• Crossborder traders admit to externalising $500 bills
• Government's formal appeal for food
• Shock supplementary budget
• Zim forks out $77b for envoys’ upkeep
• ZANU PF, MDC dig in heels over talks
• Mixed feelings over govt’s new cash crisis measures
• Talk for nation’s sake
• MDC be cautious!
• Open letter to ZANU PF, MDC
• . . . and now to the notebook
• Reality check for die-hard believer in Africa
• Zim dollar hits record lows
• Govt, fertiliser firms head for clash over prices
• Bank notes crisis needs concerted effort by all
• Zim’s deciding moment is at hand
• Inflation — root cause of cash binge

That letter

Last week, the government finally presented a formal appeal for food and
humanitarian aid to international donors. The letter was late - very late -
as cabinet committees argued over crop estimates. This delay, says the
letter, was because the government "wanted to be exhaustive in its
assessment in order to come up with a fairly accurate crop forecast figure".
Some observers say the real reason is that the government was anxious not to
reveal the true effect on food production of the "fast track" land reforms
of the last three years. Be that as it may, the government puts the food
deficit at almost 712 000 mt of maize. With 120 000 mt already in the WFP
pipeline, the net appeal for international donors is for around 600 000 mt.
Donor agencies were yesterday said to be "dismayed" that the government had
made no plans to meet any part of this food deficit on its own, and that
they were expected to meet the appeal in full. The letter states blandly
that whatever the government was able to procure would be "to ensure that
there is some reserve and that the country does not feed from hand to
mouth". Have they not noticed that the country is already feeding from hand
to mouth?

But almost as shocking, is the tone of the letter. One does not expect an
appeal for food aid at an official level to be in the language of abject
begging. But the letter is resentful and combative. "The Agrarian reforms
have necessitated making hard choices more so in the face of antagonism to
the programme and general skepticism to pro-poor policies by some in the
donor community", the document begins. And there then follows page after
page about drought - a veritable lecture to the donor agencies on how
drought is to blame for everything. Well, not quite everything. In a section
entitled "Lessons Learnt", the donor agencies themselves are blamed. "WFP
and some of the donors refused to work in resettlement areas" the document
charges. "Some of the aid agencies who bought seeds and fertilizers end up
dumping them in the communal areas, which had enough while the rest of the
farmers were looking for these precious inputs," it continues. No mention of
the endemic violence in the newly-resettled farming areas, or the repeated
attacks on aid workers in places such as Binga. And the lack of foreign
exchange is brushed off as if it were an external factor, an act of God,
beyond the government's control. Not even a glimmer of an acknowledgement
that the balance of payments crisis and the food crisis are inextricably
linked, and both caused by the government itself. In the rarified atmosphere
of the government ministries, it does indeed seem that beggars can be
choosers.

If you would like to read the entire letter, Click here.

      It also accounts for about four percent of foreign currency payments
made by the Reserve Bank of Zimbabwe (RBZ) between September 11 2000 and
July 18 this year.
      Analysts told The Financial Gazette this week that the government was
likely to spend more resources in the coming years now that it has resolved
to post tourism attaches to Germany, South Africa and France.
      “The number of missions that we have is crippling at this time because
the reality worldwide is that faced with hardships
      you close your missions abroad except the very essential ones.
      “What are they serving in Belgrade, Kuwait, Havana, London e.t.c to
name just a few,” said a source.
      The continued existence of foreign missions in some parts of the world
has triggered heated debate.
      Economic pundits suggest that some of the foreign missions should be
disbanded, while others say they should be maintained to firefight the
negative publicity that has dented Zimbabwe’s image.
      For example, envoys in Europe have become isolated because of
sanctions slapped on Zimbabwe by the European Union and the United States of
America, which do not recognise President Robert Mugabe’s controversial
re-election in March last year.
      Early this month, The Financial Gazette revealed that the government
had failed to pay envoys.
      It had to seek recourse to banks to help with staff payments from
tobacco proceeds. Each bank was allocated an average of three embassies.
      The request came at a time when some of the embassies were being
threatened with eviction. The government has at least 37 embassies and high
commissions scattered throughout the world.
      The diplomats’ accommodation, as well as general upkeep is paid for in
foreign currency, which is currently in short supply. To worsen the
situation, the Zimbabwe dollar keeps tumbling and is at its lowest levels
since independence.

      The new measures coincided with the release of the International
Monetary Fund (IMF)’s latest report on Zimbabwe.
      The international monetarists issued an article IV consultative report
on the country in which they exhorted monetary authorities to come up with
legislation to combat money laundering, one of the most effective vehicles
used to finance terrorism.
      A banking sector source said the latest package of measures could
bring sanity to the cash crisis gripping the country, maintaining that
stakeholders had to play their part in order to make the measures work.
      The sources also said the measures would be an effective way to combat
money laundering.
      “Banking institutions should avoid getting caught up in a vicious
cycle of potential prejudice when the current $500 notes are eventually
withdrawn within the next 60 days,” a bank executive said.
      However, economists and commentators said the phasing out of $500
notes and the subsequent introduction of new bank notes could just be one of
the many stop gap measures meant to firefight the economic meltdown without
necessarily addressing the root cause.
      Finance Minister Herbert Murerwa, under pressure to stem the cash
crisis, told journalists on Tuesday that all the $500 notes in circulation
would be withdrawn from the market within two months. They would be replaced
with new $500 and $1 000 notes.
      Economists were unanimous this week that the latest measures would not
get the desired results.
      “These measures are not going to solve the current cash crisis in the
long term.
      “They need to print an incredible amount of the denominations for them
to be enough to go around. But then, if people are uncertain about the
economic climate, they will hoard the new notes and the vicious circle is
once again set into motion,” said economic consultant John Robertson.
      Robertson said it would be difficult for people to retain confidence
in the banking sector in the absence of a credible interest rate policy.
      “The biggest problem that needs to be addressed is that of interest
rates. There are no incentives or guarantees for one to keep their money in
the bank and neither is there any penalty against keeping one’s cash.
      “Instead, there is a penalty in banking your money in that it’s a
hassle to get it out,” he said.
      Economic pundits said the Reserve Bank of Zimbabwe (RBZ) would need to
print at least $55 billion in new $1 000 and $500 notes in the initial
stages.
      They however, cast doubts on the RBZ’s capacity to inject the required
volumes of cash given that it has so far struggled to meet its promises.
      Nyasha Chasakara, an analyst with First Mutual Life said the
government’s move was a bluff aimed at threatening people from hoarding
cash.
      “This whole directive is a bluff,” he said.
      “However, people who are set to benefit from this directive are
retailers as many people are set to opt to purchase goods from shops instead
of banking the cash. This would lead to retailers pushing their prices up, a
trend which could worsen inflation,” said Chasakara.
      Robertson said much of the money printed was going towards settling
government’s debt. The debt will continue to grow because the government
would have to borrow to import the paper needed to print the new notes.
      He said: “We may need to start printing $500 coins instead of notes
because it’s much cheaper.”
      The country has been gripped by a serious shortage of cash for three
months with the blame being placed squarely on the RBZ.
      Long winding queues at banks have become the order of the day as the
severe shortage of cash continues with no solution in sight.
      The decision to introduce new notes came from a government task force
led by Murerwa.
      Other members of the taskforce include State Security Minister
Nicholas Goche, Defence Minister Sydney Sekeremayi, Home Affairs Minister
Kembo Mohadi, Justice Minister Partrick Chinamasa and Minister of State for
Information and Publicity, Jonathan Moyo.

      7/31/2003 8:46:45 AM (GMT +2)

      THIS is, to all intents and purposes, a defining moment for Zimbabwe,
a country with its back firmly against the wall.

      We have seen concerted efforts by various stakeholders to aggressively
push for negotiations to find a solution to the country’s political impasse
and economic crisis. The previously sceptical and cynical international
community has also swung its support behind these efforts. In fact, the next
couple of weeks, during which the stalled talks are scheduled to resume, are
crucial for the country, which has been looking for a solution to steer
clear of this rough patch.
      Although we write before nothing concrete has been finalised on the
proposed resumption of talks between the ruling ZANU PF and the opposition
Movement for Democratic Change (MDC) to seek a lasting solution to the
country’s economic and political crisis, which has had a direct attack on
social stability, it is encouraging that the key players are now looking
beyond rhetoric and contemplating action. Both sides, which had initially
adopted an icy tone resulting in the sterile first round of talks being put
on hold, now eschew negotiations as a quick route to solving the country’s
problems.
      Admittedly, there is need for caution in welcoming the latest
developments but both ZANU PF and the MDC seem to have now mustered the
political will and maturity to resume the aborted talks unconditionally.
They should, in order to break the logjam holding up the most significant
step to a negotiated settlement to Zimbabwe’s crisis, both make concessions
than remain rigid on their previous demands which scuttled the first round
of talks.
      Lack of trust, respect and ill-feeling over both parties’ sincerity,
where ZANU PF — long accused of exploiting the power of incumbency — was
said to be employing time-buying tactics, with the MDC digging in its heels
over the legitimacy of President Robert Mugabe who romped to victory in what
the opposition felt was a flawed presidential election, saw the two parties
abandoning the negotiating table.
      They should however now engage in open, sincere, well-meaning
negotiations in an atmosphere which encourages a robust exchange of views to
come up with solutions that meet broad-based population needs.
      As we have said before, national interest should take precedence above
everything else and as they set the stage for what could probably be
Zimbabwe’s most significant negotiations, the two political parties should
know that there would be no losers or winners if the country reaches a
negotiated settlement, although we are quite aware that leading hawks on
both sides might feel otherwise.
      This is why it is imperative for these parties to choose, as their
representatives to the mooted negotiations, only those men and women who see
beyond individual political interests. Those whose horizons are limited by
narrow, partisan political passions cannot possibly solve Zimbabwe’s
problems.
      This is a task that demands people with greater vision, insight and
courage. Like former American President John F Kennedy once said: “… We need
men and women who can dream of things that never were.”
      A successful conclusion of the talks will be a resounding victory not
only for national interests but for common sense as well.
      Zimbabweans have for too long endured disillusionment and social
deprivation due to the economic melt-down as well as anger and hatred over
the increasingly violent political divide that has claimed innocent lives.
We need to put a stop to this now. We have to heal the wounds and focus on
nation-building.

      7/31/2003 9:00:25 AM (GMT +2)

      EDITOR - "Mugabe set to meet Tsvangirai for talks"/ "Mbeki steps up
pressure on Zim" — lead headlines, Zimbabwe Independent, July 25 2003.
Others newspapers give the same sort of message.
      And I am concerned, very concerned.

      Morgan Tsvangirai, be wary. You don’t know what sort of quicksand,
what morass you will get yourself into if you are not careful.

      The MDC has started to make concessions, to extend an olive branch to
the government. They are considering agreement to a "dignified and safe
exit" from power for Mugabe (Daily News, July 21 2003). They attended the
current opening of Parliament by the "President" this past week, and are
always willing to meet ZANU PF on a level playing field to discuss the way
forward.

      What concessions have ZANU PF made? Oh yes! Mugabe gave Tsvangirai
permission to attend the opening of Parliament and hear him speak — as
Tsvangirai’s President, of course. What else? Nothing!

      Conversely, ZANU PF youths that same week "allegedly" blocked roads
leading to nomination courts in Karoi, Rusape, Bindura, Chegutu, and
prevented MDC candidates from presenting their papers.

      And, days later, riot police in Bulawayo assaulted some female
demonstrators, one in her late 70s, and arrested 35 for peacefully
protesting against the controversial Public Order and Security Act (Daily
News July 25 2003).

      To the best of my knowledge there has been no relaxation by Nathan
Shamuyarira of his statement that "substantive negotiations could only take
place when the MDC drops its legal challenge and recognises Mugabe’s
government as legitimate".

      That means the MDC cancelling its High Court hearing, set for
November, of Mugabe’s legitimacy as President. If they do that, the MDC lose
their only major trump card in their battle against Mugabe.

      Morgan Tsvangirai, be very, very careful. If discussions between the
MDC and ZANU PF do come about they must be chaired by a completely
independent individual, strong both within himself and in his background
forces that can ensure that any points of agreement can and will be enforced
against either party. And it is vital that the MDC group are not moderates
who will make concessions, thinking that ZANU PF will do the same — and find
that MDC finish up being absorbed by ZANU PF as PF ZANU did in 1987.

      And may God help Zimbabwe in this crucial time.

      PNR Silversides,

      Harare.

      7/31/2003 9:01:30 AM (GMT +2)

      EDITOR - To: The national chairman, MDC and

      To: The national chairman, ZANU PF
      Dear Sirs,

      The last time we wrote to both of you we were happy that despite
government confiscating the maize at least the Movement for Democratic
Change (MDC) had cast politics aside and positively responded by importing
maize for drought relief as was our urging.

      We demand this time that both parties listen and act accordingly.

      This country is going through a very sad period from which it can only
emerge if both of you swallow your pride and realise that your future is
determinant upon the very same mass of poor and insecure people whose plight
you seem not worried about.

      Taneta! (We are tired)

      What both your political parties should realise, cherish and nourish
are the interests of the people. Why should the MDC call for sanctions,
destroy the economy through purported mass actions which are nothing more
than child’s play — a mere circus?

      Why should ZANU PF continue politicking in the face of dried up
foreign currency reserves? Why recycle the same persons in important
institutions of the economy and governance? Why refuse to dialogue with
equally entitled citizens?

      If Frelimo talked to Renamo, why can’t you? After all you are situated
in the same city and drinking water from the same reservoir.

      We don’t survive on "rambai makashinga", "transparency", "good
go-vernance", "sovereignty", "rule of law", "Mugabe must go" and
"kushaiyisisa chaizvo-izvo".

      We don’t survive on words, hopes, wishes and promises.

      In our humble capacity we now serve notice on both of you to mend your
ways before July 31 2003.

      MDC, by July 31 2003 you must have:

      lStopped your fanning of political violence;

      lCalled for the lifting of the economic sanctions you have callously
called for to be imposed upon the mass of the people of Zimbabwe;

      lPublicly acknowledged the righteousness of land redistribution, and,
most importantly, publicly undertake that in the event of your assuming the
reins of government you shall not reverse what has been achieved;

      lRecognised Robert Mugabe as the President of Zimbabwe and
acknowledged the motives of your donors;

      lAcknowledged the supremacy of the principle of "national interest
first" in whatever you plan and/or do, and accept and believe that your
political differences with ZANU PF can only be resolved best at the next
general/presidential elections.

      lPublicly inform Zimbabwe why all whites in this country support your
party and none other, and also acknowledged that you created and are still
fanning your so-called "crisis in Zimbabwe",

      lPublicly announced that you have ceased exploiting the poverty of the
unemployed urban youth whom you hire for political violence on false
promises of payment, and

      lStopped referring to the EU and the USA as the "international
community".

      ZANU PF, by July 2003 31 you must have:

      lStopped your fanning of political violence as well as your selective
application of the course of justice in such matters;

      lStopped and disbanded your Border Gezi ZANU PF militias that you are
training under the guise of national service;

      lGiven the MDC political space, especially in the rural areas;

      lStopped unnecessarily repetitive public posturings against those with
foreign currency and go instead on a massive international diplomatic
offensive to woo back investors;

      lConcretised your alleged recent recognition of the MDC as a partner
in the development of this country;

      lStopped your silly concentration on naïve politics alone to the
detriment of the economy of Zimbabwe,

      lInstructed the Herald to report the positives the MDC also does;

      lPublicly announced you have ceased exploiting the poverty of the
unemployed rural youth whom you hire for political violence on false
promises of payment, and

      lAnnounced you now respect and acknowledge the critical economic role
Zimbabweans in the diaspora can play towards resuscitating this country’s
economy and that you are going to view them positively and work together
from now onwards.

      Both parties must have:

      lPublicly announced they have wronged us before and are now repentant

      lSaid good-bye to your unnecessary squabbles in Parliament and
concentrate on developing the country and its economy with priority being
the unemployment issue in this country;

      lDropped your election petitions against each other;

      lPublicly announced you are going to meet as Zimbabweans to iron out
any differences,

      lPublicly agreed and announced the European Union and USA have no
recognised positive role to play in the resolution of your self-created
so-called "crisis in Zimbabwe" and that no-one outside this Zimbabwe has a
right to set policy for us.

      We now await your responses. Zimbabwe and its people want peace,
progress and prosperity.

      NAGG (Democratic Front),

      Harare.

      7/31/2003 9:06:38 AM (GMT +2)

      Bills and Parly

      It is interesting that Justice Minister Patrick Chinamasa, in his
quest to fix the opposition MDC, is coming up with a quixotic Bill which
will prohibit Members of Parliament from "willfully absenting themselves
from debates in Parliament, interrupting or disrupting deliberations or
proceedings." MPs found guilty of this crime will lose anything up to six
months’ salary.
      Anyway, the Bill seems to have been overtaken by the events of last
week and the people whom it intended to punish may no longer be there, at
least for the foreseeable future.

      A word of advice to the "just minister" is that every time he dreams
up laws with the opposition in mind, he should remember one phrase: Hoist by
own petard.

      Chinamasa should know that one day ZANU PF will also be an opposition
party, and its MPs may also decide to boycott Parliament in protest against
the way the party in power — be it MDC, NAGG, ZANU or NDP —would be doing
things.

      But CZ has a small patriotic suggestion to make to Chinamasa. What
about if this not-so-democratic Bill is tampered with a little to prescribe
the same punishment for those MPs who choose to sleep in the august house
and therefore render themselves equally guilty of being useless, I mean,
willfully absent ... minded?

      An MP who boycotts Parliament in protest of something they don’t agree
with is much more progressive than an MP who just goes to Parliament to
sleep, no matter how popular they might be in their own constituencies.

      Still on Parliament, CZ strongly feels that there should be some form
of minimum educational qualification for someone to be elected MP because we
can no longer allow a situation in which illiterate goons make laws for us.

      CZ recently cringed in shame when, at a workshop in Kariba, one
enterprising indigenous fisherman started circulating a paper asking those
participants who wanted to buy fish to write their names and the quantities
they wanted.

      While every other literate participant wrote their names against the
kilogrammes they could afford, this particular Honourable MP, in his
parliamentary wisdom, decided to write his name and the constituency he
represents! Even the poor fisherman should have wondered.

      Such is the calibre of the MPs we have in our so-called august house!
Village yokels, some of whom cannot tell their left from their right, making
laws for us simply because they had small grinding mills in some remote
rural areas with which they could cheat poor villagers to vote for them.

      Standards

      While following last week’s developments in Iraq, in which Saddam
Hussein’s sons, Uday and Qusay were bombed to death by American forces, CZ
was surprised that the two were armed with AK-47 rifles which every news
station in the world dismissed as small weapons.

      In 1998, three American citizens were arrested in Harare in possession
of the same AK-47 rifles and do you now remember what our own Reuben Barwe
at ZBC termed them? Arms of war.

      If by our own standards, AK-47 rifles are "arms of war", and
Americans, whose children we are now threatening with death, dismiss the
same weapons as "small weapons", then there is something warped about our
standards. We all possibly need psychologists to examine our heads!

      Free and fair

      At the weekend, a friend told CZ that he was under pressure from a war
veteran relative who wanted cash desperately to meet funeral expenses at his
in-laws.

      The friend repeatedly told the "O-vet" that as much as he wanted to
assist, like any other average Zimbabwean, he did not have any easy access
to cash.

      The "O-vet" could not accept this explanation, insisting that there
was no way this young man, as someone who has a good job in the city centre,
could not have good contacts to please make the cash available. When the
"O-vet continued pestering this friend, CZ had no option, but to tell him to
stop being needlessly polite and tell this man to either go to Joseph
Chinotimba’s home, ZANU PF head office or any other place where the people
who have visited ruin to this country are found, and they should be able to
help.

      The one good thing about the problems we are now facing is that they
affect all without discrimination. MDC and ZANU PF supporters alike,
"O-vets" and us Peace Veterans alike, CIO operatives and rank marshals
alike, the brutal soldiers-Green Bombers who terrorised urbanites for not
supporting ZANU PF and prostitutes alike, politicised ZRP officers and
vendors alike. You name it.

      When we are queuing for cash at commercial banks and building
societies, the queues are made of something like: a CIO operative, a vendor,
two teachers, a Green Bomber, two prostitutes, a college student, a pregnant
housewife, four army officers, a thief, an "O-vet" and the queues goes on
and on for kilometres.

      One wonders what sort of discussions these people could ever engage in
for the days they will be queuing!

      It would have been greatly unfair if these problems spared some of the
most over-zealous supporters of ZANU PF like war veterans and Green Bombers
because they were never going to really understand how much suffering they
have brought this country.

      Entrepreneurs

      His Excellency the President of the National Association of Freelance
Journalist (NAFJ) Cde Joe Kwaramba was the guest of honour at ZBC’s Media
Watch this week. It’s refreshing to know that he is still around.

      He talked a lot, but literally said nothing as he dodged most key
issues that any serious person should have addressed. Who does he write for?
Is it true that the budget for the "multi-billion-dollar media centre" is
coming from the State Security budget or that of the Department of
Information in the office of the Great Uncle and his Cabinet?

      Why does he make it his business to defend the Great Uncle and his
madness? He should have answered all these questions.

      Cde Kwaramba said he had problems with the private Press because it
pushes a foreign agenda.

      "You see they are always writing negatively about the President and
the First Lady. They even put his picture on the front page and write
negative things. They are just negative," Kwaramba whined.

      He went on to brag about how much he loved Zimbabwe and this and that.
We wonder if there is anyone who does not love Zimbabwe who is still hanging
around.

      CZ agreed with Kwaramba when he said members of his association are
businessmen, entrepreneurs. Sure, they are. Just around the corner is the
Harare Agricultural Show, an opportunity for entrepreneurs to make money.

      In the past, NAFJ would approach the organisers of the event and ask
for dozens of Press cards to enable its members to "cover" the show. Then
the NAFJ leadership would approach desperate show visitors queuing to get in
to the show-ground and for half the admission charge they will rent out the
Press cards and many stingy Zimbos would get in.

      Once they are inside, the cards are collected and the process starts
all over again. By the close of the show, a lot of money would have gone
into the back pocket. Anyone would agree that these are real entrepreneurs!

      But ZBC should seriously consider giving this Kwaramba guy a job.

      cznotebook@yahoo.co.uk

      7/31/2003 9:01:13 AM (GMT +2)

      UNTIL three months ago I could have, with Patrice Lumumba, Ayi Kwei
Armah, Kwame Nkrumah and all Pan Africanists, shouted on top of the hill
that Africa was great and her time would come — soon and very soon.
      But the events unfolding in Zimbabwe have changed my mind radically.
My confidence has been shattered to the level where I am beginning to wonder
if there is something inherently wrong with Africa’s leadership.

      With rare exceptions of people like Thomas Sankara and Nelson Mandela,
Africa’s curse has been to have to deal with clowns like Frederick Chiluba,
Laurent Kabila and Sam Nujoma, sadists like Jean-Bedel Bokassa,
kleptomaniacs like Mobutu Sese Seko, pseudo-intellectuals like Robert Mugabe
and megalomaniacs like Sani Abacha.

      You describe a gross human quality and be sure one of the Africa
leaders would embody that.

      So much has been written in the papers about the epic tragedy
unfolding in Zimbabwe and I do not wish to repeat what has been said. All I
know is that we have a lunatic at the helm of our country.

      It is a quite frightening experience because it is like having a
suicidal pilot who has locked the cockpit and is telling you over the
intercom that you really have no choice but to go down with him. That’s
exactly what Mugabe is doing. He reminds one of the scorch-earthed policies
of yesteryear.

      A friend, Isaac Mabhikwa, calls it the game of "shaisano". The
psychology of this deranged leader is that if I can’t have it then you can’t
have it as well. If I were a psychologist I would have had a field day
analysing the dear leader. I would trace all his speeches from the 1970s
right down to the famous fuel statement about "stomach aches" and "head
aches".

      The contradictions, outright lies, half-truths, posturing, arrogance,
hubris and venom contained in those speeches would show that in reality
Mugabe has never really changed. He has been consistent in being a
chameleon — telling his audience what they want to hear and acting in an
opposite way.

      Even right now Mugabe is not acting in the interests of his followers.
Watching a documentary that featured the key players in the Khmer Rouge-like
agrarian reform, I could not help but notice that for some war veterans on
the ground the issue of land is a genuine grievance and they want it
addressed and believe that Mugabe is now giving them land. The sad reality
is that Mugabe is playing a political game of simply ensuring his longevity
in the presidential seat.

      He does not care about the ordinary person. Why should he care when he
does not even know the reality of that person’s life?

      Mugabe and Michael Jackson could be twins for all I know — both are
out of touch with reality.

      The upshot of it all is that we cannot afford Mugabe’s derangement to
contaminate the whole region. He has to go. Already Sam Nujoma has caught a
whiff of Mugabelitis and pretty soon he will be driving his countrymen down
the same road we have come — all in the name of something without any
ideological coherence except the love of power.

      At least Chiluba, who was about to catch the same disease, is now out
of the picture and his successor does not seem to subscribe to the teachings
of the Zimbabwean leader.

      The irony of Mugabe’s impending exit is that he himself is the author
of that inglorious end. He has sown the wind, now let him reap the
whirlwind.

      The imploding economy and the mass hunger are going to unseat him one
way or the other. And all of a sudden those that used to sit on the fence
using all sorts of arguments to excuse Mugabe ‘s excesses are beginning to
see the light. Saul on the road to Damascus could not have had a greater
shock than Zimbabwe’s fast disappearing middle class.

      No longer do we use the excuses that Mugabe is badly advised, that is
it this young wife of his that has blinded him or some other delusion. No!
The buck stops right with Mugabe and no one else.

      The rest of the comedians that have followed his orders will have to
account for their own actions at our own Nuremberg, for to let such
criminals get away under the guise of forging peace and reconciliation is an
insult to the thousands that have suffered grievously under Mugabe.

      A new leadership will have to be born out of this terrible experience.
No more shall we leave politics to the politicians. African leaders have
lied, looted and lynched their own people. The new Zimbabwe will be a place
where we shall have to forge a new reality. A reality that is not carved in
the image of a living being but in the image of lasting values of family,
community and nation.

      But to get there we have to galvanise all democratic forces and get
rid of the demons stalking our land. Now that is the challenge. So do your
bit ordinary person — speak, shout and kick. It will explode. It has to
explode.

      lChris Kabwato is a social and political commentator based in
Johannesburg.

      7/31/2003 8:46:05 AM (GMT +2)

      WHERE is the cash? It looks like the challenges facing Zimbabwe keep
on multiplying, with the latest being the extremely desperate position with
regards to that most basic medium of exchange, cash or bank notes.

      This subject has been widely reported in the media, both inside and
outside Zimbabwe and has become almost daily bread on national television.
However so critical is this subject that until and unless we get a solution,
we cannot be accused of being over-indulgent and it is necessary that we
continue the debate.
      Economic assessments still have to be done to ascertain the effect
that the current shortage being experienced in the major centres is having
on the economy. While other mediums of exchange such as cheques and “plastic
money” are more widely in use now than before the cash crisis, it remains a
fact that the greater part of the country’s population depends on bank notes
for payment of their daily expenses.
      The government recently announced the injection of an additional $12
billion (bringing the total over the past month to $24 billion) into the
money market with a view to easing the current local currency crisis. There
is no award for guessing that the injection had little impact, if any, on
the ordinary person seeking to carry out cash transactions.
      In my mind, the extent of the shortage of bank notes is compromising
the economic performance of the country’s productive and service sectors.
Provisional statistics available from the Central Statistics Office show
that the manufacturing sector volume of production index has been creeping
upwards since early in the year. This is explained by the fact that during
discussions leading to the adoption of the National Economic Revival
Programme, it had become very clear that the basic problem affecting the
economic health of Zimbabwe was related to pricing.
      With the agreement to free prices, the opportunity to revive
collapsing industries presented itself. Today, all goods that had
disappeared from the formal market are now available formally. The prices
obtaining are determined on the basis of producer viability and that is how
it ought to be.
      However, now that there has been this appreciable response by
manufacturers, the rate at which products move is now compromised by the
inadequacy of bank notes. The continued shortage is therefore threatening
producer viability once again and is likely to slow down the rate of
recovery of the economy.
      Overall, the economy was already suffering from the shortage of
foreign currency resulting in shortage of some of the critical inputs such
as fuel and electricity. The shortage of foreign currency itself being a
reflection of the poor performance of the export sector (i.e. gold,
platinum, ferro-chrome, nickel, iron and steel, asbestos, horticulture,
tobacco, cotton, clothing and textiles, timber and furniture, other
manufactured products).
      Furthermore, the continued absence of workers as they queue for cash
at banks means many man-hours are being lost every day and will not be
recovered. This applies to both the formal and informal sectors. The tragedy
is that after standing in queues for long hours, some of the banks can offer
very limited cash only enabling clients to go back home to try again another
day!
      There are several plausible reasons why the current cash crisis is
with us. In my view, the trigger was pulled when in an apparent attempt to
arrest informal currency trading activities, the Reserve Bank of Zimbabwe
directed that all cash withdrawals in excess of half a million dollars would
require several days’ prior application to commercial banks. If I am correct
as to the intentions of this directive, then I can safely say the target was
missed completely.
      Instead, the money changers started withdrawing large sums of money
which they did not re-deposit. It became too much of a hassle having to go
back to beg for money from the banking sector. Many homes have been
subsequently turned into mini-bureaus holding various amounts of cash to
facilitate transactions, including and mainly in foreign currency trading.
      Worse still, the informal foreign currency market thrived on the back
of the new exchange rate adopted in February 2003, which reflected an
exchange adjustment of 1400 percent. This move alone sounded some alarm
bells to the authorities as it was clear that somehow the higher requirement
for local currency for the money changers’ activities needed to be met.
      Due to the nature of the activities here, it is simply not a good idea
to try and make second guesses as to the size of the informal currency
market. Suffice it to say that substantial sums of money were required by
the money changers to ensure the smooth running of their businesses without
having to revert to the banking system.
      A second plausible reason for the emergence of the cash shortage
situation is the rise in the rate of inflation from around 200 percent at
the beginning of the year to approximately 364 percent in recent months.
Such massive increases in the rate of inflation necessarily call for
matching increases in the rate of money supply to keep the economic wheels
turning. It appears that this did not happen.
      A number of notes of the highest denomination are now needed to
purchase items which at the end of last year were going for less than a
thousand dollars (Z$). It was therefore inevitable that something needed to
be done to take care of the increased demand for cash simply as a result of
the massive rise in inflation.
      The reaction of the banking sector to the foregoing has been to limit
the amount of money that depositors could withdraw at any single transaction
or on any day. This was the final straw that broke the camel’s back. Public
confidence was completely lost.
      Since then, many members of the public are finding it hard to take
hard cash to the banks, opting to keep it for future use or sell it to the
emergent black market for local currency, an unprecedented first in reported
history that I am aware of. The emergence of such an unlikely market smacks
of greed, but then reflects on the readiness of Zimbabweans to identify
opportunities to make money through the provision of non-traditional
services — talk of innovativeness. Of course such activities add very
little, if anything at all, to the GDP. The practice of swapping bank notes
for cheques, a mundane activity within the banking sector, is now taking
place within supermarkets and other cash receiving establishments. Bank
notes therefore circulate amongst the populace without ever reaching the
banking halls.
      The lack of confidence in the banking system’s ability to provide
cash, which is now so evident within the Zimbabwean populace, will be very
difficult to overcome. This is the basic reason why the currency injections
announced recently by the authorities literally disappeared into thin air,
leaving sections of government blaming each other for doing little to
forestall the crisis. This has also resulted in accusations of sabotage
being levelled against the business community. Zimbabweans must, however, be
applauded for generally maintaining sanity in the face of the hardships
being faced as a result of the cash crisis. However, this should not lull
the relevant authorities into doing nothimng.
      There ma i There is no single solution to the bank note crisis. We
need to focus on a number of issues which combine to bring back public
confidence which is so critical to stability. There is no doubt that without
an adequate cash injection, it is well nigh impossible to solve the current
crisis to the satisfaction of everybody.
      Secondly, it is evident that the highest bank note denomination in the
land, the $500 note, hardly buys anything of substance. The rise in the rate
of consumer prices necessarily implies a lowering of the value of the
Zimbabwe dollar. Therefore, any new notes need to be of a significantly
higher denomination. There is no need for Zimbabweans to deny that we are
already in that situation which demands this shift to accommodate reality.
Traditional economic theory calls for a tightening of money supply (which
also includes notes and coins in circulation) in order to bring down
inflation.
      The traditional free market economy characterised by perfect
competition is not reality, hence the need for the authorities to think of
solutions which do not necessarily lie inside the box of traditional
solutions. A certain level of radicalism in thinking could help us come up
with plausible solutions. If we can identify that informal money changers
have taken over both local and foreign currency, we might as well free the
foreign currency market so that at least trading can take place in safe and
more formal banking environments. Whilst this may have its own problems, it
will at least make the two precious commodities, local and foreign
currencies, reappear for the public good. The market for goods has just
demonstrated the viability of such an option. At least the authorities will
have something to manage!
      I will conclude by saying that the solution to the current crisis is
not the monopoly of any one section of the community. We all need to play a
part. While it makes sense for individual firms and persons to keep money at
home (because of the hassle of getting anything from the banks), if we all
stick to the same attitude, we are doing neither ourselves nor the economy
any good (the fallacy of composition).
      Farai Zizhou is he , Acting Chief Executive of the Confederation of
Zimbabwe Industries Zimbabwe Economics Society

      7/31/2003 9:04:19 AM (GMT +2)

      The die is cast. Zimbabwe's deciding moment is at hand.
      "To be, or not to be: that is the question:
      Whether ’tis nobler in the mind to suffer
      The slings and arrows of outrageous fortune,

      Or to take arms against a sea of troubles,

      And by opposing end them?"

      It seems centuries ago, the noble playwright William Shakespeare wrote
what best describes our present situation — a situation of procrastination,
misgivings, doubt but however, demanding action — the taking up of arms
against a "sea of troubles".

      The nation is in a grave dilemma as we anticipate the long-awaited
negotiations between the ruling ZANU PF and the opposition MDC that might
make or further break our nation.

      Refreshingly, there is now a flicker of light at the end of the tunnel
that the two warring parties will settle down at the roundtable and outline
the cemetery in which Zimbabweans will bury their differences so as to
become more purposeful in seeking answers to end their deteriorating
predicament.

      We are a nation at a crossroads. We have suffered tremendously for the
past six years as the yoke of man-made blunders strangled us day in day out.

      It all began with the granting of unbudgeted gratuities to the
veterans of the liberation war, then there was the war in the Democratic
Republic of the Congo, then there was another war dubbed the Third
Chimurenga which attempted to reform land distribution and finally there was
the formation of the Movement for Democratic Change.

      As these events unfolded, the situation in the country became
unbearable and any hope of redemption became a far cry from reality until
recently when the ruling ZANU PF and the opposition MDC started negotiating
about negotiating.

      The war veteran gratuities were quickly and recklessly squandered. Our
army’s involvement in the DRC war eventually come to an end. The Third
Chimurenga is on the verge of completion and God knows just how glad
war-weary Zimbabweans are as they wait in joyful hope for the apparent
beginning of the end of the war between ZANU PF and MDC.

      Zimbabwe has been involved in wars on many fronts in the last half
decade and now that fatigue has caught up with us, it’s time to talk
rationally about peace, bread and land.

      Anywhere in the world, war is dehumanising and it is the most
irrational manner of solving problems since it destroys lifetime efforts and
impresses on the survivors the responsibility of rebuilding long-standing
achievements such as infrastructure and rehabilitating humanity afresh.

      The nation faces a plethora of problems that can never be overcome as
long as there is bickering, mudslinging, finger-pointing and backbiting.
Both the ruling party and the opposition party must admit on their own that
they are, single-handedly, powerless to overcome the agonising crisis that
the nation faces.

      Members of the leadership of both parties must examine their
conscience and take a fearless moral inventory of their inadequacies and
promptly admit where they were wrong.

      As I perceive the ZANU PF/MDC atmosphere of reconciliation and
compromise that has confronted us, the words of one Luciano De Crescenzo
immediately come to mind: "We are each an angel with only one wing. And we
can only fly while embracing each other."

      Indeed, Zimbabwe needs two wings to fly. The US has two wings, one
called Democratic and another Republic. The UK also has two wings, one
called Conservative and the other called Labour. Both countries have learnt
to fly because their two angels embrace when the national interest is at
stake.

      Will ZANU PF/MDC lift this nation off the ground?

      Do we believe we can fly?

      Is it possible that we can talk then laugh? Or after the talks there
will be more weeping and gnashing of teeth?

      If you are going to have dinner together and you are going to eat a
toad, then better eat a fat, juicy one.

      Over to you Gushungo and Tsvangison.

      ******************

      Of course last
      week’s stunt by the MDC raised quite a number of eyebrows from staunch
opposition supporters. Even those in the ruling party were a bit taken aback
at the sign of the olive branch displayed by the opposition party.

      It was more like an incredible portrait of Jews forming part of the
Third Reich during the Nazi reign of Hitler in the ‘30s.

      Many have been completely flabbergasted about how and why the MDC came
to listen — attentively — to President Robert Mugabe’s speech.

      Although as Zimbabweans we do condone the move by the two parties to
start negotiations, there are a few things that need to be probed or for
which both parties are answerable to the electorate.

      For instance, what is going to happen to the election petitions of
both parties? Are they going to drop them without the consent of the
electorate?

      As far as the election petitions are concerned, we are about to
witness the greatest legal disaster this country has ever experienced. I am
afraid the talks might guarantee not to expose the historic election fraud
of 2000 and 2002.

      Furthermore, the way MDC changed maitiro seems to point to some
conspiracy that could long have been going on between the two parties albeit
as their supporters butchered themselves ostensibly in consensus with their
leaders.

      Could it be that both parties want to contain a restive nation that
could explode into spontaneous rebellion against the ruling party for its
unruly rule and against the opposition for failing to warrant redemption for
the masses?

      As the two parties go into talks, it is not far from the truth that
MDC is in a compromised position.

      ZANU PF appears as if it wants to prove that Mugabe is invincible.
When the MDC finally decided to conquer him during the "final push," he
brutally crushed the intended uprising, then he threw Morgan Tsvangirai into
prison, and bound him in handcuffs and leg-irons.

      Last Tuesday he reduced the opposition leader to the level of Joseph
Chinotimba, for whether it was by design or by coincidence, that Tsvangirai
sat next to Chinotimba still baffles the mind.

      As a matter of fact, other Zimbabweans actually want to know whether
this country still has a sound opposition or what remains is the appearance
of one?

      We have come to a point where one doesn’t want to believe that some
executive members in the MDC are returning to ZANU PF.

      No matter what side of the argument you are on, you always find people
on your side that you wish were on the other.

      We have come to a point where we are now looking at individuals, and
we know for certain that each individual in the leadership of both parties
is now part of the solution or part of the problem.

      Indeed, Zimbabweans may be disappointed if the talks fail to yield
much but we will certainly be doomed if they are not re-attempted.

      *****************

      Doesn’t President
      Mugabe know that there is a severe and crippling fuel crisis that has
fuelled all the problems he appeared to be aware of when opening Parliament?

      The President, conveniently but shockingly ignored the fuel crisis in
his speech and if you didn’t know, it’s one thing that gives him "headaches
and stomach aches." To be precise — it makes him sick!

      Well, Mr President the land issue can’t progress smoothly without
fuel. If there is no fuel, that paradox you refer to of the rich getting
richer and the poor getting poorer will never be resolved.

      That indigenisation you talked about, Mr President? It won’t work if
there’s no fuel. I am sure you are aware that the fuel crisis is burning all
the cash, so the cash crisis is not really because of a weak monetary policy
but because you can’t cure your "headaches and stomach aches."

      On the whole however, your speech was, shall I say, "a loud climb
down" from the usual Bush-Blair-MDC bashing.

      This one was more mature, Mr President. It seems like you will
accommodate the MDC after all.

      Shouldn’t that have been the way to go about it all along?

      7/31/2003 8:36:47 AM (GMT +2)

      With consumers still trying to grapple with the now normal cash
shortages, the re-introduction of price monitoring of basic commodities may
achieve the unintended, that is, hurt consumers as the monitored products
disappear from the shelves once again.

      Having been away on business for the past two weeks I am one of those
shocked to see how prices have shot through the roof. I had not done my
groceries when I left. Controlling the rate of price increases when the cost
of producing the goods is rising is no solution, it only exacerbates the
problem.

      The crisis our economy is facing has now come to a head and must be
addressed decisively by all the stakeholders. It is encouraging to note that
over the last few weeks the government and opposition have realised this
very fact. One hopes that this will pave way for a lasting solution to the
economic crisis facing the country.

      The crisis has seen businesses and consumers suffering as a result of
the shortage of bank notes, a manifestation of the high rate of inflation in
the economy.

      In the past we have discussed the main causes of inflation in Zimbabwe
and high government expenditure has always emerged as one of the major
causes of inflation. The bottom line is that without cash people cannot
transact and this affects the profitability of businesses. What more of the
informal sector which has now begun to contribute significantly to the
economy?

      With banks giving just $10 000 to clients, there is nothing much one
can do. Cash has now become a commodity and is attracting margins of up to
25 percent. When people are willing to discount the value of their cash, it
is a signal that something has gone very wrong. Since the cash crisis begun
the Reserve Bank of Zimbabwe (RBZ) has injected $24 billion, which has not
alleviated the crisis. This indicates the gravity of the problem we are
facing. Even high value notes will not kill the crisis which is seen
deteriorating further as inflation continues to rise.

      The current monetary policy is barely tight as the government
continues to pay a cost not related to inflation for its funds. There is
therefore no incentive for the government to reign in its expenditure. For
the average man on the street, there is no incentive to save as returns are
unjustifiably low. A whooping $400 billion supplementary budget is not
unlikely, given that civil servants’ salaries have doubled.

      Undoubtedly with the economy contracting, its financing is unlikely to
be from non-inflationary sources. The printing of money unsupported by real
economic growth is inflationary and the budget deficit is by now well above
25 percent of the Gross Domestic Product.

      People with fixed incomes such as pensioners suffer the most so do
those whose salaries are not periodically adjusted. The collective
bargaining exercise has yielded salary increases ranging between 80 to 160
percent, whilst employees have been demanding increases of as much as 450
percent.

      Since inflation rose to nearly 200 percent in December 2002, its rise
has become more uncertain and meteoric. The economic environment has also
become volatile and is now disrupting the financial services sector where
banks are now operating without cash. This not only discourages the use of
banks as intermediaries but makes it difficult for people to conclude
transactions in general, thus constraining economic activity.

      The function of money as a store of value has been severely
compromised and as long as this problem persists, the role of the financial
services sector in the economy is threatened. When citizens lose confidence
in their currency as a store of value and most importantly as a medium of
exchange, they resort to other stronger currencies and this naturally leads
to further depreciation of the currency. In extreme cases barter trade, were
consumers agree to exchange commodities happens.

      The impact of the informal sector, were unfortunately banking is not a
favoured option and due to the nature of the deals is unmistakable on the
financial health of economy. Even though the government’s intentions have
been noble in trying to address the shortage of a number of commodities,
they have created a lot of arbitrage opportunities. These have been well
exploited by all in the economy.

      It is quite clear from the analysis above that unless we address the
problem of inflation, our economy will deteriorate further. The horrors of
inflation have only just begun. As long as the cash crisis continues, banks
will find it increasingly difficult to give out loans as people opt to keep
their money under the pillow. This will inevitably weaken the deposit base
and lead to an even higher inflation rate as companies fail to produce
commodities in the economy.

      It is important for the government to address the problem of inflation
in a systematic way. First the government must realise that its expenditure
is too high and has fuelled inflation in the economy. This is a painful
exercise as it requires among other things civil service reforms. It will
mean that the privatisation of public enterprises, which has stalled will
need to be actively pursued and the proceeds from the exercise applied to
the reduction of the unsustainably high domestic debt, which is nearly $500
billion. Secondly government must become a facilitator in economic
activities and allow the RBZ to have greater autonomy to enforce a strict
monetary policy which will ensure that the government lives within its
means. This will give the government a fresh start and allow a better use of
monetary policy to reduce inflation and reintroduce business confidence in
the economy.

      It will also lead to a stronger currency as citizens regain confidence
in the economy. This will translate into more savings and investment in the
economy. Exporters will find that they are becoming more competitive and
will increase their output. This will create more jobs in the economy and
alleviate unemployment. This sounds very easy, doesn’t it? I can see my
former UZ Economics department lecturers smiling.

      Unfortunately it is not going to be that easy. When one looks at the
gravity of the problems, it will take more than just persuasion to end the
speculation in the economy.

      Speculation has become the only means of survival in our economy.
Expectations are that inflation will continue to rise and therefore one is
better off spending today than tomorrow. With inflation now rising at an
alarming rate of more than 1 percent a day, 7 percent a week, over 30
percent a month, it is the only thing to do. Even the stock market has
awoken up to this fact. Unfortunately in our shrinking economy this breeds
more problems and nothing short of changing citizens’ expectations on
inflation will address it.

      We now see stock prices rising everyday and stockbrokers now have a
new argument for stock market investment — "buy today before inflation
leaves you behind."

      For now this argument is working wonders for all investors but the
million dollar question, which I have no answer to, is: "when will it all
end?"

        .. Nyasha Chasakara is a fund manager with First Mutual Life Asset
Management.