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Zim dollar crashes in hunt for fuel
July 29, 2005
By Peta Thornycroft
The largest crash of the Zimbabwean dollar took place in the last six days as desperate motorists went looking for foreign currency to fund fuel imports.
A week ago the Zimbabwe dollar was trading at about 25 000 to US$1 on the parallel market where many manufacturers source foreign currency to fund imports.
On Thursday it had touched Z$45 000 to US$1. The rand was selling at Z$6 000 but buyers were paying Z$7 000.
The unofficial exchange rates are available at any street corner from vendors trading opposite hotels frequented by foreign visitors.
The official exchange rate was set last week at Z$17 000 to US$1, a 40% devaluation. Simultaneously the Reserve Bank of Zimbabwe announced that anyone with access to foreign currency would be allowed to use it to import fuel, on a no-questions-asked basis.
Fuel importers say there has been a scramble for forex since then, sending the parallel market on a downward spiral which shows little sign of slowing down. Economist John Robertson said an inflation rate of 1 000% was possible by year end.
For the last three days, a tanker a day of privately imported fuel has been crossing the border at Beit Bridge.
Next week, the beginning of an 11 million litre consignment of fuel from Sasol bought by the government is due to start moving across the border, barely enough for the government's needs with a small amount left over for some favoured transporters.
Well-placed sources in the energy sector predict that this fuel will sell at the subsidised rate of between Z$10 000 to Z$12 000 a litre but that little will be available to private motorists.
Private importers say they hope to be able to sell fuel bought by Zimbabweans with access to foreign currency for about Z$30 000 a litre. Calculations for sale of this fuel are based on the cost of replacement stocks.
Businessmen who have put together the private importations say it has been a "hellish" operation as most people could only scrape together small amounts of foreign currency.
"Some people have blown their last bits of forex hoping to get through this bad patch, but this patch is going to go on for a very long time," said a Harare fuel importer.
Zimbabwe needs a minimum of about 30 million litres of fuel a month for basic needs.
After a year of relative stability, the Zimbabwe dollar started to deflate again in January when it slid from about Z$6 500 to Z$8 000 and began plunging after the March 31 election.
The latest six-day slump is unprecedented and formal sector traders were in a spin this week.
"I don't know what to do about mark-ups as nothing makes sense any more," said a retailer at an upmarket Harare tourist outlet.
"Please don't use my name as we will be in trouble even though our goods are not on any price control list." - Foreign Service.
The Age, Australia
Mugabe sells bankrupt Zimbabwe's assets to China
By Rochelle Mutton
July 30, 2005
"We will never be a colony again!" This has been the catch-cry of Zimbabwe's
President Robert Mugabe throughout his 25-year reign.
But while he rails against perceived imperialist, colonial agendas and
denounces anything white-skinned or Western, Mr Mugabe has spent this week
in China signing over his bankrupt country's resources to the Asian economic
Analysts claim the Chinese are forging a "colonial extractive relationship"
with Zimbabwe, which has sold forward more than a year's worth of gold and
tobacco production in exchange for Chinese military hardware and diplomatic
Zimbabwe is the world's fastest shrinking economy and as it looks east for a
saviour, China has a keen eye on the southern African nation's rich platinum
During a six-day visit to China this week, Mr Mugabe, banned from Western
countries including Australia, was warmly greeted by Chinese President Hu
Jintao as "an old friend" and given a professorship.
But as Mr Mugabe turns to the Chinese to solve Zimbabwe's $US4.5 billion
($A5.89 billion) debt migraine, commentators such as University of
Zimbabwe's Professor Brian Raftopoulos are concerned the relationship will
cost Zimbabwe dearly.
"The Chinese have a huge interest in extractive industries everywhere. Their
influence is certainly growing in Africa, not just in Zimbabwe but Angola,
Sudan and elsewhere," he said yesterday. "But of course it will be at high
cost to Zimbabwe. It's almost a colonial extractive relationship that seems
to be developing."
While Mr Mugabe was coy about the exact nature of his deals with the
Chinese, Zimbabwean economist Eddy Cross claimed yesterday the Zimbabwean
Government had forward-sold precious gold and tobacco to "pay" for
Chinese-made military consignments that included 12 jet fighters, three
60-seat turboprop planes and 700 troop carriers.
"We put the total of those transactions at about $US480 million and that was
a cash deal that was done at the beginning of this year," Mr Cross said.
"And to fund it the Government sold 25 tonnes of gold forward,
speculatively, at a set price. We used to produce about three tonnes of gold
a month. And they also sold some of the tobacco forward and the balance was
found in cash."
Zimbabwe has been condemned by the United Nations and Western countries for
its two-month old demolition campaign Operation Murambatsvina - or "clean
out the filth" - that has left 700,000 people homeless and affected a
further 2.4 million.
Described in a UN report as a disastrous venture with enormous humanitarian
consequences, the action was believed to be retribution for the huge support
for the opposition in the urban areas during the March elections.
Starting on May 19, police spent weeks destroying the informal markets and
homes of the urban poor, and are now rounding up these devastated masses and
forcing them into holding camps. After a hasty screening, they are dumped
hundreds of kilometres away, in the far reaches of the drought-stricken,
Yet while the booming informal trading sector has been razed and goods
either confiscated or destroyed, every Zimbabwean city is awash with cheap
Chinese goods, from glassware to clothing and trinkets.
Government contracts are awarded to Chinese businesses for major works such
as hospitals and bridges.
Mr Cross claims Chinese interests have also been given farms, from which
some white Zimbabwean farmers were evicted allegedly on the basis of
redistribution to landless blacks.
"The Chinese have been granted the rights to develop 100,000 hectares of
irrigation land in the Mwenzi area, about 450 kilometres south of Harare,"
"Also, they have been looking at a set of farms in the Banket-Raffingora
area and these are farms on the Hanyani River and they constitute some of
the largest farms in the Mashonaland area.
"Settlers (newly established black residents) are being removed from those
properties right now. Apparently this is what was agreed in Beijing, that
the Chinese are going to take these properties over - and Chinese State
farming organisations are actually going to run them."
Zimbabwe, increasingly isolated internationally, is also expecting China to
use its veto to block any censure at the UN Security Council.
students protest in Zimbabwe
Sokwanele Report : 29 July 2005
It is interesting to note how, despite the massively intimidating effect of all the police state apparatus Mugabe has put in place, the voice of protest is still heard. The dictator has not succeeded - and surely never will - in silencing all dissent to his autocratic rule. For the most part the challenge to the ZANU PF monopoly of power is expressed in muted fashion, with angry mutterings and quiet acts of defiance. Yet now and again a bolder act of defiance takes place and the people of Zimbabwe catch a glimpse of the boiling cauldron beneath the battened-down lid. The pity is that all too often these courageous acts of protest pass unnoticed and unrecorded. The State media is certainly not going to draw attention to them and often the severely circumscribed independent press and media fail to pick up on the stories. As a result the impression remains that this murderous regime has achieved total dominance of all the political space, driving even the opposition into a sullen subservience.
The issue which sparks a sudden protest may not even be one of national politics though, heaven knows, the democratic space has so shrunk today that there are hardly any "domestic" concerns remaining - be they of business, sport, education or religion - which escape the attention of the "Big Brother" State. So in these days of extreme ZANU PF paranoia it takes courage to participate in a protest, even on "domestic issue". The more significant it is therefore when any such protest takes place.
Earlier in the month and almost unnoticed by the media, was a protest at Bulawayo Polytechnic. Yet over 2,000 students took part in this peaceful demonstration which was sparked by student discontent caused by repeated delays by the College authorities in paying out student loans. Those responsible at the institution for making payment of the $1,8 million loan to each student, had been procrastinating for several weeks. The final straw was when the student body received intelligence that the loan funds had been received by the Polytechnic Administration, yet the latter still refused to disburse the money to all but a small number of students. Out of a total student population of approximately 5000 a mere 200 students had received any payment at all, and they only a fraction of their entitlement.
The Zimbabwe National Students' Union intervened on behalf of the aggrieved students, and managed to secure a promise from the authorities at the Polytechnic that payment would be made in full by June 30. When that deadline came and went whether any further action, the anger of the student body reached boiling point. In the meantime of course the students' ability to feed themselves and maintain anything like a normal life-style was becoming severely strained. The student leadership resorted to the only non-violent option remaining in order to force the Polytechnic authorities to address the issue urgently. On July 11 they summoned the students to a protest meeting. The fact that 2,000 students responded positively to this call demonstrates both how severe was their financial plight and how well organised the student body. It also reveals a latent potential for mobilization and mass action.
The Principal of the Polytechnic was invited to address the protestors on their grievances. Wisely he agreed, though foolishly he made yet another promise that was not going to be kept. He promised that by 11.00 am that very day the problem would have been resolved. The students waited for the deadline which came and went. Some time after 11.00 am they started to throng the Administration Centre, singing protest songs, though still maintaining a peaceful and orderly discipline. The Principal made another appearance and offered yet one more promise of immediate action - payment by 2.00 pm.
Before the new deadline had come, and while the protesters were maintaining their peaceful vigil outside the Administration Centre, a group of about 15 anti-riot police appeared suddenly, dressed in full combat gear including helmets, and wielding batons and tear gas canisters. The moment the students caught sight of them they began to disperse. The less alert among the student body however and those who did not manage to slip away in time, were soon pinned down by the riot police who moved into action mode immediately, lashing out with their batons at any unfortunate students in their path. Yet again these ruthless agents of State repression asked no questions and showed no restraint. Sensing a vulnerable crowd of defenceless youth who were not going to stand their ground anyway, they resorted to their customary "crowd control" tactics; never mind this crowd was already perfectly controlled and a threat to no one. The outcome of their few minutes of unrestrained violence was five cases of injury so severe as to require hospital treatment and scores of other abrasions, bruises and lesser injuries. When all the students had dispersed the riot police withdrew, no doubt satisfied with a good morning's work - another whiff of opposition (or potential opposition) to the dictator snuffed out.
In fact once the riot police had withdrawn from the scene the students quietly reassembled and waited patiently for pay-out, which began this time as scheduled at 2.00 pm. The protest had served its purpose and the point was not lost on those who participated in it, notwithstanding the crude response of Mugabe's storm troops.
Our reporter later caught up with two of the student leaders who helped to organise the demonstration. The leaders, who cannot be named for obvious security reasons, expressed their general satisfaction at the student response and the manner in which the protest had been conducted. They freely admitted that in the current oppressive climate of fear few students are willing to involve themselves in issues of national politics, though more are vocal on local, "domestic" issues. Added to the fear factor, they said, is the "poverty effect" which tends to discourage student activism. A student for whom daily life has become a constant struggle to survive materially, clearly presents less of a threat to an arrogant tyrant than a well-fed student who feels personally secure. Which makes the achievement of those who brought 2000 students out in protest at such a time as this all the more impressive.
Traditionally, the world around, student activists have been at the forefront of those protesting human rights abuses and demanding democratic change. Zimbabwe's dictator has not been slow to appreciate this potential threat to his continued hold on power, and he has used great cunning as well as brutal force to undermine the natural leadership emerging from Zimbabwe's tertiary institutions of learning. To some extent he has succeeded in subduing the student body nationally and diverting their attention to personal issues of survival. Nonetheless it is most heartening to observe that the flame of protest still burns strongly in the hearts of a significant number of the students of today who will undoubtedly be numbered among the leaders of the new Zimbabwe.
To the student activists of Bulawayo and those who participated in the mass demonstration on July 11, we say - AMHLOPHE - CONGRATULATIONS - MAKOROKOTO !!
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