Zimbabwe Finance Minister Sees Major Shift In US-Zimbabwean Relations

http://www.voanews.com

By Marvellous Mhlanga-Nyahuye and Blessing Zulu
Washington
28 April 2009

Zimbabwe Finance Minister Tendai Biti was to head home Tuesday from
Washington after a week of meetings aimed at securing funds for the
country's reconstruction.

Before leaving, he told VOA's Studio 7 for Zimbabwe that he was pleased with
his reception by the U.S. administration and sees the potential for a
meaningful relationship.

Reporter Marvellous Mhlanga-Nyahuye caught up with Biti on the sidelines of
a forum on Monday sponsored by the National Endowment For Democracy and
Freedom House, and he noted a "historic" change in U.S.-Zimbabwean relations
from glacial to cordial.

In Harare, meanwhile, trench warfare between Biti and Reserve Bank Governor
Gideon Gono continued as Gono responded to calls for an audit of his
institution with publication of a 20-page supplement in the state-controlled
Herald newspaper addressing issues such as his recent attempted distribution
of vehicles to members of parliament.

Biti told the cabinet last week that the central banker was running a
parallel government through the continuation of so-called quasi-fiscal
operations.

In his Herald broadside, Biti urged Zimbabweans and parliament in particular
to scrutinize Biti's recently proposed 2009 budget, alleging "alien"
influences.

Gono also accused Biti of being "very petty and needlessly controversial" by
ordering him to surrender to the Finance Ministry the vehicles he had
proposed to loan to lawmakers.

Sources in the former ruling ZANU-PF party of President Robert Mugabe warned
that Biti is playing with fire in taking aim at Gono, who he has said must
be removed from office.

Biti in an interview Tuesday with VOA rejected Gono's charge that there is a
foreign hand in the budget. VOA was unable to reach Gono for comment on the
controversy.

Economist Godfrey Kanyenze, director of the Labor and Economic Development
Institute of Zimbabwe, told reporter Blessing Zulu of VOA's Studio 7 for
Zimbabwe that Gono is caught in a time warp as dollarization has deprived
him of the power to print money.

No to Parliament-driven constitution: ZCTU

http://www.zimonline.co.za

by Andrew Moyo Wednesday 29 April 2009

HARARE - Zimbabwe's labour movement on Tuesday called for an independent
commission to lead the drafting of a new constitution for the country,
rejecting plans by the government for Parliament to spearhead the writing of
the governance charter.

The Zimbabwe Congress of Trade Unions (ZCTU) said it could not trust
politicians with the writing of the new constitution and vowed to mobilise
workers to reject any proposed new constitution drafted by Parliament in a
referendum scheduled for next year.

"We say no to a Parliament-driven constitution. We will campaign for a "no
vote" against that (proposed new) constitution," ZCTU president Lovemore
Matombo told journalists in Harare.

The ZCTU is the latest major civic society grouping to oppose plans by the
power-sharing government of President Robert Mugabe and Prime Minister
Morgan Tsvangirai to use Parliament to draft a new constitution for
Zimbabwe.

The country's largest constitutional lobby group, National Constitutional
Assembly (NCA) and the Zimbabwe National Students Union have all spoken
against the government's constitution reform process.

The NCA that nine years ago successfully mobilised for the rejection of a
proposed a draft constitution sponsored by President Robert Mugabe and his
ruling ZANU PF party says it has already begun mobilising Zimbabweans to
reject any draft constitution produced by the unity government.

The ZCTU and the NCA worked with then opposition leader Morgan Tsvangirai
and his Movement for Democratic Change (MDC) party to defeat the government
draft constitution in 2000.

The MDC that later split into two formations is now part of the unity
government with Mugabe's ZANU PF and backs the government-led constitutional
reform process.

Matombo said the ZCTU - which gave birth to the MDC - met Tsvangirai last
week but the Prime Minister told the union he would take their demand for an
a independent constitutional commission to Cabinet.

"We had a meeting with the Prime Minister on Wednesday (last week) and we
said the constitution must be headed by an independent organisation. He said
they are going to discuss it in Cabinet," the ZCTU leader said.

Speaker of Parliament Lovemore Moyo has appointed a 25-member committee of
legislators drawn from ZANU PF and the two formations of the MDC that will
oversee the drafting of the country's new constitution.

Moyo, from the Tsvangirai-led MDC formation, said the committee would drive
the writing of the new constitution over the next 18 months as outlined
under a power-sharing agreement signed by Zimbabwe's three main political
parties last year.

The Speaker said apart from lawmakers, more people drawn from business,
students, rights groups, churches, media, women's groups, labour and farmers
among others shall be tasked to assist the parliamentary select committee
that will however have final say in the drafting of the new constitution.

Moyo said the draft constitution would be put before the electorate in a
referendum expected in July next year and if approved by Zimbabweans will
then be brought before Parliament for enactment.

Once a new constitution is in place, the power-sharing government is
expected to then call fresh parliamentary, presidential and local government
elections.

Zimbabwe is currently governed under the 1979 Constitution agreed at the
Lancaster House talks in London.

The constitution has been amended 19 times since the country's independence
in 1980 and critics say the changes have only helped to entrench Mugabe and
ZANU PF's stranglehold on power. - ZimOnline

Dispute Over Zimbabwe's Central Bank Governor Intensifies

http://www.voanews.com

By Peta Thornycroft
Harare
28 April 2009

There has been a major controversy in Zimbabwe's inclusive government about
the culpability of the central bank in the collapse of the economy. The
Movement for Democratic Change party believes that the central bank mainly
served the Zanu PF party elite, and has abused its position as monetary
authority.

Even before the unity government was sworn in two months ago, the MDC
demanded that central bank governor Gideon Gono be replaced.

They accuse him of illegally usurping functions from the ministry of finance
and squandering precious foreign currency on President Robert Mugabe's
clique.

This became an issue at the cabinet meeting last week. Mr Mugabe said the
MDC's allegations about Gono were an attempt to review his administration's
performance prior to the formation of the unity government.

Economist John Robertson says he doubts whether Gono or others will be held
responsible.

"The government or the reserve bank actually legalized the process that
allowed them to transfer funds," he said. "So they would argue, I believe,
that the legalities of these things are not to be questioned in that they
gave them themesleves the legal right to do them, now the big problem here
is the fact that these issues in the end might be trivialities that are
preventing them debating much more mportant much urgent issues that the
country should be considering."

When Gono's five year term expired last November, Mr Mugabe immediately
reappointed him. When MDC finance minister Tendai Biti and others from the
MDC came to office they found the economic situation was even worse than
they expected.

Gono, whose statements are regularly printed in full by the pro Zanu PF
Herald newspaper, issued a statement last week which listed hundreds of
imported vehicles handed over to the Zanu PF administration.

He has also admitted taking, without permission, at least $1.5 billion from
exporter's and humanitarian agency's foreign bank accounts held in Zimbabwe.
He said this was to keep the country going.

He handed out many millions of dollars of agricultural equipemnt mostly to
Zanu PF leaders and supporters ahead of last year's general election, won by
the MDC.

Gono has said the inclusive government should let bygones be bygones.

"Gono's contribution was that he lengthened the decline process by a couple
of years. I think if had not done what he did, the country would have
succumbed to the incredibly bad policy decisions some years ago," said
Robertson. "But he found ways of printing money. Now that it has collapsed
we are totally bankrupt whereas before we would have least been in a
position to bring about a recovery with what we had left."

Robertson says that many people allege there were two exchange rates during
Gono's period at the central bank, one for Zanu PF and one for the rest of
the population.

The reserve bank together with the government, run by the ministry of
finance in this respect, legalized a process that gave special privileges to
individuals, and the most important was the exchange rate.

Robertson said privileged people could buy foreign currency for a fraction
of what it cost ordinary people. He said this allowed the elite to buy
assets, such as luxury vehicles and materials to build enormous houses for
the same amount of money as ordinary people would spend on a loaf of bread.

Robertson said until the central bank was managed professonally and
fundamental issues of governance, such as respect for property rights, were
back in place, he doubted whether the inclusive government would be able to
attract investment or raise international loans to rebuild bankrupt
Zimbabwe.

Millions taken from Zim farm accounts

http://www.thetimes.co.za

Moses Mudzwiti Published:Apr 29, 2009

Zimbabwe to pay back with fertiliser

ZIMBABWE'S cash-strapped government has revealed that it owes tobacco
farmers millions of dollars it siphoned out of their accounts without their
authority.

a.. The country's beleaguered central bank governor, Gideon Gono, revealed
in a huge advert that he had spent US$18-million destined for accounts
belonging to tobacco growers.

Wheat farmers are owed about US$2-million.

The central bank has already admitted spending more than US$30-million
belonging to gold mines.

Gono, who is under pressure to step down, said on Monday through an advert
that the Zimbabwe government was paying back the farmers with bags of
fertiliser.

"Those wheat and tobacco farmers who are owed money by government through
the Reserve Bank, are being repaid in the most direct way of supporting
their current season's production activities," said Gono.

Last week Gono came under fire from Finance Minister Tendai Biti for
borrowing billions of US dollars from international banks without authority.

Biti wants Gono's conduct investigated, but President Robert Mugabe has
blocked the move.

Since then Gono has placed huge adverts in state owned newspapers,
explaining what he has done with the money.

From buying cars for ministers and MPs to funding dubious farming schemes,
Gono has laid it bare for the public to see.

The unusual stance by the insular government comes amid rising tension
between Gono and his boss, Biti.

Influential members of Mugabe's Zanu-PF party have hailed Gono as a
"sanctions buster."

Speculation is rife that Gono will be relieved of his position.

Zimbabwe Schools Again Threatened By Teacher Strike Over Wages

http://www.voanews.com



By Gibbs Dube
Washington
28 April 2009

Some Zimbabwe teachers have resolved not to return to work when the new
school term begins next Tuesday, demanding that the government pay them more
than the US$100 per month they are currently receiving not that the Zimbabwe
dollar has gone out of use.

The strike resolution emerged at the the Zimbabwe Teachers Association's
annual conference in Bulawayo, which was addressed by the Education Minister
David Coltart. He said he would relay the teachers' demands to the cabinet.
The teachers are asking for at least US$200 a month - though they say they
need US$500 in order to make ends meet.

ZIMTA President Tendai Chikowore told reporter Gibbs Dube of VOA's Studio 7
for Zimbabwe that teachers, like most parents, cannot afford to pay their
own children's school fees.

Zimbabwe's schools were closed for much of 2008 and the early part of 2009
as teachers went out on strike or simply could not get to their jobs on what
they were paid.

Meanwhile, headmasters of state primary schools say nearly all parents are
applying for the exemption from paying school fees which Coltart recently
announced.

President Paul Ngwenya of the National Association of Primary School
Headmasters said there are fears the scheme could be abused, plunging
schools into a fiscal crisis.

Coltart to announce fees for new school term

http://www.newzimbabwe.com

Posted to the web: 28/04/2009 23:54:13
RAISED fees demanded by most public schools are illegal, Education Minister
David Coltart said Tuesday as he prepared to fix new fees limits for the
second term which opens on May 5.

Cabinet met on Tuesday to discuss proposals by the National Education
Advisory Board on ways to improve Zimbabwe's primary and secondary
education, including fixing affordable fees and establishing a "means test"
system for parents who cannot afford the fees.

In March, Coltart set out fees for the first term, with a ceiling of US$150
per term for primary schools and US$280 for secondary education.

But letters sent out by schools ahead of the second term have shown a
dramatic rise in fees. Bulawayo's Founders High School pegged fees for the
second term at US$500 including levies, while Mzingwane High School in
Matabeleland South fixed fees at US$360.

Coltart said: "We are announcing new fees shortly and parents should wait
for that announcement, and all public schools should be guided accordingly."

Coltart has recently admitted that a majority of families in the country
cannot afford the fees being charged. He recommended that schools should
allow pupils to pay in instalments, and where the parents have no income,
headmasters have been directed to carry out a "means test" to decide if
qualifying students should get a free education.

The entire Zimbabwe civil service receives monthly allowances of US$100, and
unions say the fees being charged by schools are way above their members'
earnings.

Coltart gave no indication if the new fees would be reduced, as he forecast
in March, or an increase from the last term.

National Education Advisory Board secretary Trudy Stevenson said some
schools were smuggling fees increases through levies which are not regulated
by the government.

"There seems to be no control over levies, of course it is meant to be the
parents that control levy and how it is spent, but many parents don't
exercise their right to have a say in the amount to be paid, and a solution
is greater participation by parents to ensure their voices are heard," she
said.

13 MDC supporters accused of violence

http://www.thezimbabwetimes.com/?p=15912

April 28, 2009
Geoffrey Nyarota

BUHERA (The Zimbabwe Mail) - Three people have been arrested in Prime
Minister Morgan Tsvangirai's village in Buhera, bringing to 13 the total
number of villagers arrested so far in connection with acts of alleged arson
and

politically motivated violence in the area during the burial of Prime
Minister Morgan Tsvangirai's late wife.
Manicaland police spokesperson Inspector Brian Makomeke confirmed the arrest
of the 13 and said the net would soon close in on those who are currently on
the run.

He said the 13 were likely to appear in court soon to face charges under the
Criminal Law Codification and Reform Act, for malicious damage to property.
Meanwhile, the police have since released the Deputy Mayor of the City of
Mutare, Councillor Admire Mukorera, who was arrested early Saturday. No
formal charges were brought against him.

Mukorera was picked up by police around three in the morning and spent the
whole day assisting with investigations.

It is suspected that the Deputy Mayor is the owner of one of the vehicles
used to ferry the 13 arrested people to Village Six, where they torched 12
huts.

The Deputy Mayor was released after clarifying that his vehicle was being
driven by another person on that particular day.

That person is now said to be on the run.

The arrested villagers, all believed to be members of the MDC led by
Tsvangirai burnt houses and livestock and beat up people for their alleged
allegiance to Zanu-PF.

Some agricultural equipment acquired under the mechanisation programme, such
as scotch carts and a tractor, were also burnt.

Kim Yong Nam to Visit South Africa and Zimbabwe

   http://www.kcna.co.jp/

calendar>>April 28. 2009 Juche 98

Pyongyang, April 28 (KCNA) -- Kim Yong Nam, president of the Presidium
of the DPRK Supreme People's Assembly, will soon visit South Africa to
attend the inaugural ceremony of the President of the country.

He will also visit Zimbabwe.

ARM is on lookout for Zimbabwe investments

http://www.businessday.co.za

 29 April 2009

SURE KAMHUNGA

Companies Editor

MINING group African Rainbow Minerals (ARM) yesterday said it had registered
a company in neighbouring Zimbabwe to scout for investment opportunities in
coal and platinum mining.

ARM joins a growing list of international mining firms from Europe, Russia
and China eyeing the country's rich mineral resources.

ARM head of investor relations Monique Swartz said the company, led by
billionaire Patrice Motsepe, was "excited" about the opportunities in
Zimbabwe, which is slowly emerging from more than a decade of economic
mismanagement.

The interim unity government has identified mining as one of the key sectors
that investors would be encouraged to enter either in partnership with local
firms or by starting greenfield projects.

"I can confirm that our interest in Zimbabwe to date relates to coal and
platinum. ARM remains excited about the opportunities in Zimbabwe, it being
a resource-rich country," she said.

ARM had already held preliminary discussions with the country's mining
ministry and its chamber of mines and concluded that there was "mutual
interest".

Motsepe recently led a high-powered 22-member delegation of South African
companies who were on an exploratory mission to search for possible
investments.

The delegation included representatives from mining, banking, construction,
retail and textile firms and its trip was carried out under the umbrella of
Business Unity South Africa.

Swartz said ARM was unable to say when it would be making concrete decisions
about investing in Zimbabwe, which is reputed to hold the second-largest
platinum deposits (after SA), and is endowed with rich deposits of gold and
coal.

"We have to follow the formal procedures in Zimbabwe. And within ARM, we
also have our official procedures for making any investment, that also take
time. Both of these processes would vary depending upon the nature of the
investment. What we can guarantee is that we will make a public announcement
at the appropriate time," she said.

kamhungas@bdfm.co.za

MTN signals it is keen to get into Zimbabwe

http://www.businessday.co.za

29 April 2009

LESLEY STONES

Information Technology Editor

MTN has confirmed that it is eager to enter Zimbabwe, and may make its move
by taking control of the existing mobile operator, Telecel.

Africa's cellular giant has taken the unusual step of declaring its interest
ahead of firming up any precise moves by exhibiting at the Zimbabwe
International Trade Fair in Bulawayo this week.

Spokeswoman Nozipho January-Bardill said yesterday plans were still
preliminary, but operating in Zimbabwe was definitely high on the agenda.

"We have always said we are looking for value-enhancing opportunities, and
Zimbabwe presents us with one," she said. "Zimbabwe is our neighbour sitting
there waiting. The government is embarking on a reinvention of itself and
has opened up to South African companies to go in and operate there."

Asked if MTN was most likely to enter through an acquisition or if a new
licence might be issued, January-Bardill said: "It's not an answer I can
give right now. We will see what is available. Some governments are very
slow at opening up completely, and don't always tell you exactly what they
are doing, so we will see once things are clearer."

Sceptics may fear that Zimbabwe is too volatile or its population too poor
for phone calls, but MTN confounded critics with its success in Nigeria and
Iran.

Analyst Richard Hurst of research house IDCNews welcomed the news. "It makes
a hell of a lot of sense to go in now. The market is at rock bottom, but
there is massive opportunity for someone like MTN," he said.

"MTN is very good at managing risk whether it's political or otherwise, and
they are right to prepare for change in Zimbabwe."

The country is already served by three mobile networks: Econet and Telecel
and government-owned NetOne. Hurst believes MTN's most obvious route is to
buy the 60% of Telecel owned by the Egyptian operator Orascom. The other 40%
is owned by the Empowerment Corporation of Zimbabwe.

"Orascom has hinted that it would like to get out because it wants to
concentrate on north Africa and the Middle East. With three mobile operators
already in place, I think it's going to go in through an acquisition rather
than a new licence."

January-Bardill said exhibiting at the trade fair had let MTN raise its
visibility and had shown people the services it could offer.

The degree of competition in Zimbabwe was not a problem, she said, as
cellphone penetration was still low and MTN was accustomed to entering
emerging markets against several rivals.

"MTN has taken risks in much poorer countries and from what we are seeing
there seems to be a commitment to grow and redevelop the economy,"
January-Bardill said.

Zimbabwe's Sunday Business newspaper said existing operators had failed to
serve the market well, leaving it with one of the worst communication
networks in the region, a concern for businesses, which complained that they
paid way above the regional average for calls.

SIM cards could cost $10, but were rarely available on the formal market so
customers often paid up to $50 on the black market, the newspaper said.

stonesl@bdfm.co.za

Army moves in to protect endangered rhino

Rural service providers resort to barter trade

http://www.herald.co.zw/

Wednesday, April 29, 2009

Bindura Bureau

THE scarcity of foreign currency in some rural areas has forced service
providers and villagers to resort to barter trade in conducting business.

In Guruve District, clinics are demanding payment in kind after realising
villagers did not have foreign currency.

Zimbabwe recently adopted the use of multiple currencies as a way of reining
in inflation and ensuring stability in the economy. Clinics in Guruve have
been forced to shift to barter trade as a form of payment for patients
seeking treatment but do not have foreign currency.

Patients interviewed at clinics said they were paying consultation fees in
the form of beans, salt, soap and sometimes chickens.

Mr Peter Nyanga, whose wife was being attended to at Ruyamuro Clinic, said
he paid eight cups of sugar beans after failing to raise the required US$1.

"My wife suffered from malaria and I took her to Ruyamuro Clinic for
treatment. After failing to pay the US$1, we negotiated to pay in the form
of beans, which I did," said Mr Nyanga.

Another villager, who only identified himself as Muzika, said he was given
an option of paying in the form of salt, sugar beans or laundry soap. He
applauded this new development, saying it was convenient to patients.

$50bn note defies odds

http://www.herald.co.zw

Wednesday, April 29, 2009

HR.

The $50 billion note continues to circulate in Harare where it is being used
as change in commuter omnibuses and by vegetable and biscuit vendors.

The note is being used as change in most omnibuses which charge US 50 cents
or 5 rand or Z$3 trillion in $50 billion notes.

Kombi conductors and the vendors also accept the $50 billion notes as
payment.

Kombi conductors and vendors accept only the $50 billion note while all
other denominations in the local currency have since been retired.

Following the legalisation of multiple currencies in the economy early this
year, small change has remained a problem, a situation that has forced
business to either persuade customers to pick up small items such as sweets
in lieu of cash.

The note is, however, no longer accepted as legal tender in other urban
areas.

Government has suspended the local currency for the next 12 months after
which the Cabinet Economic Cluster says a decision would be made when to
re-introduce the national currency.

The cluster is made up of the ministries of Finance, Economic Planning and
Investment Promotion, Industry and International Trade and Regional
Integration and International Co-operation.

At least US$13 million is required to mop up Zimbabwe dollars held with
banks. - HR.

Exhibitors shun ZITF

http://www.zimeye.org/?p=4234

By Moses Muchemwa

Published: April 29, 2009

Bulawayo  - ONLY 400 exhibitors out of an anticipated 1 000 are
participating at this year's edition of the Zimbabwe International Trade
Fair which gets underway today.

ZITF general manager Daniel Chigaru revealed to the ZimEye that only 10
African countries are taking part as the international community keeps
shying away from Zimbabwe.

"We have a total of 10 countries taking part at this year's Trade Fair.
However, I cannot precisely give accurate numbers of companies from
individual countries that will participate at the Trade Fair because some of
them are still coming, even at the moment."

This year's exhibition will run from 28 April to 2 May and is being held
under the theme "Golden Opportunity for Dynamic Takeoff".

Prime Minister Morgan Tsvangirai is expected to officially open the annual
International Business Conference that runs concurrently with ZITF on
Wednesday.

Speakers to address the business conference include Finance Minister Tendai
Biti, Tourism Minister Walter Mzembi, Mines and Mining Development Minister
Obert Mpofu, Regional Integration and International Co-operation Priscilla
Misihairabwi-Mushonga, Information and Communication Technology Minister
Nelson Chamisa, Economic Planning and Investment Promotion Deputy Minister
Dr Samuel Undenge, and Welshman Ncube, the Industry and Commerce Minister.

Dutch Institute Urges 'Smart Support' Complementing Targeted Zimbabwe Sanctions

http://www.voanews.com

By Jonga Kandemiiri
Washington
28 April 2009

A Dutch think tank says Western donor nations should complement their "smart
sanctions" imposed on Zimbabwean President Robert Mugabe and hundreds of his
supporters with what it calls "smart support" to help the unity government
deliver critical services.

The Netherlands Institute for Multiparty Democracy said the world should not
punish all of the members of Zimbabwe's new government for the policies of
the previous administration of President Robert Mugabe even though Mr.
Mugabe remains head of state within a power-sharing arrangement negotiated
following violence-tainted 2008 elections.

Institute for Multiparty Democracy Chief Executive Roel Von Meijenfeldt told
reporter Jonga Kandemiiri of VOA's Studio 7 for Zimbabwe that Zimbabweans
have suffered enough.

Inviting the media to its party

Zimbabwe: Donors Should Focus First on Reforms

Zimbabwe is still sitting on a crisis seesaw

http://www.thezimbabwetimes.com/?p=15928

April 29, 2009

By Greg Mills

ZIMBABWE'S  economy is in a parlous state. Per capita income has halved
since 1997. Once the second-largest economy after South Africa in the
region, it is now the third-smallest, after Swaziland and Lesotho.

Exports and employment have more than halved - the UN calculates that just 6
percent of the workforce is in formal employment now. Seventy percent of the
population is in urgent need of food assistance.

With a current account deficit of 27 percent last year, gross international
reserves amounted to US$6 million (R53.85 million) at the end of that year,
while external debt was $5.9 billion.

Budget revenue fell from 25 percent of gross domestic product (GDP) at $1
billion in 2005 to $133 million last year, causing, in the International
Monetary Fund's words, "an almost complete collapse in the provision of
public services".

As if all this is not enough, the politics are fraught and fragile at best.
The government of national unity (GNU) has two principal actors: one that
ransacked the state to the point of bankruptcy and record hyperinflation,
with the presidency, security chiefs, and the 2 00-strong reserve bank at
the centre of these activities; the other a reform-minded and post-colonial
liberation movement. Both are reluctant partners in a shotgun marriage.

If the first Zimbabwean challenge is to ensure short-term liquidity and end
hyperinflation - as detailed in good bits of the GNU's short-term economic
recovery programme - the second is political: to strengthen rights and
institutions without endorsing bad practices. The programme rightly focuses
on the short-term challenges to increase the chance of political stability.

De facto dollarisation and randisation in February, ridding the country of
the worthless Zimbabwean dollar, has stabilised the economy, tilting the
balance of political power at least temporarily to the Movement for
Democratic Change (MDC) - not least since it holds the purse strings for the
250 000 civil servants, who are all now paid $100 per month. Stability
depends on maintaining economic momentum - thereby isolating those who may
wish for the GNU's demise.

As the end of the first 100 days of the unity government fast approaches
next month, what are the policy options?

Stability demands the MDC-led economics team meets two other interrelated
needs: dealing with donors and articulating an economic vision.

Donors offer the most ready source of funding liquidity. Finance Minister
Tendai Biti needs $25 million monthly just to pay the civil service stipend.
Yet his current receipts amount to little more than $30 million, mainly from
customs and VAT.

But the donors face a difficult conundrum: how to support the MDC reformers
with scarce cash, without endorsing the past bad practices and
anti-democratic behaviour of Zanu-PF?

Hence the current donor preference for humanitarian assistance and carefully
circumscribed programmatic financing, rather than budget support, not least
because their constituents would not stomach lending succour to the regime
of President Robert Mugabe.

From the government vantage point, dealing productively with donors also has
a technical dimension: acquiring the necessary expertise to assist, for
example, with arrears and debt rescheduling. More importantly, beyond the
initial stability phase, it demands ensuring the government and not the
donors set the agenda.

One way to avoid the usual problem of the donor tail wagging the government
dog is for the government to accept donor funding only for those projects
that create hard (physical) and soft (education and health) infrastructure.
And the Ministry of Finance alone should identify priority projects.

All of the projects need clear, identifiable and tangible outcomes and
benchmarks - not just the usual workshops, seminars, consultants' papers,
and studies.

The second aspect requires recognition that Zimbabwe's dramatic collapse
from the mid-1990s is the result not just of the violent seizure of
productive farmland since 2000 but even more the result of the
uncompetitive, antiquated, overregulated, protectionist and isolated
economic model that has existed for more than 40 years.

However, a moratorium on land grabs might regain donor confidence by helping
regain faith in the rule of law, especially for property rights.

In summary, if the economy is not to lurch from crisis to stasis and back
again, Zimbabwe has to become less expensive and more competitive - in
productivity, trade and currency.

A programme to achieve this would help to solve the inherent problems of a
GNU - that it is weak, fractious and inevitably short-lived.

There is a need to deliver against a clearly stated, longer-term vision,
which addresses the realities rather than what veteran Zimbabwean economist
Tony Hawkins describes as the "myths" of Zimbabwe.

One myth is that Zimbabwe was once a regional bread-basket (South Africa
was, Zimbabwe was not). Another myth is that per capita income has been
declining only from the mid-1990s, when in fact it has been dropping
steadily since the mid-1960s.

A third big myth is that it is just a question of hitting the rewind button
to return the country to its old prosperity, where the reality is that it
will never be the same again, given the extent of entrepreneurial, social
and institutional decay.

The government should also quash rumours that it intends introducing a new
local currency in the foreseeable future.

Because of Zimbabwe's history of hyperinflation, foreign currency holders
will be discouraged from investing until such a currency is introduced if
they think it is imminent.

One way around this question is to propose a referendum be held on the
reintroduction of the national currency within the year when Zimbabwe's
annual GDP per capita exceeds $5 000.

For the moment, Zanu-PF has no option but to go along with the MDC-led
economic changes. Even if Zanu-PF were now to destroy the GNU, it would
simply be the dog that has caught the car; it would face intractable
economic difficulties, with little means to deal with them.

At the same time, there is a danger that ZanuPF is behaving itself
(relatively speaking) only until international resources start flowing, at
which point the bickering will start in force and real splits will
re-emerge. Recovery and reform is thus likely to be fraught with both
victories and defeats.

In short, the challenge for the GNU is first to ensure currency stability
and liquidity, to maintain political and social cohesion and steadiness, and
then to articulate a vision of a dynamic and competitive Zimbabwe that would
not lurch, again, into economic stagnation and crisis.

( Greg Mills heads the Johannesburg-based Brenthurst Foundation and has just
been in Zimbabwe.)