It's a judgement call, but I think Mugabe has crossed the line in political terms. He did this by raising the price of liquid fuels by nearly 50 per cent on Friday morning - while he was on his way to a UN conference at which he was going to give a paper on land reform! He took with him a 767 and a large entourage with no consideration of the cost or the crisis at home.
We now pay a price per litre of about 75 US cents for diesel and petrol compared to about 34 US cents in South Africa. Paraffin - the basic fuel of the poor has gone from Z$1,7 per litre to Z$30 in less than 9 months and is now 3 times as expensive as South Africa. For the average resident in Chitungwiza - a satellite town for Harare containing nearly a million people, the cost of a trip to work each day absorbs about Z$2 500 per month - probably half of their gross income before tax. At this level they cannot afford even basic necessities.
The explanation given was trite - devaluation of the dollar and higher international oil prices. This does not explain why our prices are now double those of South Africa and well above those of Zambia and Botswana. The real reason lies elsewhere and in this lies a useful lesson in African economics.
Four years ago, Libya and Kuwait were persuaded to give the National Oil Company a six-month line of credit for fuel supplies. This enabled the company to buy its requirements of about 5 million litres per day on credit and sell for cash. This resulted in a huge build up of cash in the coffers of the company and this proved to be too tempting. Hundreds of millions were placed on deposit with new Banks opened by Zanu PF cronies; further hundreds of millions were siphoned off into dubious investments and private pockets. As with all corruption such activity is very expensive if you want to keep it secret and huge commissions and margins were taken. United Bank, owned by one Roger Boka was the main conduit and he secretly externalized over Z$1.2 billion using his connections. This was worth about US$62 million at the time. His Bank is in liquidation and Roger Boka is dead, the debts are irrecoverable.
While this was going on the seemingly endless source of Zimbabwe dollars was also used to support an arbitrary restriction on increased fuel prices. Zimbabwe motorists ran their vehicles on the cheapest fuel in the world and truckers from Johannesburg crossed the border to refuel in Zimbabwe where the fuels were a fraction of the cost in South Africa. Consumption rose and the losses began to mount. When the inevitable happened and our creditors asked for payment, we did not have the money. We defaulted on our credit lines and these were rescheduled and withdrawn. Suddenly we had to find the cash to do business. By this time, the shortage of foreign exchange began to build up and despite increasingly frantic search for foreign exchange, the National Oil Company could not meet its obligations.
We now face the situation where we must find a dollar for debt for every dollar we have to find for fuel. Since government is broke - they have turned to the consumer and placed this huge tax on fuel sales, thereby increasing the burden on ordinary Zimbabweans to unsustainable levels. The cities are quiet, but it's the quiet before a storm. Morgan Tsvangirai is pondering what to do and will no doubt decide on some kind of mass action shortly to re-enforce the message that the only way out is for the President to resign.
We met the IMF/World Bank on Friday - it was a sobering experience as we presented our view of the economic crisis and the way forward. They did not query our projections and did not challenge our position that we need an injection of US$1,5 billion to solve our immediate problems. They also did not question our bleak assessment of the impact on the poor and disadvantaged in our society of the crisis. In fact they said our projected recovery program was "ambitious" and the one presented by government a "mixed bag". We were told there is little chance of any assistance for the economy given the current economic and political environment.
Without international assistance we cannot restore stability or start the recovery program and this news will further compound Mugabe's difficulties. I see little real alternative to his resignation and the holding of fresh presidential elections before Christmas. His resignation would be enough to stop the violence and the illegal land occupations and aquisitions and get the agricultural sector back to work. It would probably restore some business confidence. However a start to the recovery process could only start once a new government was sworn in and adopted new economic policies and restored some international confidence. Speaking to business leaders today, I think they have also reached this conclusion. Watch this space, its only a matter of time - and may happen very quickly.
For the rest, we sit in long lines of motor vehicles for fuel, the roads are almost empty of traffic and you can find parking anywhere. The pall of pollution that hangs over Harare in the morning has disappeared and more people are walking to work or cycling. It's actually quite pleasant if you do not need to earn a living by actually producing something. Spring is here and the Msasa trees are coming out in their spring foliage. The Mountain Acacias are also out and in the granite kopies their rich colors splash across the veld. Our birds are all nesting, the weavers decimating the palms and the early mornings are crisp and fresh. It's a wonderful time of the year and if only we could see our farmers out there planting their crops and working their cattle, we could be surer that there would be a tomorrow.
I will always remember an incident in the late 70's. A Zanla unit with heavy arms - and a 60-mm mortar attacked a small unit of men protecting the Birchenough Bridge on the Save River. After a night of action the men were completely exhausted when suddenly from up the road came the sound of an ice cream vendor from the Dairy Marketing Board. It was a sign that a more normal world was working somewhere. I became General Manager of the Dairy Board and I remember telling my senior staff that it was their job to ensure that the milk bottles rattled every morning outside every home - a sign that life was going on despite the crisis and the war.
Eddie Cross
5th September 2000
4 September 2000
An Englishman, a Frenchman and a World Bank economist are viewing a painting of Adam and Eve frolicking in the Garden of Eden. "Look at their reserve, their calm", muses the Englishman. "They must be English." "Nonsense", says the Frenchman. "They're naked and beautiful. They're French." "No clothes, no shelter," says the World Bank economist. "They only have an apple to eat and they're being told this is Paradise. Clearly, they're Zimbabwean."
From The Mail & Guardian (SA), 3 September
Hitler's back in power
Harare - THE ousted leader of Zimbabwe's war veterans association has been reinstated as the leader of the group that occupied white-owned farms in the run-up to the country's June elections. Chenjerai "Hitler" Hundzvi was ousted from the Zimbabwe National Liberation War Veterans Association last weekend after being accused of running the organization like it was his own fiefdom. But this weekend, following a executive meeting of the organization, Hundzvi - now a Zanu-PF MP - was reinstalled as the body's "supreme leader". The association's secretary-general, Andy Mhlanga, who engineered Hundzvi's ousting, was expelled.
From The Star (SA), 3 September
'Hitler' stands ground despite palace coup
Harare - Chenjerai "Hitler" Hunzvi, who was enlisted by President Robert Mugabe to direct a group of war veterans to unleash a reign of terror in the rural areas that left 36 people dead, is now fighting to save his own political life. This follows a palace revolution in the Zimbabwe National Liberation War Veterans' Association (ZNLWA), which toppled him from his controversial leadership of the association last week. Andy Mhlanga, the ZNLWA secretary-general, masterminded Hunzvi's demise and took over as interim leader of the association.
Mhlanga said Hunzvi had been ousted because he was "irrational and had dictatorial tendencies". But Hunzvi, defiant as ever, contemptuously dismissed the meeting that toppled him, despite the fact that it was attended by representatives of most of the association's provinces. "I am still the legitimate leader of the war veterans until our congress in 2002," Hunzvi said. "Anyone who wants my post will have to wait till then. This includes Mhlanga, who is evidently under sponsorship of white farmers to derail the agenda of land reform."
Hunzvi called his own meeting of war veterans on Saturday to oppose Mhlanga. He repeated his charge that Mhlanga's meeting had been unconstitutional, saying his own meeting had been the appropriate forum to discuss grievances in the association. At the time of going to press, the outcome of Hunzvi's meeting was still unclear, but analysts said that whatever it was, the association was now clearly divided. This would weaken Mugabe's strategy of illegal land invasions and occupations to garner political support, they said. "It's obvious to all fair-minded people that Mugabe still needs Hunzvi to cow voters ahead of the 2002 presidential elections, but his strategies may fail because of these divisions among the war veterans, his only key supporters," said a senior government official who spoke on condition of anonymity.
Although analysts said it was still too early to say what would happen to the war veterans now occupying farms if Hunzvi's ouster stood, they were unanimous that the rift in the association would throw the land invasions programme into more confusion. Although Hunzvi has appealed to Mugabe for his support, the Zimbabwean president, who is at present visiting Libya and the United States, has not yet made any public statements. Hunzvi also accused top officials of the ruling Zanu-PF party, who he said were uncomfortable with his closeness to Mugabe, of engineering his "illegal" successor.
From News24 (SA), 3 September
Opposition slams fuel price hike
Harare - Zimbabwe's opposition denounced a fresh increase in fuel prices on Saturday, and demanded more transparency in the operations of the nation's parastatal oil company. "The MDC is shocked by the decision to increase the price of liquid fuels by 45 percent to 101 percent," the party said in a statement. "The fact that there is no transparency in such matters despite their importance is also of grave concern. Such decisions cannot be made in secret," added the party, which voters made Zimbabwe's first significant opposition during June elections.
Harare's buses are the bane of motorists but a lifeline for thousands of commuters, who are struggling to cope with fares that have quadrupled over the last year due to repeated fuel price hikes. Sim Nyati is a fruit-seller who travels daily from the city's southern Mbare suburb to the University of Zimbabwe campus in the northern suburbs. In January, the trip cost him about 10 Zimbabwean dollars. On Friday, the price was 40 dollars, after drivers again hiked their fares to keep pace with a 54 percent jump in diesel prices. "It's very expensive," Nyati said. His 40 dollar fare amounts to about 80 US cents, but in a country where the lowest-paid workers earn only about 800 Zimbabwean dollars a month, the transportation costs are crippling. On days when Nyati can't reach the fruit stand, he said he's forced to scrounge for other work closer to home.
"You can go two or three days, or even a whole week without diesel," said Jeffrey Dangare, a commuter driver. Dangare tried to fill his tank at 11pm on Thursday, after spending the whole day trying to find a station in Harare that had diesel to sell. The station said it was going to shut down for a few hours, and when Dangare reached the pump at 9am on Friday, his tank of gas cost him 500 dollars more than it would have the night before. "They didn't want to sell it at the old price," said Dangare.
Zimbabwe has experienced erratic supplies of fuel since December last year. Petrol and diesel are both in short supply, but the diesel shortage poses particular problems because public transport, farms, mines and industries all rely on it to keep their vehicles running. With the price hike, businesses will have to pass their increased costs on to consumers, which means even more inflation in an economy where prices have risen 60 percent over the last 12 months. "Having these monthly increases is very bad for economic planning," economist Moses Tekere said. He described it as "a shift of money from you and me to government" that won't affect the supply situation.
Zimbabwe's only oil company, the parastatal Noczim, also raised petrol prices 41 percent and paraffin - used for cooking by the majority of the low-income population in urban areas - by 101 percent. Noczim had already raised prices twice this year, in February and late July, in an effort to cope with the shortages blamed on Zimbabwe's almost non-existent foreign reserves and on alleged corruption within the national oil company. The fuel price increases will lead to more inflation, said economist John Robertson, but even so "we are yet to get to a figure that covers the full cost of procurement". After the July price hikes, Noczim said it was selling fuel at 40 percent below cost. Zimbabwe imports all of its petroleum supplies, but the foreign currency crunch has left it unable to pay its bills.
Analysts blame the currency crisis on Zimbabwe's military intervention in the DRC's two-year-old civil war and on a massive pension scheme for liberation war veterans agreed to almost three years ago. The IMFlast year suspended credits for Zimbabwe in part because of how the government financed its DRC military campaign. Most other international lenders followed the IMF's lead in pulling out. A team from the IMF and the World Bank is here to assess the economic situation, but few analysts see much chance for aid to resume immediately.
From The Times (UK), 4 September
World leaders vie for top UN billing
NEW YORK - An all-star cast including Fidel Castro, Yassir Arafat, Robert Mugabe, Hillary Clinton and Cherie Blair will brave terrorist threats, New York traffic and the mosquito-borne West Nile virus this week to attend the largest gathering of world leaders in history. More than 150 presidents, princes and prime ministers - and their spouses - will descend on Manhattan to discuss globalisation, peacekeeping and world poverty at the United Nations' Millennium Summit, which runs from Wednesday to Friday. The UN debate will, however, be overshadowed by the hundreds of private meetings between the leaders, particularly President Clinton's effort to clinch a Middle East peace deal with Mr Arafat and Ehud Barak, the Israeli Prime Minister.
The presence of so many colourful characters on the world stage offers an opportunity for one-upmanship not seen since the fiftieth anniversary of the United Nations five years ago, which attracted about 140 leaders. President Mugabe of Zimbabwe, criticised for seizing white-owned farms, will take his case to a black church in Harlem. President Chavez, the Venezuelan soldier-revolutionary, says that he will flout the UN rule restricting speakers to just five minutes each. President Khatami, the reformist Iranian leader, is hosting a special debate on the "dialogue of civilisations". President Putin of Russia will be paying his first trip to the United States since taking office while President Jiang Zemin of China will have to run the gauntlet of hundreds of pro-democracy protesters.
Rudolph Giuliani, the Mayor of New York, has promised to protect all the leaders present, even though he considers some of them "despicable, horrible human beings". He described Senor Castro, who once tried to camp in Central Park on a visit to New York, as a "murderer". The Secret Service will provide bodyguards for 245 people - 18 of them considered "high risk". Mr Blair's schedule is vacuum-packed with official functions that range from signing UN treaties on child soldiers and the sexual exploitation of minors to attending a closed-door roundtable discussion on the future of the UN. Mrs Blair gets to tag along with her husband at a "Third Way" dinner on Wednesday and President Clinton's reception for the other leaders at the Metropolitan Museum on Thursday, but the rest of the time she will be left to her own devices. The Blairs, like the other leaders, face one unexpected menace. Last week a dead bird infected with the West Nile virus was discovered on the steps of the UN. Mr Giuliani has ordered the whole area to be sprayed.