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Mugabe's price cuts bring cheap TVs today, new crisis tomorrow

Police and Zanu-PF lead bargain hunt after officials order shops to act

Chris McGreal in Harare
Monday July 16, 2007
The Guardian

The enforced cuts means many Zimbabwean shops have run out of stock and are
unable to reorder because official retail prices are below wholesale costs.
Photograph: Bishop Asare/EPA

Zimbabweans are shopping like there's no tomorrow. With police patrolling
the aisles of Harare's electrical shops to enforce massive
government-ordered price cuts, the widescreen TVs were the first things to
go, for as little as £20. Across the country, shoes, clothes, toiletries and
different kinds of food were all swept from the shelves as a nation with the
world's fastest shrinking economy gorged itself on one last spending spree.
Car dealers said officials were trying to force them to sell vehicles at the
official exchange rate, effectively meaning that a car costing £15,000 could
be had for £30 by changing money on the blackmarket. The owners of several
dealerships have been arrested.

President Robert Mugabe's order that all shop prices be cut by at least
half, and sometimes several times more, has forced stores to open to hordes
of customers waving thick blocks of near worthless money given new value by
the price cuts. The police and groups of ruling party supporters could be
seen leading the charge for a bargain.
Mr Mugabe has accused business interests of fuelling inflation, running at
about 20,000%, to bring down his government. A hotline is in place to report
"overcharging", and retailers who flinch at slashing prices are being
dragged before the courts. Several thousand have been arrested for
"profiteering" over the past week, including the chief executives of the
biggest retailers in the country, some of them foreign-owned.

Economists say the price cuts will only deepen the national crisis, leaving
many shops bare because they will not be able to afford to restock while
official retail prices remain lower than the cost of buying wholesale or
importing. Mr Mugabe has dismissed such warnings as "bookish economics".

Some businesses fear that Operation Reduce Prices is intended to pin the
blame on the private sector for Zimbabwe's economic problems as a step
towards seizing control of many companies in the way that white-owned farms
were expropriated at the beginning of the decade, sparking the crisis.

Parliament is expected to pass legislation in the coming weeks that will
effectively give a controlling stake in all publicly traded companies to
ruling party loyalists and others chosen by the government.

The impact of the price cuts was felt almost immediately as fuel virtually
disappeared from sale after garages were forced to sell petrol for 23p a
litre, less than they paid the state-owned supplier.

The police and army broke the locks on petrol pumps at some garages and
tanks ran dry amid panic buying. Now petrol is available only on the
blackmarket, at more than seven times the official price and three times
what garages had been charging. By Saturday, most minibus taxis had gone
from the roads because drivers could not find petrol. Crowds of workers were
left on kerbs for hours trying to get to or from their jobs.

The riot police had to be called out to the South African-owned Makro super
store in Harare after thousands of people stormed the shop after it was
forced to slash prices. The scenes were replicated in stores throughout
Harare. The Bata shoe chain's shops were stripped bare in two days by people
snapping up pairs for as little as 20p.

Food is still available, although bread, sugar, cornmeal and other staples
are hard to find, and meat has all but disappeared because livestock owners
say it is now uneconomic to slaughter their animals. Much of the meat that
is available is goat slaughtered in backyards and sold in informal markets.

The rest of the food supply - already severely undermined by drought and
lack of production on land seized from white farmers - is also under threat
after Mr Mugabe threatened to take over manufacturers if they shut down
their plants on the grounds that they were uneconomic. "Factories must
produce. If they don't, we will take you over ... We will seize the
factories," he said.

Last week, the government said it was reviving the State Trading
Corporation, shut down two decades ago because of mismanagement, to take
over businesses that collapse or are seized. But many factories are unable
to produce goods because electricity and water are unavailable for much of
the day.

The price cuts were ordered by the joint operation command, a committee of
army, intelligence and police officers closely tied to the ruling Zanu-PF
and chaired by Mr Mugabe.

The government despatched security personnel and party cadres, including its
notorious "green bomber" thugs, to enforce the price cuts, in some cases by
beating up shop managers who did not implement them quickly enough.

"Zanu-PF is at heart a military organisation and that's exactly how it's
gone about this, as a military operation," said David Coltart, an opposition
MP. "The benefits will only last a few weeks at most and then we're going to
have to live with the consequences. They believe they can dictate price cuts
and print money with gay abandon but ultimately it will rebound. Not
ultimately, very soon."

Business leaders say one reason for the price cuts is to quell unrest in the
security forces, which saw a dramatic increase in inflation last month wipe
out a 600% pay rise in May. They also fear the campaign is a step towards
doing to private companies what was done to white farmers. Mr Mugabe is
pressing a law through parliament in the coming weeks that will require all
businesses to be at least 51% Zimbabwean owned and managed.

Zanu-PF has dressed up the move as an affirmative action measure to help
previously disadvantaged black people. But firms will not be able to choose
their new partners. They will be selected by the government. The measure
will be paid for by taxing the same businesses forced to hand over control.

Mr Coltart said the move was essentially a means for the ruling party and
military to take over the economy. "We can't expect a rational policy to
emerge. You will see the military in charge of manufacturing. We've already
got the military in charge of railways and grain marketing and the electoral
process. There are military men now involved in all sorts of other
businesses. The militarisation of the state will continue," he said.

In a letter to the cabinet the governor of Zimbabwe's central bank, Gideon
Gono - until recently considered one of Mr Mugabe's closest allies - said
that price controls must be scrapped and foreign investments and property
rights protected to put the country on the path to economic recovery.

He also said that the seizure of white-owned farms had been
counterproductive because it cost Zimbabwe foreign currency earnings by
losing tobacco exports and scaring off investors.

Many of Mr Mugabe's opponents agree with Mr Gono but they are quietly
heartened by the latest upheaval. They are fond of quoting the US ambassador
to Harare, Christopher Dell, who recently said that Zanu-PF was committing
regime change on itself with its disastrous economic policies and that Mr
Mugabe would be gone by the end of the year.

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Anger at Mugabe's invite to EU Africa summit

The Telegraph

By Graeme Wilson, Political Correspondent , Sunday Telegraph
Last Updated: 1:18am BST 16/07/2007

      Gordon Brown faced calls last night to speak out against plans to
invite Robert Mugabe, Zimbabwe's president, to a major European Union summit
on Africa.

      William Hague, the Shadow Foreign Secretary, condemned the proposal to
invite Mr Mugabe to the meeting in Lisbon as a "disgrace" at a time when
Zimbabwe is descending into chaos.

      In a strongly-worded letter to David Miliband, the Foreign Secretary,
today, Mr Hague urges the Government to speak out against the EU's plans to
issue an invitation to Mr Mugabe.

      With MPs due to debate the crisis in Zimbabwe on Thursday, Mr Hague
also calls for ministers to press for much tougher and more comprehensive EU
sanctions against senior figures in the Mugabe regime.

      His message was echoed yesterday by Kate Hoey, the former Labour
sports minister, who said that British ministers should boycott the Lisbon
summit if Zimbabwe's ruler was allowed to attend.

      In his letter to the Foreign Secretary, Mr Hague stresses that
Zimbabwe was "facing impending humanitarian catastrophe" and he was
therefore surprised to learn that the EU is planning to invite Mr Mugabe to
the EU-Africa Summit in Lisbon in December.
      "There can be no justification for such a decision. Issuing the
invitation implies that the EU has no intention of developing a serious
response to the crisis in Zimbabwe or reprimanding President Mugabe for his
government's unacceptable actions," writes Mr Hague.

      "While we support the Portuguese presidency's plan to make better
links with Africa its priority, the fact remains that welcoming the
architect of Zimbabwe's catastrophe to Lisbon and granting him such
international recognition would be nothing short of a disgrace.

      "Do you agree that, rather than courting the dictator, a firm stand by
the EU would send a powerful message of solidarity to the people of
Zimbabwe? Can you confirm that the government will oppose any move to invite
President Mugabe or anyone on the EU sanctions list to the Lisbon Summit?"

      Mr Hague also calls on the Foreign Secretary to press for a much more
rigorous system of targeted sanctions against the Mugabe regime, coupled
with "a concerted diplomatic approach."

      He argues that the EU should widen its net and start freezing the
assets of family members and business associates of members of the
Zimbabwean government.

      EU visas and residence permits should also be cancelled and the list
of those affected by sanctions should be extended to include the Governor of
Zimbabwe's Reserve Bank, he said.

      Furthermore, he argued that Britain should also work with countries
like the United States, Australia, New Zealand and Canada to bolster the
financial sanctions imposed on the Mugabe regime.

      The Government was also urged to take a more robust stance on Zimbabwe
by Ms Hoey in an interview on GMTV yesterday.

      She said that Mr Brown needed to "make it quite clear that we will not
accept any invitation to Mugabe to the European Union African Union
Conference that is due to be held."

      If the EU pressed ahead with its plans, then ministers should boycott
the summit, she said.

      "There is absolutely no way the Foreign Secretary should be attending
any meeting with Mugabe. He is not meant to be coming to Europe," she said.

      Ms Hoey said the EU should take steps to extend its existing sanctions
to include more people and stop them taking assets out of the country or
travelling to Europe.

      "We shilly-shally while other governments in other long distant parts
of the world like Australia come out and speak out", she said. "If we can't
solve Zimbabwe then what hope is there for the rest of Africa?".

      The Foreign Office said last night that discussions were continuing
with other European countries about Zimbabwe's representation at the summit.

      A Foreign Office spokesman said: "We would not want to let Mugabe's
attendence to capture the agenda. The important thing is to focus on the
substance of the summit but there is still time to find a solution."

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Hague's letter on Mugabe

The Telegraph

Last Updated: 1:18am BST 16/07/2007

      Earlier this year the Mugabe-led government escalated its oppression
of the opposition in Zimbabwe, most prominently with the arrest and brutal
beating of Morgan Tsvangerai, and the murders of opposition activists and

      Since then every day brings grimmer news of state repression and an
economy in freefall. Reports of rioting at shops and filling stations in the
wake of a government directive for 50% food price cuts and 70% fuel price
cuts, and news that more than 1,300 supermarket managers and owners have
been arrested for refusing to sell their merchandise at the lower prices,
suggest that the country is on the verge of economic and social collapse.

      Zimbabwe is today facing impending humanitarian catastrophe. I am
therefore surprised that the EU appears to be attempting to conduct business
as usual, and is reportedly considering inviting President Mugabe to the
EU-Africa Summit in Lisbon in December this year.

      There can be no justification for such a decision. Issuing the
invitation implies that the EU has no intention of developing a serious
response to the crisis in Zimbabwe or reprimanding President Mugabe for his
government's unacceptable actions.

      While we support the Portuguese presidency's plan to make better links
with Africa its priority, the fact remains that welcoming the architect of
Zimbabwe's catastrophe to Lisbon and granting him such international
recognition would be nothing short of a disgrace.

      Do you agree that, rather than courting the dictator, a firm stand by
the EU would send a powerful message of solidarity to the people of
Zimbabwe? Can you confirm that the government will oppose any move to invite
President Mugabe or anyone on the EU sanctions list to the Lisbon Summit?
Furthermore, will you undertake to encourage the EU to develop a more
comprehensive approach to Zimbabwe, combining increased sanctions and a
concerted diplomatic approach?

      The EU has failed to respond effectively to the ongoing crackdown in
Zimbabwe. Adding several more individuals to the EU assets freeze and travel
ban do not amount to the substantial increase in pressure on the regime that
is needed. Surely the time has now come for the EU to urgently impose
additional European sanctions. The EU should widen the assets freeze
considerably to include family members and business associates of those
already on the lists, it should cancel EU visas and residence permits of
those on the lists and their family members, and it should add the Governor
of Zimbabwe's Reserve Bank to the EU list.

      Beyond the EU, we must work with other countries that also have
sanctions in place against Zimbabwe, such as the United States, Australia,
New Zealand and Canada, to agree wider financial sanctions that maximise our
leverage on the Zimbabwean regime. Pius Ncube, the archbishop of Bulawayo,
has repeatedly highlighted the disastrous economic plight of the country and
the increase in state repression.

      Despite his disastrous policies Mr Mugabe has demonstrated that he has
no intention of leaving office and is seeking to extend his rule. The
British government should urge Zimbabwe's neighbours to make a concerted
effort to resolve the crisis and to block the extension of Mugabe's rule,
making the case that the consequences of a total collapse in Zimbabwe will
fall heavily upon them and their region.

      Finally, the time may now be right for the International Criminal
Court to take a close and detailed look at the atrocities committed under
the auspices of Mr Mugabe and his regime. In light of public interest in
this matter I am making this letter available to the press.

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Murambatsvina cement diverted to Mugabe mansion

HARARE, July 16, 2007 - Over 350 families affected by Operation
Murambatsvina, a widely-condemned government clean-up exercise in 2005, are
still living in the open amid revelations that President Robert Mugabe
diverted to his Harare mansion tonnes of cement bought by government to
build houses for the victims.

A secret report leaked to The Zimbabwe Times this week, prepared by a
government official early this year, shows that Mugabe last year diverted
over 2 000 bags of cement meant for the victims of the operation to build
his mansion in Harare's leafy suburb of Borrowdale.

The cement was transported from Hopley Farm, just outside Harare, to Mugabe's
residence on different occasions. "Please take note that 1 150 bags (of
cement) have gone to the President's residence in Borrowdale," says the
report by dated March this year.

The report entitled "Cement Quantities and Usage" was complied by Engineer
Tobias Chombe, a site planner at Hopley Farm. It covers the period between
January 2005 and February this year and was prepared from records by N.G.
Security, a firm that offers security at Hopley settlement, as well as the
stock books of Operation Garikai staff.

While Mugabe is already living in the comfort of his mansion, thousands of
families whose houses were destroyed by the internationally-condemned
operation are still staying in the open countrywide.

A victim of the clean-up exercise, Cecilia Munapo, who stays in a shack at
Hopley Farm, has lost hope of been given a home by government. "It's more
than two years and we are still waiting. I don't know if we will ever be
allocated a house," she said.

In May 2005 the government of Zimbabwe embarked on Operation Murambatsvina,
(drive out filth) a programme of mass forced evictions and demolition of
homes and informal livelihoods. The operation, which was carried out in
winter and against a backdrop of severe food shortages, targeted urban areas

In a report released on July 22, 2005, the special envoy of the
Secretary-General of the UN, Anna Tibaijuka, estimated that some 700,000
people lost their homes, their livelihoods, or both during the operation. In
contrast, Mugabe's mansion, said to be his retirement home, rivals the most
extravagant of African leaders' residences.

Surveyors in Harare estimated the building cost at about £3.75 million - a
colossal sum in a country where factory workers can earn as little as £6 a
month. Final costs, including landscaping, security and interior decoration
are expected to push the bill close to £6 million.

The residence offers more than three acres of accommodation, mostly on three
floors, including two-storey reception rooms, an office suite, and up to 25
bedrooms with adjoining bathrooms and spas. The Chinese-style roof is clad
with midnight blue glazed tiles from Shanghai. The ceilings were decorated
by Arab craftsmen.

Mugabe's mansion is more than three times the size of his present official
residence and his offices at State House. Recently, Mugabe bought out houses
of his neighbours, and last week evicted about 300 families at a farm near
his mansion citing security reasons.

The 83-year-old leader has increased security around him. The road to his
private home is guarded round the clock by heavily armed soldiers. At his
official residence, armed soldiers and secret agents mill around while the
road that passes through is closed to the public between 6 pm and 6 am.

This is not the first time that the First Family has benefited from projects
meant for the poor. In 1994 Mugabe's extravagant wife, Grace, benefited from
the pay-for-your-scheme, a programme meant for lowly-paid civil servants,
and later built a massive house, which later became known as the

After exposure in the media, she sold it, and it ended up in the hands of
Libyan diplomats. Cabinet ministers have also been accused of plundering
public resources. Tonnes of construction material were allegedly looted by
senior government officials to build their houses while some was sold on the
black market.

The secret report also says about 400 bags of cement, which were at Hopley,
were said to have been loaned to Chikurubi Maximum Prison and later
returned. But the report noted that consignment was never received back at
Hopley. "400 bags said to have gone to Chikurubi. This amount was loaned to
(ZPS) Zimbabwe Prison Services. Of interest is the issue that the cement was
returned when in actual fact it was not," says the report.

The sources said the cement was taken from Hopley on the pretext that it was
going to be used to build houses for people affected by the operation. "It's
not only cement that was looted by senior officials. They took diesel and
other building materials, which they sold on the black market. It involves
senior officials, that's why is it taking long to investigate," said one

Some of the cement was recorded as having been transported from Manyuchi Dam
Project in Masvingo to Harare. "But surprisingly the record show that on 1st
and 2nd, November the same cement was transported back to Masvingo," says
the report. While the alleged looting is said to be continuing, construction
of houses for the victims of the Murambatsvina at Hopley, Whitecliff and
other sites countrywide has ground to a halt.

At least 365 families are still staying in shacks at Hopley. "The 365
families are still staying in the open. I again pray for your authorization
for us to allocate them stands," says the report. The minister of local
government, public works and urban development Ignatius Chombo, whose
ministry is responsible for Operation Garikai, could not be reached for
comment.- The Zimbabwe Times.

Nehanda Radio: Zimbabwe's first 24 hour internet radio news channel.

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Zimbabwe price blitz a vote-rigging tactic: opposition

Yahoo News

Sun Jul 15, 3:28 PM ET

CHITUNGWIZA, Zimbabwe (AFP) - President Robert Mugabe's price crackdown is a
tactic to divert attention from vote-rigging for next year's elections,
Zimbabwe's main opposition leader said Sunday.

"The real issue is diversion, to divert the people of Zimbabwe from the
problems they are facing, so that they spend most of their time chasing each
other in shops at a time voter registration is taking place," Morgan
Tsvangirai told supporters at a rally to the south of Harare.
Tsvangirai, leader of the Movement for Democratic Change (MDC), has
threatened to boycott next year's parliamentary and presidential elections
unless their independence can be guaranteed.

Opposition groups have long voiced fears that 83-year-old Mugabe will try to
ensure a sixth term in office by rigging the electoral roll in favour of his
ruling ZANU-PF party.

Mugabe, accused by Western nations of rigging his re-election in 2002, is
facing his biggest test at the ballot box next year since coming to power as
a result of an economic meltdown that has seen inflation spiral to well
beyond 5,000 percent.

His government's decision to order shops and manufactures to slash their
prices late last month was widely seen by analysts as a bid to win over
voters who have been unable to afford the rapidly rising price of goods.

Although the price cuts have enabled households to afford goods that had
become luxuries, many analysts have warned the move will ultimately backfire
as stores run dry and goods instead end up on the more expensive black

Mugabe has accused businesses of deliberately pushing up prices in order to
topple his regime, but Tsvangirai said the president was to blame.

"How did the prices get there in the first place?" said Tsvangirai.

Tsvangirai was addressing a crowd of around 5,000 supporters at one of the
first opposition rallies authorised by authorities following the lifting of
a blanket ban on demonstrations on June 29.

The opposition leader and dozens of his supporters were assaulted by
security forces when they tried to attend a prayer rally earlier this year,
but there was no sign of trouble at Sunday's gathering, which was monitored
by a small number of police officers.

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Zimbabwe Opposition: Mugabe's Price Cuts Mask Deeper Economic Problems


      By VOA News
      15 July 2007

Zimbabwe's opposition leader says President Robert Mugabe's government
slashed prices of food, fuel and other goods to divert attention from the
country's economic crisis.

Authorities in Harare say steep price cuts they ordered last month will
reduce the record inflation rate, but the move has instead triggered
shortages of basic foods and other necessities. Shop owners say their costs
are much higher than the prices they can charge, so they are not restocking
their shelves.

Economists predict inflation will rise further as consumers resort to paying
extreme black-market prices for everyday needs such as cornmeal, cooking oil
and sugar.

Morgan Tsvangirai, leader of the main faction in the opposition Movement for
Democratic Change, says the price cuts conceal Zimbabwe's continuing
economic collapse. As shopping becomes more and more difficult, he warns,
public attention may be distracted from political misconduct in advance of
next year's presidential election.

Tsvangirai was speaking to supporters Sunday at a rally south of the

His MDC coalition is threatening to boycott the presidential vote in March
unless a free and fair vote is guaranteed. Many opposition members say they
expect the ruling ZANU-PF party will try to rig voter registration lists to
assure the 83-year-old president a sixth term in office.

Mr. Mugabe says Zimbabwe's long-running political and economic crisis has
been caused by sanctions that Britain and the United States imposed on his

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Mugabe stepping up abuses, say rights group

Zim Online

Monday 16 July 2007

By Edith Kaseke

HARARE - Zimbabwe human rights groups have accused President Robert Mugabe's
government of continued abuses against opponents and have urged Harare to
respect judicial officers and court rulings, adding that it was worrying
that lawyers have been harassed while carrying out their duties.

The veteran Zimbabwe leader, who is seeking to consolidate his controversial
rule by seeking another five-year presidential term in 2008, has long been
accused of using heavy handed tactics against those who oppose and criticise
his 27-year rule.

The United States and European Union have imposed targeted travel and
financial restrictions against Mugabe and several of his government and
ruling ZANU PF officials over the rights abuse charges.

"Abuse of state power by state security agents, disregard of court orders by
the police, harassment of lawyers, intimidation of opposition and civic
society activists continued unabated in May," the Zimbabwe Human Rights
Forum, a grouping of over a dozen rights groups said in its latest monthly

"The Human Rights Forum continues to deplore the heavy-handedness with which
peaceful demonstrators are treated and the criminalisation of political and
civic activity by the government of Zimbabwe," according to the report.

The rights group recorded a total of 373 cases of abuse by state agents in
May compared to 318 the previous month. These included torture, unlawful
arrest and detention, assault and curtailing of freedom of expression.

The Human Rights Forum said for example on May 2, an opposition Movement for
Democratic Change (MDC) member was arrested by six plain clothes police
officers in Epworth and taken to Mbare police station.

Police reportedly beat the victim with baton sticks and empty soda bottles
under the soles of his feet while he was handcuffed because he failed to
answer questions properly. He was thrown in a cell where he was reportedly
denied food, water and any form of communication but was released the next
day without charge.

Critics say Mugabe, whose rule has generated controversy even within his
ZANU-PF party, has increasingly relied on state apparatus such as the
military, police, and the feared secret service to silence opponents.

Political analysts say the 83-year-old leader has successfully used state
security agents to cripple the MDC, which came closest to unseat him from
power in 2000.

The rights group said it was worried by the resurgence in the brutalisation
of student leaders from higher and tertiary education institutions in
Zimbabwe and accused university security staff of colluding with police

"Cases that were reported in May to the Human Rights Forum reportedly
revealed that the University security officers were responsible for
apprehending the student leaders, assaulting and then handing them over to
the police where they are in most cases tortured in police custody," the
report said.

In May, police arrested and charged with obstruction two lawyers
representing MDC supporters but the attorneys were released by the court
while more than 50 lawyers demonstrating against the arrests were beaten and
forcibly dispersed at the Harare High Court.

"The Human Rights Forum would like to remind the Government of Zimbabwe that
lawyers are not just ordinary citizens but officers of the courts and the
judicial system and should be treated as such when they are engaging in
their work," the Human Rights Forum said. - ZimOnline

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Mugabe will have to pay Soviet-era subsides to industry

Zim Online

Monday 16 July 2007

By Tsungai Murandu

HARARE - The ultimate cost of Zimbabwe's ongoing war on profiteering will be
even higher prices and more economic hardships for the country's
long-suffering people, analysts warned yesterday.

Although no credible estimates of losses by companies affected by the price
war are available, economic analysts yesterday warned that the beleaguered
Zimbabwean economy would ultimately pay dearly for the ongoing government

University of Zimbabwe business lecturer Tony Hawkins said the decision to
roll back prices to June 18 levels was unsustainable and could backfire on
the government.

"The government is going to have to climb down on the issue and put in place
subsidies to support industry," Hawkins said. Among the main candidates for
subsidies will be the beef and fuel industries, Hawkins said.

The Harare authorities have in the past week restored the monopoly of the
state-controlled Cold Storage Company (CSC) that now has the sole
responsibility to buy cattle from farmers.

But the cash-strapped government would have to pump out money to entice
farmers to sell their cattle to the CSC that offers less than what private
abattoirs used to pay.

Beef has disappeared from the formal market since the government withdrew
permits from private abattoirs last week.

The same fate has met the fuel industry following a directive to slash
petrol and diesel prices by up to 60 percent two weeks ago.

The state fuel procurement agency, National Oil Company of Zimbabwe
(NOCZIM), has failed to meet demand while private fuel importers have gone
underground where a litre of petrol costs up to $500 000 compared to the
gazetted $55 000 a litre.

The perennially loss-making NOCZIM has had a chequered history in the past
eight years, characterised by an over-dependence on government subsidies and
inability to supply adequate fuel to meet the country's industrial and
household needs.

The analysts warned that the current price war could worsen an already
complicated situation for Reserve Bank of Zimbabwe (RBZ) governor Gideon
Gono who is expected to come up with a much-awaited monetary policy
statement at the end of the month.

Gono, who has previously declared war on inflation, is said to have clashed
with his government colleagues over the manner in which the price freeze was
being handled. The RBZ chief however told state media at the weekend that he
was in principle fully behind the price crackdown.

Any future subsidies exert greater pressure on inflation, officially
estimated at more than 4 500 percent although independent analysts put it at
more than 8 000 percent.

The analysts also warned that subsidies would nudge the country's already
huge budget deficit set at 17.6 percent of gross domestic product in the
2007 national budget.

The analysts commented as it emerged that Zimbabwe's besieged manufacturing
sector was now switching to auto-pilot mode on Fridays as company executives
go into hiding to escape arrest and avoid languishing in police cells during

More than 2 700 company executives and managers have been arrested in a
crackdown that followed a government directive for manufacturers and
retailers to roll back prices.

Sources in the manufacturing sector yesterday said most senior executives in
the sector no longer reported for duty on Fridays and leave the levers in
the hands of junior or middle management staff.

"The trend has been that since the war on prices started most senior
managers in industry never report for work and make sure no one knows where
they will be in order to minimise the risk of spending the weekend in police
custody," said a senior executive with a leading manufacturer of consumer
goods, who cannot be named for fear of victimisation.

The executive said there was a feeling in industry that the arrests are
usually timed for Fridays as a way of embarrassing the captains of industry
who would be forced to spend the weekend in police cells.

The arrest fears compound an already difficult situation for Zimbabwe's
industry, which is being forced to continue producing under sub-economic

The sources said most producers were contemplating or had already downsized
their operations since the government onslaught on prices began three weeks

Meanwhile, official media reported on Sunday that President Robert Mugabe's
government was planning a new law to extend the price freeze indefinitely.

Industry and International Trade Minister Obert Mpofu had initially
indicated that the price freeze would last until the first week of August
but the state-controlled Sunday Mail newspaper reported that the government
had finalised a statute to be published this week to extend the freeze

The lower prices bonanza has been a welcome relief to a majority of long
suffering consumers used to daily increases, but it has brought new problems
with basic goods, such as soap, sugar and cooking oil, no longer available
except only on the illegal black market where prices are extortionate.

Analysts say the government's latest effort to keep a lid on prices was
meant to pacify angry workers ahead of next year's elections but would come
at a heavy cost as this could force companies to shut down and could bring
Zimbabwe's severely weakened economy to a complete halt. - ZimOnline

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Letter from David McAllister

The Zimbabwean

Name :  David McAllister
Phone :  07799245214
Address :  210 London Road
Email :
Branch :  General
Comments :  I would like to inform you of a campaign started on Facebook. A
group called Solutions and strategies for saving Zimbabwe has been formed on
Facebook. To date we have 484 members. We together with members of the MDC
have set up a campaign to send a postcard to the Human Rights Watch to
encourage them to speak out against the situation in Zimbabwe. Please take a
moment to visit this group on Facebook Any assistance you could
offer would be greatly appreciated. Thank you David McAllister

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Zimbabweans can't be that stupid, can they?

16th Jul 2007 00:18 GMT

By Chenjerai Chitsaru

IN a far-off land which we shall, for the purposes if this epistle, call
Zimbabwe, the president, in power for 27 years, was not confident he could
win the next election.

He had won every election since independence in 1980, with thumping
majorities - except in 2000, when everything and everyone, including The
Almighty, to whom he proclaimed lifelong allegiance, seemed to conspire
again him.

He had won that one by the skin of his teeth, none of them false,
fortunately for him.

So, how to win the next election? One of his advisers, a very clever, but
not particularly intelligent scholar who had studied at the president's old
school, Fort Hare, came up with a humdinger of an answer: cut the price of
everything, including roora by 50 percent.

Another adviser, ghetto-bred in the old Harare township, asked softly, his
voice loaded with contempt: "Do you think Zimbabweans can be THAT stupid?"

We shall leave that tale of woe there, shall we? And proceed to more serious

In 2000, before the parliamentary elections, a referendum on a new
constitution was held. At the last minute, almost as if in afterthought, an
item on  land reform was added.

In the estimation of all the Zanu PF spin-doctors, including the latest
addition to the staff, a bright, young former radical newspaper columnist
named Jonathan Moyo, this was a stroke of genius. No voter could resist
voting for Zanu PF with this promise of fertile land dangled before their
slavering mouths.

Something went horribly wrong during the voting: the party almost lost the
election and rescued itself only through some very violent tactics,  which
reminded everyone in the party that this formula had been used time and
again and was almost  foolproof as a guarantor of victory.

Come 2008 and some analysts are predicting that Zanu PF may have to employ
this tactic again to win the harmonised election.

This is going to cost someone his job. The so-called price stabilization
ploy, which the party has hailed as a device to "bring sanity" to the
pricing system, may not be the unparalleled vote-catcher than President
Robert Mugabe's spin doctors have told him it is.

Zimbabweans would have to be incredibly stupid to buy this as a surefire
antidote to their Seven-Year Itch - the economic decline occasioned by the
land reform programme in 2000.

The cornerstone is the 4,000-something inflation rate. As long as that
problem is not addressed, what possible guarantee could there be that the
price reduction forced down the throats of the retailers and wholesalers
will last until 2008?

Moreover, the foreign currency crunch has not been addressed through this
price stabilization exercise. What will the manufacturers use to source the
raw materials they need to produce more goods?

Gideon Gono's bearer cheques have become as stale as last week's milk. He
himself is in no better shape: his flip-flops over the stabilisation
exercise seem to be a remarkable portrayal of a man who is against the whole
crazy operation but is so aware of the consequences of publicly disowning it
he decides to take refuge in doubletalk.

Can there be Zimbabweans of sober habits who believe that all the country's
retailers and industrialists were roped into this grand evil plan to hike
prices as part of a regime change plot against Mugabe?

During the Cold War, it was easy enough to conceive of The Ugly American
using every trick in the book to hoodwink greenhorn African or Asian leaders
into doing their bidding, without knowing that it was all designed to pull a
fast one on the Soviets or the Chinese in the struggle for the hearts and
minds of the "neutrals".

Today, the lines of ideological demarcation are fuzzy, to say the least. In
any case, the former communist champions are now such stalwarts of
capitalism it can take a computer to figure out if they were ever obsessed
with the dictatorship of the proletariat, in the first place.

For the politically savvy Zimbabwean, the price stabilization plot cannot be
disguised as a Good Samaritan act of charity by the government. The
supermarket and even tuckshop shelves are emptying even as I write this.

When they are completely empty, what next? The government says "we will take
them over". As they did the land on the vast, productive commercial farmers
which turned the country into the breadbasket  of the region, until the new
farmers were let loose to loot and plunder everything in sight?

Looked at with the sober, non-racist, non-ideological gaze of a rationalist,
the whole plan is so loaded with stupidity, it would be amazing if a single
Zimbabwean were to be convinced that there was nothing politically sinister
in it.

It would be even more amazing if a Zimbabwean voter, aware of the 80 percent
unemployment, the collapse of the health delivery system, the corruption in
places, which places the bigwigs at the heart of most of the illegal
operations in the land, decided to vote for Zanu PF and Mugabe.

The leopard has not changed its spots. Yes, it is as wily as before,
treading noiselessly towards its unsuspecting prey. Only this time, there is
much alarm surrounding the prey. Even the United Nations chief has warned
that the price stabilisation exercise is not the benevolent plan for the
people's survival that the government would have us  believe it is.

One United States president once said: "The business of America is
 business." The US became the world's richest nation, not because it's main
business was business, but because the government and the people, in
concert, applied themselves wholeheartedly and with almost insane dedication
to the task of uplifting the lives of its people.

One might add that all this was blended with a large dose of ruthlessness in
adversity and a single-mindedness in conquest which acquired for the
ordinary American a reputation of not wanting to be second-best at anything.

In the end, the Americans, though almost universally loathed for their crass
self-promotion, carved out for themselves a place in the sun, as the richest
country in the world.

One element that can be identified as having made the drive towards this
goal achievable was the relative amity between the government and business.
Even during the long periods that the Democrats, with their alliance with
the workers and the underprivileged, were in power, both sides were
conscious not to jeopardize the health of the economy.

The achievement of a similar relationship between government and business in
Zimbabwe, anchored in the Social Contract, is haunted by the insincerity on
the part of the government.  Labour has its own gripe against the
government, which could be described as quasi-political.

For its part, the government will not forget that it was labour which gave
birth to  the most formidable opposition party it has ever encountered since
its formation and since independence, the Movement for Democratic Change.

So  every time the two meet across a negotiating table, the government might
be forgiven for seeing the face of Morgan Tsvangirai , rather than that of
either Matombo or Chibhebhe.
Yet the bigger picture ought to preoccupy both sides. The economy, once one
of the most promising in Africa, is now in tatters. If an election were
conducted on a truly level playing field, the opportunity for Zanu PF to
repeat the victories of the recent past would be heavily compromised by its
record in mishandling of the economy, the major casualty of its 27 years in

Only those Zimbabweans insisting, on the basis of the flimsiest evidence, on
believing the lie that sanctions or Big Business are responsible for their
pathetic plight, could vote for Zanu PF in 2008 or any other year.

Most Zimbabweans would know that such an act would be one of the stupidest
in their political or social lives.

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Going down the Zimbabwe way

New Vision, Kampala

Sunday, 15th July, 2007
By Paul Busharizi

ZIMBABWE'S president Robert Mugabe is a classic example of how not to run an

Last week, Mugabe decreed that in order to fight mounting inflation,
businesses should roll back commodity prices to the levels of June 18. He
further decreed that any businessman defying the order would be arrested and

At last count, at least 200 businessmen had been arrested for defying the
83-year-old leader and are currently cooling their heels as guests of the

A week or two earlier, prices rose sharply and consumers had cleaned out the
shops, stocking in bulk to hedge against future price increases. Mugabe
again decreed that businessmen should not sell in bulk so that shops are not

When a leader starts defying the natural order of things clearly, the end is
Zimbabwe was not a basket case economy - it was the breadbasket of southern
Africa as recently as the 1990s, had a functioning civil service and vibrant
business community.

Mugabe is not some clueless village buffoon who opportunistically seized
power and does not know the first thing about the workings of government -
Mugabe has several degrees including in sociology and law. Zimbabwe once had
one of the highest per capita incomes, literacy rates and largest industrial
bases on the continent.

But how did it all come to this?
Mugabe is clearly a relic of the cold war, where sound economic management
was not as essential as who your international allies were.

These allies would paper over symptoms of economic mismanagement with funds
that went largely unaccounted for.
In the aftermath of the cold war, developing nations were forced to balance
their books and ensure sound economic policies prevailed.

Somehow, Mugabe has been unable to shake off the hangover and has continued
to run Zimbabwe like his old-time patrons from North Korea and the Soviet
Union will always be there to bail him out.

A World Bank study conducted in the 1990s showed that aid - of any kind - is
most effective in countries which pursue sound economic policies. These
would include countries that put a lid on inflation, liberalised their trade
environment and thus promote private sector-led growth.

The theory is that countries that are committed to promoting private sector
growth have the best chance of harnessing natural and human resources to
generate wealth. The economic activity can then be taxed and the funds used
to finance education and health, uplifting everybody.

So to inject funds into such an environment is most likely to produce the
best results for the population.
History has shown that countries are only as strong as their private sectors
are viable.

However, the argument can be made that Kenya was also a big beneficiary of
the cold war but unlike Zimbabwe, its economy has not shuttled out of

The difference between the two is that ex-Kenyan president, Daniel arap Moi,
had interests in several businesses and had forged a strong alliance with
corporate Kenya.

This was not by accident. The breadth and scope of the Kenyatta family's
business interests is legendary. Moi's mentor and predecessor was Jomo

Unlike Mugabe who has a Marxist suspicion of the private sector and sees it
as a threat to his continued hold on power, Moi saw the business community
as an ally and courted it to sustain himself in power.

Mugabe's apologists point out that there were huge imbalances in the
Zimbabwean economy with the white minority controlling 70% of all arable
land. But similar disparities occurred in Kenya after independence and in
South Africa today.

Mugabe's sympathisers conveniently ignore that the way he has gone about
redressing the inequalities has ended up aggravating them by parceling out
choice tracts to his cronies who are disastrous managers of the once
productive farms.

As a result, for the first time in decades, Zimbabwe is now a net food
There is no doubt that land distribution has been necessary in Zimbabwe but
it could be done without destabilising the productive capacity while at the
same time without being held hostage by the big land-owners.

Mugabe cloaks himself in the shroud of protector of the marginalised
peasant, but this alliance is largely opportunistic, as has been seen with
the collapse of the Zimbabwean economy. This alliance of convenience allows
him to continue in power even when his country is going down the toilet.

There is no contradiction in promoting the private sector and uplifting the
plight of the rural masses. Businesses provide jobs, services and pay taxes,
all of which can improve the standard of living of the rural and urban

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When dictators drive disasters

Christian Science Monitor

from the July 16, 2007 edition

Burma's and Zimbabwe's strongmen have created humanitarian crises.
Not all iron fists are clumsy at the economic helm. Chile's economy did well
under Pinochet's rule, and many Asian strongmen reigned over tiger
economies. Not so today in Burma and Zimbabwe, where misrule is driving many
toward starvation. The world should take more notice.

Both countries have top-ranked inflation rates. In Burma, the military's
erratic policies have caused prices to rise 40 to 50 percent a year. In
Zimbabwe, hyperinflation is in the four digits, pushing President Robert
Mugabe to order police to arrest shopkeepers who raise prices on basic

Food scarcity has driven people to desperate measures. In Zimbabwe, many
more people poach wildlife, from hippos to squirrels, simply to eat. In
Burma, many parents go without food for one or two days at a time to feed
their children.

These are not nations that lack natural resources or suffer many natural
disasters. Policy is to blame - the kind caused by leaders who make big
economic mistakes as they cling to power. Fortunately, the international cry
for action on these humanitarian crises is intensifying.

The International Committee of the Red Cross issued a rare public censure
last week by accusing Burma's rulers of causing "immense suffering," partly
as a result of abuse of farmers in minority areas. The UN Humanitarian
Coordinator for Burma, Charles Petrie, says that "ill-informed and outdated
socio-economic policies" in Burma (also known as Myanmar) have produced
chronic malnutrition.

Zimbabwe appears closer to near collapse. The World Bank says the country
has the fastest contracting peacetime economy. Such news has caused South
Africa to intervene. But its foreign minister said last week that outside
powers will find it "very difficult to rebuild an economy in a country where
there is a serious divide and polarization."

Mr. Mugabe has beaten down his political opposition, leaving the nation's
Roman Catholic church as his chief critic. Archbishop Pius Ncube has called
for nonviolent street protests to bring down the government. That appears

Rescuing people from hunger under a ruthless regime poses a moral dilemma
for world diplomats. Mass starvation in North Korea in the 1990s was largely
a result of policy, and many nations found it hard to send food aid -
especially after some was found with the military.

Even more difficult is outside military intervention. In 1992, the United
Nations approved a US-led force into Somalia to relieve starvation. But the
UN is still debating an "international right" for such humanitarian
intervention. Despite genocide in Darfur, it hasn't sent in forces without
Sudan's permission.

These days, China's veto power in the Security Council remains an obstacle
to pressure on dictatorships where China is doing business. China has beefed
up trade with both Burma and Zimbabwe in its rapid pursuit for resources.
That makes it difficult for the UN to act.

But more international pressure on these regimes is needed, even as food and
other humanitarian aid continue to flow directly to the people. Neighboring
nations especially must turn up the heat.

The ultimate solution is a return to democracy - not that democracies don't
make economic mistakes, but they generally fare better in avoiding such

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