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Mugabe's economics of despair

The Telegraph

By Sebastien Berger
Last Updated: 12:06am BST 24/07/2007

The lone box of washing powder on a Zimbabwean supermarket shelf was
an object lesson in economics.

President Robert Mugabe's government has set prices for sugar, flour,
cooking oil and meat below the cost of production. So there are gaping
spaces under the signs for those goods.

"Everything is stopping," said an illegal money changer, explaining
the sudden fall in demand for foreign currency and the rising value of the
Zimbabwean dollar.

While Mr Mugabe seems to be ignorant of the basics of economy, the
regime appears to be preparing to seize firms in the same way that it
destroyed the country's commercial agriculture by confiscating White-owned

Businessmen describe the price-control policy as "organised looting"
and say the ruling Zanu-PF party has embarked on a "scorched earth"

The prospects for almost all ordinary Zimbabweans - those not
connected to Zanu-PF - are dire. Basic commodities are available only after
queueing for hours, and life expectancy is the lowest on earth.

Despite their desperation, the overwhelming sentiment, is one of
resignation and resentment, expressed with quiet dignity. The opposition is
divided and there is no expectation of an uprising.

The washing powder in the Bulawayo store exposed the effects of the
government's measures against hyperinflation, last said to be 4,530 per cent
before publication of the figures was stopped.

The manager said inspectors visited the store every morning to ensure
official prices are being followed.

"With the situation now we don't have any stock," he said. "The basic
things you are not going to get. I don't know when we're going to get them
or if we're going to get them. People don't have raw materials to supply.
Basically it's useless for me to go to a wholesaler.

"If nobody's going to make money for them to survive, then what's the
point of producing anything?

"The things that are not available are the things people want and
need - chicken and flour. Ninety per cent of the stock we have got is things
we can't eat. You can't eat washing powder and toilet cleaner.

" We can't even close our doors. They say if we close our doors they
are going to nationalise us, so we are sitting on a time bomb."

He was being only too realistic. Addressing businessmen in Bulawayo,
Obert Mpofu, the chief of the price-control programme, said a defunct state
firm "is now being reactivated with a view to making it a vehicle to acquire
especially trading companies".

"All we are saying is come forward and let us talk," he said. "If you
think there is a miracle that will remove this government and bring
something better, you should be kidding. We do not want you to leave your
business, but should you force us, you will [do so].

"Once we take over a company, we retain all the staff and bring a
manager. All we get rid of is the owner."

The likelihood is that seized businesses, like the White-owned farms,
will be handed out to cronies who will asset-strip and destroy them as going

With Zanu-PF members having "bought" cars and flat-screen televisions
at give-away prices from managers facing arrest if they do not comply, it is
also pressing forward with plans to make the national oil company Noczim the
only retailer of fuel.

A proposal to require permits to import food has been suspended
pending "consultations", but not cancelled. The opportunities for huge
black-market profits and control over the distribution of commodities such
as petrol and foodstuffs, are immense.

A current banking advertisement in Zimbabwe has the slogan: "Today we
may look the same but tomorrow one of us has to take charge." However, the
opposition Movement for Democratic Change is split into rival factions.

With Mr Mugabe making clear he intends to die in office, leading
figures admit the best hope for change is an internal coup within Zanu-PF.

Moses Mzila-Ndlovu, MDC MP for Bulilima and the shadow foreign
secretary, said Zanu-PF's crushing of opposition, particularly the massacres
of tens of thousands of people in Matabeleland in the 1980s, had left an
indelible mark on the national psyche.

"They have stamped it into the minds of the people that Robert Mugabe
is indestructible, that Mugabe is irreplaceable, that Mugabe is Zanu-PF,
Zanu-PF is here to stay and Zanu-PF is Zimbabwe. If you don't believe this
you will be defeated and that means you are defeated already.

"That fear that he has been rubbing into the minds of the Zimbabwean
people accounts for the failure of the people to stand up to him."

In Midlands province, a stone-carver who is lucky to sell one piece a
fortnight said: "Here, we are very poor. We are suffering because of ."

He paused, holding up a single finger, before saying: "One man.

"We put our faith in God. We hope God will save us."

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Harare to evict 1 000 villagers from ranch

Zim Online

Tuesday 24 July 2007

By Regerai Marwezu

MASVINGO - At least 1 000 villagers occupying Samba ranch in the southern
Chiredzi district are facing eviction after President Robert Mugabe's
government admitted that they were occupying the property illegally.

In a classic illustration of the chaos rocking the government's land reform
programme, the villagers will be evicted to pave way for Masvingo
businessman Moses Chingwena.

The Harare authorities say Chingwena bought the property before the
government sanctioned the violent seizure of white farms in 2000.

In addition to the Samba evictions, the government is also forging ahead
with plans to remove about 750 families from Gonarezhou national park to
pave way for the giant Transfrontier national park in the province.

Harare says it will also remove villagers who occupied Chikore farm, 20
kilometres south of Masvingo, that is owned by Higher Education Minister
Stan Mudenge.

Masvingo provincial governor Willard Chiwewe confirmed the looming

"It is true that those in Samba ranch will have to go because we later
realised that the farm had been bought by Mr Chingwena after we resettled
people there.

"We will also remove all those currently occupying conservancies and
black-owned properties. We are looking at about 3 500 people who have to be
evicted before the onset of the rainy season," said Chiwewe.

Contacted for comment on Monday, State Security Minister Didymus Mutasa, who
is also in charge of the government's land reforms, said the evictions will
go ahead as planned.

"If the provincial land committee has seen that these people have to move,
they have to do so. We have to admit as government that the land reform was
chaotic and we want to formalise everything now," said Mutasa, who has
fiercely defended the land reforms.

Only about 600 out of the about 4 500 white farmers are still on their
properties in Zimbabwe following the government's violent land reform

The land reforms destroyed Zimbabwe's key agriculture sector resulting in
most people depending on food handouts from international food aid agencies
over the past seven years.

But Mugabe has defended the land programme saying the land reforms were
necessary to correct historical imbalances in land allocation that had seen
the best farmland being owned by minority whites.

The main opposition Movement for Democratic Change (MDC) party and major
western governments have also accused Mugabe of parceling out farms to his
senior ruling ZANU PF officials and military officers at the expense of
landless villagers, a charge Mugabe denies. - ZimOnline

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Tsvangirai orders MPs to attend Mugabe address

Zim Online

Tuesday 24 July 2007

Own Correspondent

HARARE - Zimbabwe's main opposition leader Morgan Tsvangirai on Monday said
his Movement for Democratic Change (MDC) party would attend the opening of
Parliament by President Robert Mugabe today to help foster a conducive
environment for dialogue with the government.

Tsvangirai urged Mugabe to reciprocate the good will gesture from the
opposition by calling off plans by his ruling ZANU PF party to use its
absolute majority in Parliament to unilaterally amend Zimbabwe's
constitution to allow for the holding of presidential and parliamentary
elections next year.

ZANU PF and the MDC are in talks under South African mediation aimed at
finding a solution to Zimbabwe's long running political and economic crisis.

"That dialogue, although fraught with difficulties and challenges, has in
fact commenced. As a gesture of our bona fide belief in this dialogue, I
have duly instructed our MPs (Members Parliament) to attend the official
opening of Parliament on 24 July 2007," Tsvangirai said in a statement.

The talks - seen by many analysts as probably the last chance to save
Zimbabwe from total collapse - are in danger of failing because ZANU PF
refuses to discuss constitutional reforms with the opposition, insisting it
will press ahead with plans to unilaterally amend the constitution.

Constitutional Amendment Bill No. 18. that is already before Parliament
will, in addition to harmonising elections, also empower the House to elect
a successor to Mugabe in the event that he dies or steps down.

The MDC says the amendment is a ploy by Mugabe - who will extend his rule to
33 years if he is re-elected next year and finishes the five-year
presidential term - to hang on to power for life.

The opposition party insists the South African-led talks that are also being
supported by the regional Southern African Development Community should lead
to the promulgation of a new and democratic constitution that will guarantee
free and fair polls in 2008.

Tsvangirai said: "It is my sincere hope that ZANU PF and President Robert
Mugabe will also show restraint and maturity. In this regard, the withdrawal
of Constitutional Amendment No 18 that is currently awaiting its first
reading in the Lower House will be a good and decisive confidence-building

The opposition leader also called on Mugabe to act to end political violence
and to order the release of MDC activists held by the police under what the
opposition party claims are trumped up charges.

Mugabe's spokesman George Charamba was not immediately available for comment
on the matter. However, political analysts say they expect ZANU PF to change
the constitution to allow it the opportunity to appoint the 83-year old
leader's successor - in the event he leaves office -without having to face
the electorate.

Tsvangirai, who now leads the larger faction of the MDC after the party
split in 2005, narrowly lost to Mugabe in a violence-marred presidential
poll in 2002.

Tsvangirai maintains the veteran President cheated him of victory. He and
his MDC party previously boycotted state functions including the opening of
Parliament presided over by Mugabe who they say has no legitimate mandate to
occupy the office of president.

Zimbabwe, which was once an economic model for Africa has plunged into
political and economic crisis in the last seven years due to what critics
say are Mugabe's controversial policies such as seizing white-owned
commercial farms to give to blacks.

The crisis is seen in the world's highest inflation rate of nearly 5 000
percent, 80 percent unemployment and acute shortages of food, fuel and
foreign currency.

Mugabe - who once boasted that no one could have managed Zimbabwe's economy
better than him - denies ruining the country and blames the economic
meltdown on what he calls sabotage by Western powers who are angry over his
often violent programme to hand out white-owned farms to blacks. - ZimOnline

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SA opposition says Zim refugees flooding into country

Zim Online

     Tuesday 24 July 2007

By Ntando Ncube

JOHANNESBURG - South Africa's main opposition Democratic Alliance (DA) party
on Monday said there has been a dramatic increase in the number of
Zimbabweans streaming into the country as economic conditions worsen in the
troubled southern African country.

In a statement released to the media yesterday, the DA said the South
African police working along the border with Zimbabwe had "completely lost
control of the situation" as thousands of Zimbabweans cross into the

"What is abundantly clear is that there has been a dramatic increase in
people coming to South Africa illegally and legally.

"Around 6 000 legal immigrants have been streaming through Beitbridge a day
which is a 100 percent increase since 1 July (2007)," said the statement.

The DA said President Thabo Mbeki's government must quickly acknowledge the
"growing disaster" on South Africa's borders warning of a serious
humanitarian crisis as the eight-year economic crisis in Zimbabwe
deteriorates further.

Last week, the DA urged the government to set up refugee camps along the
border to deal with the growing influx of Zimbabweans fleeing hunger and
political persecution at home.

The Zimbabwe Exiles Forum (ZEF) as well as the South African authorities
sharply criticised the call saying placing Zimbabweans into refugee camps
would stigmatise and violate the rights of the people.

Meanwhile, the ZEF urged the South African government to investigate
allegations of gross human rights abuses perpetrated by home affairs
officials on desperate Zimbabwean asylum seekers.

The Forum, which promotes and defends the interests and rights of Zimbabwean
asylum seekers, alleged that Home Affairs officials at Marabastad refugee
reception centre in Pretoria were demanding bribes from asylum seekers of
around 500 rand per individual.

"ZEF is deeply concerned by the human rights conditions of the immigrants
who are currently seeking asylum at the Department of Home Affairs Office
(Marabastad Branch), located in Pretoria," ZEF director and human rights
lawyer, Gabriel Shumba said in the report.

"We call on the South African government and your department . . . to
respect and fulfill your obligations to assist refugees in accordance with
International Refugees Laws, to which South Africa has acceded," said
Shumba. - ZimOnline

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Taibu to mark Zimbabwe return

Zim Online

Tuesday 24 July 2007

By Nigel Hangarume

HARARE - Former Zimbabwe skipper Tatenda Taibu is expected to mark his
return to international cricket today after he was named in the side to face
India A in a four-day match at Harare Sports Club.

The 24-year-old player turned his back on national duty about two years ago
following differences with Zimbabwe Cricket officials as well as alleged
threats on his family.

Taibu's return is likely to give Zimbabwe's youthful side a major boost as
they come up against a strong India A, captained by Mohammed Kaif who played
at this year's ICC Cricket World Cup in West Indies.

"If there is one player who is likely to surprise people with runs, it's
Taibu," Zimbabwe manager Givemore Makoni said. "He has been working hard and
batting for hours because I think he knows people will be watching him on
his return."

Zimbabwe will also pin their hopes on skipper Prosper Utseya, Hamilton
Masakadza, Stuart Matsikenyeri, Vusi Sibanda and Gary Brent.

The home side will be desperate to win the two-match series as they bid to
regain their Test status, which they gave up for the second time in as many
years in January last year as they struggled to come up with a competitive

India A manager TC Matthew said his players were also eager to impress in
this tour to boost their chances of making their senior national side.

"The tour will definitely give us exposure," Matthew said. "Many of these
players are going to play for India. It is only a matter of time.

"The likes of Sachin Tendulkar, Saurav Ganguly, Rahul Dravid and Anil Kumble
are nearing the end of their prime. This team is the next India team."

He added: "Zimbabwe is playing these games in preparation for returning to
Test cricket so it is going to be good experience for you as well. The India
board is always helping countries like Zimbabwe and Kenya and the Associate
countries and will continue doing so," he pointed out.

The second and final four-day match between Zimbabwe and India A is set for
Bulawayo's Queens Sports Club next week. - ZimOnline

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Dissent In Zimbabwe Ruling Party As Harare Stands Aloof On Food Aid


By Blessing Zulu
23 July 2007

With general elections just eight months away, senior politicians in
Zimbabwe's ruling ZANU-PF party are expressing displeasure over the
government's continued delay in formally requesting humanitarian food aid
from the international community.

United Nations food agencies say more than 4 million Zimbabweans could need
food by early next year. About 2 million will face hunger in the next three
months. Many of the likely recipients are in rural areas traditionally
dominated by the ruling party but which will be hotly contested by the
opposition in the forthcoming balloting.

Governors and senior politicians in the most affected provinces -
Matabeleland North and South, Midlands and Masvingo - where families could
run out of food as early as next month have urged the government to formally
ask for food assistance.

An acute water crisis and sanitation breakdowns with sewage flowing in the
streets of Harare, Bulawayo and other towns are exacerbating the general

But President Robert Mugabe, backed by State Security Minister Didymus
Mutasa and the Joint Operation Command comprising officials from the
uniformed and security services, remains adamant his government will not
"beg for food" as he put it.

However, as in previous years, Harare has given international humanitarian
officials to understand that it would not reject food assistance that may be

The president has instructed Reserve Bank Governor Gideon Gono to raise
funds to import maize - the country's staple - and tasked Agriculture
Minister Rugare Gumbo and Mutasa to negotiate for food from Malawi, Zambia
and South Africa.

Agriculture Minister Rugare Gumbo said Harare wants another food survey
though the United Nations Food and Agriculture Organization and World Food
Program in conjunction with the government itself just produced one.

The state monopoly Grain Marketing Board, which did its own survey, said it
is only looking for 500,000 tonnes of maize from the most recent harvest,
well short of the 2 million tonnes Zimbabwe needs. Zambia has provided
100,000 tonnes of maize and the purchase of another 400,000 tonnes has been
agreed with Malawi.

Spokeswoman Elizabeth Byrs of the United Nations Office for the Coordination
of Humanitarian Affairs told reporter Blessing Zulu of VOA's Studio 7 for
Zimbabwe that even without a formal appeal from Harare, her office and
others will continue to canvass for donor contributions to feed the
Zimbabwean people.

Cape Town-based political analyst Glen Mupani, meanwhile, said the
government's refusal to ask for food in the face of a humanitarian crisis is
politically driven.

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'This whole city will be a graveyard'

Mail and Guardian

Chris McGreal

23 July 2007 11:59

      Togara Sanyatwe was buried in the West Park cemetery on the edge
of Bulawayo at 83 years of age. The headstone reveals nothing more about his
life, but he would already have been considered an elder of his community at
the time those who now lie around him were being born.

      They include Zah Zah Ngwenya, who was just 28 at the time of her
death on the same day as Sanyatwe. A little further on lies Mabutho Njini,
who died a fortnight shy of his 46th birthday, but he still enjoyed more
years than Norah Manyati, who barely made it past 30.

      Their graves sit at the beginning of a narrow road running
through the newest part of the cemetery. Its length is a chronicle of
Zimbabwe's surging death rate and plummeting life expectancy as political
crisis and economic collapse have fused with rampant Aids to transform the
graveyards from resting places for the elderly at the end of a full life to
the premature final stop for a generation barely out of youth.

      In Bulawayo, the cemeteries are filled to the point where there
is now pressure to put two corpses in each grave.

      Women in Zimbabwe live an average of 34 years and men manage
just three years more, half of the life expectancy of little more than a
decade ago. Prince Handina didn't even make that. He died at 20. Plan
Ndebele, in the neighbouring grave, made it to 39.

      The pair are buried just after the road passes the walled and
padlocked Muslim cemetery. Here the graves begin in January 2004. The
numbers buried each month are already rising, their ages dropping and the
plots squeezed closer together.

      A little further down the road, among the graves of 2005 and
2006, granite headstones, decorated with pictures, fond messages or biblical
quotations, increasingly give way to black metal plates hand painted with
white lettering that tell no more than a name and dates of birth and death.
It is one more sign of the growing poverty as Zimbabweans struggle to

      Not far away is the children's cemetery, packed with bodies of
those who did not live long enough to go to school.

      At the far end of the road, where there is almost no more room
to spare, the recent arrivals are easy to spot. Multicoloured plastic
flowers adorn the freshly turned earth mounds that are almost on top of each

      Odian Ncube is digging a new grave in front of the last resting
place of Sibonginkosi Dube, who was buried last week at the age of 30.

      "We have enough for two more rows of graves before we reach the
road," he said. "Maybe they will find room somewhere else. Perhaps this
whole city will be a graveyard."

      President Robert Mugabe's destruction of his own economy as he
fights to hold on to power -- with inflation running above 4 500%, power and
water cuts a daily reality, shops rapidly emptying of food and the grain
harvest expected to fail yet again after the seizure of white-owned farms
and drought -- has played a large part in the surging number of deaths.

      Millions are underfed, weakening immune systems and leading to
Aids. Few can afford the drugs to treat the illnesses that the disease
brings on, even if the medicines are available which, increasingly, they are

      Many of the country's doctors and nurses have left for South
Africa or Europe.

      The World Health Organisation estimates that that lethal
combination is claiming 3 500 lives a week in the former British colony. The
World Food Programme says four million Zimbabweans, one-third of the
population, will need food aid this year.

      Ncube's team of diggers is making four to five new graves each
day, and that is just in one corner of one cemetery. "We work harder now.
There are many many more. Look, you can see it's different. Over there the
graves are like they used to be, a certain distance apart. Now we put them
almost on top of each other," he said.

       Many of the dead are laid to rest in cardboard coffins or cloth
bags. Ncube says some people come in and bury their relatives at night in
the graves dug during the day because they cannot afford the funerals or the
ubiquitous burial societies, a savings club that provides a decent funeral
for the dead if nothing for the surviving family.

      The number of burials in Bulawayo is rising by about 20% each
month. The mayor, Japhet Ndabeni-Ncube, says the time has come when people
will have to be buried one on top of the other or not at all. He wants the
city's residents to accept two bodies in a grave or cremation, a social
taboo for many.

      "It is very real. In most cases we run away from facing
reality," he told a council meeting last week. "It is incumbent upon us to
go and spread the message on cremation and the burying in the same grave,
and at the same time continue with the fight against Aids."

      Another councillor, Amen Mpofu, said the real problem was not
how to bury the dead but how to save the living. "I think the most important
question we should ask ourselves as we discuss this is why are people dying
at this rate? I think this is what we should zero in on," he said. -- ©
Guardian News & Media Ltd 2007

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Africans Fear 'Ruin' in Europe Trade Talks

Africa Renewal (United Nations)

23 July 2007
Posted to the web 23 July 2007

Gumisai Mutume

The warnings are grim. Cape Verde may lose 80 per cent of its import
revenues. Three-quarters of Ghana's industry may collapse. And African
countries could end up even more dependent on trade with Europe than with
each other. Such worries about the possible impact of ongoing "free trade"
negotiations between Europe and its former colonies in Africa, the Caribbean
and Pacific (ACP) are beginning to galvanize public debate in the region.

African governments, policy analysts, regional economic groups and civil
society organizations are increasingly speaking with one voice: the Economic
Partnership Agreements (EPAs) now being hammered out between Europe and the
ACP countries must be significantly modified to safeguard those countries'
prospects for development.

"If the EPAs are signed as they are, it will be suicide and death for
farmers," Jules Zongo, national president of Burkina Faso's regional
chambers of agriculture, declared at a protest march and rally of 2,000
farmers in that country's capital, Ouagadougou, in December. Several months
earlier, civil society organizations rallied in Senegal, as part of a global
Stop EPA campaign, to demand that their government not sign the agreements
unless significant changes are made.

African leaders have taken note of such calls. When heads of state from
throughout West Africa converged on Ouagadougou for a summit meeting in
January 2007, Burkina's President Blaise Compaoré affirmed that the
"legitimate concerns" of farmers and other producers must be considered in
any trade talks with the European Union (EU).

Among other venues, opposition to the EPAs also featured at the World Social
Forum in Nairobi, Kenya, in January, at which tens of thousands of civil
society representatives chanted and carried signs declaring: "Fight
poverty... Say no to EPAs." In April, the Africa Youth Coalition Against
Hunger mobilized more than 1,000 activists from 20 countries in the Gambia
to launch a "big noise campaign" to stimulate public debate on the proposed

Beyond the concrete impact that the new agreements may ultimately have on
people's lives, the negotiations are attracting wider attention for another
reason: they began at a time when talks to further liberalize global trade,
under the so-called Doha round of the World Trade Organization (WTO), seemed

One factor in the indefinite suspension of the Doha round last year was the
reluctance of richer countries to liberalize their agricultural sectors,
while at the same time they insisted that developing nations open their own
economies even further to products from the North. Some analysts regard the
EPA negotiations as an attempt by the more powerful EU to extend to its
weaker ACP trading partners, through a different forum, agreements that it
could not obtain at the WTO. The 27 countries of the EU have a combined
gross domestic product of US$14 bn, while 39 of the 79 ACP nations are among
the world's least developed countries (LDCs).

New scenario

Although the Doha round talks have bogged down, earlier changes at the WTO
have already seriously affected the nature of the EU's relations with the
ACP countries. From 1975 to 1994, the EU and ACP shared special development
cooperation arrangements through a series of five-year agreements,
originally known as the Lomé Conventions. Through those agreements, the EU
granted trade preferences to ACP exports, without requiring similar
treatment for EU products in ACP markets.

The so-called Uruguay Round of trade negotiations, which concluded in 1994,
adopted new rules requiring parties to regional trade agreements to
eliminate duties and other restrictive regulations on "substantially all the
trade" among them. But for some regions application of the rules was
postponed, as the WTO, which emerged from the Uruguay talks in 1995, agreed
to a special exception allowing the EU to maintain "non-reciprocal"
preferences for ACP exporters until December 2007.

With the WTO deadline in mind, in 2000 the two groups signed a new
cooperation accord known as the Cotonou Agreement, covering aid, trade and
political cooperation. Its aim was to "facilitate the economic and political
integration of the ACP countries into a liberalized world market." Its
framers also envisaged the conclusion of negotiations on EPAs or other
alternative trade arrangements by the start of 2008, to comply with WTO
rules. Initial talks on the EPAs began in 2002.

Some developing countries now fear that the EU's approach to such EPAs will
oblige them to remove trade protections so quickly and to such an extent
that the development of their own industries will be harmed. "At no point in
time was an EPA as a free trade agreement the first choice for the ACP,"
says Mauritius' ambassador to the EU, Sutiawan Gunessee. "It was not. But we
had no alternative."

According to Zimbabwean Trade Minister Obert Mpofu, any new trade agreements
should reinforce, not undermine, "the development of our economies,
employment generation, wealth creation for our people and ultimately poverty

Ending dependency?

In contrast, EU Trade Commissioner Peter Mandelson views the EPAs as
beneficial. He argues that they will shift the relationship between the EU
and Africa from one of dependency on tariff preferences to one that promotes
business competitiveness. After 30 years of preferential market access,
African countries still export a limited range of basic commodities, he
points out. "Most of these are sold at lower prices than they were 20 years
ago. This is not sustainable. It certainly isn't sustainable development."

Countered Nigerian Commerce Minister Aliyu Modibo Umar: "If 30 years of
non-reciprocal free market access into the EU did not improve the economic
situation of the ACP, how can a reciprocal trading arrangement achieve
anything better?" Instead, he argues, simply liberalizing trade will
"further widen the gap between the two [blocs] and probably destroy the
little development that some ACP countries have managed to achieve over the
past years."

Unloading grain at the port of Dakar, Senegal: Africa worries that Europe is
trying to bring in new trade issues that have not been agreed at the World
Trade Organization.

Hard choices

Under the type of EPAs currently proposed by the EU, ACP countries would
eventually have to liberalize 80-90 per cent of their trade with the
regional bloc in order to gain duty-free access to European markets. That
would allow ACP countries to use tariffs to protect only a small portion of
their products from competition with European goods.

To stay within that narrow band, governments would have to make some hard
choices, notes Oxfam in a 2006 report, Unequal Partners. They could choose,
for example, to maintain tariffs on valuable revenue-raising imports such as
cars and electronics, protect staple foods such as maize, exempt a few
existing industries from competition or retain the ability to support future
industrial development.

Fiscal losses

In the short term, lifting tariffs on European goods would deprive many
governments of an important source of fiscal revenue. "Many countries would
lose the valuable income they earn from tariff duties," notes Mr. Godfrey
Kanyenze of the Labour and Economic Development Institute of Zimbabwe. Until
countries are able to diversify their revenue bases - often a long process -
they could be confronted with national budget deficits, possibly leading to
lower spending on education, health care, poverty reduction and social

A 2002 study by the Common Market for East and Southern Africa, a regional
trade bloc, found that if all EU imports entered that region duty-free,
governments would lose about 25 per cent of their trade taxes and about 6
per cent of total tax revenue. Another study, by Germany's Hamburg Institute
of International Economics, estimated that declines in import duties in
countries of the Economic Community of West African States would range from
the equivalent of $2.2 mn in Guinea-Bissau to $487.8 mn in Nigeria. The
decline would be sharpest in Cape Verde, where 80 per cent of import
revenues are likely to be lost. If no adjustments on spending were made,
Cape Verde and the Gambia would incur budget deficits of 4.1 and 3.5 per
cent respectively.

Such "doomsday" predictions need to be treated with caution, responds EU
Trade Commissioner Mandelson. "If we look closely, most studies are highly
theoretical," he argues. "They assume immediate and complete liberalization,
and ignore the economic benefits of reform." According to Mr. Mandelson, the
EU and ACP can negotiate the timing and phasing of tariff reductions to
guard against any sharp drops in government income.

The commissioner adds that while some "transitional protection" may be
necessary, the aim should be to reduce protection to encourage local
industries to become more competitive. Over time, ACP countries will need to
adapt their economies to compete with the rest of the world.

'Back door' issues

In principle, the central objective of the Cotonou Agreement is poverty
reduction. Both parties agree that whatever arrangements are negotiated,
they should foster development in the ACP countries. But they differ on what
policies would best serve that purpose, echoing debates that previously
unfolded within the WTO.

The EU, for example, is proposing that ACP countries adopt stringent rules
to protect foreign investment, promote domestic competition and increase
transparency in government procurement procedures. Similar proposals - known
as the "Singapore issues" after the WTO ministerial meeting at which they
were first raised - were blocked by developing countries, which feared the
rules would hinder their ability to use trade policy to promote development
(see Africa Renewal, January 2004).

But rich countries, following their failure to introduce such issues into
WTO agreements, are now trying to insert them into multilateral and
bilateral agreements as conditions for aid or loans, notes Mr. Irungu
Houghton of Kenya, a pan-Africa policy analyst for Oxfam. EPAs are one part
of this broader effort to bring the Singapore issues in through "the back
door," he argues.

In several countries, Mr. Houghton told Africa Renewal, "there is intense
pressure to open up procurement processes for public contracts and supplies
to non-indigenous suppliers, who because of their international reach are
able to produce those goods at a much lower cost than local contractors."
Such a liberalization of procurement would take away one of the few tools
governments have traditionally used to promote local industry - that is,
favouring domestic companies ahead of foreign ones.

Mr. Houghton notes that similar changes in government procurement policies
are also appearing in Country Assistance Strategies - documents that spell
out loan conditions from the continent's main lender, the World Bank.

The implications of adopting all the Singapore issues in Africa have not
been fully studied. But policy analysts agree that simply implementing new
laws to enact the reforms will by itself be costly. Oxfam estimates that
rewriting domestic laws and changing business procedures in each of the 16
areas of reform agreed under the Uruguay Round would cost an average country
$2.5 mn.

The European Commission (the secretariat of the EU) insists, however, that
there will be "no EPA without investment rules and full reciprocity." The
commission argues that "the EPAs are, at root, about putting progressive
trade policy into practice," by reducing bad business practices hindering
investment in Africa.

'A field of ruins'

But opposition is mounting to the EPAs, as currently envisaged by the EU. In
2004 civil society organizations from across the world rallied in London to
launch a Stop EPAs campaign. The campaigners charge that in their current
form EPAs are essentially narrow "free trade" agreements intended to further
liberalize the markets of ACP countries. They cite examples of earlier trade
liberalization measures. In 1986 Côte d'Ivoire cut tariffs by 40 per cent,
resulting in massive layoffs in the chemical, textile, footwear and
automobile assembly industries. Senegal lost one-third of manufacturing jobs
between 1985 and 1990 after reducing tariffs from 165 per cent to 90 per
cent. The campaigners are calling for EU-ACP trade relations that support
the weaker partners' pursuit of economic development.

The organizations endorsing the campaign include the Economic Justice
Network in South Africa, Third World Network-Africa in Ghana, Civil Society
Trade Network of Zambia, Action Aid and Oxfam International. In a number of
African countries, including Burkina Faso, Ghana, Nigeria, Kenya and
Senegal, thousands of farmers, workers and civil society activists have
staged public protests against the perceived consequences of EPAs.

In April, West African business representatives also voiced alarm. Meeting
in Dakar under the auspices of the regional chamber of commerce of the
eight-country West African Economic and Monetary Union, they affirmed their
readiness to become more competitive in global markets, but not to enter
into competition "with unequal arms." Commenting specifically on the EPAs,
Mr. Iddi Ango, president of the regional chamber, said that "if we open up
our countries, given the current state of our enterprises, it will not be an
opportunity, but a disaster, a field of ruins."

Mr. Ibrahim Akalbila, national coordinator of the Ghana Trade and Livelihood
Coalition, comprising civil society and farmers' groups in that country,
cites the high domestic subsidies that many European governments continue to
provide their producers, allowing European products to undersell producers
in poor developing countries. "Whether it is tomatoes and rice, textiles or
iron rods," he said in April, "cheap imports, illegally dumped into our
markets, are destroying whole areas of economic activity, and with it, the
lives of millions."

'EPA light'

Some European analysts acknowledge the validity of the ACP criticisms. But
they also note that the EU faces a dilemma: how to reconcile the special
status of the ACP group with its obligations to the WTO.

One possible solution, they suggest, is for the EU to accept an agreement
that is only as reciprocal as necessary to meet WTO requirements, while
leaving the ACP countries some room to safeguard their domestic markets and
industries. The European Centre for Development Policy Management, an
independent foundation funded by a number of European governments, proposes
the adoption of an "EPA light."

Such an arrangement would initially require ACP countries to open up their
markets only enough to comply with WTO rules. They would liberalize just
50-60 per cent of their EU trade over a long transitional period of 20 years
or more, while the EU would continue to grant full market access to all ACP
countries. During the transition, the EU also would support the building of
viable industries in ACP countries.

Along similar lines, the UN Economic Commission for Africa (ECA) argues that
the primary focus of EPAs over an initial 12-year period should be to
strengthen intra-African trade, to help local industries first become more
competitive with their African counterparts. Only after this period, notes
the Addis Ababa-based ECA, should EPAs then consider opening African
economies to EU competition. And even then, tariff reductions should be
phased in gradually, to allow countries time to adjust to the rigours of
global markets.

Alternative options

If ACP countries ultimately decide not to sign EPAs, there are a number of
other options they could pursue. At the Cotonou meeting in 2000, the EU
agreed that if EPAs were not accepted, it would propose "alternative
possibilities, in order to provide these countries with a new framework for
trade which is equivalent to their existing situation and in conformity with
WTO rules." A country, however, would first have to reject an EPA before
work could begin on an alternative.

One such option would be to develop new trade arrangements agreeable to both
sides. For example, notes Action Aid, the EU could continue offering ACP
countries preferential access to European markets while allowing them to
protect their vital industries or cut tariffs in ways that do not jeopardize
their economic development goals. But such provisions would require changes
to current WTO rules on regional trade agreements. With the Cotonou deadline
looming and the Doha round talks still suspended, that option seems

Therefore, both parties may have to rely on existing trade regimes. One of
these is the Generalized System of Preferences (GSP): nonreciprocal
market-access schemes open to all developing countries that meet certain
standards in human and labour rights, environmental protection and good

Nations classified as least developed countries - 39 out of the 77 countries
currently taking part in the EPA negotiations - could benefit from one of
the variants within the GSP framework, the "Everything But Arms" initiative.
It grants LDCs nonreciprocal duty-free and quota-free access to the EU for
all goods except arms and munitions.

Non-LDCs could also decide to seek GSP treatment, but they would not be
eligible for full duty-free access to the EU market. Moreover, GSP
arrangements are narrower in scope than EPAs or the current ACP-EU
agreement, since they cover only market access. Unlike the Lomé or Cotonou
agreements, they do not include any development assistance, in the form of
either financial aid or technical cooperation. GSP rules are also considered
more restrictive and onerous than those of the Lomé/Cotonou agreements:
hence the reluctance of ACP countries to rely solely on them.

The European Commission acknowledges that the GSP alternative would be a
"second best" solution, from the development perspective of the ACP
countries. A GSP arrangement is not negotiated, like a contract. The EU
would design it and offer it on its own terms, and could amend or suspend it
at any time. The products covered would not include all those of interest to
ACP countries. And if an ACP country were to develop a new product not on
the list, that item would be excluded.

Some civil society organizations argue that in a worst-case scenario, GSPs
could be used as a starting framework for a new trade arrangement, but with
their flaws corrected to provide both market access and development
assistance to ACP countries.

Because of the controversy, the British Parliament held public consultations
on the EPAs in 2005. Subsequently, its parliamentary committee on
international development recommended that the UK push the EU to ensure that
alternatives for non-LDC ACP states guarantee the same level of market
access as the Lomé arrangements. "Development," it concluded, "should be
integral to any trade options presented to the ACP, even when they are not
the first choice of the EU."

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Zimbabwe's Tsvangirai Says Ruling Party "Out Of Ideas" On Economy


      By Netsai Mlilo, Carole Gombakomba & Jonga Kandemiiri
      Bulawayo and Washington
      23 July 2007

The founding president of Zimbabwe's opposition Movement for Democratic
Change is campaigning for president in the election coming up in March 2008
telling voters the ruling ZANU-PF party has run out of ideas on how to
revive the economy.

Tsvangirai said the government's drive to force down prices, which has
emptied store shelves and virtually halted domestic production of food and
other essential goods, showed that ZANU-PF is a party whose time has come
and gone.

Morgan Tsvangirai, leader of one faction of the divided MDC, told a campaign
rally in Bulawayo on Sunday that it is time Zimbabweans from all walks of
life united to remove President Robert Mugabe and ZANU-PF from power to end
their suffering.

Correspondent Netsai Mlilo reported from Bulawayo.

Elsewhere, the nongovernmental Zimbabwe Election Support Network said it
intends to file a complaint with the Office of the Registrar General
alleging "irregularities" in the government's ongoing mobile voter
registration drive.

The independent election monitoring body said some would-be first-time
voters have been unable to register to vote though they managed to obtain
identity cards.

ZESN said residents of Matebeleland and Lower Gweru have complained that
mobile registration vehicles are deployed for a "ridiculously" short time.
It said the registration teams were deployed at the Kawondera and Dzikamidzi
primary schools in Zvimba for just one day, making "a mockery of what should
be a noble exercise".

But spokesman Utoile Silaigwana of the state Zimbabwe Electoral Commission
told the government-controlled Herald newspaper that mobile voter
registration was meant to give "every citizen a chance to acquire national
documentation and to be registered" as a voter. Silaigwana said the
commission is urging all Zimbabweans to visit their local  registration
centers before the exercise ends on August 17.

ZESN program manager Tsungai Kokerai told reporter, Carole Gombakomba of
VOA's Studio 7 for Zimbabwe that not everyone is able to register to vote
next year.

In other political news, the Tsvangirai MDC faction said its members of
parliament will attend the opening of the assembly on Tuesday, breaking with
a recent policy of boycotting such events at which President Robert Mugabe

The statement said the Tsvangirai formation decided to attend in
consideration of ongoing crisis talks mediated by South African President
Thabo Mbeki.

Mr. Mugabe is to officially open parliament's last session before next year's
general election, and will deliver his state of the nation address.

Secretary General Tendai Biti of the Tsvangirai MDC faction told reporter
Jonga Kandemiiri that his party duly respects the efforts of President Mbeki
and the Southern African Development Community to bring about a negotiated
end to the crisis.

Spokesman Gabriel Chaibva of the MDC faction led by Arthur Mutambara said
party members will be at parliament in force, adding that it would be
inconsistent to boycott the opening of parliament when faction members
attend ordinary sessions.

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Speculators Fuel Bull Run on ZSE

This Day, Nigeria

By Eromosele Abiodun, 07.24.2007

Zimbabwe Stock Exchange  (ZSE) Chief Executive, Mr Emmanuel Munyukwi, might
be forced to eat humble pie following his spirited defence of the
unparalleled growth of the local market.
Last November, the ZSE boss rejected out of hand accusations that the local
bourse had become a haven for speculators arguing the equities' key
function, among others, was to help companies grow and raise capital.
But eight months down the line, there is a general consensus that runaway
stock prices are out of sync with declining economic activity.
Reserve Bank of Zimbabwe governor Dr Gideon Gono is one of those who
believes the ZSE is a major source of distortions in the economy.
This is because only the stock market and a few other speculative trades are
sitting comfortably ahead of inflation.
Investigations by the Herald Business this week reveal that the bull run
that has characterised the ZSE since last year has been driven by
speculation more than anything else.
Equity analysts were also agreed that the ZSE's unprecedented growth this
year was by and large aided by speculative buying.
In other words, stock market patterns since January have closely shadowed
the foreign currency parallel market, turning it another black market of
sorts, albeit one sanctioned by law.
While there is nothing wrong with buying shares to hedge against inflation
because one has to make a small profit, premiums reported on certain shares,
particularly Old Mutual and cement maker PPC, have surprisingly defied
economic fundamentals, analysts said.
"On a broad scale, I think it made a lot of sense for investors with excess
cash to speculate on equities," explained a stockbroker with New Africa

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Dating the pimp for political survival

Nyasa Times, Malawi

Nyakuchena Ganda on 23 July, 2007 14:35:00

Looking at the demeanor of the Malawi President Bingu wa Mutharika on Sunday
at Masintha ground, I could see the tell tale `trolls' of Mugabe the
dictator. Indeed Mutharika has shown the whole world that he is not a
classicist when it comes to aligning himself with one of the most notorious
dictators in Africa next to late Idi Amin. He seems less mindful of the
acidic outgrowth such unholy alliances yield.

At Masintha, I saw a man in desperation unknowingly manipulated by the king
of jungle politics in Zimbabwe and miserably turn himself into a scarecrow.
Surely, the political pimp did his job well much to the detriment of Malawi.

It goes without saying that gaining the cooperation of other governments to
develop economic links and corporation is a reasonable foreign policy

But what Mutharika seems to forget with enormous promptness is that by
identifying himself with the Zimbabwean dictator, he is fundamentally
condoning the abuse of human rights of Zimbabweans and fellow Malawians who
are resident in that country.

What is very puzzling is the fact that all the negative predictions about
his trip to Zimbabwe have come to pass.  It's unfortunate that Malawians
have to suffer just because Mugabe is running this country by remote
control.  There are so many Malawians who married Zimbabweans but have never
hawked themselves to the devil.

The moment Bingu took to stage one could see a man who was ready to divulge
what the "political gigolo" across the Zambezi had pumped into his head. No
wonder he provoked a huge public outcry. Such a speech was not befitting a
leader facing the current political and constitutional crisis.

Due to his overwhelming lack of social skills, the bogeyman's 'trolls' were
not that hard to detect if you knew what to look for.  He lambasted the
opposition and shamelessly declared that he is going to dissolve parliament
if the budget doesn't get approved.

It is apparent that the Mutharika is so alarmingly oblivious to anyone or
anything but himself and his bevy of drug addicts in cabinet, and thus
behaves in a way that makes you shudder with embarrassment.

All the crazy ranting was unnecessary.  He needs to be statesmanlike and not
reduce himself to the very pedestrian game his misguided squalor followers
are playing.  The nation needs unity and not a cocktail of threats and
confrontations.  We all know what Muluzi said when he was coming from his
vacation.  He did not even need to talk about it.

This inappropriate behavior is just a front to foment civil war in Malawi.
We do not need so much emphasis on the unfounded allegations of under the
table opposition tactics or prevention of every twisted opposition maneuver,
but rather need maturity and patience from our Mutharika - a greater
capacity to respond and to bounce back from seemingly hopeless situations.

If parliament is dissolved, it will not in any way spare the ruthless and
irresponsible political traitors who are now facing the chop in Parliament.

If he does not fear elections, then why is he poaching riff-ruff like
Nicholas Dausi and harboring the notorious goons in his retrogressive party?

Why is he clinging to the likes of Hetherwick Ntaba for political survival?
Why should it surprise the Mutharika when Tembo meets Muluzi?  Is it not the
fact that both are in the opposition and understand the need to discuss
political strategies?  These two great politicians did not in any way query
him when he went to meet Mugabe?  Although we know that each and every sane
leader is shunning the Zimbabwe murderer.

We all have seen how Dr Muluzi and Hon John Tembo have cleverly and
generously left wriggle room for some toadying, for this power-hungry
government. In essence the opposition has just extracted a quid pro quo that
Section 65 and the budget must be deliberated together.

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