This
is a fundamental precept of economic survival, but government and NIPC could
not, or would not, recognise basic fact.

Instead, because of businesses inability to import or produce goods,
in the absence of operational viability, scarcities became greater and
greater. Inevitably, this fuelled a thriving, vigorous black market, wherein
prices were markedly greater than they would have been in a decontrolled
formal sector. Inflation soared upwards, and concurrently, as businesses
contracted, unemployment intensified, as did the "brain drain" of Zimbabwe's
valued skilled to neighbouring territories.

But with the obduracy and dogmatism that are the characteristics of
the Zimbabwean government, zero recognition was given to facts, and instead
there has been a continuing intensifying, scathing assault upon the private
sector.

In the last few weeks, the president, Minister Mpofu, and NIPC's
Godwills Masimirembwa have all been vocally vitriolic against the business
community, and have with increased intensity threatened retribution and
intensely punitive actions.

The result has not been to improve the lot of consumers, and of the
economy, but to bring about the closure of yet more enterprises, the
contraction of many others, increased unemployment, discouragement of
critically needed investment, further economic collapse, lesser revenues to
an already extremely bankrupt fiscus, and ever-greater hardships and
suffering for the populace. Government's continuous usage of fear as an
instrument of misguided policy implementation is accelerating the
destruction of Zimbabwe.


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Candid Comment: Compromise Only Way Out

http://www.thezimbabweindependent.com


Thursday, 14 August 2008 17:49
WE have now reached a critical moment in the ongoing power-sharing
talks between Zanu PF and the MDC, although talks have stalled, at least for
now.

Leaders of the negotiating parties need to be decisive and show
direction. There is a great need for strategic and futurist thinking.

At such a watershed stage, leaders should remain levelheaded and
focused, not on a self-serving pursuit of power, but on the bigger picture
in the national interest. They have to be rational and flexible; also
realistic and practical.

In negotiations parties have to know the strength of their leverage.
Power relations between negotiating parties determine the outcome, not
self-delusion or romanticism.

In the current negotiations, the reality is the balance of power still
favours Zanu PF because it controls the levers of state power, although the
MDC factions have strong leverage. Zanu PF has all the instruments of
coercion and is still capable of inflicting brutality on its opponents. The
violence and casualties during the recent elections - greeted by pathos and
outrage at home and abroad - help to prove the point.

But the MDC, particularly as a joint force, is very formidable.
Whatever the pretences of petty or foolish opportunists on both sides who
thrive on the divisions, the reality is the MDC is stronger as a united
front. If the party had contested the March polls as a collective, Morgan
Tsvangirai would have without doubt decisively defeated President Robert
Mugabe, with the MDC seizing a clear majority in parliament - end of story.

If that had happened there would have been be no need for these
negotiations in the first place because Tsvangirai would be president and
the MDC in the majority. Mugabe and Zanu PF would be in the opposition, in
fact history.

However, this did not happen due to pointless divisions. The facts are
clear: Tsvangirai beat Mugabe, but did not get a majority of votes. He fell
closely short. His faction also won but did not get the required majority to
control parliament.

After that Zanu was furious and sought to reverse Mugabe's defeat
through a brutal campaign of violence and murder. Tsvangirai lost his nerve
at the eleventh hour and pulled out. Mugabe claimed hollow victory, but
failed to gain recognition and legitimacy.

At that point - after the March 29 and June 27 elections - every
sensible person appreciated the gravity of the resultant political stalemate
and saw the need for immediate negotiations.

We are now towards the end of that dialogue to break the impasse. A
lot of things have happened in between related to talks. Most Zimbabweans
want the negotiations to succeed. However, politicians, in pursuit of power,
not their disingenuous lies of "people's will or national interest", are
haggling with intensity over positions and authority stakes.

Clear thinking is required as to how negotiations operate. Negotiation
of course does not mean that the two sides sit down together on a basis of
equality and talk through and resolve their differences that produced the
conflict between them.

Gene Sharp, in his distinguished work From Dictatorship to Democracy,
which Tsvangirai has read, reminds negotiators of two critical points.
First, he says in negotiations it is not the relative justice of the
conflicting views and objectives which determines the content of a
negotiated agreement. Second, the content of a negotiated settlement is
largely determined by the power capacity of each side.

Several difficult questions must be considered. What can each side do
to gain its objectives if the other side fails to come to an agreement at
the negotiating table? What can each side do after an agreement is reached
if the other side breaks its word and uses force to fulfil its objectives?

A settlement is not reached in negotiations through an assessment of
the rights and wrongs of the issues at stake. While those may be much
discussed, the real results in negotiations come from an assessment of the
absolute and relative power relations of the contending groups.

What can Tsvangirai do to ensure that his minimum demands are met?
What can Mugabe do to stay in control and neutralise the MDC? In other
words, if an agreement comes, it is more likely the result of each side
estimating how the power capacities of the two sides compare, and then
calculating how an open struggle might end.

Attention must also be given to what each side is willing to give up
in order to reach agreement. In successful negotiations there is compromise
because it is a give-and-take process. Each side gets part of what it wants
and gives up part of its objectives.

Mugabe and Tsvangirai need to understand this.

By Dumisani Muleya


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Muckraker: Mutambara's Vote Of No Confidence

http://www.thezimbabweindependent.com


Thursday, 14 August 2008 17:12
MUCKRAKER is reluctant to dismiss Arthur Mutambara as a mere demagogue
competing for space in the nation's already crowded parade ground of
nationalist poseurs.

But judging by his populist remarks on Heroes Day, that's exactly
where he belongs.

Telling the Western powers to "back off", he said sanctions were
"totally retrogressive" and are "a vote of no confidence in Africans".

What would he call the state-orchestrated violence that took place
between March and June? A vote of confidence? And why is he diverting our
attention to Western predators when the local variety go unremarked?

Given his education and experience you would have thought Mutambara
would know something about how inter-dependent we all are in the global
village. Zimbabwe will soon need all the help it can get in crafting a
recovery programme. Will he tell donors then to "back off"?

Those countries which have condemned political violence and demanded
accountability in governance will be asked for large sums of money to put
right what our political demagogues have wrecked.

This is not the time to be parroting Mugabe in claiming "Zimbabweans
will be masters of their own destiny". This is simplistic nonsense, just as
is Mugabe's call to "allow the country to freely chart its destiny as a
sovereign people".

Is that what happened after March 29? Was the country allowed to
"freely chart its destiny"? Mutambara should tell us.

Instead of ingratiating himself with our delinquent rulers Mutambara
should speak of the nation's need to avoid the mistakes of the past. Is he
so anxious for office that he can't tell it like it is?

Muckraker is curious about the latest discourse from Jonathan Moyo. He
has taken it upon himself to attack Botswana's decision to expel Caesar
Zvayi. It was "shocking treachery", he claimed, to deport Zvayi who held a
legal work permit.

Leaving aside the number of journalists deported from Zimbabwe who
held legal work permits while Moyo was Minister of Information, one detects
in the Tsholotsho MP's vituperations the same sort of nationalist posturing
that Mutambara is guilty of.

"When a country has more goats than people," Moyo opined, "it suffers
a serious leadership deficiency as is happening in Botswana where a
primitive and intolerant military junta is masquerading as a democracy."

Couldn't we say the same about a primitive and intolerant junta closer
to home?

Let us hope Moyo is not advertising his candidacy for office with
these populist remarks about a neighbour which alone among Sadc states has
stood up for the people of Zimbabwe when they had an election stolen from
them.

We had "an observer" telling us that Botswana was likely to be seen as
closer to the EU than Sadc with the sort of remarks their foreign minister
had been making.

How many Zimbabweans will care that Botswana is seen as closer to the
EU than Sadc? What matters is that they get a government of their choice. In
any case, this clumsy attempt by a not-so-mysterious "observer" to suggest
that Botswana should do the wrong thing just because the rest of Sadc is
doing the wrong thing by turning a blind eye to electoral fraud is no longer
so pertinent.

Most Sadc states, including allies such as Angola and Tanzania, have
since firmed up on their positions regarding Zimbabwe's elections. Officials
such as the one who spoke to the Herald can no longer count on the region's
acquiescence in electoral truancy. That has been one of the more encouraging
developments to emerge from the past few months.

And the next time somebody wants to draw attention to themselves by
talking about how iniquitous sanctions are, perhaps they can remind us of
the sanctions taken against the Daily News and its staff.

The Herald's political and features editor Mabasa Sasa, who assumed
the heroic mantle bequeathed by Caesar Zvayi, is an engaging writer. But he
needs helpful guidance. In his latest epistle he complains that "the silent
masses" should not be airbrushed from our record of the past. Traditional
historians have tended to focus on glorious events, he points out, that have
led us to celebrate names such as Josiah Tongogara, Shaka, Napoleon and
"Alexander of Mesopotamia".

But we need to take account of the social dimension, he reminds us.

The record of those airbrushed from history is decidedly wider and
more diverse than powerful individuals, Mabasa notes

We agree. But who is Alexander of Mesopotamia? Is he related to
Alexander of Macedonia, we wonder?

As for "Wolfgang van Goethe", who pops up in Sasa's article, he must
be a Dutch cousin of German man of letters Johann Wolfgang von Goethe!

One of Goethe's finest plays is about Dr Faust who sells his soul to
the devil in return for knowledge.

Sasa should ask Mutambara if he's heard of it.

Sasa did make a useful contribution to the political process this
week. By publishing the agreements the three parties had signed to date he
exposed the MDC-T as prepared to endorse Zanu PF's delusional agenda on
sanctions, "external interfence" and "pirate" radio stations.

MDC-T supporters will be outraged by this childish nonsense. But they
will be pleased that the negotiators rejected any "unlawful, violent,
undemocratic means of changing governments". That presumably deals with June
27!

Mutambara's press conference on Wednesday rather killed Sasa's
dramatic front-page story headed "Deal Sealed". It was inconceivable, he
said, that he could sign a separate deal with Mugabe when the talks were
part of a trilateral process. There had been a break, he said, not a
break-down.

It was a welcome clarification.

Despite the agreement of all parties not to leak information to the
press, Zanu PF has been leaking like a sieve, telling the public what
President Mugabe would or would not accept in the way of a settlement and
taking pot shots at Tsvangirai, claiming he had misled his own negotiators.

The government press is having great difficulty restraining itself
from attacking the MDC-T.

It would be useful to know what agreement the negotiators have reached
on freeing the public media from partisan control.

Unprofessional habits are now so well ingrained that it will take
months if not years to build a media that serves the people of Zimbabwe as a
whole.

We referred last week to the new ideology of "the talks". Nobody is
allowed to say a word of disagreement with this private palaver parlour.

Indeed, when photo-journalist Tsvangirayi Mukwazhi was beaten and
taken from his home to Southerton police station on July 24, he was asked,
he says, why he was showing the country in a bad light and not giving talks
a chance.

This was a nice irony coming on the same day that John Makumbe was
denounced for suggesting that violence persisted in various parts of the
country.

It is shocking that party leaders can sit down to discuss the country's
future when people still have political charges outstanding against them.

At the Kempton Park talks in 1993 the ANC ensured that all their
members were released from prison before talks could start and that
sanctions stayed in place until the ANC was sure of a democratic transition.

Could Mbeki be reminded of this the next time he jets in.

Gongs galore have been handed out this week to individuals who proved
highly "patriotic" during the recent electoral run-off including one who
presided over the election fiasco itself.

The awards, which look very much like acknowledgements of personal
loyalty and appear to fall into the same category as judicial propitiation,
might also give the impression of one departing office and wishing to thank
those who kept him there. Or is that wishful thinking?

One of the issues that has been under discussion in the inter-party
talks has been the need for a restoration of professionalism in the various
arms of the state.

That will by definition include the understanding that these arms
serve the nation and not individuals who have glued themselves to the seat
of power.

Has anyboby seen Statutory Instrument 103/08 imposing a licensing fee
on households running generators?

Muckraker has.

Can you imagine anything so iniquitous?

Zesa provides a totally inadequate service to the nation.

But then seeks to impose a levy on people who have to provide their
own electricity.

This is misrule writ large and explains why we have to give Zanu PF
and its crony parastatals the boot.


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Editor's Memo: Compromise Is Of The Essence

http://www.thezimbabweindependent.com


Thursday, 14 August 2008 17:09
IN the rough and tumble of politics leaders who are willing to
compromise are viewed as appealing, so too are those who demonstrate
political conviction.

The topic of compromise is a contentious one, especially when
considered in the context of leadership, and acquisition and cession of
power.

There were mixed reactions to MDC leader Morgan Tsvangirai's refusal
to sign a power-sharing agreement with Zanu PF this week. His supporters,
especially those of the Chitongai tione variety and a sizeable portion of
civic society saw this as a victory for their cause. This constituency
includes one of my snappish siblings who took me through the motions of the
need for Tsvangirai to stay strong and not compromise. This, he said, was
the best way forward to achieving what he called "tangible good" for the
nation.

My brother is an aggressive negotiator and a prime specimen of a
competitor. He gets things done his way through a cocktail of subtle force
and very little in the form of compromise. The scales in his armour have
very few chinks. To him this is a virtue he carries with pride.

I am relatively slower in executing processes because I am always
haunted by the fear of making decisions in haste. In debates ranging from
hard-nose politics to trivialities like cars and television, we are often at
opposite poles of engagement. Sometimes I have allowed him to win debates,
switch topics or to avoid a phone call in the dead of night challenging me
on issues he knows I feel strongly about. But he is smart enough to protest
instances I have handed him an easy victory. He derives satisfaction in
flaying me into submission and silencing me forever on an issue.

This week, we found ourselves at opposing corners again over the
stalling of the talks but this time I have refused to succumb to the whiff
of grapeshot in pursuit of terminating ear-numbing salvos. I have stuck it
out and contended there was need for compromise on both sides to break the
hopeless cycle we find ourselves in. The issue to do with right and wrong
here should be secondary to the need for each of the parties to put their
best foot forward and lead the nation out of the mess instead of tethering
themselves to posts of entrenchment.

This is an unacceptable weakness perhaps, my brother would argue. He
would take heart from Ayn Rand who was one of the most important
philosophers of the 20th Century, whose works on the subject of compromise
are both cogent and thought-provoking.

She wrote in one of her controversial essays: "There are two sides to
every issue: one side is right and the other is wrong, but the middle is
always evil... In any compromise between food and poison it is only death
that can win. In any compromise between good and evil, it is only evil that
can profit."

She added: "When men reduce their virtues to the approximate, then
evil acquires the force of an absolute, when loyalty to an unyielding
purpose is dropped by the virtuous, it's picked up by scoundrels -- and you
get the indecent spectacle of a cringing, bargaining, traitorous good and
self-righteously uncompromising evil."

In the case of our political protagonists, it is always easy to place
tags on who between the political protagonists is brandishing offers of
"food" and who is giving the poisoned chalice - depending on one's political
persuasion. This is how we have come to view each other as a nation - poison
and food; black and white; demagogue and democrat; puppet and revolutionary;
patriot and traitor; local and foreign and so on. It is true that a cocktail
of food and poison is lethal but compromise can be both, constructive or
destructive. The first is a virtue, the second is evil.

I believe Tsvangirai has to consider the constructive aspect of
compromise because the MDC and Zanu PF both have valid claims. It is
critical that both parties agree on a fundamental principle, which exists as
a foundation for their deal.

In life, to compromise on moral issues is another story all together
and as Rand opines, evil then "acquires the force of an absolute." But
Tsvangirai can easily argue that politics is a moral issue. Compromise would
be a negation of his position and responsibility on issues like rule of law,
freedom of expression and separation of powers. But what leverage does he
have to push through these principles? He got more votes in March but he
remains a junior partner in negotiations - a very unkind thing to say but it
is true. It this case, it is not righteousness that will give him leverage
in negotiations but certain basic rules of power.

Rand refers to them here:

l In any conflict between two men (or two groups) who hold the same
basic principles, it is the more consistent who wins;

l In any collaboration between two men or (or two groups) who hold
different basic principles, it is the more evil or irrational who wins;

l When opposite basic principles are clearly and openly defined, it
works to the advantage of the rational side; when they are not clearly
defined, but are hidden or evaded, it works to the advantage of the
irrational side.

Amen.

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