The Implosion Begins
- From: ":oD" <spam@xxxxxxxxxx>
- Date: Sun, 21 Aug 2005 17:21:04 +0100
The Implosion Begins
Eddie Cross
Bulawayo, 19th August 2005
In 1997 the Zimbabwe economy was reasonably stable - showed real
growth rates on average of about 5 per cent per annum and a healthy balance
of payments situation. Exchange rates were about 12 to 1 against the US
dollar and there was only a limited parallel market for foreign exchange.
Then came the fateful decisions to enter the war in the Congo on the
side of Kabila (Senior) and his Tutsi allies and the decision to pay the
veterans of the Zimbabwe civil war some US$350 million in unbudgeted
reparations.
Together these two decisions began the tumble from the heights held in
1997.
Since then the economy has shrunk by over 50 per cent, exports by two
thirds and living standards have retreated to levels last seen in the mid
fifties - half a century ago. Life expectancies have declined from a high of
59 years on average in 1990, to less than 34 years today. No other country
in recent history has seen such a collapse in its economic fortunes in
peacetime.
But despite the collapse, Zimbabwe has looked remarkably "normal".
Traffic has filled our streets, our supermarkets have been reasonably
stocked and most goods available - albeit at rather high prices. Life went
on, people tightened their belts and made do with less, rallied round to
help those less fortunate and to the outsider, things did not look so bad.
In fact visitors from war torn parts of the continent repeatedly said that
we looked much better to them after the mayhem of the Sudan, Somalia and the
Congo.
Not much comfort in the comparison, but it is true - we looked better.
It is only when you get under the surface here that the real cost of
the past 7 years of economic regression really shows. And to get the facts
is not easy. Take a photo of a queue for bread, or sugar, or maize meal or
fuel and you will find yourself in detention and your equipment confiscated.
Make a statement you cannot substantiate and you will find yourself in Court
and facing a heavy fine or imprisonment. Hard facts from reliable sources
are impossible to come by and official government statistics tell you only
what they want you to know.
But the real situation - human and economic is not hard to see. Cities
surrounded by sprawling cemeteries, millions in flight from economic
depravation and moving to anywhere where life is a little bit better.
Statistics on child and maternal mortality that make the hair stand up
on the back of your neck. The aching poverty that is evident everywhere -
people in rags, the sense of despondency and the almost total absence of
hope and vision.
Three weeks ago President Mbeki of South Africa moved to prop up the
Zimbabwe regime and to try and prevent any further collapse. He warned as he
did so that if South Africa did not help, that there was a very real threat
that Zimbabwe would collapse to the detriment of the entire region. Those of
us who live here ask ourselves how much more of this punishment can we take?
We as a nation have "turned the other cheek" for so long - how much
longer can we put up with this state of affairs?
Well we may be about to find out. On Friday last week, Mugabe rejected
the South African offer of emergency funding - because it was conditional.
He knows full well that any concessions to South Africa will signal the end
of Zanu PF and the end of his own presidency and probably his own flight
into exile for the rest of his life. He never was going to give in easily or
to rational argument - he is not that sort of a character.
I told a South African journalist who was stunned by this rejection
that South Africa had to understand what they were up against and that if
they wanted to get the attention of Mr. Mugabe, they would have to hit him
hard with a big stick!
And so the threatened implosion of the Zimbabwe economy begins. You
cannot buy fuel for local currency anywhere; most basic necessities are in
short supply. Our money, already virtually worthless, has halved in value in
one month. Inflation in July was 47 per cent - month on month - over 2000
per cent per annum. Exchange rates in parallel markets have collapsed by at
least 50 per cent in the past few weeks.
People cannot handle such conditions anymore - it is now beyond the
capacity of our hard pressed community and businesses. In a statement last
week, instead of addressing the fundamental problems in the economy, the
Minister of Finance simply made things worse. He raised tax rates
dramatically - we were already among the most highly taxed people on earth,
he widened the net of those items we can now buy and trade freely to include
wheat and maize in a desperate attempt to plug holes in the market place -
this will simply increase demand for foreign exchange on the parallel market
and drive up costs for everything else. In a vain attempt to halt inflation
he placed a ceiling on wage increments of 120 per cent per annum - an
impossible limit to maintain in our hyper inflationary environment.
At the same time the Minister continued to spout the fiction that the
Zimbabwean economy is on the mend and that there will be growth in 2005.
That is just a sick joke. By my calculations every sector of the
economy is in retreat - agriculture, mining, industry, tourism. None show
any signs of recovery, in fact conditions are now much worse than they were
this time last year and I project even worse production data for agriculture
even if we have a good or above average wet season.
Mugabe has in the past fortnight rejected offers of assistance from
South Africa, rejected the UN report on operation "Murambatsvina" which they
now euphemistically call "Operation Restore Order". He has rejected the AU
initiative to kick-start the process of national reconciliation and recovery
and he has firmly ruled out any talks with the Movement for Democratic
Change.
Quite frankly I am delighted with this hard line position. Our worst
nightmare would be Mugabe working with Mbeki instead of against him in the
resolution of our crisis. At least with the hard line position being taken
by the Zimbabwe regime we can decide our future on the basis of principle
rather than compromise. When the time comes, we can toss out the entire
structures of Zanu PF, start afresh and purge our society of all those who
have been responsible for our sad situation. In the meantime hold onto your
life jacket - the next few months are going to be very tough.
.
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