HARARE, Zimbabwe -- From the Mercedes-Benz he drives to work to his new three-story mansion set in the hills outside the city, it is clear that Zimbabwe refrigerator manufacturer Callisto Jokonya is having a good year.

In any other country, such success would not be remarkable. But this is Zimbabwe, a country on the verge of economic collapse, where half the population is threatened by starvation and even the wealthy suffer from acute shortages of everything from milk to beef to cooking oil.

Jokonya acknowledges that his fortune defies logic: Why would Zimbabweans be buying refrigerators when they have no food to put inside?

The answer reveals less about what Jo- konya is doing right as a businessman than how much has gone wrong in Zimbabwe.

The country of 12 million people, once the breadbasket of Africa, has slid into its worst economic, political and humanitarian crisis since independence in 1980.

President Robert G. Mugabe's seizure of the country's white-owned farms -- launched more than two years ago -- has unraveled the agriculture-based economy, disrupted food production and left thousands of people out of work.

If that were not enough, Zimbabwe is one of six southern African countries hit by the worst regional drought in more than a decade, threatening the lives of 14 million people -- nearly half of them in Zimbabwe.

"Zimbabwe is at the epicenter of the crisis in southern Africa. It's the country where everything is at its worst," said Stephen Lewis, a United Nations special envoy to Africa, during a recent Zimbabwe visit.

To enter Zimbabwe today is to see a country turned upside down: Where 6.7 million people face starvation in a nation that was once celebrated for its ability to produce surplus food.

Where a severe fuel shortage has crippled transportation in the country, creating long lines of cars, taxis and buses waiting to fill up at gas stations nationwide. Where Zimbabweans not waiting for fuel spend much of their days and nights standing in equally long queues for such basic commodities as bread, sugar, salt and maize.

Where inflation is so high -- 144 percent this year and predicted to jump to 500 percent next year -- that some stores announce hourly price increases over loudspeakers.

Where, according to one recent economic report, workers who earned $150 a month in 1980 take home less than $15 today.

Where that worker would be considered lucky because more than 60 percent of the country's population is unemployed.

And where 10 percent to 20 percent of the population, frustrated with life here, has fled the country.

The Zimbabweans left behind, no longer trusting their currency, are scrambling to put whatever meager savings they have into assets that might keep their value: cars, bicycles, cell phones, houses and -- much to Jokonya's benefit this business year -- refrigerators.

"If I buy a fridge and I don't even use it, two months down the line it will be worth more," says Jokonya, who has invested his savings in apartments, an extra car and a second house.

The absurdities of Zimbabwe's economy are not limited to refrigerator sales. Although the vast majority of the country is hopelessly poor, there is a small group of people getting rich.

The stock market is booming. So is the property market, with housing costs up 400 percent in the past two years. Both, like the refrigerators, are viewed as investments that might keep pace with the runaway inflation.

No more middle class

There is a bizarre mix of affluence and poverty. Zimbabwe's well-to-do drive sports cars, build summer homes and flock to Harare's finest restaurants for three-course meals of filet mignon, prawns and goose. The poor flirt with a devastating famine.

"There are two classes of people in Zimbabwe today: the low class and the high class. There is no more middle class; they have fallen away to the low class," says Fungai Mutizhe, a used car dealer who is doing a brisk business this year. "In these hard times, there are people doing well taking advantage of the situation."

What's driving these economic distortions is the government's refusal to acknowledge the collapse of the currency. Officially, one U.S. dollar is worth 55 of Zimbabwe's currency. But on the black market, one U.S. dollar fetches 30 times that much.

The government, however, has bristled at calls for it to devalue the currency, blaming the crisis on enemies of the state. Inflation? That's the result of greedy money traders and businessmen. Shortages? Whites and opposition party leaders must be hoarding goods.

In an effort to curb inflation, the government recently slapped price controls on almost every imaginable item, from toilet paper to television sets, and shut down all foreign exchange dealers.

These measures only made life more difficult. Unable to sell their products at a profit with price controls, manufacturers are either closing their factories or selling their goods on the black market at hugely marked-up prices.

One Zimbabwe family complained that it spent one quarter of its $4 weekly income on a bar of soap.

Everyone, it seems, from flower sellers to restaurant owners to bellhops, is involved in the underground trade. No one appears to be afraid to get caught because, traders say, government officials are heavily involved in it themselves.

The only concern for currency traders is that the higher inflation grows, so does the weight of the Zimbabwe dollars they must haul around town.

"Have you ever carried 3 million Zimbabwe dollars [about $3,000]?" asked Krishna Makurumidze, a black market money trader. "It's heavy. You have to use a shoulder bag to carry it."

Problems acknowledged

One measure of just how far Zimbabwe has fallen is that Mugabe's government freely admits that the country has problems. Not too long ago, government officials offered perpetually sunny forecasts for the economy and the country's harvests.

Speaking this month at a conference of his ruling party, the Zanu-PF, Mugabe appealed to the country to work together to reverse the economic decline and end the shortages of food and almost all other goods. But he did not accept responsibility for any of these problems.

Instead he blamed a regional drought and his growing list of enemies: the British, the West, members of the country's main opposition party and, as always, the country's white population.

"We wish that more would join us as we seek common solutions to the hardships imposed on us by our detractors," Mugabe told his party leaders. The solution to all the country's challenges is land reform, Mugabe said.

But what's clear, critics say, is that land reform is the source of the country's ills.

Consider the case of Stan Magutakuona, 55, a peasant farmer who tilled a small patch of inferior farmland while he watched his white neighbors grow rich with their large commercial farms.

Like most Zimbabweans, Magutakuona wanted the government to correct the historic imbalance of land ownership that left former white colonists -- who make up less than 1 percent of the population -- with the majority of the best farmland.

But few were prepared for the tactics employed by Mugabe. His popularity waning in 2000, Mugabe unleashed bands of so-called "war veterans" on the countryside who seized the country's richest commercial farms for redistribution to black peasants. Of the country's 4,500 white-owned farms, about 4,000 were shut down in this way.

In the winter of 2000, Magutakuona was one of several dozen peasants who each received 30-acre plots of prime land on Rona Farm, a large white-owned commercial farm north of Harare. Magutakuona left behind his smaller, inferior piece of communal farmland nearby and moved his family onto his new property.

He was overjoyed, he recalled, at the prospect of perhaps living someday as well as the previous owner. But two years later, that dream, he says, is gone.

On a recent morning, Magutakuona emerged from the mud hut where he lives with his wife and two children. He was barefoot and dressed in a torn suit coat and tattered pants. His land grant did not include the white owner's home, his farm equipment or any guidance.

Tilling the land with an ox-drawn plow, Magutakuona produced 10 tons of maize last year. That harvest gave him enough for his family and a little left over to sell. He hoped to grow more, but without modern farming equipment it was difficult, he said. This year about half of his property was left fallow.

"Giving the black man the land is a noble idea, but the government must understand that we are in need of help," says Magutakuona. "It's not what I dreamt of."

Without the capital to invest in tractors, seed and fertilizer to plant, many resettled farmers have found it difficult to grow crops. They can't go to a bank for a loan because the government has not given the resettled farmers title to the property.

In the hands of a commercial farmer, who could use modern agricultural techniques, Magutakuona's plot might have produced more than 10 times that amount of maize.

Now repeat this exercise across thousands of pieces of farmland and it is easy to see why Zimbabweans -- even without a drought -- will be hungry, critics say.

"A single resettled farmer will be able to feed his own family, whereas the farmer he replaced could have fed thousands of families," says John Robertson, a Harare-based economist.

Deep political divide

Despite the clear shortcomings of the land-reform program, Mugabe has clung to it as the central policy of his government. Anyone who disagrees with him is dismissed as a supporter of the opposition party, the Movement for Democratic Change, or MDC.

"They are the enemies of the people and our government. We must be on our guard. Our survival is an ongoing war," Mugabe said at the party conference this month.

A deep political divide separates the ruling party and the opposition. Just how deep it has become is clear in the town of Chegutu, about a two-hour drive southwest of Harare.

A year ago, Francis Dhlakama, a former primary school teacher and member of the MDC, won the mayoral race in Chegutu, an agricultural and mining community of 50,000 people. He defeated a member of Mugabe's Zanu-PF.

But winning the office was not as difficult as taking it. Members of the Zanu-PF refused to allow the newly elected mayor to enter City Hall, blocking the entries to him for more than a month. When he finally got in, the mayor discovered that the deputy mayor, a Zanu-PF member, had taken over the mayoral office. Later, the deputy mayor also seized the mayoral car.

His year in office has been hazardous work. When he tried to clean up corruption in the town finance department and reshuffle members of various departments, a band of Zanu-PF supporters tossed a gasoline bomb in his window.

When he went to the news media last month to voice his complaints, his house was pelted with rocks and his bushes were burned down.

The next day when he showed up at City Hall for work, a mob of 30 Zanu-PF supporters wielding pickaxes and iron bars attacked him. He barricaded himself inside the office until riot police arrived an hour later. He has not returned to City Hall since that day.

"I'm afraid of going to the office," said Dhlakama, in an interview from his Chegutu home, where he has been hiding for much of the past month. Two guards stood watch outside. "I'm trying to evacuate my family out of the country."

"Zanu-PF's strategy is to crush the opposition and crush them into insignificance," said a Western diplomat in Harare. "But even if they crush the MDC, they can't crush the opposition because at least half of the population, or more than half, is unhappy with the government."

In these times of hunger, whether you eat is political, too. In Chegutu, members of the Zanu-PF party who sit on the City Council receive government food to distribute in their districts; the mayor and the one opposition party council member receive none. MDC members here accuse the ruling party of handing out the food only to party supporters.

Food and politics

Chegutu is not the only place where such accusations have been made. Aid groups have accused Zimbabwe's government of withholding food from opposition party supporters. In October, the United Nations' World Food Program suspended operations in the southwestern district of Insiza when members of Mugabe's party seized tons of donated grain. The WFP, which has warned that it would not tolerate any politicization of its food, has since agreed to restart distribution.

There is a joke told on the streets of Zimbabwe these days: One Zimbabwean says to another: "Have you heard that Zimbabweans have the highest IQs in the world?"

"Really?" says the second Zimbabwean.

"Yes. I queue for gasoline. I queue for bread. I queue for sugar. I queue for maize. I queue for" (the latest item in short supply). The ability to joke in times of crisis reveals one of the oddities of the country. For all the problems here, people manage to limp along.

"The collapse of the Zimbabwean economy has seemed imminent for several years but, the more bleak things look from the outside, the more ways to survive are found in this resilient country," concludes a report released this month by South African Institute of International Affairs.

Closer look

From a distance, it could almost appear that nothing is wrong in the capital, Harare. Despite the fuel shortages, business carries on. Despite having to depend on a line of credit for electricity, the government held a Christmas tree-lighting ceremony. While hungry rural dwellers forage for roots and leaves and grow more dependent on international aid, the country's elite hold elaborate year-end banquets and dances in Harare's five-star hotels.

But look closer, and all the hardships come into view. In the past month, Harare residents worried about the safety of drinking water because the government lacked hard currency to import chemicals to keep the water clean. Dozens of companies were considering shutting down because they could no longer afford to do business. A Harare woman tried to bite off the lip of a man who tried to steal her two loaves of bread.

At Jokonya's refrigerator manufacturing plant in the outskirts of Harare, Jokonya remains open for business despite all the uncertainties. When there were food shortages, he started giving his 200 employees a free lunch so they would be able to work. When there were fuel shortages, he bought his entire staff bicycles so they would show up at work.

He learned recently that the government price controls will apply to his refrigerators. That will no doubt hurt his sales to people looking for a hedge against inflation.

He is not so sure business will be as good next year. That is part of the unsettling future he can already see.