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Mutambara unsettles Tsvangirai

Zim Independent

Dumisani Muleya
OPPOSITION Movement for Democratic Change (MDC) leader Morgan Tsvangirai,
now leading a faction of the party, was yesterday digging in as likely
leader of the rival camp, Professor Arthur Mutambara, appeared set to roll
into the political hot seat.

Inside sources said Tsvangirai was in a combative mood. He is prepared to
use his residual influence in the MDC, they say, to fight to the bitter end
to hang on to the leadership in what has become an escalating battle for the
heart and soul of the party.

Tsvangirai's spokesman William Bango yesterday talked tough when asked if
his boss or his emissaries had held any meetings with Mutambara.

"Tsvangirai can't jump around looking for Mutambara if he has not said he
wants a meeting with him. Mutambara has not requested such a meeting," Bango
said.

"If such a request for a meeting is made it will be considered when it
comes. But let's get this thing right: Tsvangirai is the president of the
MDC and Mutambara is seeking office on a platform we don't recognise."

He said Mutambara was an ordinary card-carrying member who did not deserve
special treatment from "the president".

Tsvangirai's lawyers this week wrote to the attorney of MDC deputy leader
Gibson Sibanda's faction in a bid to shore up Tsvangirai's authority. This
dramatically pushed up political temperatures yesterday.

Professor Welshman Ncube, MDC secretary-general, a key strategist in the
Sibanda faction, said: "If they believe they have a genuine case why don't
they go to court?"

Meanwhile, sources said, Mutambara continued to prepare himself for a grand
entry into local politics at the congress of the Sibanda faction.

The former University of Zimbabwe student leader, a professor of robotics
with vast working experience internationally, caused a stir in politics this
week after his return. Mutambara is widely expected to be elected leader of
the Sibanda faction at the end of their congress in Bulawayo this weekend.

Mutambara said he was not bargaining to be a faction leader but a player in
a broad-based movement fighting for democracy.

Former MDC MP Gabriel Chaibva, who worked with Mutambara at the UZ as a
student leader, said he had no doubt about Mutambara's "leadership qualities
and capacity to rejuvenate" the MDC.

But there are sceptics who say Mutambara might find real politics on the
ground difficult. They say he has been away for a long time and lacks the
skills to survive on the rugged political battleground.

Sources said Mutambara would take over despite fierce resistance from Gift
Chimanikire and his supporters. Chimanikire has been loudly protesting over
Mutambara's leadership bid because he wants the job. Indeed, he appears to
think it was his for the taking.

However, sources said Chimanikire has not been able to rally the faction
round him to launch a powerful assault on the leadership.


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Mugabe advisors push for Blair talks

Zim Independent

PRESIDENT Robert Mugabe is coming under increasing pressure from his closest
political and security advisors to talk to British Prime Minister Tony Blair
to resolve Zimbabwe's multilayered crisis. But his initiative comes at
precisely the moment when Blair has abandoned all prospect of any
rapprochement with Zimbabwe's 82-year-old leader.

Diplomatic sources said Mugabe's advisors were pushing for a meeting with
Blair in view of deteriorating material conditions in the country. Zimbabwe
has been in the grip of a debilitating political and economic crisis for the
past nine years.

Sources said Mugabe's coterie of advisors - which includes politicians and
state security agents managing a brittle political transition - now want
talks with Blair as it appears to them it has become the only way out of the
quagmire.

"Mugabe's security advisors, who know exactly what's happening on the
ground, have been telling him it would be better for him to swallow his
pride and talk to Blair about this situation," a diplomatic source said.

"They think such a move can open the way to break the political impasse, end
Zimbabwe's international isolation and create an opportunity for economic
recovery."

This explains Mugabe's remarks when receiving the credentials of Britain's
new ambassador to Harare, Dr Andrew Pocock recently. He said the two
countries should build bridges. But it comes as Blair, in talks with
President Thabo Mbeki two weeks ago, is understood to have set his face
against any dialogue, regarding it as pointless.

At the same time, South Africa - a regional superpower - is said to be also
hardening its position on Harare after Mugabe refused to cooperate with
Mbeki in his constitutional plan for a negotiated political settlement in
Zimbabwe.

Diplomatic hostility between Pretoria and Harare will almost certainly
intensify after Mugabe's comments in his birthday interview in which he
implied everybody - including friends - should "keep away" from Zimbabwe.

Sources said Mbeki this week asked for the video footage of Mugabe's
interview to study his remarks and act accordingly. Mbeki, sources said,
held talks with Blair on a range of issue including Zimbabwe during their
Progressive Governance summit at Didimala Game Lodge in Hammanskraal, north
of Pretoria.

Sources said Mbeki told Blair that he had resolved to steer clear of
Zimbabwe and "let the situation sort itself out". This is said to be a view
shared by Nigerian leader Olusegun Obasanjo.

Other influential countries on the international diplomatic chessboard also
involved in the Zimbabwean question like the United States have publicly
shown growing hostility towards Mugabe's government. US president George
Bush recently attacked Mugabe for repression in a State of the Union
address. Already Washington has classified Zimbabwe as one of the six
"outposts of tyranny".

Sources said ambassadors of the most influential countries represented in
Harare have come to a common conclusion after initial differences to let
Mugabe "stew in his own juice".

The diplomatic moves around Zimbabwe resemble what often happens when an
internal political problem is internationalised.

Sources said the state security agency, the Central Intelligence
Organisation (CIO), has of late through formal and informal liaison missions
with the British been giving clear signals that Mugabe is ready for talks
with Blair.

A political solution, sources say, has become the most viable option for
Mugabe's advisors because they have now come to accept that policy measures
have failed to contain the crisis.

Mugabe last Thursday gave the clearest signal yet that he was prepared for
talks with Blair when he told Pocock he should help "build bridges between
the two countries".

Pocock replaced Dr Rod Pullen who hurriedly left Harare last month under
unclear circumstances. Although Pullen cited personal reasons, sources said
it could have been related to political developments.

A picture of Mugabe walking with Pocock at State House - accompanied by a
big headline "Let's build bridges, President tells UK" - was splashed on the
front page of the state-controlled Herald in a move which could well be a
sign of a change of attitude towards Britain in Harare. - Staff Writer.


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More farmers get eviction notices

Zim Independent

Augustine Mukaro
GOVERNMENT appears determined to seize all land still in the hands of white
farmers including those who survived the onslaught of the controversial
fast-track land reform.

Sources in the Lands, Land Reform and Resettlement ministry said government
last week dispatched a team to Mashonaland West province to establish the
exact number of white farmers still on farms and serve them with eviction
notices.

Last Thursday, a team led by permanent secretary in the Lands ministry Simon
Pazvakavabwa served eviction notices on farmers in the Selous area, sources
said.

Farmers in Selous confirmed having received fresh 90-day notices to wind-up
their operations, a move they said buttressed Minister Didymus Mutasa's
threat that: "We are still hungry and we want all our land back and all our
land to be used by our own people."

President Robert Mugabe and Reserve Bank governor Gideon Gono on the other
hand have called for a halt to farm invasions. The contradictions in
government's position undermine investor confidence and prospects of
boosting agricultural production to ensure food security.

An estimated 400 white farmers are still on the land six years after the
launch of government's chaotic and often violent land reform programme.

Farmers who were given up to May to vacate their farms include fugitive
Zimbabwean tycoon and a perceived ally of President Mugabe's government,
Billy Rautenbach, who owned Marshlands Farm operated by his brother Peter in
the Karoi area.

"It has been resolved that you move out of the farm on 14 May 2006 as the
land reform is being finalised,'' reads the eviction order to Rautenbach and
other white farmers that was shown to the Zimbabwe Independent at the
weekend.

Rautenbach, who is now spending most of his time in Harare after fleeing
South Africa's Scorpions anti-crime unit, is viewed as closely connected to
former Speaker of Parliament Emmerson Mnangagwa.

Mnangagwa is locked in a vicious struggle with retired army general Solomon
Mujuru for the control of Zanu PF after Mugabe steps down in 2008.

Eleven other farmers in the area have also been given eviction notices.

Former Commercial Farmers Union president Nick Swanapoel is understood to
have received a notice to vacate Avalon farm, also in Mashonaland West.

More than half of the 18 farmers who remain in the Selous area are
understood to have been visited by the government delegation, which
delivered eviction notices.

The majority of the farmers who had remained on farms had strong links to
Zanu PF either due to their past involvement with the CFU or their support
for the ruling party through donations.


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Cop sues Mugabe

Zim Independent

Clemence Manyukwe
A FORMER high ranking police officer, Senior Assistant Commissioner
Ngonidzashe Gambiza, has taken President Robert Mugabe to court seeking
reinstatement after his dismissal from the police force in July 2004 on
allegations of misconduct.

In papers filed with the High Court, Gambiza said President Mugabe should
not have consented to his dismissal that was recommended by a police probe
because the president had not sanctioned the enquiry team in the first
place, as required by the Police Act.

"The decision to institute any disciplinary proceedings against a
commissioned officer in terms of Section 50 of the Police Act should be
preceded by strict compliance with Section 14 of the Act. In effect, the
president must sanction any intended disciplinary action against any officer
before it is implemented," argued Gambiza.

The former head of the Police Internal Investigations Unit said he had cited
Mugabe as the first respondent "in his official capacity as employer,
disciplining authority and dismissing authority in respect of all
commissioned officers as provided in Section 14 of the Police Act".

In the papers, Gambiza said he was fired as a result of differences between
the section he headed and the Criminal Investigations Department (CID)
Vehicle Theft Squad. He said he was wrongfully accused of having submitted a
damning report to President Mugabe detailing alleged rampant corruption at
the Vehicle Theft Squad.

In 2004, Gambiza instituted legal proceedings against Police Commissioner
Augustine Chihuri, Home Affairs minister Kembo Mohadi and two senior police
officers: deputy police commissioner, Godwin Matanga and senior assistant
commissioner, Mary Masango, before withdrawing the application and
substituting it with the latest one which includes President Mugabe.

In the same year, Gambiza won another court case against Chihuri when the
High Court ruled that his eviction at gunpoint from police accommodation in
November 2004 was illegal.

On Tuesday, Gambiza's lawyer, Charles Warara of Warara & Partners, confirmed
that they had withdrawn the initial court application and submitted another
one that included Mugabe, but refused to comment further.

Mugabe has not opposed the application but Chihuri made submissions to the
effect that Gambiza's sacking from the police force was above board.

The police commissioner sought the dismissal of the application saying it
was "hopelessly out of time" as it should have been filed eight weeks after
Gambiza's dismissal in 2004.

"Applicant was discharged as being unsuitable for police duties in terms of
the Police Act after a board of inquiry had been set up in terms of Section
50. In terms of Section 50 the commissioner of police is empowered to
convene a board of enquiry (suitability) for any member serving the force,"
he said.


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Manufacturing sector slashes labour 42%

Zim Independent

Shakeman Mugari
THE country's manufacturing sector has lost 42% of its labour force in the
last two years as companies closed down or downscaled operations due to a
sustained economic meltdown, worsening Zimbabwe's soaring unemployment, said
a State of the Manufacturing Sector report released yesterday.

The annual survey, which measures manufacturing sector performance and is
compiled by the Confederation of Zimbabwe Industries (CZI), pours cold water
on government's claims that the economy has turned the corner.

It said the few remaining workers have had their hours severely reduced
because of capacity underutilisation. The manufacturing sector has shrunk by
more than 40% over the past three years as the economic crisis continues
unabated.

The survey said retrenchments and reduced working hours in the sector had
been caused by low capacity utilisation which it said was at its lowest.

Capacity utilisation, the survey said, had plunged due to shortages of
foreign currency, raw materials and a slump in demand.

It added that fuel shortages and power cuts had also affected utilisation.
The survey established that only 13% of the companies that responded to the
survey were operating at above 75% of capacity.

"Overall, the fact that only 13% of the responding companies are operating
at over 75% capacity means that most companies are unable to meaningfully
cover their costs and utilise their standing capacity," the report said,
adding that this showed that, "the country's installed capacity is therefore
being grossly underutilised".

The survey found that most Zimbabwean business people had lost confidence in
the economy and did not believe that the government was capable of changing
the country's fortunes in the near future.

"The results indicate a worrying level of pessimism about the economic
recovery process," it said.

Out of the managers surveyed, only 16% of respondents shared government's
claims that the ailing economy would recover between 2006 and 2007, while
19% believed it would only improve in 2008.

A whopping 49% did not believe that the economy could be turned around
within the next half a decade to 2010.

"The main reason was that they did not think there was anything currently
taking place or likely to take place in the foreseeable future that would
significantly change the economic fortunes of Zimbabwe by 2010," the report
said.

The survey also reveals a significant drop in business confidence and that
more people are more pessimistic than they were in 2000. Optimists dwindled
to only 9% of respondents compared to 50% in 2000.

It said there were indications that despite a slight rise in the business
confidence levels soon after RBZ governor Gideon Gono's appointment, there
were now strong signs that most see a bleak future for their businesses.


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Mutambara's arrival: a blessing or curse for Zim?

Zim Independent

Ray Matikinye
THERE is a similarity between the invitation extended to Robert Mugabe by
the late Jason Ziyaphapha Moyo to return from exile in Ghana in the late 50s
to participate in the nationalist struggle and last week's return of Arthur
Mutambara to join mainstream politics.

Mugabe was elected to an organisational role and he soon became one of
Zapu's most erudite leaders. He was among a handful of black Rhodesians who
were well-educated and therefore it was assumed he could lead as a natural
consequence of his education.

Mutambara is an academic too, but that is where the similarities end. The
likely ascent onto the political stage of Mutambara as leader of the
pro-senate faction will be both a blessing and a curse to opposition
politics in Zimbabwe, analysts say.

Mutambara, a former student activist at the University of Zimbabwe in the
late 80s, has joined the political fray which has seen Morgan Tsvangirai and
Welshman Ncube's wings of the dysfunctional Movement for Democratic Change
pitted against each other.

He has been widely tipped to take over the leadership of the pro-senate camp
of the MDC at a congress to be held in Bulawayo this weekend.

But in a statement released after a marathon meeting with the pro-senate
faction in Harare on Monday Mutambara appeared to dampen media speculation
by saying that he would only accept the invitation if it led to the
reunification of the warring MDC factions. He wanted to lead a democratic
struggle that involved all democratic forces including civic organisations,
he said.

Professor Brian Raftopoulos of the Zimbabwe Institute of Development Studies
at the University of Zimbabwe said Mutambara could be a good leader if
elected.

"He has a good history as a student leader but will need time to grow into
the position of national leader," Raftopoulos said.

He said Mutambara had the capacity to be a good leader aided by his appeal
to youths.

"He has got to be prepared for a long battle to build a national stature
through a vigorous media campaign to create awareness among the electorate,
especially those in rural areas in order to compete with the advantage that
Morgan Tsvangirai already has," Raftopoulos said.

"There is a lot of groundwork to be done to get him known after a long
absence. Morgan has an advantage because, besides Mugabe he is the only
other leader with a national profile and appeal.

"Tsvangirai still feels the national profile he has built over the six years
the MDC has been in existence before the split would be a good point in his
favour but Mutambara's presence will create intense competition for
recognition between the two camps."

But Raftopoulos said it was going to be an uphill task to build Mutambara's
national profile although Zanu PF has similar problems to build a profile
for whoever was going to replace Mugabe.

He described Mutambara as highly intelligent but warned that as a
prospective leader Mutambara would have to deal with "huge challenges" such
as media restrictions and the laws that subverted individual freedoms.

Eldred Masunungure of the UZ politics department said Mutambara's entry into
the political fray had become a major factor in Zimbabwe's political
landscape.

Commenting about Mutambara's organisational capacity Masunungure said: "He
had the capacity to mobilise against a one-party state at a time when
challenging the state was unthinkable during a time when Independence
euphoria was still strong among the academia. He shook the state apparatus
and is not someone who should be taken lightly.

Masunungure said it would be extremely na´ve of either Mugabe or Tsvangirai
to take Mutambara for granted.

"But we could be seeing a polarisation in the Ncube camp just like the spit
that occurred in the main MDC over the senate elections," he said. "If the
issue is not handled carefully it will lead to an implosion within the Ncube
camp."

Masunungure said Mutambara had the capability to energise and invigorate the
MDC - a factor that works in favour of the Ncube camp in the fight for
supremacy.

But on the other hand, Masunungure said, "Mutambara's presence is likely to
introduce tension between Welshman Ncube and Gibson Sibanda and the tribal
factor in Zimbabwe politics needs to be addressed. That is the reason why
they are eager to get him on board although this might send Chimanikire back
to the Tsvangirai camp where his trade union colleagues are."

Masunungure said Mutambara was very articulate and charismatic judging from
the September 1987 student demonstration he organised. "He strikes me as a
natural politician who knows the psychology of the masses. He is someone who
should not be taken lightly and I think his arrival on the political scene
is a landmark development."

He said Mutambara was able to infuse the student leadership with courage
with his charisma.

"He shares the same articulate trait with Jonathan Moyo but is a strategist
who knows when to retreat unlike Moyo who plunges into issues headlong,"
Masunungure said.

"He is more skillful in reading a situation than Moyo and I understand he
was working with Moyo on his United People's Movement project."

Former student leader and MDC MP Munyaradzi Gwisai, who was
secretary-general in the SRC led by Mutambara, said: "Arthur played an
incredible role in the history of the democratic struggle of this country.
But I don't have respect for a very dangerous constellation of right-wing
capitalist formations that he is about to become part of."


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No policy shift, says new Swedish envoy

Zim Independent

Itai Mushekwe
DESPITE a change in representation, Sweden will maintain its insistence on
upholding human rights and good governance in its relations with Zimbabwe.

Newly-appointed Swedish ambassador to Zimbabwe, Sten Rylander yesterday
said: "The promotion and protection of rights are very good examples of
endeavours that could ignite dialogue on the need for national rebuilding.
Human rights are indivisible and no rights are more important than others."

Rylander made the remarks at the hand-over of vehicles for a child rights
project in Murehwa.

He reiterated his country's stance that although relations were strained
between Zimbabwe and the European Union, Sweden would not abandon the people
of this country.

"This is why we continue providing development assistance through civil
society organisations, such as the Human Rights Trust of Southern Africa
(SAHRIT).

Sweden's support for Zimbabwe covers a variety of areas, including
humanitarian support in the form of drought relief and construction of
shelter, civic education, media and culture," he said

He noted that Zimbabweans have had to contend with a dreadful six-year
economic recession that has been compounded by a calamitous political
impasse.


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Zim dollar tumbles

Zim Independent

Paul Nyakazeya
THE Zimbabwe currency depreciated by an average of 15% against a basket of
major currencies comprising the United States dollar, British pound, South
African rand, Botswana pula and Euro on the interbank market in January, a
financial institution reported this week.

In its monthly economic commentary for the month of January made available
this week, diversified financial services group, Finhold, said the dollar
fell by 15%, 14% and 11% against the Zambian and Malawi kwachas and
Mozambican metical respectively.

The weakening local currency forced prices of both imported and local goods
up, further creating inflationary pressure on the economy, the report said.

Sharp drops in international aid, tourism receipts and exports had put
pressure on Zimbabwe's currency.

The financial services group said the dollar was likely to depreciate
further, though at a slower rate following the introduction of the
volume-based exchange rate system.

"We expect the local currency to suffer further losses during the course of
the year, more so if fears of food shortages become a reality," Finhold
said.

The local currency opened the year trading at $82 300 against the United
States dollar, falling by over 10% during the first three weeks of the year.

The Zimbabwe dollar is presently trading around $99 201 against the US
dollar.

On the parallel market, the US dollar is trading at around $145 000 and $155
000.

The volume-based exchange rate introduced by the Reserve Bank on January 24
has kept the exchange rate fixed due to low transaction volumes on the
interbank foreign currency market.

"The dollar is expected to remain relatively stable aided by the
introduction of the (volume-based) exchange rate management system and the
reduction of the export proceeds retention period to 30 days," Finhold said.

"However, in the absence of significant foreign currency inflows, the
crawling rate may become unsustainable and result in the overvaluation of
the Zimbabwe dollar," the group said.


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Afdis mourns erosion of product demand

Zim Independent

AFRICAN Distillers Ltd (Afdis) has joined a list of consumer goods producers
and retailers mourning the erosion of demand due to rising inflation, a
development that could be a precursor to growing consumer resistance in the
country.

Afdis said consumers had hit its bottom line after a significant reduction
in demand for its products during the first quarter - particularly the
festive season in December.

"Consumers diverted expendi-ture to essential goods and services," Afdis
said in a statement accompanying its interim half-year results.

Sales volumes for the half-year to December 31, 2005 were 34% below those
for the comparable period last year, but the group managed to produce
reasonable results under the circumstances, with net turnover growing by
288% to $348 billion while attributable income increased by 330% to $117
billion.

Afdis is involved in the manufacture, importation and marketing of branded
wines and spirits for distribution in Zimbabwe and export.

The company maintained a good cash position despite a reduction in sales in
the second quarter and on-going currency devaluations that have negatively
impacted upon its cash generation capacity.

Cash generated from operations amounted to $152 billion. Of this, $123
billion was reinvested in working capital and $14 billion in capital
expenditure.

"Disposable incomes will come under further pressure with the result that
the next six months will be difficult," Afdis said.

With inflation likely to move higher, the group acknowledged that management
of liquidity would be very critical to its survival during the second half
of its financial year.

Zimbabwe's retail sector has been caught unawares by growing consumer
resistance in the country following five years of recession.

The biggest retail giant, OK Zimbabwe Ltd, last year sounded the alarm
bells.

OK Zimbabwe's CEO, Willard Zireva, said while its turnover for the year to
December 2005 was expected to increase, sales volumes had come under threat.

"We're beginning to see resistance from customers to continued prices
hikes," said Zireva.

Delta Corporation, which enjoys a near-monopoly in the beverages sector
(beer and carbonated soft drinks), said there had been a decline in
beverages consumption. - Staff Writer.


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Power cuts impact on mining sector

Zim Independent

Eric Chiriga
THE Chamber of Mines of Zimbabwe says current power cuts by the Zimbabwe
Electricity Supply Authority (Zesa) have badly affected business in the
sector.

The chamber's chief executive officer, David Murangari, said a power cut of
four hours translates to an 18-hour loss of production.

"Whenever there is a power cut, the whole shift is distorted and time is
lost. Time cannot be reversed," Murangari told businessdigest.

He said the losses in revenue incurred due to the power cuts were
"significant".

Murangari said the exchange rate had also adversely affected operations in
the mining sector.

He said before the last monetary policy statement there had been no
meaningful movements in the official exchange rate.

"Movement in the exchange rate has been sluggish and it needs to be
adjusted," he said.

However, he said the foreign currency retention levels were now viable.

In response to the issue of an increase in raw materials consumption without
a corresponding increase in output, Murangari said at times raw materials
were used in developing the mines and not getting the mineral.

"Sometimes you are mining lower grade ore and you use more explosives and
other raw materials to mine more ore and at the same time develop the mine
and there is no increase in output."

Murangari confirmed that they had a meeting with the Reserve Bank last week
in which they discussed problems in the mining industry.

"We had a meeting at the Reserve Bank where we discussed the problems
(affecting mines)," he said, refusing to discuss details of their meeting.

He said perpetrators of crimes in the sector, particularly smuggling, should
be brought to book as they tainted the entire industry.

Recently, the Chamber of Mines wrote to the Minister of Mines, Amos Midzi,
responding to allegations of smuggling, policing, empowerment and other
issues raised by the RBZ governor Gideon Gono in his last monetary policy
statement.


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Damper on amnesty for Zim's fugitive executives

Zim Independent

Paul Nyakazeya
JUSTICE minister Patrick Chinamasa this week poured cold water on Reserve
Bank of Zimbabwe governor, Gideon Gono's plea to government to grant amnesty
to fugitive business executives who have skipped the country, saying
Zimbabwe's law only allowed such amnesty after convictions in the courts of
law.

Six bankers fled the country at the height of a financial craisis in 2004,
facing allegations of externalising huge sums of cash or illegally dealing
in foreign currency.

Speaking to businessdigest on Wednesday, Chinamasa said if the bankers had a
case to answer, they were unlikely to be granted amnesty.

"If one commits a crime or crimes, justice is supposed to take place,
especially if (the crimes) involve pulling the economy down. I will not
comment much on that subject as that would depend upon evidence gathered by
the police," Chinamasa said, referring questions on the issue to the
Attorney-General's office.

Chinamasa said he had not heard of any reports suggesting that Gono had made
a formal request to government to declare amnesty on the bankers.

"Only the president has powers to grant amnesty. Like I said, I do not want
to go into detail or comment on that subject because I haven't got enough
information."

No comment was immediately available from the Attorney-General's office.

Gono last month asked government to grant amnesty to business executives who
fled the country at the height of a crackdown in the financial sector.

"We call upon government to declare an amnesty to all those who may have
erred and strayed economically in the past, so that a new beginning can be
worked out after which any future deviations from the national code of
conduct and ethics should invite mandatory custodial sentences," said Gono.

The six bank executives are Intermarket chief executive Nicholas Vingirayi,
Barbican chief executive Mtuli Ncube and four NMB directors - Julius Makoni
(CEO), Otto Chekeche, James Mushore and Francis Zimuto.

The six have denied any wrongdoing but insist they will not return to
Zimbabwe because they are not assured of a free trial.


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Warped Mugabenomics no solution to our woes

Zim Independent

Editor's Memo

Vincent Kahiya
PRESIDENT Robert Mugabe's government last year ordered the destruction of
thousands of homes ostensibly to crack down on crime and spur Zimbabwe's
economic regeneration.

Suborned economists, commentators and fellow politicians applauded Mugabe's
plan as the work of a genius almost deserving of a Nobel Prize for
economics.

Picture this. The genius Mugabe is invited to give a lecture and he tells
this story to starry-eyed undergraduates as an illustration of his economics
ingenuity.

"We are constructing brand new houses, mending those which require to be
mended, where it is necessary to destroy some. But the thrust is a
reconstruction one, a positive thrust to rebuild things."

Additionally, there ".will be joy on the part of those who did not have
homes, joy on the part of those who had homes which could not accommodate
fully their families. Let's bring about that joy and we shall erase this
image of a Zimbabwe that is in ruins." (July 15, 2005)

He is surprised why some people do not embrace the joy of government-induced
domestic destruction so that all may prosper.

At this point, the auditorium reverberates with thunderous applause. Here is
a president who turns government forces against his own citizens, to destroy
thousands of homes to create the aggregate demand necessary - for housing,
furniture, appliances, etc - and put Zimbabwe back on the road to
prosperity. Mugabenomics takes academics by storm.

Scholars start to take an interest in his public statements and they do not
need to wait long for him to pronounce another theorem. Eights months later
he offers theorists more nuggets.

"Those who say printing money will cause inflation are suggesting that you
just fold your hands and say 'aah, let the situation continue and let the
people starve'.

"The Good Lord up there has given you a brain and the brain must function,
not in a stereotyped manner but in a flexible manner ... so I will print
money today so that people can survive." (February 19, 2006). Applause!

He will print more to buy foreign currency to import fuel, food, medicine,
military equipment and more Peugeot 607s. The printing press at Fidelity,
which is running more constantly than pumps at Jaffrey Morton waterworks,
needs spare parts. It has to print more notes to buy forex so the country
can import spare parts for it!

There are notes everywhere. Companies manufacturing wheelbarrows design "new
models" to carry notes. Kombis will require trailers or roof racks to store
notes. The benefits for the downstream industries are immense and
opportunities for employment-creation limitless. This is not a bad dream but
a 21st century nightmare.

There is a dangerous pattern of destruction by this government that we have
been made to believe is for the benefit of the whole nation. The land reform
we were told was meant to correct racial imbalances, albeit by first
destroying the very base of this economy in preparation for a major
rebuilding exercise. That is a farrago of nonsense. Operation Murambatsvina
was crafted in the same crazy fashion. And then there is a spirited attempt
to trash our economy by printing money on the pretext that it will make us
richer.

This strange economic theory has its roots deep in the facile mantras of
nationalism and sovereignty. There is no place for common sense here. Our
poverty does not stem from lack of paper money but because we do not have
resources of intrinsic value.

Simple economics denotes that people need resources to live and live well.
Money is exchanged for resources. The value of money is what it will buy,
and that value is fairly constant. The value of a banknote is in the eye of
the beholder. If there's confidence in the currency then printing more of it
allows the creation of wealth. If you print too much then confidence
collapses and you're in trouble.

Imagine that Bill Gates writes you an IOU for US$100 000. That IOU has worth
because you know Bill Gates has money, land, and resources to back it up.
It's currency. Now imagine a beggar on the street hands you an IOU for $100
000: it's worthless, because you know he doesn't have anything worth $100
000 to back it up.

Zimbabwe can't get richer by printing more money for the same reason a
homeless guy can't get rich by writing IOUs. Just being a country doesn't
give you the ability to create value and worth. It's as simple as that.


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Mugabe rapidly losing grip on reality

Zim Independent

Dumisani Muleya
PRESIDENT Robert Mugabe's lengthy interview was on Sunday night screened on
state television to mark the occasion of his birthday on Tuesday when he
turned 82. He spoke on a wide range of issues, which might act as a reality
check for Zimbabweans.

He raised numerous issues ranging from history, economics, politics, HIV and
Aids, his own personal health, and his succession, to slavery and
colonialism, neo-imperialism, alleged plots to oust his regime, the
dominance of the global order by the West and the United Nations reform
agenda.

He attacked US President George Bush and British Prime Minister Tony Blair
for interfering in Zimbabwe's internal affairs. African leaders were
described as cowards for failing to tell Bush and Blair "to go to hell"
after they rejected Mugabe's disputed re-election in 2002.

South African President Thabo Mbeki, Nigerian leader Olusegun Obasanjo and
others who tried to help to resolve the local crisis were told to "keep
away".

Zimbabwean ambassador to South Africa Simon Khaya Moyo has been clumsily
trying to do damage limitation by denying Mugabe was referring to Mbeki and
others when he said they should keep away.

Posing as a moral knight, Mugabe also whined about cultural and moral
decadence in Zimbabwe. He lashed out at gay people and youths who ape
western culture.

Cabinet ministers came under fire for corruption and incompetence.

The International Monetary Fund (IMF) was described as a monster and a
political instrument for regime change. Mugabe insinuated the IMF was
recently working to to remove his regime. He said the IMF has never helped
Zimbabwe even though his government in the past secured balance-of-payments
support from it.

On economic policy, Mugabe firmly rejected orthodox ideas - "bookish
economics" as he calls it - and vowed to pursue his own voodoo
prescriptions. He said he would continue to print money to alleviate
socioeconomic hardships. This coming from a supposed economist!

Exonerating himself from any failure, Mugabe blamed capricious weather
conditions and sanctions for the economic crisis in Zimbabwe. He tried to
portray Zimbabwe as a victim of external aggression.

On a lighter note, he said his doctors had told him his health was good, to
the extent that his bones were like those of "a 28-year-old boy".

He said he usually goes for checks twice a year and encouraged citizens to
follow suit without saying what he is doing about the collapsing health care
system.

Mugabe also spoke about soccer, slamming the Zimbabwe Football Association
for failure, and what he had bought his wife, Grace, for Valentine's Day.

Now to return a verdict on Mugabe's interview: it provided the clearest sign
yet that he is rapidly losing his grip on reality. His detachment from
events on the ground and the situation around him shocked many.

Mugabe appeared off message and handcuffed to the past, thus confirming he
is beyond his sell-by date as a leader.

His analysis of the current political and economic crisis was based on a
flawed premise, and was, in the end, neither interesting nor convincing. Due
to the lack of structured analysis, Mugabe was found wanting and exposed on
real issues, especially to do with the economy. He struggled to articulate
fundamental political, policy and institutional issues underlying the
prevailing crisis.

Eventually, Mugabe - assisted by a rather apologetic interviewer - just
turned the show into a platform for a blame game now typical of his regime's
head-in-the-sand politics.

While denying he was an autocrat, Mugabe managed to prove he was not only a
political dictator but also an intellectual one as well by refusing to
listen to other people's ideas.

Describing others as intellectual slaves, he also failed to realise that, in
fact, he himself is a prisoner of shibboleths of the past. This is made
worse by his tendency to reason by conclusion on issues.

However, Mugabe's interview provided interesting insights into his
make-believe world. It showed he is rigidly opposed to reform. It also
indicated what he thinks about African leaders, including Mbeki: that they
are not revolutionaries, but cowards.

The interview also exposed his threadbare grasp of modern economics and his
struggle to get to grips with global dynamics. It helped to confirm the
wholesale abdication of reason and a complete breakdown of common sense in
government.

Mugabe avoided certain telling issues, including the fact that currently
state institutions and government departments - a vast swathe of the
bureaucracy - have collapsed due to leadership and policy failures. This
explains why the functions of a number of ministries are now performed by
the central bank which has assumed a quasi-fiscal instead of a monetary
policy role.

Mugabe could also not explain why government has lost capacity for effective
policy formulation and implementation, something at the heart of the current
system's virtual collapse.

Apart from endorsing the current local government system, Mugabe did not say
why government is failing to deliver even basic services - water,
electricity, education, roads, transport and health care - the sort of
things that make any political administration legitimate.

In the end, the interview was a yarn-spinning endeavour that only helped to
confirm Mugabe is now a past master of politics and man of the past.


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People should own agenda for change

Zim Independent

By Priscilla Misihairabwi-Mushonga
RECENTLY in parliament I tabled a motion to commemorate the death of
Corretta Scott King, wife of the late Dr Martin Luther King Junior.

I felt it was important to find a way of honouring an individual who has
been a role model and inspiration to oppressed people around the world.

Throughout her life she fought against prejudice, violence and inequality.
She spoke out for the marginalised and championed their human rights.

Like her husband, Corretta's passion for equality and social justice never
wavered despite the hostile political environment in which these goals were
pursued.

The passion that she and her husband demonstrated permeated throughout the
US civil rights movement. It galvanised its structures, mobilised the
grassroots and inspired individuals to stand up and fight for their basic
rights.

Corretta's death has prompted me to reflect on the history of our own
liberation struggle and the manner in which it is being fought today.

To peacefully advance progressive and democratic change in a society
deliberately structured to promote the interests of a particular group,
which aggressively guards its status and interests, requires not just unity
of purpose among those waging the struggle, but also an individual
commitment to act outside of the group construct and engage in individual
protests about the state of society.

When Rosa Parks refused to give up her seat to a white person, she was not
acting in accordance with a carefully-structured plan of civil disobedience.

Her action was instinctive, reflecting her own sense of anger, offended
dignity and degradation.

Her own personal experience provoked her to take a stand against a system
which denied her basic rights, denied her dignity and forced her to live as
a second-class citizen in her own country.

When I reflect on the courageous individual actions of people like Parks, I
question why similar individual acts of protest are so rare in today's
Zimbabwe.

Part of the reason is no doubt due to the framework of repression that has
been created, and the consequent climate of genuine fear that it has
provoked. This in itself, however, does not fully explain the phenomenon.

In my view, the answer also lies in the systematic manner in which President
Robert Mugabe and Zanu PF have eroded people's pride for their country.

A study of the history of civil disobedience in various contexts illustrates
the close relationship of passion and pride with individual acts of courage
and protest.

To imbue a sense of pride and passion, people need to be empowered, they
need to feel that they are playing a part in shaping the society in which
they live and they need to believe that the government and its institutions
are geared towards promoting and protecting their basic rights.

In Zimbabwe, the vast majority are cognisant of their exclusion and
remoteness from the institutions and processes which impact on their every
day lives.

There is no connection to the centre or a sense of belonging. This umblical
cord has been deliberately cut off by the current regime. To them
nationalism is an exclusive concept. They have deliberately constructed a
dichotomy of which the guiding ethos is" "you are either with us or against
us".

Anyone who holds views which are at variance with the status quo is
instantly labelled a "traitor" or "enemy of the state".

Zanu PF's privatisation of the liberation struggle in the post-Independence
period is a manifestation of its myopic definition of nationalism.

In the eyes of the Zanu PF leadership, they - and not the people - possess
ownership of everything associated with the liberation struggle.

They contemptuously ignore the fact that it was the people of this country
who secured our Independence and not a clique of individuals. Only the
people can own the liberation agenda.

The deliberate attempt to disconnect the people and deny them a sense of
ownership over a shared history is further reflected by the flagrant refusal
by the government to formulate a constitution, in full consultation with the
people, which encapsulates the guiding principles and values of our fight
against Ian Smith's Rhodesia.

The government regularly waxes lyrical on the importance of patriotism and
yet denies the people the processes and instruments that are necessary to
foster national pride and patriotism.

A constitution should be a symbol of national pride. It should act as the
catalyst for fostering a culture of national unity and identity.

In Zimbabwe, our much-amended constitution is simply tailored to suit the
whims of a ruling clique.

One of the biggest challenges facing the MDC is how to restore the patriotic
fervour that Zanu PF has diluted. We need to reawaken people's pride and
passion for Zimbabwe. To do this, we first have to reconnect with the people
and ensure that they have a sense of ownership of our agenda for peaceful
and democratic change.

We must bridge any gaps that have developed between the party leadership,
the party structures and the people. The people must feel empowered, valued
and part of the national effort to revive Zimbabwe's fortunes.

We cannot afford to be complacent and take it for granted that the people
will simply back the MDC because it offers an alternative to Zanu PF. This
would be political folly. We have to get out there and inspire the people
with our patriotic zeal and vision for Zimbabwe.

We need to make our vision the bedrock for a revival of national pride. Only
then will we see the acts of individual protest that, taken collectively,
will help us to re-claim the democratic space that has been taken away.

* Priscilla Misihairabwi-Mushonga is MDC parliamentary spokesperson.


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Waiting to reclaim my land

Zim Independent

By Bruce Gemmill
AS a dispossessed farmer and one who is determined not to be driven into
exile, I fervently believe I will one day soon be back on my farms and begin
the long haul of bringing them back to life.

We produced tobacco, deciduous fruit and weaners. Just before our eviction
we were in the process of applying for export processing zone (EPZ) status,
having made the decision to go into greenhouse production.

All we produced was exportable.

When I return to my farms, which I do from time-to-time, the situation is so
different from what it used to be. It is silent, empty and has the feeling
of a graveyard, full of memories and sadness.

Getting the farmers back onto their farms and into production makes economic
and humanitarian sense, nothing else does.

I employed 170 people as regulars, who in turn supported about 1 000
dependants. Most of my regulars are now located in the nearby communal land,
they say, waiting for me to return. I keep in contact. They have no jobs or
money and are chronically short of food.

A high proportion of them are reported to have died. I am informed there are
now only four settler families left on my farms plus two beer selling
outlets. Land reform? No, it is denial and destruction.

Large-scale commercial agriculture in Zimbabwe has a substantial comparative
advantage over countries in the northern hemisphere with whom we seek to
trade.

We have the ability to produce and sell a wide range of agricultural
products both fresh and processed at highly-competitive prices. We have a
climate that allows us to produce crops all year round.

A rainfall pattern that usually produces sufficient runoff water to be
stored for use in the dry season and adequate good quality arable land, both
high and lowveld.

We also have long daylight hours, a large rural labour force (currently
unemployed) who are flexible and capable of high productivity, and most
importantly of all (until it was forced to disband) a competent and
competitive commercial farming community which could hold its own anywhere
in the world.

The tobacco industry exemplifies this comparative advantage very well.

Starting in 1980, this industry fought its way back to a leading position in
the word market. It became a world-class industry, respected and trusted by
both the trader and the manufacturer.

Today it is in ruins, Brazil has taken over our market. A properly
reconstructed large-scale commercial agriculture will in addition to
providing food security at home, be able to seek out and exploit
opportunities in the dynamic and fast-changing world food market.

It is not entirely the fault of the white farming community that we do not
have a black farming community capable of taking over abandoned commercial
farms.

The Zanu PF government has existed for 25 years and during that time it has
made no effort to correct that imbalance.

Large-scale commercial farming was a national asset, even though it was in
private ownership.

The same description would apply to the mining industry and tourism. All
qualify as national assets because they exploit the natural resources and
bring benefit to all Zimbabweans, either directly or indirectly.

"Land is the economy and the economy is land" was a vacuous statement, on
par with "never in a thousand years".

Land has no intrinsic value; it only has value when you grow things on it,
extract minerals from it, build on it or persuade tourists to come and look
at it and what grows out of it.

"Land is the economy and the economy is land" can be understood when used in
the context of a tub-thumping electioneering speech. But when used in the
context of everyday life in the modern world in which we struggle to survive
and compete, it is irrelevant nonsense.

Only after the present political debacle has been sorted out and brought to
a credible conclusion can a serious debate about our return to economic good
health get underway.

It is imperative that the reconstruction of large-scale commercial
agriculture is at the epicentre of this debate. It is known and accepted
that the disruption of commercial agriculture is the genesis of this
country's economic collapse, therefore the corollary must be its
reconstruction if we are serious about getting out of the present morass.

To pretend that we can manoeuvre our way around this contentious political
hot potato is dishonest and delusional. From the platform created by a
recovered large-scale commercial agriculture, we can diversify and expand
into a more industrialised and organised economy. There are no shortcuts on
offer.

The reconstruction of commercial agriculture should not be done in a
piecemeal manner, as some members of the present government seem to be
contemplating. It simply won't work. Agricultural problems can only be
solved by pragmatic agricultural solutions.

What we put together this time must last for generations - a truly massive
undertaking.

It is estimated an investment in the region of US$15 billion will be
required to restore the industry to where it was in year 2000. This figure
excludes the cost of refurbishing and reconstructing the upstream and
downstream service industries.

This money can only come from the international donor community. Assistance
of this scale will be predicated on proof of judicious and corruption-free
disbursement. The scale of destruction wantonly carried out by the
government is mind-boggling.

The Reserve Bank governor (Gideon Gono) spends a lot of his time advising us
that he can navigate the economy out of its present straits by fiscal and
financial manipulation. He knows very well he is dealing with the symptoms
and not the cause.

He gives the game away when he goes to plead with the president on behalf of
the 5% of commercial farmers still left on the farms.

This plea has interesting implications. If a mere 5% can alter the course of
events, should he not be telling the president: "Get the remaining 95% back
on their farms and the country's problems are solved"?

This of course will not happen. In Zanu PF circles, it is a heresy to tell
the truth. The law of unintended consequences is clearly on show in the
aftermath of this politically-engineered catastrophe.

The obscene comparison between the undeserving rich minority and the
deserving poor majority was not planned or even intended.

The government was totally unaware of the complexities and finely tuned
forces that are constantly at play in the industry called large-scale
commercial agriculture.

Once the avalanche of economic collapse started, there was nothing the
government could do to stop it; a massive loss of face was unthinkable. I do
not see how the government can survive the present crisis.

* Bruce Gemmill is a dispossessed farmer and land activist.


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Ex-student leader might be soiled by past

Zim Independent

By Itai Masotsha Zimunya
ON October 4 1989 at the University of Zimbabwe arose one of the most
noteworthy acts of resistances to President Robert Mugabe's rule. The
students' union rose against the one-party state agenda and compelled Mugabe
to act on corrupt government chefs.

Arthur Mutambara was the union president and Munyaradzi Gwisai secretary. It
is this era of student activism that gave the duo fame.

Today Mutambara is set to lead the pro-senate faction of the MDC. However,
it is my contention that Mutambara, however learned or intelligent, may be
soiled by the political remnants and stumps in that faction. In the end he,
like Jonathan Moyo, could emerge the greatest loser. After the fateful
October 12 2005 split, the MDC factions espoused different ideologies,
meanings and political promises.

The Gibson Sibanda-led faction is reported to cherish dialogue and a
non-confrontational approach to engaging dictatorship. On the other hand,
Morgan Tsvangirai's faction believes in a systematic and mass engagement of
the regime, including mass defiance and protest actions.

It is another thing whether both factions have the capacity to launch a
serious challenge against the dictatorship or succeed in bringing about the
much-needed socio-economic relief using their strategies.

Another realistic perspective of Zimbabwe's reform could be a reformed Zanu
PF that implements all that the people are asking for.

Mutambara's ascendancy to the MDC presidency would bring with it high
expectations to those who know or have interacted with him. In 1989, at the
University of Zimbabwe, and as members of the Shadreck Ghutto's informal
socialist school, the Mutambara-led union challenged several government
positions, including its silence on corruption, the need to notify the
police of a planned meeting, and the one-party state agenda among other
issues.

The famous statement of October 2 1989 that made Mutambara, Gwisai and
others famous did not only incite massive demonstrations, but invited the
terror of the government. The statement read:

"They (the riot police) harassed and terrorised students indiscriminately
throughout the campus, randomly tear-gassing halls of residence, wantonly
clobbering and brutalising students and threatening to use gunfire when
necessary . . . Comrades, this is state terrorism at its worst!

"Yes, we did not apply for permission and we will never apply for permission
from anyone in this country to hold a seminar at this university . . . To
them, the ruling dogs of imperialism, academic freedom involves the narrow
acquisition of knowledge, domination of knowledge and who should be taught
by whom . . .

"It is a government which displays brute neo-fascism only comparable to that
of (apartheid) South Africa before its own unarmed defenceless students.
It's our strong submission that this institution of government has thus been
rendered completely disreputable and hence the incumbents have completely
lost legitimacy.

"Who in this government can have the audacity and credibility to criticise
the De-Klerk regime in South Africa? Or are we even worse than De Klerk? Ian
Smith never banned political seminars at this university . . .

"That one fought for this country does not justify them to loot, plunder and
wreck the economy of Zimbabwe let alone stifle people's democratic rights .
. . You can't push a cat into a corner - after all we are not cats but
tigers! Defeat is not our agenda!"

The statement angered the Education minister who branded Mutambara and his
colleagues "hooligans, drunkards and megalomaniacs . . . anti-patriotic and
anti-nationalistic in nature".

Some students were arrested and detained on allegations of being a threat to
the government and the people of Zimbabwe because they had "connived with
foreign politicians to tarnish the image of the country". The detention was,
however, set aside by the High Court.

On October 5 of the same year, Morgan Tsvangirai, then the secretary-general
of the Zimbabwe Congress of Trade Unions, issued a solidarity statement
rebuking "the authorities responsible (who) have developed so much
uncertainty in themselves that they cannot even show tolerance and
rationality in dealing with our own children". Tsvangirai was arrested and
detained for six weeks for this solidarity.

It is from this history that we draw our assertion that, while we celebrate
Mutambara's entry into full-time politics, his past may haunt his future.

Firstly, the statement of October 2 1989 remains true today and the first
question is: will Mutambara remain so confrontational and militant in his
political approach to Zanu PF? Any deviation from this mass-based political
approach, which does appear to be the idea of the pro-senate MDC faction,
might soil his revolutionary history.

Secondly, Mutambara might find it challenging to work with people whose past
was at variance with the principles he espoused. A senior official of the
pro-senate group was a senior legal officer of the University of Zimbabwe
who contributed immensely to the suspension of other student leaders like
Brian Kagoro and Tendai Biti, among many who championed the same cause as
that of Mutambara.

Thirdly, Mutambara, though he has every right and freedom to join and
associate with any person of his choice, must not forget that political
power comes from the people. It is the same Tsvangirai who as
unsophisticated as he was in 1989 who came to Mutambara's rescue and was
incarcerated for that.

While not suggesting that Mutambara must pay back Tsvangirai by siding with
him, any moves towards negotiating with Zanu PF will quickly discredit him
so much that he will go to the political abyss like Moyo, whose rich
political past was soiled by his fellowship with the ruling party.

Most of the above scenarios, even if realistic, pose lesser damages to
Mutambara's political career. His greatest fall could come when he follows
his party's policy of engagement with Zanu PF. Such an engagement might lead
to a government of national unity, and under such an arrangement, history
will take its toll.

Zanu PF, being the stronger party in the talks, will want to maintain a
powerful position in the new power-sharing structure.

In conclusion, like the scholars of old, we leave it to time. What we can
firmly assert though is that the people of Zimbabwe are not looking for
oratory or high-class people but a person that would resolve the current
socio-economic crisis. That is why, as in the Christian Bible, Lord Jesus
was born of unknown parents and in a cattle kraal.

The saviour's coming may not necessarily be high-sounding or wealthy. But
they who stand with the people and for the people may get the people's
assent to the throne of power. We wait to see the tiger in Mutambara.

* Zimunya is a Harare-based socio-economic researcher..


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Only austerity measures will rescue Zim from abyss

Zim Independent

Dumisani Ndlela

WHEN the country experienced a 500 percentage points decline in inflation
from an all-time high of 623% in January 2004 to 124% in March 2005, even
the most hardened pessimists believed Zimbabwe was out of the inflation
abyss.

But how wrong they were.=

Since 2005, inflation has soared unabated, coming close to the all-time high
of 2004, after reaching 613,2% year-on-year for January.

To many observers of monetary developments, the problem was simply one of
imprudent fiscal policy, and persistent nagging of the central bank by a
government not used to austerity.

But some monetary analysts say the central bank has been an accomplice in
stoking inflationary fires and burning the economy down by accepting
government directives to print money.

Reserve Bank of Zimbabwe governor, Gideon Gono, last week made a rare
admission that the central bank had printed a whopping $21 trillion to
purchase United States dollars for repayment of IMF arrears to stave off the
imminent expulsion of the country's membership to the Bretton Woods
institution.

This is besides cash printed to raise money for grain and fuel imports, as
well as for other quasi-fiscal operations by the RBZ.

The government last year borrowed heavily from the central bank mainly for
grain imports against the backdrop of drought as well as for fuel imports,
implying that cash from the central bank was used again to buy foreign
currency.

Money printing stokes money supply growth which provides impetus to soaring
inflation.

Money supply expanded from 177,6% in January 2005 to 411,5% in November of
the same year, according to latest figures released by the central bank.

There are fears among economic players that the money supply growth figures
might be understated, but a number of factors might contribute to this.

Money supply is the generation of new money - in other words, an addition to
stock of money already in circulation.

While the major reason for such growth in Zimbabwe has been credit to the
government, banking institutions have become major contributors to
government debt through statutory reserve requirements, which stood at 60%
of deposits in 2005 but were reviewed downwards to 45% in October.

This large chunk of money from banking institutions sits at the Reserve Bank
earning no interest, and has largely been lent to the government to meet its
expenses. This quasi-fiscal operation has been condemned by the IMF.

Giving reasons for the expansion in money supply, Gono said: "The
collectivity of Zimbabweans must realise that this high growth in money
supply was occasioned by printing of $21 trillion to buy foreign currency to
pay the IMF."

Independent economic consultant, John Robertson says: "These are political
decisions with (negative) economic consequences. The people are paying the
price; it's a big price to pay."

While it has become clear to everyone that large-scale money printing would
lead to high inflation, the threat of such an outcome is still not real to
the government.

President Robert Mugabe this week pledged to print more money, arguing that
the government could not watch while people starve.

This is not a sound economic argument, as the president himself admits that
Zimbabwe's economic woes no longer require text book solutions.

But printing money cannot be a solution to the current economic crisis.

Large-scale money printing propels high inflation, which is the equivalent
of a drastic loss of the purchasing power of money.

Robertson says inflation has been "the main consequence" of the government's
money printing venture, and people's savings over the years are eroded and
become valueless.

"Hard work is destroyed and damages the country's ability to invest," said
Robertson.

In other words, the very same people the government insists it is trying to
save through money printing are picking up the cost of that decision through
skyrocketing costs for basics and even non-essential commodities.

The inflationary cycle has made it unattractive to hold the local currency
when costs of goods and services go up almost everyday. What this means is
that rather than saving, people are now making sure they spend their little
incomes as fast as they can, on goods.

The population, in order to avoid the inflationary effect, flees the
domestic currency as a store of value, and instead shifts their wealth into
hard currency and durable goods.

This explains why the parallel foreign currency market has continued to
thrive, despite the RBZ's efforts to destroy it.

The problem is compounded by the fact that there are serious shortages in
the economy. Scarcity, by nature, generates inflation, and this adds the
impetus to a problem the government is already exacerbating through money
printing.

Fuel is in very short supply, as is maize-meal, the country's staple food,
as well as foreign currency, sugar and cooking oil.

A power shortage has also become another spot of bother, with intermitent
blackouts now a common feature in the country.

All this creates opportunities for arbitrage or outright corruption in the
trade of scarce commodities, especially in cases where middlemen are
involved, or where ruling party and government heavyweights are entitled
access and have to resell later to the general public.

This has further fuelled inflation in the economy, with the general public
bearing the brunt.

But the inflation risk emanating from skewed economic policies has not only
affected individuals; it has cut across the broad spectrum of the economy -
industrial and commercial operations are mourning.

Robertson points out a particular risk likely to be suffered by the
financial sector. When inflation accelerates, Robertson says, it leads to
poorly performing financial assets. Interest rates have not moved up as much
as inflation has done, Roberton says, arguing that this poses a serious
threat to the well-being of investments.

Noticeably, what the situation in Zimbabwe has done is to move institutional
and private money parked in bonds and deposits into equities and real
estate.

The stock exchange and real estate have performed considerably well under
the circumstances, but Robertson worries about the sustainability of bullish
sentiment on the stock market when companies are haemorhaging from fuel
shortages, power cuts and foreign currency shortages.

Analysts say nothing else except austerity measures will rescue Zimbabwe
from the inflationary abyss. Only tighter monetary and fiscal policies will
reduce inflation expectations and reinstall confidence in the local
currency.


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Economy has lost its backbone

Zim Independent

By Eric Bloch

FOR more than a century, agriculture has been the foundation and the
mainstay of the Zimbabwe economy. By 1997, when the economy was at its most
optimum in over 30 years, agriculture constituted more than 18% of Gross
Domestic Product (GDP), was the source of almost a quarter of the country's
foreign exchange earnings, and accounted for about 23% of total formal
employment. For more than 15% of Zimbabwe's population, agriculture was the
source of their livelihoods and well-being.

Regrettably, those were the circumstances of yesteryear, but are certainly
not those of the present day. Over the last eight years agriculture has been
decimated, most of its contribution to the economy wiped out, and not only
has that had devastating repercussions upon farmers, farm workers, and their
families, but has had disastrous consequences for the economy as a whole. In
those eight years, more than 4 000 farmers and their families have been
evicted from their homes, more than 300 000 farm workers have become
unemployed, and with their families and other dependants have become more
than three million additional persons who are struggling to survive below
the poverty datum line and are suffering great malnutrition,
under-nourishment and allied ill-health.

Foreign currency earnings have fallen sharply, with exportable tobacco
production having fallen from 237 million kg in 2001 to an anticipated less
than 50 million kg in 2006 (and much of that being of considerably lesser
quality). So too have exports of beef, citrus, tea, coffee and many other
agricultural commodities declined, gravely worsening the availability of the
critical foreign exchange necessary to keep the wheels of the economy
turning, and required to address the needs of the populace.

According to the 2003 Utete Land Report, Zimbabwe's total land area is 39, 6
million hectares of which 33,3 million hectares (84%) are reserved for
agriculture. Of that agricultural land, almost half (16,4 million hectares)
constitute communal lands, and the remainder is supposedly for commercial
farming (16,9 million hectares), inclusive of newly-settled A1 and A2
farmers. Regrettably, latest available estimates indicate that cultivated
commercial farm lands currently approximate a niggardly 850 000 hectares
only, with the remaining more than 16 million hectares lying fallow.

Very clearly, Zimbabwe's economy has lost its backbone, being agriculture.
Instead of feeding itself and the region, Zimbabwe must now import, year
after year, the greater portion of its food needs, with massive
consequential inflationary impacts, and necessitating diversion of very
scarce foreign currency.

The near total collapse of agriculture has had vast negative effects upon
all other sectors of the economy, with diminished demand of that sector of
goods and services provided by the other economic sectors, massively reduced
consumer spending power, non-availability of foreign currency, and much
else.

In a supplement to the fourth quarter 2005 Monetary Policy Review Statement,
the governor of the Reserve Bank of Zimbabwe, Gideon Gono identified that
over and above ensuring an adequacy of funding for the agriculture sector,
nine other policies must be ensured to boost production. He stated these to
be:

* Halting further illegal land invasions;

* Respecting private property rights;

* Stringent enforcement of the law without fear or favour;

* Comprehensive development of the country's irrigation capacity;

* An efficient agricultural pricing system that fully takes into account
production costs;

* Continued government support to farmers, especially in terms of access to
finance;

* Full utilisation of every inch of allocated land;

* Significant recapitalisation of Agri Bank to allow for the provision of
medium to long- term agricultural financing; and

* Establishment and consolidation of well- structured agricultural support
institutions, as well as the unification of farmers' representative bodies.

Unfortunately, much of Gono's prescription of agricultural recovery has
fallen upon the deaf ears of the very persons who most needed to listen,
including the Minister of Agriculture and Rural Development, Joseph Made,
Minister of State for National Security, Didymus Mutasa, Minister of State
for Land and Resettlement Programmes, Flora Bhuka, and Minister of Home
Affairs, Kembo Mohadi. Had they listened to, and heeded, Gono's words, they
would have ensured that illegal farm invasions ceased forthwith, but they
continue to occur.

Mohadi should ensure that the Zimbabwe Republic Police enforce law and
order, instead of which farm invasions continue unhindered, and private
property of white commercial farmers continues to be vandalised and
misappropriated.

If government genuinely wishes for recovery of the agricultural sector, and
thereby the recovery of the economy as a whole, it needs to face up to some
unpalatable facts. It needs to acknowledge that its land reform programmes
have been a dismal failure, instead of its specious recurrent declarations,
ad nauseum, of the great success of land reform. It needs to reform its land
reform!

If there is a real desire on the part of government to bring about a
positive transformation of agriculture, government will strive to implement
that which was agreed at the 1998 Harare Donor Conference, and again agreed
at Abuja in 2001 instead of spuriously justifying its reneging of those
agreements by unfounded allegations of contractual breach by Britain and its
allied states in the European Union.

To do so, it must enable any, be they black or white, Ndebele, Shona or
other tribe, male or female, to access on merit a farm, not exceeding a
specified size.

To that end, any whose farms have been expropriated should be entitled to
have one farm, within size constraints, returned to them. Any not wishing to
resume farming should receive fair compensation, timeously, for the land and
the improvements thereon, and for all moveables, inclusive of those as have
been vandalised, destroyed or stolen. (Such compensation would, in terms of
the Harare and Abuja agreements, be partially funded by the international
community.)

All land acquired by the state should be promptly resettled, but not to
those whose qualifications are nepotistic. New settlers should, without
exception, be those who are possessed of, or have access to, all necessary
skills and resources to work the lands to best advantage, and not as only
"weekend get-away destinations", away from the hustle and bustle of urban
life.

And, most critically, all who are availed of farm lands, must be vested with
real and negotiable tenure, either in the form of title deeds, or 99-year,
assignable leases. Without effective ownership, there can be little
motivation to develop and enhance the lands, and there is no collateral to
support essential operating borrowings. For five years government has talked
of issuing 99-year leases but, to date, all that has sped forth from
government on vesting of any farm tenure has been talk, but no action.


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What a sore loser!

Zim Independent

Muckraker

President Mugabe this week remained as vague as ever about his succession
plan and his departure from office. There wasn't much of national importance
to be gleaned from his rambling Reflections at 82 interview on Newsnet. To
prompt his spineless ministers to start making their own plans and get out
of his shadow, he will need to clearly state that he is stepping down in
2008. He has been vague on that point. Why does one who is so fluent on all
other issues want us to have to guess at what he is trying to say about
quitting office?

The second point about succession derives from the vagueness referred to
above. Mugabe said when the time came Zanu PF should be able to find a
replacement. Like he said last time around, he talked about campaigning
having to be done openly instead of "clandestine manoeuvres".

"There is time to campaign," he said, "but campaign at the right time and
not become divisive and over-ambitious, with secret meetings taking place
and denouncing and denigrating others and so on." In other words, campaign
my way and for whom I say.

The clearest he came to saying what this entailed was when he said the
leadership is elected at congress. But that can only work if people feel
that there are equal chances for all and that the rules are not arbitrarily
changed to suit the whims of those at the top. It is difficult to foster
openness in an organisation that is not democratic. Moreover, Mugabe himself
is squandering a good chance to foster a culture of smooth transition. He
obviously is failing to build that legacy in the party at a time when he is
still able to influence events. We should not be surprised when Zanu PF
disintegrates with his departure.

There was Dr Tafataona Mahoso rambling on again about how journalism is such
a bad profession just because during his long sojourn in the US he read that
CIA agents often operated as journalists and vice versa. Writing in his
Sunday Mail column this week, his conclusion was that journalists are being
used by "imperialist powers" in their war on terror.

Mahoso has also reached the enlightened conclusion that the Mahommed
cartoons, first published in Denmark, were a deliberate imperialist plot "to
frame" the Muslim world.

In other words to him there is nothing called free flow of information or
freedom of expression and conscience. Everything must be seen through his
jaundiced eye as he masquerades as a licensing agent and a moral Father
Superior at the Media and Information Commission.

In his rage on behalf of similarly intolerant brothers in the Middle East,
Mahoso, who until recently was a media lecturer at the Harare Poly, is now
happy to denounce journalism as "a pretentious profession". Why then is the
good Dr making a living out of such a profession? We would not want to
remind him of how he has since shed his socialist pretensions and embraced
capitalist symbols like moving around in a chauffeur-driven 4x4 in the city
centre.

Are these not the fruits of a pretentious profession Doctor? Still we will
call your bluff and say show us one so-called real profession and we will
show you a thousand rotten apples!

Ranga Mataire, formerly Lovemore, says he has had three interviews with
President Mugabe since becoming a journalist. In these encounters he has
discovered that the president is a "principled and unquestionably patriotic"
father figure for the youths.

He is entitled to his views. We were however touched by the fawning
confession about how the guy sees himself. Mataire says he was very nervous
when he first met the president, a meeting he says was facilitated by Zanu
PF information chief Nathan Shamuyarira. "It's not so common for a simpleton
like me to be afforded such an opportunity," he remarked.

It's not every day that you encounter this level of honesty. Unfortunately
the nation won't get any wiser from interviews conducted by simpletons
either.

Mahoso has been complaining about the "neo-liberal" opposition in Zimbabwe
poking fun at Zimbabwe's increasing trade with the Far East. He referred to
Malaysia as among those Zimbabwe was now doing business with. The centre of
gravity in the global capitalist system was shifting eastwards, he claimed,
and Zimbabwe had recognised the shift as a strategic moment for
geo-political and economic reorientation.

On Friday the Herald quoted the new Malaysian ambassador, Cheah Choong Kit,
as remarking that trade between the two countries remained flat. President
Mugabe appeared to agree pointing out that planned beef exports to Malaysia
had not taken off.

In other words, despite Mugabe's numerous visits to Malaysia, trade between
the two countries has not grown in any significant way. We all recall the
fate of YTL's proposed investment at Hwange. It would be useful to quantify
the sum total of Malaysian investment in Zimbabwe since the "Look East"
policy was launched.

Mahoso evidently doesn't have the figures although that doesn't stop him
making dramatic claims!

In this connection, Transport minister Christopher Mushohwe was asked by the
Sunday Mail what measures he was taking to address Reserve Bank complaints
that Air Zimbabwe was losing money hand over fist on its routes to the Far
East.

His answer was less than inspiring. "If such suggestions are made," he said,
"let them be brought to us and if they are proved correct Air Zimbabwe will
take corrective measures."

Mushohwe likes to position himself as the architect of Air Zimbabwe's "Look
East" thrust. But he needs evidence to be brought to him by the Reserve Bank
before he will accept that the routes he inspired are not paying.

Here we can see that Zimbabwe's bid to keep abreast of what Mahoso calls
geo-strategic reorientation has badly backfired. Instead of the profitable
airline it used to be, AirZim is now a threadbare tool of politicians
pursuing investments that produce no dividends. Anybody watching Malaysian
investment trends will know where much of it has gone: South Africa, a
country that works. And China's interest in the rest of Africa far exceeds
its dabbling in Zimbabwe.

We liked remarks by Masvingo governor Willard Chiwewe condemning fresh farm
invasions in the province. He called on law enforcement authorities to act
against people who continue to act illegally in occupying new farms.

"We do not know where the missing link is with regards to continued reports
of fresh occupations of farms," Chiwewe said.

Can anybody assist him?

Somebody else needing help is Attorney-General Sobusa Gula-Ndebele. He has
called on the courts to impose stricter bail conditions to avoid accused
persons skipping the country. This comes in the wake of Benjamin Paradza's
disappearance.

Let's hope the courts ignore calls from the state to deny individuals their
right to liberty, whatever the charges, or to tighten bail conditions. The
state repeatedly loses cases because the charges are politically-driven or
simply poorly framed. Very often the state simply doesn't have a case.

The recent lifting of remand conditions against Mathias Ndlovu in the Cabs
fraud case is an example of how not to proceed. Chief law officer Joseph
Jagada admitted the state was not sure who the complainant was!

It cannot in the circumstances expect the courts to take a tougher view.

And references to Paradza and businessmen skipping the country should
include the obvious fact that most left because they did not see any chance
of a fair trial in today's Zimbabwe. The Attorney-General's office appears
not to have woken up to that salient point.

Gula-Ndebele, opposing a court application by the Law Society, said there
was no reason for anyone to become a fugitive from justice if they were
innocent.

Indeed. But supposing there is no justice?

Justice Chinembiri Bhunu, a senior High Court judge, was quoted last week as
saying politicians should not relocate political battles to the courts, but
should go to the people to canvass their support in order to win or retain
political office.

"Let me warn those who want to use the courts to gain political power that
it is not the duty of the courts to spring anyone into power or to maintain
anyone in power," Bhunu said last Monday at the opening of the High Court
circuit in Masvingo.

"Those wishing to do so should go to the people to garner support because it
is the people who can give them such power and not the courts."

Doesn't this beg the obvious question: What is an aggrieved party supposed
to do if the state denies them an opportunity to test the people's will? If
it manipulates the voters' roll for instance or uses coercion as an
electoral weapon? What if the ruling party abuses its position in government
to produce a flawed election result? Isn't it then the duty of the courts to
rule on the freeness and fairness of the poll? Isn't that their
constitutional obligation?

What we are beginning to see in a number of recent pronouncements is a
judiciary that appears unwilling to fulfill its constitutionally-mandated
function on the grounds that the issues before it are political. As if
anything is not nowadays!

Gula-Ndebele for instance believes that locking somebody up without bail for
21 days was "reasonably justifiable in a democratic society". But the
judiciary appears reluctant to admit that this constitutes a serious
usurpation of its authority. Why is it so silent on this fundamental threat
to liberty when judges have been happy to express views on a range of other
matters?

Perhaps the most misleading of Gula-Ndebele's claims in opposing the LSZ
application was that some countries hold suspects for much longer than 21
days. He is absolutely right: China, Cuba, North Korea, Belarus, Iran, Saudi
Arabia, Vietnam, and Sudan all have provision for lengthy detention without
trial. So did South Africa before 1994. But those are not useful benchmarks.

As for his suggestion that the state was the best judge of what constituted
national interests, we can see from Zanu PF's trail of misrule that this is
a claim that needs serious interrogation, as the academics would say.

Somebody else needing serious interrogation is the Russian ambassador to
Harare, Oleg Scherbak. He was quoted in the Herald as denouncing sanctions
against Zimbabwe saying "ongoing developments in your country are purely an
internal issue".

He should be asked the same question as judges seeking to deny citizens
justice in the courts. What do people do to resolve their problems if the
government denies them freedom of expression or electoral fairplay? Why is
Russia intent upon siding with the forces of repression against those
seeking a democratic order?

" Russia intends to continue to energetically promote finding comprehensive
solutions to problems facing the continent," the ambassador assured us. But
this will remain cheap talk so long as Russia does nothing to promote
democracy or human rights. What assistance has Russia provided to civil
society in Africa as distinct from selling arms to repressive regimes?
Scherbak should provide some answers. The interview was headed " Russia: A
steadfast friend of Africa". In fact Russia is a friend of African
governments, not the people. Let's not forget Sekesai Makwavarara's visit to
Moscow.

Will all those who took President Mugabe's promotion of certain women to
high office as an indication of enlightened policy please note the views of
one of his speech-writers.

Nathaniel Manheru last Saturday took exception to comments by Mavis Makuni
in the Financial Gazette on Thabo Mbeki's role in the Zimbabwe crisis. He
asked whether her comments were not a case of "PMT senselessness".

So much for gender sensitivity! And the Independent's Dumisani Muleya got it
in the neck for examining the diplomacy around Zanu PF/MDC talks in 2004.
Again, the very mention of the word "Mbeki" had Manheru frothing at the
mouth.

We should not be surprised. The President's Office was hotly denying the
existence of the South African-promoted talks - first reported in the
Independent and culminating in a constitutional draft signed by both
negotiators - right up until the point this month when Mbeki announced he
had a copy of the draft. Now the Independent has been proved right and
Manheru wrong. But he is proving a sore loser!

What has Zambia's Foreign Affairs minister been smoking? He told his
Zimbabwean hosts recently that he had driven 50km outside Harare and was
"exceedingly impressed by what I saw. People are really serious about
farming contrary to press reports that the land is not being utilised
effectively".

As anybody else driving 50km outside Harare, in any direction, would find it
very difficult to find any evidence whatsoever of agricultural activity, we
can only assume the Zambian minister was high on political solidarity -
which as we know can be somewhat mind-altering.

Put together with the recent expulsion of Zimbabwean opposition members for
simply talking to each other in Livingstone, we should make sure the world
knows that Zambia is not a safe place to hold a conversation and that its
ministers, in addition to deluding themselves, are inclined to delude others
as well!


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The tragedy before us

Zim Independent

Comment

LET us spare a thought for the sad state of our manufacturing sector. A KM
Financial Services/CZI survey for 2004-5 released yesterday is yet another
illustration of unmitigated failure in what was once one of Africa's most
developed industrial sectors. More distressing though is the huge slump in
business confidence and with it prospects of a quick economic regeneration.

The survey says in the period under review, 54,5% of responding companies
operated at 50% or more of capacity. About 40,5% reported operating at
between 50% and 74% of full capacity. Only 13% reported operating at 75% and
above of full capacity.

It must be noted that the capacities reported were on an eight-hour-day,
five-day-week basis. Under normal circumstances the manufacturing sector
operates three eight-hour shifts. The statistics from the survey can safely
be divided by three to give a more realistic capacity utilisation rating.

The country's installed capacity is therefore being immensely underutilised
and this is manifest in the quality of products available and the myriad
products that have disappeared from shop shelves. Reduced capacity
utilisation has seen a slump in employment. The manufacturing sector can
only absorb 42% of optimum number of industrial workers. The knock-on effect
of workers' reduced disposable income and buying power is haunting
manufacturers whose goods are staying longer on the shelves.

Zimbabwe , despite its central location in the Sadc region with 300 million
potential customers, has lost its export competitiveness, being reduced to
exporting 91% of products to the region with Zambia taking up 29%. Business
to key trading partner South Africa has slowed down to 22% of exports.

The survey says this is a major indicator that our manufactured products are
losing competitiveness in the much bigger world out there. Coupled with
misdirected militancy in foreign policy direction, Zimbabwe has also lost
key traditional markets in the West where the country was exporting fresh
produce, meats and meat products.

Companies that have remained open have to make do with intermittent water
and electricity cuts. Fuel is expensive and supplies have remained erratic
for over seven years. There is the high cost of money and the clear and
present danger posed by hyperinflation, currently at 613% and headed for 1
000% by year-end.

Rushed fiscal and monetary policy directives have exacerbated the situation.
Manufacturers have expressed their disquiet at constant policy shifts,
especially in the foreign currency retention regime. In the end, the
efficacy of systems put in place cannot be properly evaluated as changes are
announced sporadically leaving no room for forward planning.

The decline of the manufacturing sector since 1998 has been horrifying. That
decline is an economic tragedy, as the country has lost opportunities for
growth. Zimbabwe is the second most industrialised country in Comesa, with a
central geographic location that facilitates access to markets of more than
300 million people. The gains made between 1990 and 1998 when the country
pursued prudent economic policies have been sacrificed to political
expediency and governmental mismanagement.

Neighbouring countries, despite their obsequious support for President
Mugabe, have now taken advantage of Zimbabwe's foolhardiness to grow their
economies.

The greatest tragedy which precipitated the fall in industrial production
has been the collapse of agriculture, the foundation on which all else was
built. By the end of 2003, agricultural output was, at best, 40% of 1998
production levels.

Observers believe that the further decline in output has since cut current
production to a quarter of pre-land reform levels. As agricultural incomes
diminished, so too did consumer spending on industrial outputs. And as the
demand for those outputs became less and less, the demand by some industrial
enterprises upon other industrial enterprises also diminished.

A combination of poor central bank policies on the cost of money and foreign
currency retention together with populist policies like price controls and
then inflation, have all worked to pull down production. These are sure
symptoms of a very sick economy.

All talk of recovery - expounded in voluminous documentation by the central
bank in the last 30 months - is treacherous dishonesty. The reality of our
situation is at manufacturing plants. Even without scientific studies, a
drive into the heavy industrial areas in Bulawayo and Harare will show
evidence enough of a ruined economy. Machines have fallen silent, abandoned
factories are overgrown with grass, roofs have rusted and gates have been
chained for extended periods. Workers who used to be employed in these
places are at home and industrialists have taken their business acumen
elsewhere across our borders.

At the CZI congress in Nyanga last year, business and government promised to
work together under a system akin to the Business Unity of South Africa
where government, capital and labour unite for economic development. This
could be a key factor in restoring business confidence but nobody in
government seems to be listening.

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