| Election over, Zimbabwe is back to bad old
days |
By Michael Wines The New York
Times FRIDAY, MAY 20, 2005 |
 |
|
BULAWAYO,
Zimbabwe In the weeks before parliamentary elections last March, the
leaders of this threadbare nation threw open the national larder, wooing voters
with stocks of normally scarce gasoline and maize and a flood of freshly printed
money.
It must have worked: The ruling ZANU-PF
party was installed for another five years. But Zimbabwe's Potemkin prosperity
has evaporated since the vote, swiftly replaced by penury and mounting signs of
economic collapse.
Here in Zimbabwe's second largest city,
lines of cars stretch half a kilometer at fuel-parched service stations, and
drivers spend the night in their back seats lest they lose their place. Milk,
cooking oil and most of all maize, the nation's corn staple, are a distant
memory. At one city-center grocery, much-prized Colgate toothpaste is kept in a
locked case.
Zimbabwe's currency, which traded on the
black market at 120 to the dollar in April 2002, went for 6,200 to the dollar
last December, 12,000 last April 1 and 17,000 in early May. By mid-May, a single
American dollar brought as much as 25,000 Zimbabwean dollars - and the rate
continues to climb.
[Zimbabwe's government had steadfastly
maintained an official exchange rate of about 6,100 Zimbabwe dollars per
American dollar until Thursday, when the nation's reserve bank announced a 45
percent devaluation. But the new exchange rate - 9,000 per American dollar -
remains nearly two-thirds less than the black market rate, and business managers
here say it is unlikely to have more than a brief impact on the economy.]
"It's running out of control," one
Bulawayo manufacturer said.
"When you're going down a path of
destruction, you can keep putting patches on the tires - patch, patch, patch -
but eventually, the tire is going to burst," he said. "We're going down that
path."
Of course, people regularly say that
about Zimbabwe's economy, a chewing-gum and baling-wire affair long plagued by
70 percent unemployment, triple-digit inflation and a currency that no foreign
creditor will accept.
Prosperity has been receding since the
late 1990s, when the government's attacks on international creditors and its
seizure of commercial farms triggered a cascade of economic backlashes.
Past economic plunges have provoked food
riots, gasoline line protests and government crackdowns. This one is similar:
The government has sent police to quell mobs outside groceries and gas stations,
and begun a roundup of street merchants who were dealing too openly in
black-market goods and selling currency at illicit rates.
Yet, some say that the current crisis,
perhaps the worst since the economy began foundering, may mark a turning point.
Zimbabwe's main economic problems - capital flight, a dire shortage of foreign
exchange with which to buy imports, and turbocharged inflation - are now so
severe that they are eroding what remains of the industrial and agricultural
base.
Manufacturing has slowed to a trickle,
hamstrung by shortages of fuel and imported components. Businesses have been
driven into barter and the black market, fueling inflation. Appeals for
government help are mostly fruitless: The government is all but broke.
One persistent critic, a former
government economist named John Robertson, said the government apparently
exhausted its reserves on a feel-good campaign before the parliamentary
elections, and is now paying the price.
"The scarcities now are coming from
manufacturers who can't deliver enough to retailers to fill their shelves,"
Robertson said in Harare, the capital. Initially, the problem was that
manufacturers could not get enough supplies to make their products. But "now
that there are more critical shortages in things like fuel," he said, "it's
almost academic whether they can get the material, because they can't deliver
the products anyway. The end result of the shortages is that prices are rising."
In Harare this week, rumors that a
shipment of sugar had arrived created a line of shoppers nearly a kilometer long
outside one suburban supermarket. Yet the problem, said Robertson, was not a
shortage of sugar but one of the imported polyethylene bags that hold it.
Coca-Cola is being rationed because the
gas that provides carbonation is in short supply, and the local bottler cannot
find foreign currency to buy the imported syrup that makes a Coke a Coke.
Virtually any product made of steel is in a parlous state because most rolled
steel is imported from South Africa, and South African steel mills are demanding
cash up front from their Zimbabwe customers.
"It's what I call a chain-link economy,"
said a Bulawayo maker of a basic steel commodity. "Company A manufactures parts
for Company B, and Company B manufactures a part for Company C, and so on until
company F makes the finished product.
"What's happening is that the links are
falling apart. And when one link breaks, the whole chain doesn't work."
Reduced to a television-screen crawl,
this is Zimbabwe's major problem: It has run out of foreign currency.
Over the last five years, Zimbabwe's
parceling out of 5,000 commercial farms among squatters and peasants has
decimated agricultural exports, an economic mainstay. When commercial farming
collapsed, so did the businesses that supported it, from tractor sales - the
nation needs 50,000, and has fewer than 400 working ones - to irrigation
suppliers.
That only deepened the farming woes and
the export tailspin: Zimbabwe tobacco production is down two-thirds in five
years, and the quality, once world-renowned, is so poor that buyers are scarce.
Falling exports made foreign currency
dear, causing exchange rates to rocket. But the government has generally refused
to revalue its currency, choosing instead to print more money; Zimbabwe's money
supply rose 226 percent in 2004. The result has been hyperinflation and a
thriving black market in both money and goods. Hyperinflation and the artificial
exchange rate, in turn, have crippled gold mining, Zimbabwe's other big
exporter. Production fell 18 percent in the first quarter of 2005.
Starved for foreign currency to import
crucial supplies, the government now requires all businesses to sell it 25
percent of their foreign income at the official exchange rate of 9,000 Zimbabwe
dollars per American dollar. |
