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http://www.theage.com.au/news/wo ... eIUZbvCy2LlraJ_RPdA|
MAFIA-STYLE dealings, corruption and political manipulation have contributed to the economic crisis engulfing Zimbabwe, the head of the country's central bank has said.
With the country teetering on the brink of hyper-inflation and wages 15 times lower than the official poverty line, the Reserve Bank of Zimbabwe has resorted to printing billions of Zimbabwean dollars in a failing attempt to keep the economy afloat.
The World Bank is predicting inflation of 4000 per cent by the end of the year. Business deals can only be negotiated a few hours ahead because prices are rising so rapidly.
In a devastating assessment of the economic situation, Gideon Gono, the governor of the Reserve Bank has admitted that the consequences of failing to tackle the situation are "too ghastly to contemplate".
Mr Gono — a favourite of President Robert Mugabe and the man many think is being lined up to succeed him — writes: "If we continue with this casual and sometimes selfish approach, we risk subjecting the majority of our people to continued suffering under the inflationary yoke, foreign currency shortages, transport hardships, inadequate pay levels, shortages of basic commodities, parallel market operations and negative growth."
Mr Gono's previously stated belief that the economy could be turned around was what so endeared him to Mr Mugabe, but even he has now been forced to make the tacit admission that political expediency has been allowed to override economic considerations and common sense — benefiting a few, at the expense of the national good.
Outlining some of the ways that Mr Mugabe's attempts to subsidise his supporters had created "a fertile haven for corruption", he revealed how:
■The Government buys maize from farmers, who are often former soldiers and Mr Mugabe's supporters, at $Z52,500 ($A274) a tonne but sells it to millers for a mere $Z600 a tonne. The millers sell it back to the Government at the original price, pocketing the difference.
■Farmers are permitted to buy fuel at just $Z330 a litre, but can sell it on at the market price of $Z6500, making it vastly more profitable to deal in fuel than to grow crops.
■Subsidised electricity typically costs consumers $Z20,000 a month, equivalent to the price of a small bundle of firewood or two packets of candles.
The bank has had to bale out the state-run generating company. According to the bank, "illegal, intimidatory and mafia-style dealings" take place "day in, day out".
Unless the problem is tackled, the country can "kiss goodbye to any hopes of recovery over the foreseeable future".
The bank's solution has been to print more and more money, although the flow was temporarily halted last year when it ran out of foreign currency to pay for the paper and ink it needed for the bank notes.
The result has been financial meltdown. Last week, the poverty line for an average family was set at $Z938,000 a month, but a labourer earns on average just $Z65,000, while a lecturer only manages $Z80,000.
Living costs have risen inexorably. Last month the price of vegetables rose by more than 150 per cent, milk by 90 per cent.
Hyper-inflation, defined as a 50 per cent increase in prices per month, is imminent. In February, the price of a basket of goods rose by 49.5 per cent.
The trade unions question how long it can go on.
Lucia Matibenga, vice-president of the Zimbabwe Congress of Trade Unions, said Mr Mugabe and his Zanu-PF party had packed the nationalised industries with his people and relied on fear and cronyism to prop themselves up.
The Reserve Bank's solution to the crisis was to call for a price and wage freeze from March 1. Last week, there was still no sign of agreement on such a deal.
And so what was once Africa's second richest nation collapses under the misrule of ZANU-PF. Still no word from Thabo Mbeki, Nelson Mandela, or any of the rest of the ANC. No call for tough sanctions or shunning of ZANU-PF in the way that the ANC insisted that the Nats be shunned during the struggle that came to an end in 1990. But after all, why would they? Comrade Mugabe is after all their brother in the struggle against imperialism, colonialism, racism, blah, blah, blah... so as long as it is a black man murdering and starving his own people, "quiet diplomacy" ("silent diplomacy"?) is quite sufficient; protests from the US and UK only vindicate Comrade Mugabe in their eyes, since it shows his determination to resist foreign interference, etc.!...
A deafening silence if there ever was one.
[ Last edited by irishinuk at 2007-3-19 10:54 AM ]