• Anglicans resist Kunonga’s bid to consolidate powers
• Muzenda receiving intensive care
• SADC agenda dodges Zimbabwe crisis
• Mozambique customs impound sugar load
• ESC report not helpful – lawyer
• MDC accuses ZANU PF of poll fraud
• Is the bank notes crisis a security threat?
• Why the silence on RBZ governor?
• Zimbabwe fiasco likely to feature at food conference
• Net credit jumps by 136 percent
• Zimbabwe must pay IMF US$32 m by December
• Not fooled by ‘money in the bush’ tricks
• Cabs must not turn away cash depositors
• Of cash shortages, rules and regulations
• Zimbabwean economy needs socialist transformation
• MDC PRESS: Zanu PF Intensifies Violence in Kariba Ahead of Urban Council Elections
• JAG Security Warning and Legal Communique
• Crisis Pushes Many Into Informal Sector.
• Zimbabwe workers getting poorer by the day
• EU eyes new Zimbabwe food aid rules
• Think-tanks finds talks key to peaceful change
• Zim to discuss food flow
• Zimbabwe ups spending by 84% in revised budget
• Zimbabwe to increase salaries for officials
• Housing backlog grows in tandem with economic crisis
• JAG Open Letters Forum No. 133

      Stumbles, who is a renowned lawyer, says the proposed amendments would
create a dictatorship within the church structures.

      The letter comes at a time when relations between Kunonga and the
majority of Anglican parishioners have been severely strained.

      Kunonga, a fortnight ago, sent out to parishioners the proposed
amendments that some within his flock believe would grant the bishop powers
to ban, dismiss, remove or transfer priests without approval from other
church structures.

      Stumbles wrote in a letter he has distributed to Anglicans in Harare:
"What the Bishop and his advisers are proposing may be right in their own
eyes and for their own purposes, but it is submitted that it is disastrous
for the Church, contrary to democratic laws and does not achieve what is
best for one another and all those around the Diocese."

      Kunonga, who has clashed with parishioners since becoming bishop in
2001, could not be reached for comment on the matter.

      Kunonga suspended Stumbles as chancellor of the Anglican Church in
Harare last June, but the lawyer has challenged the suspension in court.

      According to Stumbles, if the proposed amendments are passed they
would "thrust much more power and control into the hands of the Bishop and
deprive others of rights to which they are presently entitled. The bishop is
anxious to have these changes adopted".

      The amendments also seek to authorise church wardens and members of
the church council to prevent "demonstrations, disturbances and strikes
against the incumbent, church leadership and administration".

      Some Anglican parishioners have on several occasions staged
demonstrations against Kunonga over his management of the diocese.

      Senior Reporter

      Hospital sources told the Daily News that Muzenda, 81, who has been in
and out of hospital in the past year, was moved from the hospital’s B6 ward
to the CCU on Tuesday night. Efforts to get clarification on Muzenda’s
condition from the government and from the ruling ZANU PF party, for which
Muzenda is also a vice-president, were unsuccessful yesterday.

      ZANU PF chairman John Nkomo, who is also Special Affairs Minister in
President Robert Mugabe’s office, said he had seen Muzenda in hospital but
he would not be drawn to give details on the vice-president’s condition.
Nkomo said: "Talking about his condition would be too personal. I suggest
you talk to his family members."

      Muzenda’s daughter, Tsitsi, yesterday said she was unable to comment
on her father’s illness because she was "in a meeting".

      A hospital source, who spoke on condition he was not named, said: "The
VP is in serious condition. We transferred him on Tuesday night from the D1
Floor to the Coronary Care Unit (CCU) in B6 Ward where he is now."

      Muzenda, who has been in and out of the country, mostly to China, to
receive treatment for an undisclosed ailment, was admitted at Parirenyatwa
Hospital over the weekend.

      Patients admitted in the CCU require constant care and should be
monitored by at least two nurses at any given time. "Usually, the patient
has difficulty in breathing resulting from a problem either in the lungs,
the heart or the kidney," said one Harare doctor.

      Mugabe’s trusted deputy since 1980, Muzenda is widely seen as a
crucial power broker in the ruling party. Muzenda is also regarded as a key
player in determining who will take over from Mugabe, with ZANU PF insiders
saying he prefers Speaker of Parliament Emmerson Mnangagwa to succeed
Mugabe.

      One of the pioneers of Zimbabwe’s bitter struggle for independence,
Muzenda is believed to have expressed his wish to retire from active
politics in April citing "‘ill health and fatigue", but is said to have been
pressured to remain in power by some of his colleagues in government.

      Staff Reporters

      Briefing journalists on the imminent Council of Ministers meeting, and
the subsequent summit from 25 to 26 August, Ramsamy said these issues had to
be tackled by the region, with or without the support of the rest of the
world.

      When asked about Zimbabwe, Ramsamy played down suggestions that the
regional body might make a statement on the country’s political and economic
crisis, saying the issue was being discussed by the Organ on Politics,
Defence and Security, but SADC’s position had not changed.

      "The sanctions (imposed on Zimbabwe) are not helping the country or
the region as a whole," he said. "We have always asked for the sanctions to
be lifted."

      Following a SADC HIV/AIDS summit held in Lesotho from 2 to 4 July,
where regional leaders approved a revised SADC strategic framework for
tackling HIV/AIDS, Ramsamy said the pandemic had to be addressed
immediately.

      "Our active population is being destroyed. We won’t have people to
work, so we can forget about development," he warned. "It is true we need
the capacity to cope with the numerous challenges, but our capacity is being
decimated by HIV/AIDS, therefore it is something that we have to address."

      Current SADC figures estimate that 14 million people in the region are
HIV-positive, representing the largest share of infections not only in
Africa but also of the global total.

      The strategic framework focuses on prevention, care and support to
ensure sustainable human development in the SADC region. But Ramsamy said it
was difficult to tackle HIV/AIDS when the costs were so high.

      "We should be able to give cheap drugs," he said. "It makes no sense
if (antiretroviral) drugs cost one dollar a day, when people don’t have one
dollar a day to give . . . People shouldn’t make money out of the deaths of
our people."

      Ramsamy also stressed that in the face of growing evidence on the
impact of trade-distorting subsidies, SADC countries had to consolidate
their position on world trade and access to markets.

      "It is critical that we, as SADC, agree on one voice and go there (to
the World Trade Organisation) and say that we don’t want subsidies. We have
to make our voice loud and clear."

      Following last year’s food crisis in the region, the council would be
discussing food security and measures to avoid potential crises in the
future, the executive secretary said.

      "It was fortunate that we sounded the alarm bells in March 2002, and
we were able to get enough food assistance for the 15.2 million people
affected. But these are short-term solutions – we need long-term development
in agriculture."

      He cited the case of Tanzania, which produced a surplus last year and
could donate food to the region, but due to poor rains and failed crops this
year, an estimated two million people would need food assistance.

      "We can’t afford to swing between surpluses and deficits. We need to
be more consistent . . . It is a contradiction that people in Africa live in
abject poverty, when we have the resources: water, fertile land and people.
Agriculture is an area where we (SADC) can make a difference," Ramsamy
concluded.

      – IRIN

      The sugar, sent into Mozambique last Friday, was seized earlier this
week in Manica town, about 60 kilometres east of Zimbabwe’s border city of
Mutare.

      Mozambican Customs Director Jose Chicote Caetano, told the Mozambican
news agency, AIM, that police also impounded a pick-up truck used to
transport the smuggled products.

      However, the police failed to arrest the three people believed to be
the owners of the merchandise.

      It was not immediately clear whether the culprits were Zimbabweans or
Mozambicans.

      "What we want is to check the source of sugar smuggling into the
country, that is causing a severe damage to the national sugar industry.
Thanks to co-operation with the police, our operations have been a success,
which show in the reduction of cases of sugar contraband", Caetano told the
news agency.

      Smuggling of sugar and other basic goods into Mozambique is rife as
there is a lucrative markets for the goods.

      Mozambicans rely on Zimbabwean goods such as sugar, maize meal,
potatoes, tomatoes, eggs, cold meats, tea bags, cereals, soft drinks and
canned beer.

      However, authorities in Mozambique have launched a campaign against
the smuggling of sugar into their country in a bid to protect that country’s
sugar industry.

      Mozambicans shun sugar produced by a company in Beira, preferring to
buy Zimbabwean sugar saying it is of better quality.

      The sugar is used mainly to brew illicit brews such as kachasu.

      Wayne Bvudzijena, the police spokesman, yesterday said police were
arresting an average of 36 people a week for smuggling goods into
Mozambique.

      Bvudzijena said, "We are arresting them. We have several patrols along
the border area. That is one way we are trying to contain the problem."

      The government accuses illegal cross border traders of causing the
shortages of basic foodstuffs in the country and also the local Zimbabwe
dollar which the traders are accused of stashing out in neighbouring
countries.

      Own Correspondent

      Harare lawyer Sheila Jarvis, representing the 11 opposition Movement
for Democratic Change (MDC) party aspiring candidates, told Justice Ben
Hlatshwayo that the report by ESC chairman, Sobusa Gula-Ndebele, did not
have much information but merely confirmed that the atmosphere was tense at
Chegutu nomination court.

      She said: "In general, the ESC report has not provided the court with
much assistance, save to confirm the tense environment and the gunfire
dispersing people from the nomination court and that someone, other than the
applicants, was prevented from filing his nomination in Chegutu on 21 July
by the interference there."

      Jarvis, of Harare law firm Atherstone and Cook, urged the court to
"timeously throw the necessary lifeline to democracy and without further
ado, (and) ensure a further opportunity for submitting nominations".

      The MDC aspiring candidates, who say they were attacked and prevented
from submitting their nomination papers allegedly by ruling ZANU PF party
militias, want Justice Hlatshwayo to order Registrar-General Tobaiwa Mudede
to accept their nominations to contest council elections in Chegutu at the
end of this month.

      Justice Hlatshwayo last week ordered the ESC to submit a report on the
events at the Chegutu nomination court, saying "their views and observations
would be critical to the finalisation of this matter".

      In his report, Gula-Ndebele claimed that proceedings inside the
nomination court were "relaxed and peaceful" and that they were conducted in
an orderly manner.

      Gula-Ndebele, a former military intelligence officer, told the court:
"In the afternoon, the commission’s representative noted that the
environment was tense.

      "At approximately 1430 hours (whilst in court), he heard the sound of
gunfire (three shots).

      "He later collected that these shots had been fired in the air by the
police to disperse people who, it is believed, could have interfered with
court proceedings. The holding of court proceedings was, however, not
interrupted.

      "In the Commission’s view, the proceedings of the nomination court
were done in accordance with strict adherence to provisions of the Electoral
Act."

      After MDC candidates failed to submit their papers, ZANU PF candidates
were then declared winners in accordance with the electoral law that where
there is no opposing contestant, the sole candidate be proclaimed the
winner.

      Court Reporter

      MDC chairman for Midlands province, under which Kadoma falls, Evans
Ruzvidzo, told the Daily News that his party had since last week observed
hundreds of suspected ZANU PF supporters registering as voters at the
Registrar General’s offices in the mining town.

      Ruzvidzo said: "On Monday a group of about 300 Zanu PF supporters
thronged the district registrar’s offices where they were formally
registered as voters in our presence.

      "When we confronted the district registrar, Mr Kazingizi, for
clarification, he said the registration was for the forthcoming by-election
for Kadoma Central."

      ZANU PF PF spokesman Nathan Shamuyarira could not be reached for
comment on the matter by the time of going to print last night.

      The registrar for Kadoma, who would only identify himself as
Kazingizi, denied that people were still being registered to vote in the
local government elections scheduled for 30 and 31 August.

      He said: "The voter registration exercise was officially closed on 30
June and has not been extended."

      The government’s Electoral Supervisory Commission (ESC) that is tasked
with ensuring that elections are free and fair said voters being registered
now were for future elections and not for the forth coming local government
elections.

      ESC spokesman Thomas Bvuma: "Voter registration is a continuous
process and people are always registering any time.

      "But for a specific election such as the one in Kadoma, there is a
cut-off date.

      "That cut-off date was 10 June 2003 and those who registered after
date will certainly not vote in this election but in other future polls."

      Reporters from this newspaper on Monday this week saw truckloads of
suspected Zanu PF supporters disembarking at the Kadoma registration
offices.

      Some of the people, who were being ferried to the offices wore ruling
ZANU PF party uniforms and most openly confirmed they had come to register
as voters.

      "We have come here to register and we will vote," one of the suspected
ZANU PF supporters told this reporter.

      Last week the MDC said it had unearthed about 6 000 ghost voters on
the Gweru voters’ rolls for the forthcoming council polls.

      ZANU PF, which has lost nearly every other major election in urban
areas to the MDC in the last three years, battles it out in at least nine
municipalities where new mayors and councillors will be chosen at the end of
the month.

      But the ruling party has already won at least 30 seats uncontested
after suspected ZANU PF militias prevented MDC candidates from submitting
names for nomination in Bindura, Marondera and Chegutu towns.

      Meanwhile, police in Harare yesterday permitted the MDC to mount a
roadshow through Harare’s central business district and affluent suburbs to
kick-start its election campaign to retain the vacant Harare Central
parliamentary seat.

      A police vehicle monitored the convoy from close range.

      Although the police cleared the opposition party to proceed with its
roadshow, they did not allow the party to hoot or to address the public.

      A convoy of more than 20 vehicles left the party’s headquarters at 12
noon yesterday and drove around the streets in central Harare before the
convoy drove to major business centres in Harare Central constituency to
unveil their bid to reclaim the seat left vacant by MDC legislator Mike
Auret who resigned due to ill-health. The MDC’s Murisi Zwizwai battles it
out with ZANU PF’s William Nhara for the seat. MDC officials did not address
people during the roadshow but could not resist hooting to cheering supporte
rs along the route they were cleared to use by the police. "We wanted to
have another roadshow before the election. But the police said they were
committed with the agricultural show." Also MDC leader Morgan Tsvangirai,
vice-president Gibson Sibanda and secretary-general Welshman Ncube were last
night scheduled to address residents at a Harare hotel. Zvizwai said his
party’s campaign would focus on ways of combating crime, political
intolerance among Zimbabweans and cultivating relations with business,
industry and civic society for the development of the constituency. Own
Correspondent

      But the shortage of bank notes has taken Zimbabwe by storm; it is the
"mother" of all shortages. This is so because even where the other scarce
commodities are available, mostly in the underground economy, one needs cash
to buy them. Zimbabwe is essentially a cash-run economy in which almost all
transactions are cash transactions.

      Without cash, everything else grinds to a halt. And "everything else"
includes rent, rates, electricity, mortgages, food, medicines, and
transport, to mention a few basic essentials. Being unable to pay for these
items because one does not have any money anywhere is tolerable.

      It’s a totally different situation when you cannot buy whatever you
want to buy simply because you can’t access your own money; it’s absolutely
intolerable and dehumanising.

      There are few things as annoying, frustrating and humiliating as not
being able to get your own money. It’s worse than being unable to access
your own house or being chased out it.

      Many bank account holders have literally been sent away empty-handed
and their anger has long reached boiling point, and it’s understandable.

      Moreover, the cash crisis affects virtually everyone (except those who
are hoarding the cash or connected to the hoarders) from urban workers to
"old" and "new" farmers, from MDC to ruling ZANU PF supporters, from "Green
Bombers" to uniformed security forces.

      In fact, two days after drafting this contribution, The Standard (17
August 2003) ran a headline Soldiers run amok over cash.

      It was reported that about 40 soldiers and police officers ran berserk
after being told that the Chitungwiza branch of Beverley Building Society
had run out of cash. This prompts the question: who will guard the guards?
Apparently, the civilians, who were in another queue, did not run amok.

      The simple point is that cash crisis is non-partisan and
non-discriminatory, and to the extent that it affects all corners of the
country, it unites all corners of the country in this misery and
humiliation.

      National unity is achieved via the national cash crisis!

      I have long subscribed to the thesis that Zimbabweans are slow to
anger and that we are not mass activists, at least not in the organised
sense of mass action.

      However, Zimbabweans are perfectly capable, like all human beings, of
spontaneous outbursts of anger once their frustration has reached breaking
point.

      Further, such sudden explosions of anger are often not in search of a
political solution in the sense of regime change. The anger is directed at a
specific grievance or target, but can have far-reaching political
consequences, including regime change.

      The point here is that a perfectly non-political event can trigger a
chain of events that have unanticipated political ramifications.

      For one thing, political entrepreneurs, who never initiated, let alone
anticipated, the riotous behaviour, always stand ready to fish in troubled
waters.

      This then brings us to the intersection between the cash crisis and
political upheavals.

      I agree (which is very seldom indeed) with conspiracy theorist
Tafataona Mahoso in his contribution in The Sunday Mail of 3 August, 2003.
To me, he got the causes wrong but the consequences right.

      He characterised the "cash shortages and the manipulations of our
currency as a serious security threat" and that "the so-called cash crisis
is the most lethal and most effective method of doing the job (of mass
stayaways) so far".

      He continued: "Cash scarcity is more lethal than past stayaways
because, where peasants and newly resettled farmers used to defy calls for
stayaways to continue with their normal business, this time they are the
most severely hit by the cash shortages. No one can escape from taking
part!", including soldiers and the police.

      If anyone had any doubt that the government itself is acutely alarmed
by the potential political consequences of the cash crisis, the Press
conference of 29 July 2003 provided ample testimony. The Press conference
was the occasion at which Herbert Murerwa, the Finance Minister, announced a
string of new measures to arrest the bank notes crisis.

      The announcement itself was not significant. The significance was in
the people who flanked him as he delivered the medicine. These were none
other than the Defence Minister, Sidney Sekeramayi, and the State Security
Minister, Nicholas Goche. The only security portfolio that appeared not
represented was the Ministry of Home Affairs, in charge of the police.

      The Zimbabwe Republic Police Support Unit has been summoned to deal
with riotous crowds at several banking institutions when irate clients
failed to access their cash. Now the police and their uniformed colleagues
have proved not immune to the riotous tendency. One of the measures
announced was the formation of a Cabinet taskforce chaired by Murerwa with
all the three critical security ministers as members.

      No evidence is more eloquent testimony to the fact that the government
takes the cash crisis to be a grave security threat to its political
survival. The stern and worried faces of Sekeramayi and Goche at the Press
conference betrayed this. What should be noted is that this time around, the
security forces will not be dealing with the perpetrators of the cash crisis
as such, but with the consequences of the cash crisis.

      This crisis is, therefore, fundamentally different from other crises
that are allegedly instigated by the "British-sponsored" MDC. This one is
home-grown. The perpetrators are invisible, but those reacting to the cash
crisis are not. Even as the rioters do not necessarily seek political
change, the consequences of their actions are manifestly political. This is
the extent to which the cash crisis is a regime threat, that is, a threat to
the government.

      No doubt some of the contingency plans likely to be considered by the
Murerwa-led taskforce are strategies and tactics of dealing with the angry
public should the public decide to take matters into its own hands,
notwithstanding the famed "wrath of the law". The cash crisis is the most
visible and sharpest manifestation of a deep, comprehensive and debilitating
national malaise.

      The country has never been in deeper despair. If not managed urgently,
decisively and with positive results, the cash crisis threatens to wreck the
regime and its government, succeeding where the opposition has so far
failed.

      By Eldred Masunungure

      Eldred Masunungure is head of the Political and Administrative Studies
Department at the University of Zimbabwe

      The financial sector and many Zimbabweans eagerly awaited the
announcement of a new central bank governor on 1 August, but the day came
and went with no word from the Finance Ministry about who has been chosen
for this critical post.

      As Zimbabweans have come to expect from the government, neither the
Finance Ministry nor any other state official has taken the time to apprise
the nation about what steps are being taken to fill the post.

      Instead, people are being left to speculate about possible candidates
and the problems that could be impeding the selection of a new RBZ governor,
which is unlikely to be instilling confidence in Zimbabwe’s financial
sector.

      Yet if the Finance Ministry was serious about maintaining stability in
this sector, it would have moved with speed to either install someone in
Tsumba’s place or to prevent speculation by making a statement to inform the
nation about whatever is causing delays in the appointment of his
replacement.

      It must be clear to most right-thinking Zimbabweans, among whom it
seems this country’s leaders cannot be counted, that the Reserve Bank has
never needed a governor more.

      The institution is battling to alleviate severe cash shortages, partly
attributed to Zimbabwe’s foreign currency crisis and to rampant inflation,
which some analysts predict will soon top 1 000 percent.

      It is unlikely that a new governor would come up with a magic solution
to the cash crisis – this must be obvious to everyone. But that the
government would leave the central bank rudderless at such a critical time
is the height of irresponsibility.

      Zimbabwe is facing a crisis that is causing serious inconvenience to
millions of people, but the institution that should be responsible for
coming up with solutions is blundering without a substantive head.

      While the government takes its time about filling the post, many
financial institutions are anxiously awaiting policy decisions that are
unlikely to be made until a new central bank governor is installed.

      For instance, the financial markets have for several months been
awaiting a new monetary policy statement that they were hoping would be
announced by a new governor and which they expect to contain measures to
deal with inflation.

      While they wait, many financial institutions and other local companies
cannot make long-term decisions and speculators are making a killing at the
expense of the productive sectors.

      If the government is at all serious about arresting costly speculation
and uncertainty, it has to move with speed to appoint a replacement for
Tsumba or tell the nation when it is likely to do so.

      Of course, we cannot emphasise enough that whoever takes over at the
central bank should be given the freedom to take tough decisions that will
arrest Zimbabwe’s macroeconomic instability.

      This means the government must abandon its puppet master tactics and
allow the Reserve Bank its autonomy, even if this means allowing it to take
decisions that will be painful for long-suffering Zimbabweans.

      It has been said before but bears repeating that it is the government’
s interference and populist policies that have contributed to the mess that
central bank officials are now being blamed for.

      As Member of Parliament Victor Chitongo pointed out in the House on
Tuesday, heads should roll because of the cash crisis, but clearly Reserve
Bank managers alone cannot take the fall for this monumental disaster.

      The government – which, judging from its handling of the central bank
governorship, has learnt nothing from its past mistakes – should shoulder a
substantial part of the blame.

      But numerous calls for the government to resign in shame over its
misgovernance have fallen on deaf ears in the past, so we will not waste our
time even suggesting such a thing here.

      However, if the government does not care enough to get its act
together and soon, it is likely that Zimbabwe’s leaders will shortly wish
they had taken the option to bow out gracefully.

      The urgent need for African economic recovery is clear. Sub-Saharan
Africa is the only region in the world to have experienced a large increase
in the number of undernourished people in the past 30 years.

      If this trend continues, Africa cannot possibly meet one of the
Millennium Development goals of halving hunger in 30 years.

      There have been some gains in African agriculture recently, but there
have been some spectacular disasters too.

      Nine years ago, Zimbabwe’s President Robert Mugabe opened the meeting
of the International Association of Agriculture Economists, a body which
brings together international economists from research, academic and
financing institutions. Then, Zimbabwe was an example to Africa for both
small- and large-scale agriculture. Today the country is in deep crisis with
more than half the population dependent on food aid.

      Zimbabwe is likely to be discussed at the conference this week,
although it is not on the formal agenda.

      In many ways Zimbabwe shows the limitations and frustrations of
agricultural economists and that agricultural recovery is firmly in the
hands of politicians in certain countries.

      "Economists can turn around lots of things, but not fundamental
governance problems," says the outgoing president of the association,
Joachim von Braun, who is also the director-general of the Washington-based
International Food Policy Research Institute.

      He says there are issues that donors and governments should address as
a matter of urgency to bring rapid, proven results to the problems and
challenges facing African agriculture. Market access to advanced industrial
countries is one of the issues near the top of his list for agricultural
recovery, but the institute’s team is not hopeful the World Trade
Organisation talks in Cancun next month will solve this problem.

      If agricultural protection is lifted in developing countries, a number
of studies suggest that Africa will see a US$3 billion (Z$2 472 billion)
annual increase in national income, as agriculture makes up 30 percent of
the continent’s exports.

      Von Braun would like to see greater public investment in rural
infrastructure, such as roads, storage facilities, and banking. Although
agriculture makes up between 25 percent and 50 percent of most sub-Saharan
countries’ gross domestic product, investment in agricultural infrastructure
is only between 4 percent and 6 percent.

      During the 1980s and 1990s, most African governments embarked on
fundamental economic reforms to their pricing regimes to lower the
discrimination against their domestic agricultural sectors.

      Most governments have depreciated their exchange rates and allowed
farm gate prices to rise, giving farmers a greater incentive. But the lack
of infrastructure continues to bedevil efforts to make markets work more
effectively.

      – Business Day

      Economic commentators said the trend was worrying, given that the
government had indicated in its latest economic blueprint, the National
Economic Revival Programme, that it wanted to see growth in the productive
sector.

      They said this was not being supported by growing funding of the
Treasury – whose appetite for spending had continued to rise – at the
expense of the country’s financial sector.

      The analysts said diminishing funding of Zimbabwe’s productive sectors
had contributed to the economy’s negative growth rate, which is around 14
percent, an indication of critical economic recession.

      Credit to the government is mainly used to finance consumption
activities, including civil servants’ salaries and other activities that do
not increase economic productivity.

      David Mupamhadzi, chief economist with Trust Bank Corporation, said
most of the government’s funds were not channelled to productive sectors,
which is crucial in eliminating growing poverty in Zimbabwe.

      "The increase in the net credit to government is mainly to finance
consumption expenditure, which does not directly contribute to economic
growth," said Mupamhadzi, adding that the government was actually crowding
out crucial private sector investment.

      The government is now heavily dependent on the domestic market for
funds because of its alienation from most of the international community.

      Balance of payments support from multilateral institutions such as the
International Monetary Fund and the World Bank has been suspended for the
past four years because of huge debt arrears and controversial government
policies.

      This has worsened the country’s foreign currency shortages,
contributing to company closures that have increased unemployment. Ranga
Mandaza, an economic analyst at Century Holdings, said the country’s
unemployment rate was unacceptably at around 70 percent and could only be
reduced if the government used its funds on productive and exhaustive
activities.

      Exhaustive expenditure refers to government spending on infrastructure
and other activities that enhance economic productivity.

      "The government is currently facing a critical budget deficit, which
is a true reflection of its inability to finance developmental activities,"
said Mandaza. The budget deficit in 2003 is expected to total $241.9
billion, up from $136.9 billion last year.

      However, analysts said with the impending supplementary budget that
the Finance Ministry is expected to table before Parliament, the deficit
would be much higher, putting upward pressure on inflation.

      University of Zimbabwe economist Edwin Muchapondwa said the allocation
of more credit to the government would lead to " a huge social loss".

      Business Reporter

      In a recent 62-page report on Zimbabwe, the IMF said the southern
African country had on 28 May paid US$3 million (Z$2.472 billion) on its
debt after promising to make quarterly payments to clear its arrears with
the Bretton Woods institution.

      According to the IMF, the US$3 million was the first significant
payment to the Fund by Zimbabwe since the middle of last year.

      However, up to US$32 million in outstanding arrears to the Fund should
be cleared by the end of the year, or else the Harare authorities should
show a strong commitment to clear the arrears.

      If Zimbabwe fails to implement either of the two options, the IMF
board is likely to suspend the country’s voting rights when it meets in
early December.

      Zimbabwe’s arrears to the IMF stood at about US$234 million (Z$192.816
billion) as of 31 May this year and will continue rising until the
government makes significant payments to the fund.

      Zimbabwe was due to pay another US$1.5 million at the end of June, but
it was not possible to establish yesterday whether the money had been paid.

      It was not possible to obtain the information from IMF senior resident
representative Gerry Johnson, who flew out of the country yesterday and will
only be back in on 2 September.

      The IMF, however, noted in its report: "In spite of the problems to be
faced in honouring their commitment to make quarterly payments of US$1.5
million to the Fund, they (Zimbabwe government) have resumed payment with a
US$3 million on 28 May."

      "The payment is small compared to debt service obligations falling due
to the Fund (about US$32 million during June – December 2003) and to the
stock of arrears (about US$234 million as of end of May)."

      Zimbabwe, which is battling crippling foreign currency shortages, has
been failing to settle outstanding arrears to the IMF and other multilateral
donors since 1999.

      Balance of payments support to Zimbabwe from the IMF and other
multilateral institutions has been suspended partly because of the debt
arrears and also because of government policies that have eroded property
rights and the rule of law.

      Suspension of the financial aid has worsened the country’s hard cash
crisis.

      Business Reporter

      Where on earth can you find people, even fools, counting such a large
sum of money in the bush?

      We are not fools. There is nothing like that and you know it.

      You did not even bother to show those foolish economic saboteurs on
the camera.

      Most probably we would have seen "Muurayi" (Killer Zivhu) among them.

      Hakuna mari, hakuna mari chete, matadza, siyai basa kupinde vamwe
zvinake munyika yababa (Money just isn’t there, you have failed so please
quit and give others a chance)

      Jonathan Matariro

      Harare

      I went to the branch to deposit some money twice, only to be told by
their staff manning the queue that I had to join the queue with those who
were making withdrawals.

      On 14 August, I tried to explain to the staff members that I could not
stand in the queue for hours with a bag of cash as that would compromise my
security, but they would have none of it.

      The following day, I tried again, only to be told the same thing.

      I phoned the bank from across the street and I was told this was a
measure to control the queue and I could as well go away with the money if
at all I could not join the queue.

      I have not tried to go back and deposit the money in my only account
with them and I am keeping the money at home and the effects of this on the
cash crisis are very obvious.

      May the CABS management please explain how managing queues by turning
away cash depositors can contribute to solving the cash crisis.

      Instead, people bringing cash to the banks should be given prefernce
since this makes it possible for others to withdraw money.

      Frustrated Client

      Gweru

      They tend to follow certain rules and regulations. If you sit down
properly and analyse anything, including events in your own life, trying to
understand why and how things happened the way they did and being very
honest with yourself, you will be astounded.

      You will realise that if you had given it time and thought right at
the beginning, you could have seen it coming and probably avoided it. But
you did not and now you are in a mess. Too bad.

      It sounds very much like I am talking about our current cash crisis,
does it not? And yes I am. Here is how and why it happened.

      You see, there are basically two types of laws in the world. These are
natural laws or laws of nature, and man-made laws. I can tell you that I am
not talking about man-made laws here. These do not matter at all since they
do not make a difference in our lives.

      Surprised ? Just wait.

      We have had a lot of man-made laws trying to change or govern human
behaviour since time immemorial, but nothing has ever changed. Man-made laws
say thou shall not steal, though shall not kill, though shall not commit
adultery, though shall not lie, thou shall not be corrupt and so forth and
so on.

      But ever since the beginning of time, man is still a thief, a killer,
an adulterer, a lier and everything else that he is not supposed to be,
according to himself. The only purpose that man-made laws serve is for those
in power to be able to prosecute and punish those of us who may break their
laws and nothing more. They do not prevent anything from happening at all.

      For example, in Zimbabwe today we have had a deluge of laws since our
problems began in earnest in 1999. Hoarding ( whatever that means) of fuel,
maize, sugar, cooking oil and now cash was outlawed, but the shortages of
these things continued unabated.

      Foreign exchange bureaux were outlawed, but there is still no forex in
the country. The black market was long ago made illegal, but still it’s the
in thing today, even more so.

      You can say that about almost anything and everything that man has
ever and can ever make laws against. Make all the laws you want and nothing
will ever change. Things do not happen according to man-made laws, but
according to the laws of nature.

      I wish our government knew this. Everyday, they gazette another law
about cash, yet everyday cash gets scarcer and scarcer. Will these guys ever
learn? No amount of laws will ever bring us back to normal.

      If we want to get back to normal in Zimbabwe today, it’s about time we
started obeying the laws of nature. Defying them will get us nowhere!

      What are these laws of nature anyway? Funny to ask such a question,
but these are the laws that have made you and me be here on earth in the
first place. There were no man-made laws when my father and mother made me.
They just did it naturally and naturally I was created, and here I am.

      So far I have talked about some of the laws of nature in human
biology. There are also laws of nature in physics, chemistry, mathematics,
psychology, sociology and so forth and so on. In fact, there are laws of
nature everywhere, but unfortunately, they are not written down anywhere and
a lot of us may not even be aware of them and yet they are definitely there
and they determine and govern our behaviour everyday.

      These are the laws that it would do us a lot of mighty good if we
tried to obey. But in Zimbabwe today, our very own government is trying to
defy them every day, without success of course. If they continue like this,
all our problems will also continue and even increase and naturally, things
will have to come to an end one day.

      Let me show you how we tried to beat the laws of nature and failed
here in Zimbabwe. Our government had a noble idea no matter how it came
about (i.e. honestly or dishonestly) to give land back to the people, but
against all known laws of nature, vakazorova shumba nembama, and now we are
in serious trouble, including themselves.

      Naturally, you do not do something for which you are not prepared. Is
it not natural that if you fail to prepare for something, then you have
prepared to fail, and when you fail do you get surprised as to why you
failed? Do you then go about blaming others for your very own failures
caused solely by you when you failed to prepare adequately for your
endeavour? No, no, no, no, you do not do that!

      Ladies and gentleman, let us be very honest with ourselves here and
with each other too. Did we adequately prepare for taking back our land, as
noble an idea as it is, or did we just wake up one day to grab it back?

      If our forefathers had, as ill-prepared as they were then with their
bows and arrows, decided to continue fighting the whiteman for the very same
land with his superior weaponry in the first Chimurenga, would they not have
been naturally wiped out? Where would we be now if they had done that? Of
course, nowhere and perhaps with no third Chimurenga either. But our
ancestors chose to be wise and obeyed the laws of nature that say that guns
are better than spears in any battle and here we are today in our own
botched third Chimurenga, seemingly trying to defy natural logic but with
not much success.

      So, rather than do things properly, our government talked long and
loud about their intention to take back our land without paying for it since
it was similarly taken in the first place. Well and good about the taking
back of the land bit, but, naturally, things are not accomplished by words
but by deeds. They should have done something and not just talked. Naturally
as well, industry did something about it. There was no response in talking
from industry. Action chete. They panicked and lo and behold, in no time we
had no forex. Then the natural progression of things followed according to
the laws of nature. No forex led to no petrol, which led to no industry,
which in turn led to no mealie-meal, no sugar, no bread and now no cash.
Very soon, there shall be no water, no electricity and finally no pay. Mark
my words. By Dr. Cleopas Sibanda

      A planned economy is the only road to success. A planned economy is
possible only if the people have taken the power into their own hands and
under a socialist system. It is possible to develop the national economy, in
a planned way.

      In 1980, the power was in our hands as Zimbabweans. Ten years later,
in1990, corruption was now crippling the country right from the top.

      Ten years later, one of the strongest opposition parties to be formed
in Zimbabwe emerged and from there ,the power of the people totally
disappeared.

      The economic basis of our country will only be firm and developed if
the people’s democratic system is re-installed and strengthened.

      It has been weakened over 23 years and the people’s democratic system
has not been consolidated, now it is impossible to draw up and implement
comparatively long-term plans.As I have mentioned before, the power must be
in the people’s hands.

      There was absolutely nothing wrong with giving land to the people,
that was a step towards moving away from colonial industrialisation.

      The problem with the fast-track land redistribution was that it gave
land to politicians and not to the poorest and deserving citizens of
Zimbabwe.

      A lot of former farm workers are living in destitution, not even
knowing how they will make a living the next day. Previously, Zimbabweans
used to live from hand to mouth, now it has gone below that standard.

      A land commission must be run by honest people from all interest
groups, including women’s representative committees and chiefs, and they
should recognise all social, economic, cultural and traditional values and
processes.

      A planned way for the reconstruction of the economy will afford the
prospects of socialist construction and a bright future for the entire
people and this will confirm faith in victory. Hence, Zimbabweans can
surmount any difficulty with still greater courage.

      At present, we need to lay foundations of socialist industrialisation
and basically solve the problem of food and cash shortages, clothing, and
housing.

      This simply means the country should devote its attention to all
aspects of the problems of economic construction and the people’s living
standards and solve them in a proportionate manner by combining them
rationally.

      In other words, while stepping up all work of construction for the
future development of our country and for the further consolidation of the
nation’s economic foundation, we should plan simultaneously to solve the
problems of food, housing, cash problems in order to improve the people’s
material and cultural life.

      Zimbabwe is a rich country in terms of resources and can be easily
turned into an independent industrial-agricultural state.

      The laying of the foundation of a socialist industrialisation will
help this transformation. Liquidating colonial/lopsided industrialisation
and building an independent, modern socialist industry will help construct
an independent, self-supporting economy. This means building a country in
which we can earn our own living. That is, a country which can support
itself.

      The creation of such an economics foundation requires both heavy and
light industries with modern technological equipment.

      We need to build an independent heavy industry and a developed light
industry.

      As for agriculture, it needs to be revisited and it should be
converted from a background rural economy.

      Now it is hard to anticipate a stable harvest. The new farmers should
be fully supported by the government and at the same time, they should also
utilise all the land for mass production.

      An advanced rural economy will enable farmers to work easily, reap
bumper harvests at all times free from disasters and guarantee sufficient
food supplies and industrial/raw materials. The government and the people of
Zimbabwe should respond to such a call, mobilising to build this kind of
hopeful, joyful and prosperous socialism. People might ask: Can we reach
this goal? Is it possible to build such a country? It is not a dream. Of
course it is attainable; it is not at all a dream. At the same time, it is
important to find a final rational solution to the questions of economic
construction and the people’s living standard both in financial policy and
in accumulation and consumption. We cannot follow a policy of consuming all
we earn without accumulation. We must constantly increase accumulation for
the future, for our country’s prosperity, for its industrialisation and for
the sake of further consolidating the basis of socialism. Accumulation is of
course for the people. It is different from consumption only in terms of
time. The entire people of Zimbabwe need to be concerned about the
accumulation and that the country will become rich and strong once again and
the people’s living condition will improve only when economic construction
goes and production will steadily rise through accumulation. This is the law
of economic development and the Government and the people must be brought to
have a clear understanding of this law. We must continue to observe the
principle of regulating accumulation and consumption in a rational way. My
fellow Zimbabweans, the power is in your hands. Let’s save our economy
before it goes beyond recognition. Prince Chibanda Chinhoyi

Financial Gazette (Harare)

August 21, 2002
Posted to the web August 21, 2003

Hama Saburi
Harare

Zimbabwe's biting economic crisis, the worst in the country's 23-year-old
post independence history has spawned a vibrant informal sector where those
made redundant due to the faltering economic fortunes are trying their hand
in business to survive.

Street corners have been transformed into vending cites in disregard of
municipal by-laws while home industries have also mushroomed around
residential areas.

The furniture and clothing industries have been the hardest-hit, as
customers are now buying from emerging home industries.

It is estimated the working population in the formal sector has declined
from 18 percent in 1980 to 10 percent last year.

While there are no official statistics about informal activities, economic
pundits claim the decline in the formal job market has to a certain extent
been off set by growth in the informal sector.

Analysts are, however, divided in their interpretation of the informal
sector's contribution to the economy.

Critics described the growth as reflective of the height of desperation
caused by the biting economic meltdown.

President Robert Mugabe, desperate for quick solutions to the crisis blamed
on his government, leads a band of optimists who threw their weight behind
the informal sector.

The 79-year-old leader told guests invited to witness his inauguration in
March last year: "Greater emphasis than before will be placed on the
informal sector in order to adequately revamp it as a vital contributor to
gross domestic product."

Harare economist, Collin Magurah, described the sector as a potential growth
area that could turn around Zimbabwe's waning economic fortunes.

Eighty percent of the volume of business generated in the United States
comes from the informal sector. The sector has grown ten-fold in other
industrialised countries such as Japan and Germany in the past two decades.

"Sentiment is that the growth in the informal sector in Zimbabwe is more
driven by unemployment than anything else," said Magurah.

Unemployment has reached over 70 percent, with estimates indicating it could
leap beyond 80 percent inside the next two years.

"At the moment, the majority of people operating in the informal sector are
survivalists and not businesspeople.

"These are people who are ready to leave whatever they are doing if they get
formal employment elsewhere," added Magu-rah.

The sector needs to be nurtured into the formal sector where it can begin to
contribute towards the payment of taxes and generation of the much-needed
foreign currency.

Analysts said players in the informal sector were reluctant to join the
mainstream economy because of huge operational costs involved.

They are content operating in the peripherals where they escape the tax net
and other contributions.

Start up costs are also minimal in the informal sector, while the ease to
exist is another major advantage.

Growth in the informal sector has, however, had a double-edged sword effect
in that it has encouraged established companies to go underground.

While it has absorbed hundreds of thousands of school-leavers and
retrenchees, substantial business has been lost in the formal market.

A considerable chunk of business sustaining the informal sector is also
largely unlawful, such as the illegal trade in foreign currency and fuel.

The huge premiums charged by informal traders are then added by companies
resulting in spiralling production costs, relentless price increases and
high inflation.

For instance, while the official price of United States dollars is $824
against the Zimbabwe dollar, illegal foreign currency dealers are selling
the same unit for as much as $5 000.

The price of petrol has also gone up on the black market from the gazetted
pump price of $450 a litre to around $1 700 on the black market.

Informal traders are also side-stepping price controls by circumventing
scarce commodities from the formal market and selling them on the black
market at exorbitant prices.

John Robertson, a local economic consultant said workers have been exposed
to all sorts of injustices because of the growth in the informal sector.

Workers are not adequately protected because they have no access to medical
aid, pensions and are generally poorly remunerated.

The economic consultant said it would be difficult to sustain such growth
unless if it is matched by the expansion in the production base.

"You need producers as well who need huge amounts of money in machines,
technology and quality control, among other things. Once we do that, we will
be able to provide something people can trade. Countries get wealthy by
producing and not trading alone.

"Zimbabwe has a discriminatory, hostile tax environment, which makes it easy
to stay informal," Robertson said.

He said there is need to encourage those with capital to pour more resources
into production.

Robertson said: "The process is long-term and needs confidence. At the
moment, there is no confidence and we should build it up starting with
respecting property rights."

Zimbabwe Congress of Trade Unions (ZCTU) chief economist, Godfrey Kanyenze,
said people would continue to shun the formal sector until employers begin
to pay real wages in line with inflation.

Inflation is now close to 400 percent yet some companies are still awarding
wage increases below 50 percent.

"It is a sign of weakness in the economy. We are cascading towards a
volatile situation. These are the things that builds up towards violence,"
said Kanyenze.

Most workers have turned to moonlighting to make ends meet amid fears that
the situation could degenerate into what happened in Uganda in the early
1980s.

During this period, salaries in Uganda fell far below inflation to an extent
where there was an exodus of workers into the informal sector.

At one point the United Nations considered paying its workers additional
money to keep them in formal employment.

Unlike in the past when a family used to have just one breadwinner, the
majority of families, particularly those in high-density suburbs now have
two or three breadwinners to make ends meet.

The ZCTU chief economist said government actions have also given rise to the
informal sector because of its failure to address shortages.

For instance, the introduction of price controls has given rise to shortages
and the mushrooming of the informal sector trading in scarce commodities
such as cooking oil, mealie-meal and sugar, among other things.

Harare, Zimbabwe (BNS) - Someone trying to explain inflation, according to
an article I read in Zambia - I cannot remember exactly where-had this to
say: When a man went into a coffee shop and ordered a cup, he was asked to
pay $500. When he went back for a second cup, he was told the coffee was now
$850. When he pointed out that he had just bought another cup for $500 a few
minutes before, he was told: "Sir, if you want two cups of coffee, and want
to pay the same price, you order and pay for both at the same."
This story must be ringing true to most Zimbabweans. Prices have become so
unpredictable that one always has to carry extra cash just in case. But
while most Zimbabweans are whining, cursing ten devils and some
unmentionables, only at times pacifying themselves with the new national
anthem, Rambai makashinga (remain steadfast), those with access to foreign
currency are finding things cheaper by the day.

The worst hit are workers whose wages are being eroded by the day while
employers complain about ever increasing labour and production costs, yet
their companies are making hefty profits.

According to the bread basket compiled by the Consumer Council of Zimbabwe
(CCZ), the average employee has to work for five months to afford one
month's basic requirements.

The poverty line by the Zimbabwe Congress of Trade Unions (ZCTU), which is
based on inflation figures released by the government, reduces this to two
months.

But most people argue that the current official rate of inflation is
inaccurate because the Central Statistics Office uses controlled prices to
calculate inflation when very few people buy commodities at these prices.

According to the ZCTU, the national minimum wage in June should have been
pegged at $88 863.25. The Consumer Council says a family of six needed $181
260 to meet its basic necessities during the same month. The ZCTU figure is
based on a family of five, the national average family size.

A closer look at the prices quoted by the CCZ, however, shows that even
their prices are below the market. For example, the council gives the
impression that the price of mealie meal has declined from $5 000 for a 20kg
packet in April to $3 700 in June when one cannot buy a 10 kg packet with
this amount. It puts the price of bread at $550 a loaf when the cheapest
price one can buy bread for is $700.

ZCTU figures show that the national urban poverty line almost doubled in the
first half of the year from $44 697.31 in January. Urban centres in
Matebeleland South are the cheapest to live in while Bulawayo remains the
most expensive, beating Harare by almost $2 000 per person.

According to the ZCTU, the minimum wages announced by the government in
April in the middle of a three-day stay-away organised by the labour
movement to protest the arbitrary 300 percent in the price of fuel should in
fact have been implemented earlier and were based on the poverty datum line
(PDL) for January. The government gave the impression that the new minimum
wages had just been agreed upon by the tripartite negotiation forum (TNF)
which comprises government, labour and business.

According to the labour movement, the social partners had started
negotiations on PDL-linked minimum wages soon after the signing of the
Prices and Incomes Stabilisation Protocol on January 30, but the government
"unilaterally" increased the price of fuel by almost 100 percent on 25
February before the negotiations had been concluded.

The labour movement says it complained to the government that this was in
violation of the Prices and Incomes Stabilisation Protocol, "but in the
interest of progress", the TNF agreed on the new minimum wages, which were
to be based on the January 2003 PDL levels adjusted upwards for the fuel
price increase.

The minimum wages were to be $23 070 for agriculture, $42 168 for the
agro-industry, and $47 696 for industry and commerce. The ZCTU says the
government made an about turn and declined to implement the new wages.
Instead, it invited all national employment councils to indicate whether
they could meet these new wages or not.

The ZCTU declined to participate in this exercise insisting the government
should simply implement the new wages through a statutory instrument as was
done in 2001. Statistics from the labour movement show that wages agreed in
2001 saw the workers's lot improve with those in agriculture getting 97
percent of the food poverty line up from 52.1 percent in 1995 while those in
industry were receiving 94.8 an improvement from 51.3 percent in 1995. The
wages had, however, plummeted to 22 percent for those in agriculture and
40.5percent for those in industry by the end of last year.

According to the ZCTU, the government once again increased the price of
fuel, this time by up to 300 percent, on 15 March 2003 before any agreement
was reached. The ZCTU organised a three-day stay-away to protest the
increase starting April 23-25.

In an effort to win the support of the workers and break the stay-away, the
government announced new minimum wages on April 24, but at the same time it
stated that national employment councils would negotiate new gross minimum
wages which implied that the new ages were not going to be enforced by law.

The ZCTU rejected the new wages because they were already outdated. The new
minimum wages announced by the government in April were 51 percent of the
poverty line for those in agriculture and 53.6 percent for those in industry
at the end of June.

The ZCTU says because of hyperinflation, which has seen the poverty datum
line increasing by an average of $10 000 a month, national employment
councils should depart from the traditional method of annual negotiations
and should negotiate at shorter intervals.

This is easier said than done. Though the business sector has joined hands
with workers in their proposed stay-aways, they play a different ball game
when it comes to hiking workers' wages. Most of the companies are making
hefty profits, even in inflation adjusted terms, largely because they are
laying off workers.

But even those employed are becoming poorer by the day as their wages are
eroded by escalating inflation and a weakening currency which has already
lost more than half its value this year alone.

According to the ZCTU, the dollar in June was worth only 0.4 cents of the
1990 dollar. In other words it was worth less than half a cent of 1990. Put
another way, one needed $250 to buy goods bought with $1 in 1990.

But the dollar could be worth much less because the ZCTU uses official
inflation figures for its calculations. Most economic watchers believe
inflation is perhaps double the official figure.

The erosion of the local currency is easily demonstrated when one converts
it to foreign currency. The minimum wage for industrial and commercial
workers in 2000, for example, was $3 109.76. This translated to about US$39
using the black market rate. The current minimum wage of $47 697 translates
to only US$13 using a very conservative parallel market rate. This means
that though the minimum wage has gone up more than 15 times in three years
in nominal terms, it has declined by a third in real, or US dollar, terms.

This is probably more than most workers can stomach as they continue to
cling to the belief that their currency still has value when a million
dollars is only just US$300. In other words, while most workers are
suffering, those with access to foreign currency are laughing all the way to
the bank. Things are getting cheaper by the day with stoves now costing more
than $1 million actually costing them half the price they were five years
ago.

The bread basket compiled by the CCZ, for example, translates to only US$50.
Now where in the world would one get 2kg of margarine, 40 kg of mealie meal,
6 kg of sugar, 500gs of tea leaves, 30 pints of milk, 5 litres of cooking
oil, 30 loaves of bread, 2 kg of flour, 4 kg of rice, 1.5 kg of salt, 20
bunches of vegetables, 8 kg of beef, six bars of soap, and a three-roomed
house, all for US$50?

The problem, of course, is that Zimbabwean workers are not paid in US
dollars, pula or rand. And they are getting poorer by the day. The minimum
wage of $70 in 1980, for example, now translates to a whopping $901 863.90.

[ This report does not necessarily reflect the views of the United Nations]

JOHANNESBURG, 21 Aug 2003 (IRIN) - In a special report on the Zimbabwean
crisis, the United States Institute of Peace said the best means of ensuring
a peaceful political transition was a combination of increased international
and domestic pressure on the government.

The Washington-based institute said that although the idea of a national
government of unity fell out of favour following the breakdown of talks
between the government and the opposition Movement for Democratic Change
(MDC) in April 2002, a poll conducted last year showed that the majority of
Zimbabweans were in favour of this option as a way out of the political
impasse.

Since a unilateral solution to the political deadlock was increasingly
impracticable, movement towards a transitional government or some form of
power sharing has gained ground, the political think-tank found.

This scenario could include joint parliamentary and presidential elections,
as well as various constitutional amendments curtailing the powers of an
executive presidency and changing electoral laws.

But while media reports exploring this option have increased, so to have
concerns about transparency and stakeholder participation by civil society
organisations.

The think-tank remarked that civil society groups were keen to negotiate
their role in the transition process, aiming to ensure that they are not
left out by the government and MDC initiatives.

"Some are arguing that any mediation efforts and transition dialogue must
formally include representatives of civil society to ensure the talks move
beyond the narrow balance-of-power concerns of ZANU-PF and the MDC," the
report noted.

Human rights groups have also called on the international community and
United Nations to investigate reports of rights abuses. News reports on
Wednesday said the Zimbabwe Human Rights NGO Forum will approach the United
Nations Commission on Human Rights to request it to second a special envoy.

The institute also questioned the impact of further mass protest action,
saying acts of civil disobedience alone were unlikely to result in political
change given the government's control of the security apparatus.

"While there is still a popular view that mass action may be a necessary
condition for continued dialogue, there is perhaps even greater fear of
violent government clampdown - particularly against students, who are at the
forefront of any such action," the report said.

Change from within ZANU-PF was more likely, given overtures last year by the
chief of the armed forces General Vitalis Zvinavashe and Speaker of
Parliament Emmerson Mnangagwa to the MDC. However, the MDC made public the
overture, which controversially involved early retirement for President
Robert Mugabe. Mnangagwa subsequently denied approaching the MDC.

The institute commented that lack of consensus within ZANU-PF could make
interparty talks less likely and "until the succession battle is resolved,
the anti-Mnangagwa faction has a strong incentive to block talks mediated by
South Africa or other regional powers".

Should change come from within ZANU-PF, ruling party elites would seek
protection from investigations into the acquisition of personal wealth, and
from potential prosecution for human rights violations, the report stated.

Despite recent hints by Mugabe that his party members should discuss the
succession, the "lack of expressed interest suggests that Mugabe has not
signalled sufficiently to his party members that he will step down any time
soon".

In the event of a president's resignation or death, the Zimbabwe
constitution requires a fresh poll within 90 days.

The study found that change via military involvement seemed to have the
support of some within ZANU-PF in 2002, and would benefit the current elites
in the country, since such a move was unlikely to bring about substantive
policy change. However, recent events brought into question whether a
military coup would indeed be successful.

Deteriorating conditions of service and real wages have affected morale and
created some degree of resentment and alienation in the lower levels of the
military, but while these conditions were worth considering in view of a
possible military coup, the report downplayed the possibility of collective
action. "Divisions between the command and rank and file would be expressed
in other ways - for example, by lower-ranking soldiers refusing to obey
orders to attack unarmed demonstrators, or stop mass actions," the report
said.

The report concluded that a negotiated or mediated strategy held the
strongest prospects for breaking the deadlock between the two parties, and
charting non-violent change in Zimbabwe.

Harare - Zimbabwe has agreed to meet international relief agencies to
discuss a new law that gives it full control of food distribution, the World
Food Programme (WFP) said on Thursday.

President Robert Mugabe's government last week introduced new regulations
that banned the agencies from independently distributing international food
aid to millions of famine-threatened people, raising suspicion that the aid
was likely to be distributed on partisan grounds.

Luis Clemens, WFP spokesperson in Zimbabwe said his organisation had held
talks with the Minister of Social Welfare July Moyo on Wednesday to "express
our concerns about several issues in the policy document".

The Minister promised he would hold a meeting with all the donors
distributing food aid in Zimbabwe, where it is estimated some 5.5 million
people, or half the population, will run out of food before the end of the
year.

"We also made it clear that several donors had contacted us and pointed out
their concerns," Clemens told AFP.

Zimbabwean opposition groups have already accused the government of
discriminating against known opposition supporters in the distribution of
emergency aid.

There have been reports that local authorities have been asking people to
produce membership cards for the ruling ZANU-PF party in order to receive
food.

The European Commission said on Thursday it was studying the impact of new
rules on food aid distribution, and said it would be concerned if they
hampered its operations in the country.

The new policy directive has not yet been implemented at local level.

Meanwhile, Clemens said the identification of beneficiaries and distribution
of food aid was continuing to be carried out with full participation of WFP
partner organisations on the ground.

Currently some 3.5 million Zimbabweans are receiving food aid, a number
forecast to rise sharply as food stocks dwindle towards the end of the year.

The government last month launched an appeal for 700 000 tonnes of aid to
stave off hunger until next year's harvests in April.

Poor rains have devastated crops and grazing in this southern African
country, once hailed as the breadbasket of the region.

The opposition Movement for Democratic Change (MDC), international aid
agencies and western nations say that a government land reform programme
that has redistributed former white-owned commercial farms to new black
farmers is also to blame for the food crisis.

      Zimbabwe's government is expected to spend 84 per cent more this year
than envisaged in the national budget but this will be financed by increased
government borrowing with no tax changes, according to Herbert Murerwa,
finance minister

      Tabling a supplementary budget in the Zimbabwe parliament on Thursday,
Dr Murerwa shrugged aside the country’s deepening economic woes. "The major
challenges we face arise mainly from high inflation and poor foreign
currency generation,"” he said.

      The minister said state revenue in the fiscal year to December 31
would more than double to Z$1,141bn (US$1.4bn), chiefly due to inflation
which reached 399.5 per cent year-on-year in July.

      Government spending will be Z$672bn more than originally budgeted at
Z$1,442bn.

      The budget deficit at Z$301bn will be 30 per cent higher than the
initial budget estimate, but as a proportion of GDP it will fall to 7.3 per
cent from 11.5 percent. This is because the government is now forecasting a
GDP of Z$4,123bn, almost double the projection made at the time of the 2003
budget last November.

      The minister’s statement was almost completely bereft of details of
the state of Zimbabwe's economy, though it did reveal that manufacturing
output fell 8.6 per cent in the first four months of 2003.

      No official forecast of the real growth rate of the economy has been
issued and on Thursday Dr Murerwa failed to update the government’s official
inflation forecast for 2003 of 96 per cent.

      In the first seven months of this year, consumer inflation averaged
over 280 per cent.

      The finance minister said that agriculture would recover 2.3 per cent
this year – in stark contrast to forecasts by farming organisations who
predict a 25 to 30 per cent decline.

      Dr Murerwa conceded that the benefits of February’s 93 per cent
devaluation of the Zimbabwe dollar had been “short-lived”, repeating his
promise made at that time to review the “export support rate” –
government-speak for the official exchange rate.

      Government ministries were consulting with stakeholders on the matter,
he said, fuelling market speculation that a further substantial devaluation
of the official exchange rate is likely soon.

HARARE, 21 Aug 2003 (IRIN) - Zimbabwe's housing shortage and economic crisis
has robbed many urban Zimbabweans of the dream of ever owning their own
home.

Housing minister Ignatius Chombo has admitted that the government is failing
to match demand, citing among other things, a lack of resources. The
ministry says the national housing backlog was 1.5 million units in December
2002, and the city council of Harare, the capital, has a waiting list of
300,000.

Harare has more than 10 major informal settlements where the poor have been
forced to reside. One of the oldest is Hatcliffe Extension, which sprouted
in the late 1990s when the government evicted 800 families from the farm of
an opposition leader who had allocated free stands, and dumped the squatters
20 km north of Harare.

Residents of Hatcliffe Extension, located next to plush suburbs, use pit
latrines and depend on one communal borehole for their water. Accommodation
consists of wooden shacks and, during the rainy season, the shacks flood and
the pit latrines overflow. Living alongside the original families are
criminals who have moved into the settlement to escape the law.

The capital's traditional working class suburbs are also bursting at the
seams. Thomas Saizi lives in the crowded Matererini Flats in Mbare, where he
shares one room with his family of six. The room is divided by curtains, in
attempt to at least try and provide some privacy for the occupants.

"I grew up here in Mbare and have been living in this room for the last 30
years. All my children still live with me because they are unemployed and
cannot find accommodation of their own," he told IRIN.

Saizi, who earns a living by selling scrap metal, said his eldest daughter,
aged 27, had recently returned from her husband with a 10-year old child,
bringing an additional burden to the limited space.

"I have lost all hope of having my own house because I do not have the money
to buy a residential stand. I do not see myself joining the Harare City
Council housing list because it will not help me. I know of friends who have
been there [on the list] for the past 20 or so years without getting their
stands. Even if I managed to acquire a stand, where would I get the money to
buy the material with which to build the house, not to mention monthly
payments required by building societies?" asked Saizi.

Since independence over 20 years ago, the city council has been trying, and
failing, to improve living conditions in Mbare. On several occasions it
resolved to demolish some of the worst of the accommodation in order to
build better homes - plans which never materialised.

While few have much hope of securing a home through the city council, where
officials have repeatedly been accused of accepting bribes to circumvent the
waiting list, Zimbabwe's middle class are also feeling the pinch.

Inflation has hit 400 percent and interest rates are around 80 percent. An
increasing number of families failing to make their mortgage repayments are
losing their homes to the banks.

For those who do own a plot of land, building materials are in short supply
and extremely expensive. A 50 kg bag of cement with a gazetted price of Zim
$800 (US $1) is being sold for Zim $12,000 (US $15) on the black market.
Portland Cement, Circle Cement and Sino Cement, Zimbabwe's major cement
producers, have drastically downscaled their operations, citing a shortage
of raw materials.

George Utaumire, president of the Zimbabwe Building Contractors’
Association, says the shortage of cement is crippling any initiative to
build more houses.

"A lot of housing projects have been shelved, leading to an increased
housing backlog. If by any chance construction resumes, the houses will cost
more because of increasing costs," Utaumire recently told the independent
Daily News newspaper.

Most house construction is done by private developers. Edith Kagoro,
chairwoman of the Greater Harare Housing Co-operative Union, says
co-operatives in her union often complain that private developers charge
exorbitant fees for their services.

"Many prospective homeowners are finding it difficult to build houses, even
if they might have acquired stands, because of the high fees charged by
private developers. Affiliate co-operatives often come to us complaining
that the cost of developing their stands is too high. There is a significant
number of people who ended up selling their stands, some of them with
half-complete structures," Kagoro told IRIN.

She added that some of those that could afford it were buying stands for
speculative reasons, thereby worsening the housing crisis. "Many people are
buying stands, but with no intention of developing them. They simply wait
for a few years before reselling the stands at exorbitant prices."