The ZIMBABWE Situation Our thoughts and prayers are with Zimbabwe
- may peace, truth and justice prevail.

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FinGaz

      Minister demoted

      Felix Njini
      8/12/2005 7:57:46 AM (GMT +2)

      SITHEMBISO Nyoni, the Minister of Small and Medium Enterprises
Development, whose position became constitutionally untenable when a
three-month dispensation expired last month, has been demoted from President
Robert Mugabe's Cabinet following an outcry from constitutional experts and
civil society groups.

      She has, however been retained as a consultant in the President's
Office, and still oversees the small and medium size enterprises (SMEs)
portfolio and, according to government sources, has retained all the
accoutrements of ministerial office.
      Government spokesperson George Charamba said Nyoni had ceased to be a
minister as soon as her term expired.
      "She stopped being a minister a long time ago and is now a consultant
in the President's Office working on SMEs," Charamba said. "We are very
happy with her performance. She will become a minister. We are just keeping
her now pending regularisation of her post but in the meantime she will mind
SMEs."
      Nyoni, whose appointment at the time of the April Cabinet reshuffle
raised an outcry, had up to July 15 to regularise her position by becoming a
Member of Parliament. The Constitution of Zimbabwe requires that Cabinet
ministers be Members of Parliament and, at the time of her appointment,
President Mugabe announced that he would use the three-month provision to
normalise the situation. At the time the proposed Senate was widely expected
to provide sanctuary to the former minister.
      However, with the proposed Senate Bill still to pass through
Parliament due to unforeseen delays, Nyoni's position in Cabinet became
invalid last month.
      Nyoni, who has become one of the more notable faces in the forefront
of government efforts to mitigate the effects of Operation
Murambatsvina/Restore Order - a widely condemned exercise branded a
"disastrous venture" by the United Nations, suffered a drubbing at the hands
of the Movement for Democratic Change's David Coltart in Bulawayo South
constituency during the March general elections.
      However, Nyoni is likely to bounce back into Cabinet if she is
appointed into the proposed 66-member Senate that is widely expected to
accommodate ZANU PF heavyweights who could not make it into President
Mugabe's bloated government.
      Contacted yesterday, the reticent Nyoni declined to comment. "You know
the office that appoints people, I do not want to comment," she said tersely
before switching off her phone.
      This is not the first time President Mugabe has had to re-engineer the
Cabinet he announced in April. Just two days after announcing the line-up,
President Mugabe adjusted Flora Bhuka's Lands and Resettlement portfolio and
brought it under Didymus Mutasa's National Security Ministry, creating an
unprecedented situation where one minister reports to the other.

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FinGaz

      ANZ challenges MIC's conduct

      Staff Reporter
      8/12/2005 8:00:07 AM (GMT +2)

      TROUBLED media group Associated Newspapers of Zimbabwe (ANZ), which
has lost over $10 billion in legal and other operational costs since
September 2003, has petitioned the High Court over the government's decision
to deny it a licence.

      ANZ, publishers of the banned Daily News and Daily News on Sunday,
argues that contrary to the provisions of the Access to Information and
Protection of Privacy Act (AIPPA), which give the Media and Information
Commission (MIC) 90 days to make a decision on licence applications, the
state-run body took four months to deal with its papers.
      "I believe that they (MIC) misdirected themselves . . . I believe we
satisfied everything," ANZ chief executive Sam Sipepa Nkomo told a meeting
organised by a group of human rights lawyers in Harare last Thursday.
      He added: "The Daily News won't seek political accommodation. Once we
seek political accommodation, kiss goodbye to The Daily News and I resign."
      The publishing group, which has already filed an application in the
Administrative Court challenging the MIC's decision, had its two titles shut
down in September 2003 after the Supreme Court ruled that they were
operating "outside the law" by refusing to register with the MIC.
      ANZ had refused to register with the commission pending the outcome of
its challenge in the Supreme Court of the constitutionality of some
provisions of AIPPA, the law that created the MIC and requires journalists
and media houses to register with the commission.

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FinGaz

      Govt beats its chest as house burns

      Hama Saburi
      8/12/2005 8:07:11 AM (GMT +2)

      THE government, grappling with the worst economic crisis in the
history of the country, is not showing any signs of backtracking from its
reactionary bravado of sacrificing the little that remains of what used to
be a robust economy for cheap political gain.

      Shortages of essentials commodities such as food, drugs, fuel and
electricity have plunged the country of 12 million people - now resembling a
house on fire - into negative growth rates with last year's estimates
indicating the economy shrunk by a frightening 8.2 percent.
      Nothing short of huge capital inflows and properly structured foreign
loans, analysts said, could douse the flames and pave way for economic
revival longed for by the central bank, whose five-year vision might crumble
unless the political leaders pull down the walls of egoism impairing their
view of the harsh realities confronting the ordinary people.
      Harare, which has taken the begging bowl around the so-called friendly
states, has literally slammed the doors on foreign funding that comes with
strings attached.
      While it is sound business practice to demand that certain conditions,
which may include the restructuring of institutions, be met before releasing
loans, Harare is adamant that the "mutual exchange of benefits should be
regarded as part of our bilateral engagements."
      In other words, it is determined to let the economy sink as long as
the governing party upholds its principles, never mind the consequences.
      "Today, we tell all those calling for such ill-conceived talks to
please stop misdirecting their efforts. The rest of the world knows who must
be spoken to," President Robert Mugabe was quoted in the daily Herald as
saying in what might have been meant to pre-empt South Africa, which has
offered Zimbabwe a bail out package tied to long-term economic and
constitutional reforms.
      "In case they do not, we tell them here at Heroes' Acre that the man
who needs to be spoken to in order to make him see reason resides at Number
10 Downing Street (the official residence of the British Prime Minister Tony
Blair)," the ageing Zimbabwean leader said; adding: "That is the man to
speak to and those at Harvest House (the Movement for Democratic Change -
MDC - headquarters) are no more than his stooges and puppets. What does it
pay us to speak to them? We would rather talk to the principal."
      South Africa, which has failed to thaw political relations between
ZANU PF and the MDC and has offered its northern neighbour a US$500 million
rescue package, has been driven into a tight corner and might change
tact-ics from its "quiet diplomacy."
      This comes as Nigeria has ratcheted up pressure on ZANU PF to meet the
main opposition party by appointing former Mozambican president Joachim
Chissano to mediate in any dialogue between the feuding parties.
      Former government spin-doctor Jonathan Moyo said President Mugabe's
remarks were the clearest indication that the veteran politician had lost
grip of the crisis and that he now lacks the skills to resolve it.
      "He clearly now needs to find a constitutional way out of office as a
matter of urgency. It is outrageous and objectionable in the extreme for
President Mugabe to claim, in a manner reminiscent of sell-out chiefs in the
colonial era who thought only they and not their subjects had the sole right
to talk to imperialists, that he would rather dialogue with the Prime
Minister of Zimbabwe's former colonial master than talk to Zimbabweans,"
said Moyo who was dismissed from government for defying party rules.
      Moyo, who joined the government in 2000 after mounting a spirited
campaign for the rejected draft constitution, was axed after he stood as an
independent in the March elections.
      ZANU PF, a party that prides itself of liberating the country from
Britain, sees the MDC, which commands 41 seats of the 120 contested
Parliamentary seats, as a front for the former colonial master and its
allies.
      Britain, the United States and other member states in the European
Union have slapped targeted sanctions on President Mugabe and some of his
top officials for allegedly mismanaging the economy and a perceived poor
human rights records.
      The government has denied ruining the economy and instead heaped the
blame on the MDC and its "sponsors", whom it accuses of sabotaging the
economy in retaliation to the land seizures of 2000.
      Analysts said ZANU PF should acknowledge that nearly half of the
electorate voted for the MDC in 2000 and have kept their faith in the
opposition party as evidenced by the results of 2002 and the March 2005
polls.
      "It is therefore, irresponsible for ZANU PF to think that people voted
for Blair. Why should the party have such a low opinion of its people," said
a local political analyst who declined to be named.
      The analyst said ZANU PF had sacrificed the economy for political
expediency by refusing to engage the MDC and yet claimed to be running a
multi-party democracy.
      Zimbabwe, which until its recent troubles produced enough food to feed
the entire region, cannot feed its own people anymore. The country has
struggled with unsustainable fiscal deficits, bare shelves and high
inflation.
      World Bank director for the country, Hartwig Schafer, said the rapid
economic decline over the past six years is highly unprecedented for a
country which is not at war.
      "I can't think of a country that has experienced such a decline in
peace time," he said adding "The major reasons for decline are the breakdown
of agricultural productivity and distortion of economic policies."
      Agriculture was the traditional provider of exports and foreign
exchange. At its peak, the sector used to employ 400 000 people.
      Moyo said President Mugabe does not trust Zimbabweans and would rather
dialogue with Blair who was the object of ZANU PF's election campaign,
dubbed an "anti-Blair election" only four months ago.
      "If (President) Mugabe does not trust Zimbabweans to the point of not
wanting to talk to them, then he clearly has no business being their
President. The matter is that simple," said Moyo.
      MDC secretary-general Welshman Ncube was quoted this week saying his
party had "never demanded bilateral talks with ZANU PF" or "asked to be in a
government of national unity with (President) Mugabe's regime".
      "We have never demanded bilateral talks with ZANU PF," Ncube said when
responding to President Mugabe's statement on Monday that Zimbabwe would not
accept any aid if it depended on dialogue with the MDC.
      "We have also never asked to be in a government of national unity with
Mugabe's regime. But we can't have national consensus without national
discourse. It's nonsensical to think ZANU PF can talk to itself."

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FinGaz

      We never asked SA for money: govt

      Rangarirai Mberi
      8/12/2005 7:58:23 AM (GMT +2)

      ZIMBABWE never begged South Africa for financial aid and President
Thabo Mbeki has not tied any reforms as conditions to a planned loan to
Zimbabwe, a government spokesman has said.

      Presidential spokesman George Charamba revealed yesterday it is the
South Africans who approached Harare with a financial rescue offer, whose
terms have been kept under wraps by both sides for weeks, although some
details came to light this week.
      "We never asked for any money from South Africa. It was the World Bank
that approached Mbeki and said 'please help Zimbabwe'. They (South Africa)
then offered to help us," Charamba told The Financial Gazette yesterday.
      His comments contradict earlier official denials that South African
Vice President Phumzile Mlambo-Ngcuka had delivered Mbeki's offer to
President Robert Mugabe when she visited Harare last month.
      Zimbabwe has however, previously admitted to approaching China,
Malaysia, India and even Namibia for cash in the face of acute foreign
currency shortages that have left it hamstrung and unable to import fuel,
electricity and food.
      The offer has raised a storm in South Africa with the opposition
Democratic Alliance doing all it can to scuttle the offer. A South African
church group, however, said it received assurances from Mbeki at a Tuesday
meeting that the country would not enter into an "irresponsible loan"
agreement, remarks that were taken in South Africa as confirming there would
be conditions tied to the loan.
      But Charamba insisted yesterday that the loan would be on purely
commercial terms.
      "There are no terms of agreement on the loan other than the commercial
terms that exist between lender and borrower. The loan will be repaid at
market rates. South Africa is not being charitable. This is just one country
in surplus lending to an indebted country," Charamba said.
      Logan Wort, a spokesman for the South African Finance Ministry, where
Zimbabwean and South African negotiators met last week, said reports on the
size of the loan - earlier put at US$1 billion - were "purely speculative",
but declined to comment on reports Zimbabwe had refused to agree to
conditions reportedly tied to the loan.
      The terms of the agreement have been closely guarded pending formal
announcements by both governments, expected as early as next week, according
to some sources. But a government official says the loan would come in
tranches spread over 18-month periods.
      A first tranche of US$200 million would be released for part repayment
of the US$295 million International Monetary Fund (IMF) arrears. This means
the loan deal will have to be revealed soon, as the IMF board meets to take
the crucial vote on Zimbabwe in just over three weeks.
      More funds would be made available depending on Zimbabwe meeting
economic performance targets, the source said. Mbeki recently told reporters
that South Africa could take over part of Zimbabwe's debt, but said the
country would have to first reform its economic policy - particularly the
multiple exchange rates.
      Reports have said that a central demand of the loan deal is dialogue
between ZANU PF and the opposition Movement for Democratic Change (MDC).
      President Mugabe had a searing retort on Monday to those pressing him
towards talks, saying if any talks were ever going to be held they would
have to be with British Prime Minister Tony Blair, whom he called "the
principal" of the MDC.
      After last week's meeting at the South African finance ministry, it is
understood that Mbeki in fact seeks a broader national dialogue beyond ZANU
PF and MDC, possibly a new constitution review process inclusive of civic
groups.
      South African Anglican Archbishop and close advisor to Mbeki,
Njongonkulu Ndungane, in a statement after Tuesday's meeting, said Mbeki and
three of his ministers at the meeting had assured the clergymen that South
Africa was "not going to enter into any loan agreement in an irresponsible
way and that all proper processes will be followed including engaging with
parliament."

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FinGaz

      Govt takes over FSI Agricom

      Rangarirai Mberi
      8/12/2005 8:02:09 AM (GMT +2)

      GOVERNMENT has completed a disputed takeover of Mutumwa Mawere's
controlling shareholding in FSI Agri-com, a key subsidiary of SMM Holdings,
after cre-ditors agreed a debt-to-equity swap Tuesday.

      The vote was taken mostly by representatives of a string of
quasi-government agencies, among them the Zimba-bwe Revenue Authority
(Zimra), ZESA Pension Fund and numerous rural district councils, revealing
the depth of past state involvement with Mawere, now wanted over alleged
foreign currency related crimes.
      FSI owes government $115 billion - including another $50 billion that
government has agreed to give administrator Afaras Gwaradzimba for cotton
purchases - making the state the largest creditor and now the largest
shareholder in FSI.
      After Tuesday's vote, FSI's share capital will be increased from $20
000 divided into 20 000 shares of $1 each to $1 million divided into 1
million shares of $1 each. The 1 million shares will be further divided into
100 million ordinary sha-res of 1 cent each. The value of the scheme shares
will be equivalent to the amount owing as at May 31.
      A new board and senior staff will be appointed and all "dormant"
subsidiaries of the company will be disposed of over the next six months,
during which Gwaradzimba will implement the re-form plan. FSI, according to
Gwaradzimba's plan-ned scheme, now beco-mes an "investee company" of
government.
      The scheme was ex-pected to be submitted to Justice, Legal and
Parlia-mentary Affairs Minister Patrick Chinamasa this week ahead of the
publishing of a notice on the result of the vote in the Government Gazette,
possibly today.
      FSI Agricom was pla-ced under reconstruction in September last year,
but the order was lifted in December. However, FSI remained under
reconstruction, as it is a subsidiary of SMM, whose reconstruction order
re-mains in place.
      FSI's consolidated balance sheet as at Septe-mber 2004 shows assets of
$69.1 billion against liabilities of $59 billion, suggesting the company was
technically solvent. Gwa-radzimba concedes to this fact, but alleges that
the company had cash flow problems owing to diversion of funds to other
companies related to Mawere.
      According to a report prepared by Gwara-dzimba for creditors, FSI owed
several banks a total of $37.9 billion as at September last year, and was
facing possible liquidation after the banks rolled over the loans on rates
of up to 600 percent.
      SMM was placed under Gwaradzimba's ad-ministration last year after
Mawere was ac-cused of illegally externalising the proceeds of asbestos
exports from SMM, the country's single largest asbestos producer. Mawere
denies the charges, saying the allegations are part of a ploy by politicians
to seize his companies.
      Prior to his bitter fallout with government, Ma-were's vast business
interests spanned the mining, financial and insurance sectors. But the SMM
state takeover set off major losses for Mawere, the most recent being his
loss of control at Zimre Holdings Limited (ZHL).
      Government used the reinsurer's $60 billion ri-ghts issue to raise its
shareholding from 8 percent to take a controlling 46 percent stake, after a
deal with lead underwriter FBC Holdings. Mawe-re's interests in ZHL were
slashed to below 9 percent.

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FinGaz

      Bad guys continue minting money

      Rangarirai Mberi
      8/12/2005 8:04:55 AM (GMT +2)

      A MONTH ago, fund manager Ben Ndebele sat in a boardroom with two
executives representing a top client, a major pension fund, and laid down
for them how his blend of equities and money market instruments had grown
their investment-beating inflation, but only just.

      Now, he wishes that, in addition to his mix of clever stock picks and
deft plays on the money market, he could have added to his investment basket
what many market movers are calling "non-conventional investments".
      In a market increasingly short on profitable scrip that is a
one-way-bet in beating inflation, fund managers are turning green with envy
at a booming market for foreign currency and fuel.
      It's a "non conventional market" that fund managers have always been
strictly forbidden to dabble in, especially after the leash was tightened by
central bank after the financial crisis of last year. But these are
extraordinary times. In an ironic twist of policy, Energy and Power
Development Minister Mike Nyambuya has now allowed those who had been
illegally stocking up on foreign currency to import fuel-"no questions
asked".
      "It's ironic, really," Ndebele said this week. "If you had been
breaking the law, you would be making a killing, legally this time. If you
were a saint, your portfolio will be just somewhere over there; just okay,
not spectacular."
      Now those people who chose to keep their noses clean have an idea what
Charles Dickens was going on about when he famously said "the law is an
ass".
      If fuel were a share trading on the Zimbabwe Stock Exchange (ZSE), it
would be one of those counters that are always in huge demand. Pressure from
buyers would always outrun that from sellers by a wide mile-those in
possession of the share never hesitating to hold out for a higher price from
ever desperate buyers ready to pay anything to get in.
      News of just one share being made available for purchase would entice
a stampede, buyers bidding themselves hoarse just to get at least one fuel
share in their portfolio.
      The share would have an upside potential bigger than that of any stock
trading on the ZSE today. The product is in short supply, and even if all
the oil in Saudi Arabia suddenly landed in the country, there is massive
pent up demand that would make sure a sudden surplus would never knock the
share price.
      Investors would hoard such a share in anticipation of future
shortages, keeping the huge premium on its price intact. Any news about the
counter would entice immediate and vibrant market interest-like what rumours
about a fuel delivery do to a city's rumour mill.
      Perhaps a fuel share would be the only one competing with mighty PPC,
the South African cement maker that last month became the first ZSE counter
to trade at over $1 million a share.
      "You can buy defensive and under priced shares for your equities and
buy short term paper on the money market to beat inflation, but that's where
your strategy starts and ends. You can't diversify as much as you would like
in the current market," said the fund manager, saying his portfolio was
overweight on stock, which he believes can return inflation-beating earnings
for his peevish investors.
      "Textbooks tell you that diversification spreads your risk, but there
isn't too much else to buy in our situation."
      The temptation to dive into the forex and fuel market is getting
stronger. If players can't resist, the market could be heading back to the
heady 2003 days that rewarded those that went headlong into
"non-conventional" investments while punishing conservatives that refused to
stray from "core business".
      There are many fund managers who at the half year showed off to
clients how clever they had been, buying in the dips valuable stocks that
had been ignored by the market and selling when late-comers also wanted in.
      But few deny that the real money is flowing to the same "economic
saboteurs" that had been accumulating stashes of foreign currency during a
fervent campaign by authorities to crush the black market. That fierce
anti-black market drive has quickly morphed into a policy of treating
previously illegal dealers as saviours of the economy.
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FinGaz

      Government edgy over US envoy's visit

      Njabulo Ncube
      8/12/2005 8:01:10 AM (GMT +2)

      THE government, stung by a scathing United Nations (UN) report
released late last month, was this week edgy over the unexpected visit of
the United States envoy to the world body as it battles to meet self-imposed
targets for providing housing to victims of the clean-up exercise.

      Tony Hall, the US ambassador to the UN Agencies for Food and
Agriculture, arrived yesterday to assess the humanitarian crisis sparked by
the two-month long blitz on shantytowns that shattered the livelihoods of an
estimated 700 000 people.
      Government officials overseeing the reconstruction of structures for
the victims of the clean-up campaign are panicking amid indications that the
much-trumpeted Operation Garikai/Hlalani Kuhle will not meet its target
despite official claims to the contrary.
      Ignatius Chombo, the Minister of Local Government, Public Works and
National, is on record as saying the government would be able to build
houses for the majority of the affected people by the end of August this.
      Yesterday he was not immediately available to comment on reports that
only a handful of houses had been constructed in Harare and Bulawayo, the
two most affected cities.
      Timothy Smith, the director of the US public affairs section in
Harare, was reluctant to discuss the alleged diplomatic rifts posed by the
ambassadors' visit, but said Hall's first port of call would be the capital
city and its environs, adding the visit "will go a long way in aiding the UN
and the US to solve the country's humanitarian and food security crisis."
      Government reports at the weekend indicated Harare had not been
informed of ambassador Hall's visit. Last month an envoy dispatched by the
African Union to assess Operation Murambatsvina was forced to leave without
executing his mission after the government refused to sanction it allegedly
because proper procedures had not been followed.
      Bahare Tom Nyandunga, a member of the African Commission on Humanand
People's Rights and Special Rapporteur responsible for Refugees and Asylum
Seekers, spent nearly a week cooling his feet at a local hotel in Harare
waiting for accreditation.
      He however, was forced to hastily leave the country after Harare had
expressed displeasure at his presence to his bosses in Addis Ababa,
Ethiopia.

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FinGaz

      UN reform bogged in complex political geometry

      Nelson Banya
      8/12/2005 8:06:33 AM (GMT +2)

      Africa certain to end the loser in showdown
      LAST week's decision by the African Union (AU) to stick to its guns
and press for two permanent seats with veto power in an expanded United
Nations Security Council - an inherently undemocratic body which reflects
the global power structure of 1945, when most of today's nations were still
under colonial rule - has set the stage for a showdown in which the
continent looks certain to end the loser.

      A compromise deal sold to some African leaders, including AU chairman
and Nigerian President Olusegun Obasanjo and South Africa's Thabo Mbeki, by
the Group of Four (G4) - Brazil, Germany India and Japan - was rejected at
last week's extraordinary summit in Addis Ababa, Ethiopia.
      The G4 is pushing for an expanded 25-member security council with six
new permanent members - four for them, and two for Africa - without
veto-wielding powers.
      According to reports from Ethiopia, 46 of the 53 AU states backed the
AU's position taken in Libya to push for the 15-member security council to
be expanded to 26, including six new permanent seats with veto-wielding
powers - of which two would be for Africa - and five new non-permanent
seats, two of which would also go to Africa.
      The G4 put forward the proposal in the UN General Assembly, where it
would need a two-thirds majority - and then ratification by all existing
permanent Security Council members - to come into effect.
      At present, the US, the UK, France, Russia and China are the only
permanent members of the UN body with the power to veto. Ten other nations
rotate on two-year terms.
      If there is lack of consensus on the reform proposals Africa will make
in September, there is even less convergence on who would take the seats the
continent is gunning for, with regional powerhouses South Africa, Nigeria
and Egypt all coveting the slots.
      Angola, Kenya and Algeria are also reported to harbour similar
ambitions.
      Outside the continent, other states have adopted positions which run
contrary to Africa's proposals, prompting the G4's allies in Africa - led by
Obasanjo - to caution against an all-or-nothing approach which would
certainly see the continent losing out.
      Pakistan backs a different plan from a group known as Uniting for
Consensus, which proposes adding 10 new non-permanent members who would face
re-election, while the US is calling for two new permanent seats with no
veto power, including one for Japan.
      China has called for further consultations on the issue. France,
however, is reported to be among 20 states which have sponsored the G4 plan.
      The imbroglio is further complicated by regional rivalries.
      For instance, Pakistan opposes India, Argentina and Mexico oppose
Brazil, South Korea and China oppose Japan, and Italy opposes Germany.
      South African media this week accused President Robert Mugabe, one of
the most vociferous opponents of the G4 compromise deal, of scuppering its
southern neighbour's security council aspirations.
      The Sunday Independent (SA) even ascribed "a sinister motive" to
opponents of the "tactical" compromise deal with the G4.
      "Was there an ulterior motive behind an African Union faction led by
the Zimbabwean leader ruining a tactical bid for Security Council reform?
      "Zimbabwean President Robert Mugabe this week helped defeat a South
African tactical move to win two permanent seats for Africa on the United
Nations Security Council. South Africa's defeat may have cost it and Africa
an influential permanent presence in the most powerful political body in the
world.
      "South Africa was considered one of the frontrunners for a permanent
seat on the council. Mugabe, Egypt and others spoke out at an extraordinary
African Union summit against a compromise deal which SA had helped forge
between the AU and the so-called G4, a coalition of four other nations
seeking permanent seats on the security council - Germany, Japan, India and
Brazil. President Thabo Mbeki argued strongly at the AU summit in Addis
Ababa on Thursday in favour of the compromise as the only realistic way to
get Africa permanent seats. But the Mugabe camp prevailed," The Sunday
Independent said in a commentary.
      The publication said a united G4/AU position would have greatly
strengthened their chances of persuading the UN to expand the security
council by adding six new permanent seats - two from Africa - to the present
five.
      Whatever emerges when the 191 members of the UN meet in September to
deliberate on the Security Council and broader reforms, this is one issue
which will not go away, as much as it has dominated UN general assemblies
over the past decade.
      James Paul and Céline Nahory of the Global Policy Forum contend that
the ability of the global body to police the world does not necessarily lie
in an expanded security council as more permanent members could multiply the
deformities of permanency.
      "If the G4 resolution fails, as it likely will, the Council will
escape from a dangerous and crippling reform. As the past 60 years have
demonstrated, permanency of membership makes the Council inflexible and
unable to accommodate change. Like 'president for life,' permanent
membership sets the stage for future anomalies and provides no avenue for
normal evolution as states' status and power rises and declines in the
international system.
      "One ambassador from an elected delegation in the Council called the
permanent members mockingly the "H-5" or Hereditary Five, to highlight the
anachronism of their status in a world that aspires to democracy. The
present five permanent members already burden the Council heavily. Ten or
eleven permanents would make matters much worse. Their presence would block
future reform and make limitation or outright elimination of permanency far
more difficult," Paul and Nahory wrote.
      However, the two agree with the position taken by AU leaders with
respect to the veto - at least where its elimination is concerned - although
the African leaders have gone beyond and demanded for the goose what is also
good for the gander - the five principal World War II allies clung to their
privileged status.
      "Reform of the Council must seek to restrict (and eventually
eliminate) the veto, but this obviously cannot be done in the near future
through Charter revision, which itself is subject to the veto process.
Instead, states must mobilise pressure and persuasion to get P-5 (five
permanent members) members to limit their veto use, especially the
threatened or "hidden veto" that casts a shadow over the Council's
proceedings at all times.
      "If Germany, Japan, Brazil, India and the other aspirant states
abandon their quest for permanency, they can provide major diplomatic muscle
in this veto-restriction effort along with support for a regional approach
to membership. The veto should be immediately ended in such cases as
decisions on new UN memberships, election of the Secretary General and other
cases rarely touching on core P-5 interests. Similarly, the 185
non-permanent states should make joint efforts to limit other special P-5
privileges, such as claims on high Secretariat posts and World Court seats.
Eventually, in the more distant future, permanency itself should be
negotiated into well-deserved oblivion and the oligarchy eliminated once and
for all."

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FinGaz

      Is there more to Tsvangirai case than meets eye?

      8/12/2005 8:07:50 AM (GMT +2)

      IT really should not be surprising that the treason charges against
Morgan Tsvangirai have been dropped. No doubt this is related to Zimbabwe's
quest for financial assistance from South Africa, especially.

      Although President Mugabe came back from China breathing fire and
declaring that no one at all will tell his government what to do with the
country's politics, the situation on the ground seems to tell a different
story.
      The South Africans had made the blunder of stating in public that they
would be demanding political and economic concessions from Harare before
they could react with some form of support. This was an unwise departure
from the course Pretoria (or should that be Tshwane now) had all along
chosen. For the first time, the South Africans seemed to be displaying some
irritation with their counterparts in Harare. As a result, they made it
known in anonymous and not-so-anonymous briefings that they were not going
to just hand over money and leave it at that. Blood would have to be
extracted from the stone called Zimbabwe in order for the help to be
forthcoming.
      So, on the very day that the charges against Tsvangirai were dropped,
the South African cabinet announced that it had approved in principle a
bail-out package for Harare.
      There is still some way to go yet, though. The loan request will now
have to be formulated and concrete figures supplied. After that, the issue
will go to the South African parliament, which will have to approve the loan
by a simply majority. It is unlikely that ANC MPs will rebel against cabinet
and reject the loan deal. The Democratic Alliance will no doubt unanimously
vote against the granting of the loan to Zimbabwe. Tony Leon and his crew
have all along made it clear that they care not one bit for the suffering of
ordinary Zimbabweans. The solutions they present to the Zimbabwe problem are
always designed to exact the maximum humiliation on Harare. Their stance
appears to be informed by an agenda that has no compassion for the common
Zimbabwean. The DA's conduct has made it clear that, in the quest to be shot
of President Mugabe and ZANU PF, they consider the masses of Zimbabwe fair
game, fodder for the regime change machine.
      Ordinary Zimbabweans feature on the DA radar only to the extent that
their "suffering" can promote the regime change agenda. No matter what the
opposition party in South Africa says, its prime motivation has always been
to pander to its constituency, which, not surprisingly, is made up to a very
large extent of former citizens of this country who have turned on their
country so viciously that they are willing to see it reduced to a pile of
dust to teach President Mugabe the lesson that "if you mess with our
interests, then your days are numbered".
      Still, the loan is likely to be approved by parliament in South Africa
since the ANC has a two-thirds majority. The ANC MPs are elected on a
proportional representation system, not a constituency-based system. This
means that they actually owe their positions to the party in the first
instance. It is the party that compiles a list of candidates for parliament.
      Harare, on the other hand, should not make the mistake of thinking
that the demands by Pretoria mean that Thabo Mbeki has been won over by Tony
Blair or that he has abandoned Zimbabwe. That would be a costly assumption.
      Instead, Harare should understand that, as far as Mbeki is concerned,
there are some things Harare does that are not entirely necessary. The
treason charge against Tsvangirai is one such unnecessary move. It was
achieving nothing for the betterment of the welfare of Zimbabweans. In fact,
more has always stood to be gained from withdrawing the case than from
keeping it alive. True, everyone in Zimbabwe knew that there was no
likelihood that Tsvangirai would be convicted, let alone jailed or executed.
But the very existence of the case caused unnecessary criticism of the
Harare government. It was not even like Tsvangirai was a true threat to
either our democracy or the government. Much more so in the last two to
three years, when the MDC leader's quest for power at any (admittedly
peaceful) cost had led him to speak the talk of the desperate.
      Indeed, South Africa needed to point out to Zimbabwe that, with the
whole world permanently poised against like a coiled snake, the Harare
administration did not need to indulge in any gratuitous activities that
could even be misrepresented.
      One hopes (perhaps in vain) that the Harare government now realizes
that some things are simply unnecessary. Certain controversial policies can
easily be misrepresented if carried out. Murambatsvina was a noble exercise.
It was made inevitable by the fact that the country had run out of forex
and, in desperation, government decided to flush the "hidden forex" from the
black market by destroying the bases from which these markets operated. In
fact, if the economy had been performing well, I doubt government would have
gone ahead with the exercise.
      Government should not cling to this exercise in a misguided attempt to
reassert its sovereignty. More stands to be lost than gained through an
intransigence that is not rooted in principle but simply in the need to save
face. Our friends out there will understand when we stick to our guns on
policies that are informed by fundamental principles, such as the land
reform exercise.
      When our policies and activities are based on expediency (the true
definition of the reasoning behind Murambatsvina), our friends get pressure
put on them unnecessarily. As a result, they may turn against us. Why should
bear the necessary headaches when the friendly government they are trying to
"protect" goes off on a tangent and literally shoots itself in the foot?
      Perhaps lessons have been learnt, but most people are not holding
their breath. After all, our government behaves like a drunk who provokes a
lion. He knows he can not run away, but simply wants to score a cheap point
by telling everyone afterwards that he provoked a lion? Was it necessary to
provoke it?

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FinGaz

      Zimbabwe mortgages 25% exports to China

      Staff Reporter
      8/12/2005 7:58:58 AM (GMT +2)

      ZIMBABWE, whose international creditworthiness is currently in a
shambles, might have played into China's hands by tying itself to an
ambitious loan service structure that commits 25 percent of exports to the
Asian country.

      Sources confided in The Financial Gazette this week that the loan
service structure, still to be explained fully to the public, would require
a quarter of Zimbabwe's export receipts to go towards servicing loans
advanced by China.
      Technically, it may take several years for the country, ravaged by
drought and plummeting foreign exchange earnings, to extinguish its current
obligations with Chinese firms before it can even start on new loans.
      "It might, therefore, take a number of years for us to fully pay off
our existing debts before we can talk of new loans," said the source.
      A six-day visit to China by President Robert Mugabe and his entourage,
which was, however, marred by a damning United Nations report on a
controversial clean-up operation, saw the signing of several Memoranda of
Understanding (MOUs) of which the finance cooperation agreement on exports
was one of them.
      Reports say apart from a 50 million yuan (about US$6 million) grant
dished out to Zimbabwe to finance grain imports and 100 computers secured
for local schools, the
      high-powered delegation largely returned empty-handed. Food agencies
say 4.5 million people are in need of food aid that would cost the country
US$420 million.
      Trade between the two countries is currently tilted in favour of
Zimbabwe with China's export estimated at US$32 million against US$159
million in imports comprising mainly tobacco, the country's single largest
export earner.
      Put simply, about US$40 million of export receipts would be applied
towards debt servicing. Sources said Zimbabwe might need to step up exports
to benefit from the world's fastest growing economy that has of late become
central to the country's "Look East Policy."
      State-owned enterprises indebted to Chinese companies would also need
to demonstrate commitment to executing their standing arrangements. The
country, which faces expulsion from the International Monetary Fund if it
fails to settle its arrears amounting to US$296 million, owes Chinese
companies through the Zimbabwe Iron and Steel Company (ZISCO), the Zimbabwe
Revenue Authority (ZIMRA) and Air Zimbabwe (AIRZIM).
      ZIMRA bought two state-of-the-art scanners from Nutech to guard
against the entry and exit of undeclared goods. Air Zimbabwe bought two
aircraft while ZISCO borrowed US$35 million from the Export and Import Bank
of China that was insured with China Export and Credit Insurance Corporation
(Sinosure).
      The loan was meant for the supply of equipment to refurbish ZISCO's
Blast Furnace Number 4.
      Most of the loans were insured by Sinosure, which has of late
expressed concern over Zimbabwe's failure to adhere to its repayment
schedules.

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FinGaz

      Charamba had it coming

      Mavis Makuni
      8/12/2005 8:00:36 AM (GMT +2)

      When Information and Publicity Permanent Secretary, George Charamba
stormed Pockets Hill on Monday to vent his anger over the prevailing chaos
at Zimbabwe Broadcasting Holdings (ZBH), he acted out what many frustrated
radio listeners and television viewers often wish they could do.

      Charamba is reported to have warned that heads would roll at the state
broadcaster because of the shoddy work of the staff which the Permanent
Secretary said threatened to compromise the quality of news and broadcasting
standards. What particularly raised Charamba's ire on the day in question
was the coverage of the Heroes' Day celebrations.
      Failing to understand why the day's lead story highlighted President
Mugabe's call for the umpteenth time for Zimbabweans to jealously guard
their independence and sovereignty instead of his stance on talks with the
Movement for Democratic Change, (MDC), an enraged Charamba tried to phone
the ZBH newsroom. He got no joy for an hour despite the fact that he was
using the news hotline. So much for the broadcater's boast, "We will be
there when it happens". How will they know about a breaking story when they
leave their hotline unattended for hours on end?
      Charamba's angry visit to Pocket's Hill confirmed the widely held
perception among listeners and viewers that ZBH is the pits and needs a
complete overhaul to regain a semblance of professionalism and credibility.
      Charamba's visit opened a Pandora's box of ills that leave no one in
any doubt at all as to why most people believe that being required to pay
for a licence for the fluff and juvenilia dished out by ZHB's clueless
staffers is daylight robbery.
      "There is a serious problem in that newsroom and it's an area I am
going to tackle head on. I am not going to stand by, there will be changes
in the newsroom", Charamba is reported to have fumed after his visit opened
his eyes to the chaos at ZBH. There was reported to be widespread
dereliction of duty by staffers who do their personal business during
working hours , senior editors involved in love affairs with subordinates
and even allegations of forged academic credentials.
      The question is, how can the Permanent Secretary tackle the pervasive
dysfunction at the state broadcaster without acknowledging its root causes?
      Charamba seems to have only recently noticed that something is
seriously amiss at ZBH when the truth is that the decay began more than five
years ago. This was when Jonathan Moyo, under whom Charamba served not only
as permanent secretary but as willing sidekick, set about dismantling what
had been achieved over many years at the old Zimbabwe Broadcasting
Corporation and other state owned media.
      We did not hear any expression of dissent and discomfiture from
Charamba when Moyo embarked on his vindictive and self-serving restructuring
exercises.
      In truth these exercises were a devious way of getting rid of
experienced media practitioners who were unprepared to be used as putty in
Moyo's hands and replacing them with inexperienced and pliant recruits who
would take orders directly from the Department of Information and Publicity
in the President's Office.
      I recall hearing a story during those heady days of the invincible
Moyo-Charamba partnership about a senior media practitioner who was
threatened with dismissal for questioning the wholesale firing of
experienced personnel and the appointment of inexperienced and unqualified
replacements. The media practitioner, who was eventually fired, was told
that the only qualification anyone needed to work for state media was
political correctness (Kuziva gwara romusangano) and readiness to take
orders.
      By getting into a huff about the chaos at ZBH, Charamba seems to
forget that this dismal state of affairs is the cumulative result of his and
Moyo's interference over the years. The ZBC was once a respectable
organization with fairly good radio and television services until the
Department of Information and Publicity decided to turn it into an outright
propaganda arm of government and the ruling party.
      Observers will have been surprised to read that Charamba was unhappy
with ZBH's poor news sense when it introduced its lead story on Heroes Day
with the tired theme of the need to guard Zimbabwe's independence and
sovereignty.
      Is it fair for the Permanent Secretary to blame the confused staff at
ZBH when it is no secret that journalistic principles were abandoned a long
time ago?

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FinGaz

      Staff changes loom at ZBH

      Felix Njini and Audrey Chitsika
      8/12/2005 8:01:38 AM (GMT +2)

      HEADS are set to roll in the state-controlled Zimbabwe Broadcasting
Holdings (ZBH)'s Newsnet division as a precursor of far reaching changes at
the cash-strapped broadcasting monopoly.

      Sources said government, at the instigation of its spokesperson and
permanent secretary in the information ministry, George Charamba, would in
the next two weeks wield the axe on Newsnet staffers who have been accused
of negligence and ineptitude.
      A massive restructuring exercise at the broadcasting monopoly has also
been approved and will be implemented in the next two weeks.
      ZBH executive chairman, Rino Zhuwarara, told The Financial Gazette he
would soon effect sweeping changes to bring back "sanity and
professionalism" at the state broadcaster.
      "We are making sure that our newsroom is efficient and reliable and
can cope with the demands of the information age. It is necessary to review
the systems periodically," he said.
      Morale among newsroom personnel and their editors has reached rock
bottom following reports of the impending cull. Newsnet is also said to be
recruiting unqualified journalists from a named private college in Harare, a
development that has however, not stirred to action the Media and
Information Commission, which has been selectively targeting journalists
from privately owned papers in its application of draconian media laws.
      Panic set in at the public broadcaster following a surprise visit to
ZBH by Charamba. The visit even took the editor-in-chief, Chris Chivinge by
surprise, sources said this week.
      Chivinge compounded the confusion at ZBH when he made a dramatic
return from Namibia where he had been seconded to run a regional
broadcasting project, which has since twisted in the air. Upon his return,
Chivinge promptly assumed the position of editor-in-chief and Tazzen
Mandizvidza, who had been appointed to the post, is now deputising him.
      Meanwhile, ZBH looks set to pay billions of dollars in severance pay
after it lost an appeal lodged with the Labour Court seeking to revise
retrenchment packages for 400 employees it laid off in 2002 under a
restructuring exercise.
      ZBH failed to pay the packages for its retrenched workers as agreed
prior to the lay off.
      The court ruled that the staff should return to work or be paid their
retrenchment packages in full.
      Alec Muchadehama of Mbidzo, Muchadehama and Makoni Legal
Practitioners, who represented the workers said: "The court has taken the
view that the parties entered into a memorandum of agreement which bound
them. The applicant cannot renege from it."
      The labour court dismissed ZBH's application recently, finding that
the state broadcaster's appeal held no merit and that the workers should be
awarded their benefits as initially agreed.
      "Appellant is asking the court to nullify certain aspects of the
agreement. This, the court cannot do. Contracts are sacrosanct," the court
said in passing judgment.
      "Errors should be corrected without unduly prejudicing the parties. In
the present matter, it seems clear that both parties were keen to deal with
the question of retrenchment . . . The appellant now argues that certain
aspects of the package ought not to have been included in the package."
      In an arbitration awarded at the end of 2003, the Labour Tribunal said
the employees would be deemed to be employed by ZBH "until the retrenchment
is completed as per agreement".
      ZBH stopped paying workers after they were retrenched in 2002. The
ruling means that the workers are entitled to full salaries and benefits
backdated to the time they were laid off.

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FinGaz

Comment

      It's the economy . . .

      8/12/2005 8:19:42 AM (GMT +2)

      ZIMBABWEANS have now observed the 25th anniversary of their hard-won
independence. Things are falling apart. And it is increasingly difficult to
pretend otherwise.

      Joblessness is on the rise in sympathy with corporate failures and a
shrinking economy. Foreign investor confidence has reached an all-time low
as the country gets increasingly ostracised, losing its friends, prestige
and credibility in the process. The agricultural sector, the fulcrum around
which the economy has traditionally hinged, is, to all intents and purposes,
precariously close to collapse. Not to mention the health delivery service
which is in intensive care, the education system which has lost its glitter
and the disastrous condition of the public transport services, among others.
      All this, coming against a backdrop of an acute shortage of fuel and
basic commodities points to an economy that is caving in. This means that
the economic meltdown and the government mistakes that aggravated it, are
the most critical issues in Zimbabwe today, with the people who wear the
shoe and therefore know how and where it pinches, expecting government to
explain how it will put a fresh heart into the enfeebled economy and bring
peace back to their souls.
      We have no doubt that the topicality of this issue is not in question.
Unfortunately on Monday this week, the government lost yet another golden
opportunity to spell out to Zimbabweans how it intends to restore local
economic pride and promise with a sense of national purpose and cohesion.
      We have always maintained that national occasions such as the
Independence Anniversary and the Heroes Holidays should be used for national
reflection, soul-searching and stock-taking.
      It is during such important days, which should in essence, transcend
parochial political party affiliation and ethnic barriers, that the
powers-that-be should carefully and critically assess the journey that the
country has travelled since 1980. Issues to consider are the aspirations of
the people, their thoughts and feelings, what could have-been-but-never-was,
why, how and where the wheels came off. In other words, is this the Zimbabwe
that the living heroes and their departed colleagues envisaged? Does
independent Zimbabwe meet the people's needs? If not, why? These are
distinctly uncomfortable but all the same pertinent questions. That is what
self-introspection is all about.
      All this should be done with a view to redefining Zimbabwe's national
goals in terms of the sacrifices, unshakeable principles and selflessness of
the freedom fighters, dead and alive whose aim was to make sure that the
oppressive system that made it treasonous even to speak of the trees was
swept away with the rubble of the toppled minority Rhodesian regime. This is
particularly so now given the depressing developments unfolding in the
country, which have spawned inevitable socio-economic difficulties,
stagnation and unprecedented misery.
      As we have said before in our editorials, this is the time that the
country's leadership should try to convince and reassure long suffering and
disillusioned Zimbabweans that they are addressing and urgently, the
country's economic woes. They should seize this opportunity to spell out how
they would consistently implement well thought-out, comprehensive and
cohesive policies to bring back the crisis-hit economy to the longed-for era
of surplus, self-sufficiency and security.
      Put simply, the government should take advantage of such occasions to
declare war on the unprecedented economic meltdown by elaborating to the
public their formula for a way out of the deep-seated crisis, as a basis
upon which Zimbabwe will be able to create a strong and self-sufficient
country which caters for broad-based population needs. We believe this is
consistent with the cause, principles and ideals of the liberation struggle.
      This can, however, only be possible if the country's political
leadership musters the political will and maturity that enables them to see
the broader national picture. They have to assume a modicum of sensitivity,
humility, pragmatism as well as self-introspection and disabuse themselves
of the notion that everything revolves around a certain class of people's
participation in the war of liberation.
      We have said time without number that the 70s war of liberation is
without doubt the most outstanding chapter in the history of Zimbabwe. It is
a past and a war we should be and are indeed all proud of. Suffice to say,
however, that it would not only be wrong but retrogressive to live in that
past.
      In any case when the national heroes, dead or alive, sacrificed life
and limb and endured torture in Rhodesian jails, they never meant to
bequeath to posterity a terrible legacy characterised by obsolete
socio-political and economic structures nor for a Zimbabwe that would be
frozen at the point of liberation but one which moves with the rest of the
world. Indeed, they never meant for Zimbabwe to be caught up in some time
warp and be a case for arrested development.

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FinGaz

      ...and now to the Notebook

      8/12/2005 8:30:14 AM (GMT +2)

      Patriot

      WHY did sellouts at our one and only TV station decide to show
pictures of the Great Uncle wobbling into a plane like someone who was
arriving at the peak of Mount Everest? Treasonous, isn't it? Do they want
the man's detractors to start speculating about his fitness again?

      The man is known to be "as fit as a teenager" or "fitter than all his
detractors combined can ever hope to be". So what is this business of
showing a perennially fit leader appearing to be off-colour?

      Honest?

      CZ was this week amused by the raving and ranting by the
British-trained George Charamba, who, for some strange reason, decided to
make a lot of noise about the situation at our one and only public
broadcaster.
      Does Charamba want everyone to believe that it was only this week that
he became aware of the funeral that has always been the staid broadcaster?
That all these years he has been collecting his pay-cheque he was not even
aware that ZBH is doing this nation a great disservice? Then he must be a
Rip van Winkle of some sort.
      Charamba is just waking up now to echo the sentiments that all
progressive Zimboz have long been saying about the broadcaster. He should be
sacked for sleeping on the job!
      If anything, he was part of the destructive team that contributed - by
commission or omission - to the chaos now obtaining at Pockets Hill.
      All along we thought the public broadcaster was the turf of Bright
Matonga who had lots of scores to settle there?
      Anyway, we have always been aware that there are lots of people who
were never supposed to be there in the first place . . . including one who
is now an Editor-In-Chief-At-Large and several such others.
      What ZBH needs is nothing short of another parliamentary inquiry
similar to the one that took place sometime in 1999!
      We will hear juicy stories. Who ordered who to be employed even when
they were mere village yokels (like some bureau chiefs) who could not tell
their left from right . . . who is related to who . . . who is sleeping with
who . . . who is this one! Just give it a chance!

      The impersonator

      A New Ziana sales rep, who has been masquerading as a journalist and
attending workshops for scribes, finally ran out of luck when he posed as
Financial Gazette Bulawayo Bureau Chief Charles Rukuni.
      Ralph Muchechetere, 27, sneaked into the Bulawayo Rainbow Hotel on the
evening of July 29 posing as Rukuni.
      Rukuni, who was attending a two-day human rights workshop organised by
the Media Institute of Southern Africa and the Human Rights Trust of
Southern Africa, was booked at the hotel but had opted to stay at home.
      Muchechetere could actually have got away with it because the room,
136, had already been paid for. But he went on a binge, inviting a lady of
the night and incurring a bill of $600 000 for the extra guest.
      Unfortunately, he was caught by the hotel security, who asked him to
pay the extra charge. But he only had $200 000 on him.
      Muchechetere could also have got away with it had he paid his extra
bill in full because Rukuni was only alerted by fellow journalists that
someone had stayed at the hotel in his name and had left an unpaid bill on
August 2.
      When Rukuni went to check with the hotel, he discovered that
Muchechetere had actually filled in the hotel form claiming to be Rukuni of
The Financial Gazette. But Muchechetere had put his own residential address,
his own home phone number and New Ziana's phone number instead of that of
The Financial Gazette.
      The trail made it easy for the hotel to pick him up from New Ziana and
hand him over to the police. He appeared in court last Friday facing fraud
charges but was not formally charged.

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FinGaz

      Land is the economy?

      8/12/2005 8:12:39 AM (GMT +2)

      EDITOR - It is now three years since 4 000 white commercial farmers
were evicted from their farms. This followed five years of uncertainty,
harassment, beatings and murder.

      Zimbabwe's agricultural output is now less than half what it was three
short years ago and the ramifications of poor agricultural performance are
now being felt in the rest of the economy.
      The current situation lends credence to two slogans "land is the
economy" and "no farmers no future". It is now clear that those 4 000
farmers contributed significantly to the wellbeing of 12 million people.
      President Mugabe called them "enemies of the state" but I would say
that they are real heroes. However what is done is done.
      My question to Zimba-bweans, particularly those who now occupy the
land, is what exactly are you doing with the land you insisted on taking?
The lack of performance is starting to raise real questions.
      As a target, New Zealand, a country of only four million exports US$18
billion in agricultural produce annually. How is that for a target? We look
on with interest.

      Craig Henderson
      Auckland

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FinGaz

      Dollarisation riddle boggles the mind

      8/12/2005 8:15:31 AM (GMT +2)

      EDITOR - Our most celebrated African ''revolutionary'' establishment
in Zimbabwe is at it again.

      It has finally ''dollarised'' the economy as fuel can now be bought
officially using the US dollar. (smiles there for George and Condy at the
White House despite the usual fury that Zim will never be a colony again,
the country has finally succumbed and is also making frantic efforts to pay
IMF to avoid being offloaded from the imperialist financial organisation)
      Talk about sovereignty! . . . are we seeing a sell-out here? Or the
chickens have come home to roost? Probably your criticism in an earlier
Fingaz edition on the foolish "going it alone" thinking is now being
vindicated.
      Even the most avid supporters have questioned the government's antics
of long, protracted and sustained attacks on the West and on the World Bank
and the IMF yet it is now making frantic efforts to borrow in order to
appease the wrath of the IMF over non- payment of debts.
      Now to our dollarisation riddle. Operation Murambatsvina targeted flea
markets, tuckshops, cross-border traders with, to quote a former minister,
''the ferocity of a tsunami''. The little foreign currency found (the
substantial part of it in rands) was paraded as evidence of economic
sabotage. But came the surprise in the tragi-comedy! With this much
publicised rather humiliating demonisation of the poor people's raided
foreign currency still fresh in our minds, our government allowed some
service stations to sell and people to buy fuel in foreign currency. Sadly
and predictably, there was no apology to the demonised people whose foreign
currencey was raided only to hear within some weeks that the same government
has dollarised the economy.
      During the Murambatsvina process I had sincerely thought that in the
name of fairness, the police were going to do two things. First to ransack
and destroy all the illegal settlements in the low density areas together
with those with bathroom and kitchen tiles imported with US dollars from
Italy and elsewhere. Secondly to camp at our Harare International Airport
and lie in wait to ferociously pounce on the northern surbub dwellers who
will come to board the daily flights of British Airways, South African
Airways and others who are now only accepting fares in foreign currency. If
the ''booty'' from the low-density areas was to be paraded in the media,
then we might have had a clear picture on who are the real economic
saboteurs.
      Unfortunately the whole Murambatsvina project was cancelled as it
approached where the well-to-do people live. The ferocious Murambatsvina
suddenly became tender as it transformed itself into a mere
''regularisation'' exercise as people were now given time to regularise
their structures.

      Denford Moyo
      United Kingdom

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FinGaz

      Teachers' union demands 150% pay rise

      Audrey Chitsika
      8/12/2005 8:43:12 AM (GMT +2)

      THE Progressive Teachers' Union of Zimbabwe (PTUZ) has called on the
government to immediately effect a 150 percent increase on teachers'
salaries, citing the high cost of living.

      The union is also demanding a 100 percent increase in transport
allowances and a 150 percent increase in housing allowances, all backdated
to July 1.
      "Teachers' salaries are far too less than the normal living standards.
We have realised a $5.6 million shortfall in expenditures from an estimated
monthly expenditure of $7.6 million," PTUZ said in a statement.
      PTUZ said teachers' salaries range from $2 007 955 to $4 325 692 per
month, far below the poverty datum line.
      The Consumer Council of Zimbabwe (CCZ) last week announced that an
average Zimbabwean family now requires $5.4 million per month for
consumption.
      "While teachers are expected to take home an average of $2 million
after statutory deductions, the majority are taking home far much less after
deductions from loan sharks, insurance companies and retailers," PTUZ said.
      At the last count, PTUZ recorded 43 organisations that were making
deductions from its members' salaries through the government's Salaries
Service Bureau (SSB).
      "Most of these organisations do not care what you end up taking home,
as long as they can deduct what you owe from your salary.
      "As a union we have tried to counsel many of our members who find
themselves in debt cycles they cannot escape from. However, we believe that
the only way out for these teachers is for the employer to pay them a living
wage. An immediate cost of living adjustment is an absolute necessity if
teachers are to survive for the remainder of this year."
      The teachers are being paid housing and transport allowances ranging
from $496 000 to $1 323 200 per month.

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FinGaz

      July inflation data eagerly awaited

      Rangarirai Mberi
      8/12/2005 8:42:42 AM (GMT +2)

      JULY inflation data will perhaps be the closest watched numbers in
recent months, given the new spectre of frequent rate hikes raised by the
recent shock double increase in the accommodation rate.

      A 10 percentage point rise in rates recently shocked the market, with
investors unnerved less by its size than by the speed with which central
bank had effected it.
      The two rate hikes, the earlier of 20 percentage points and the latest
rise, came within seven days of each other, raising the prospect of more
movement ahead.
      Ahead of the release by the Central Statistical Office (CSO) of annual
inflation numbers for July, analysts say the latest data will be the most
important to come out of the statistical agency in a while.
      It is widely anticipated that inflation will come in higher than
June's 164 percent - and the Reserve Bank of Zimbabwe (RBZ) has conceded as
much already - but the range of the advance will be eagerly awaited as a
handy clue on the direction of interest rates.
      The Financial Gazette has gathered July inflation forecasts ranging
between 180 percent and 200 percent, with analysts pointing mostly to a
steep rise in fuel prices and the sharp decline in the value of the Zimbabwe
dollar on the parallel market, where most businesses have been driven to due
to short supply on the formal foreign currency market.
      "If the rise is big, it will mean another rate hike early on. If it's
moderate, then maybe central bank is on track; but still, its (RBZ) rate
policy would remain on the back of our minds," a leading fund manager told
The Financial Gazette.
      The central bank last month forecast inflation to heat up further in
the current quarter before cooling in the final three months towards the 80
percent level that RBZ governor Gideon Gono has targeted for December.
      Gono had pledged to tighten monetary policy over that outlook period -
remarks initially ignored by the market. The two rate hikes that followed,
however, immediately raised the ante and analysts say the size of the jump
in inflation will be important in determining where rates may next land.
      Forecasting rate movements is a game that markets across the world
play with their central banks, but for Zimbabwean stock market investors,
more and bigger rate hikes would spell disaster in an investment environment
running well short of profitable scrip.
      A three-year government stock issued last week received scant market
support. The RBZ has lifted the rate on its benchmark 91-day Treasury Bill
to 185 percent, and is expected to raise the rate further as it attempts to
keep investors in the money market.
      The stock market, which had ignored the earlier hike, has wobbled
after the new move on the rate. Fund managers, who had bought defiantly
after the earlier hike, have been taking the cautious route and deciding to
go underweight on stock, concerned fears of large and frequent rate hikes
would depress demand for shares.

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FinGaz

      World Bank not ready to mend Zimbabwe ties

      Felix Njini
      8/12/2005 8:40:56 AM (GMT +2)

      JOHANNESBURG - There is no magical solution to Zimbabwe's economic and
political crisis and the World Bank is not ready to thaw relations with the
ostracised Harare, a senior official at the global lender has said.

      Lollete Kritzinger-van Niekerk, a senior economist with the World Bank
South African office, said the country had failed to adhere to
internationally accepted governance standards and the rule of law.
      She cited widely disputed election results and lack of freedom of
expression following the closure of four privately-owned newspapers as some
of the issues blighting Harare's international reputation.
      Zimbabwe's refusal to present itself for the African Peer Review
Mechanism, which is designed to enable African countries to monitor each
other and promote better governance standards, is weighing heavily against
the crisis-torn country.
      Presently 23 African countries have agreed to a system of review to
monitor their own political and economic performance.
      "There is no magic solution to the Zimbabwean crisis but for us (World
Bank) it is a matter of principle and it relates to how the country is being
governed at the moment," Kritzinger-van Niekerk said.
      Zimbabwe is completely cut off from aid support after defaulting on
its loans. It no longer has a working relationship with the World Bank and
the International Monetary Fund (IMF).
      Most international donors and financial institutions have frozen all
financial aid and cut offshore lines of credits.
      President Robert Mugabe, who has ruled Zimbabwe since the attainment
of independence from Britain in 1980 and his ruling elite have been slapped
with a string of biting sanctions and travel restrictions by the European
Union, United States and Australia.
      Zimbabwe, whose economy has degenerated to unprecedented levels, is
facing expulsion from the Fund over non-settlement of debts.
      As other African governments are cheering at having their debts
annulled by the Group of Eight (G8) countries, Zimbabwe was left to rue as
the wealthy nations outlined that aid would be ineffective without serious
economic and political reforms.
      Relations have been worsened by President Mugabe who has continuously
poked his finger into the eyes of Britain, the United States and the Bretton
Woods institutions, whom he accuses of sabotaging the economy in a bid to
effect regime change in the country and reverse the gains brought about by
independence from colonial rule.
      The US and Europe command 46.41 percent voting powers in the global
lender's International Bank for Reconstruction and Development (IBRD).
      Kritzinger-van Niekerk said the IBRD has earmarked US$33 billion in
loans for middle-income countries. Mozambique, Botswana and Namibia are some
of the middle income countries in the Southern African region.
      The World Bank, which pulled out of Zimbabwe, has instead focused its
attention on other nascent regional economies such as Mozambique, which is
emerging from years of civil strife, Botswana's diamond-powered economy and
Namibia.
      "Our stance is to do with how international donors are perceiving
Zimbabwe's governance problems and that is why we had to stop our
operations," Kritzinger-van Niekerk said.

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