Price controls: Act of bravado to no purpose
- From: "Zvakanaka" <lalapansi@xxxxxxxxx>
- Date: Thu, 5 Jul 2007 16:49:16 +0200
Price controls: Act of bravado to no purpose
National Agenda with Bornwell Chakaodza
Instead of trying to build bridges for Zim's sake, govt is hell-bent on
burning them
RETURNING late last week from vitreo retinal surgery at the Johannesburg Eye
Hospital, I was taken aback by the pace, magnitude and far-reaching impact
of recent events in Zimbabwe, which understandably have frayed nerves across
the length and breadth of the nation.
First, it was the sudden fall of the Zimbabwean dollar on the burgeoning
parallel market three weeks ago, which caused a sudden and shocking upsurge
in prices of basic commodities, some of them going up by more than 200
percent. Clearly the situation in the country had gone from bad to worse and
downhill it continues to slide.
Alarmed by what the sudden upheaval could mean to an economy already reeling
under an unprecedented inflation rate thought to be well over 4 500 percent,
the government, in its usual knee-jerk reaction, imposed a blanket price
control on all basic commodities, ordering retailers to reduce prices by 50
percent or reverting to the pre-June 18 prices.
The intention here was to force supermarkets and other traders to comply
with the government directive regardless of the huge implications for their
businesses. This is, of course, not to imply that the businesses are
paragons of virtue. Far from it. But to simply issue a directive is to
oversimplify what to all and intents and purposes is a very complex
situation involving an intricate web of a supply chain made of retailers,
manufacturers, transporters and other sectors.
To complicate the situation even further, President Mugabe in his usual
combative and grandstanding manner, threatened that government would seize
and nationalise any companies or manufacturers involved in any 'dirty games'
against the government. What exactly was meant by 'dirty games' only he
himself knows.
Clearly, the country's growing economic ills for which no answers have been
found to date is of no concern to him. This is no way to find a way out of
the crisis that has bedeviled this country for the past seven years or so.
To the beleaguered commerce and industry sector, this ominous message from
both the President and Vice-President Joseph Msika could only mean one
thing - they had to shape up or ship out - there was no room for
negotiation. Essentially, we are dealing with a government that is not in
the mood to find a sustainable solution to our crisis but interested in just
fire-fighting. It is just bravado to no purpose.
Every country in the world has its embarrassing moments and Zimbabwe is
going through one at the moment. In the light of what has happened in the
last three weeks, every hour, every minute that passes deepens the sense of
gloom and pessimism here. The situation that is unfolding on the ground as a
result of these government directives is having its own far-reaching
implications for the long suffering Zimbabweans.
Supermarket shelves are rapidly emptying as the few fortunate enough to have
the financial wherewithal to buy the goods whose prices have suddenly been
slashed by half stockpiled on these goods. For the majority of Zimbabweans,
it is really suffer continue. Even people who had no plans to engage in any
building construction were tempted to stockpile on cement because the price
was now down to $150 000 from a staggering $1.5 million the previous week.
What becomes obvious from all this gigantic mess is that in an atmosphere of
adversity and confrontation such as that which now prevails between the
government on one hand, and commerce and industry on the other, scope for
rational thinking and a rational approach to things is severely compromised.
The real core of the problem becomes totally lost. Instead of trying to
build bridges for the sake of Zimbabwe, it appears that the government is
hell-bent on burning them. What a dreadful and terrible situation!
Suggestions in some ZANU PF circles that any company that 'defies' a
government directive is against the government and therefore in cahoots with
the proponents of the so-called 'regime change' agenda is not helpful at
all. It is a mantra and tactic that has lost all meaning. Anyone with half a
brain cell will not buy that.
Most Zimbabweans now know that the 'regime change' agenda is a tactic that
government is using non-stop to whip those opposed to some of its ruinous
economic decisions into line. It just does not wash full stop!
In fact, to listen to speeches by President Mugabe and some of his
lieutenants, one would come to the conclusion that the manufacturing
industry in Zimbabwe is under the control of foreigners and expatriates
hell-bent on destroying the country. The real truth is that mot
manufacturing firms in Zimbabwe, although of foreign origin, are now managed
and run by indigenous Zimbabweans (black and white) who, of necessity, want
to see the country succeed. Even foreigners and expatriates, for that
matter, wish us well.
The so-called 'price war' that is raging on is a confrontation that no one
can expect to win. The government needs to realise that while enlisting the
services of the police to enforce the new price regime may, on the surface
appear to achieve the desired results, this is a hollow victory considered
side by side with the other effects of such a move. Already in most
supermarkets, shelves are empty and massive retrenchments are likely to
follow at a time when unemployment is over 80 percent.
Suddenly, we are told the government is in the process of resuscitating the
Zimbabwe State Trading Corporation to take over manufacturing companies that
government would want to seize. Only the extremely naïve would be taken in
by this myopic move as a panacea to the current crisis.
Let us, for argument's sake suppose the Zimbabwe State Trading Corporation
came into being, how does it propose to take over companies just like that?
Does the government have the capacity to run these companies? In any event,
why was this government-owned State Trading Corporation disbanded in the
first place? In truth, I did not know whether to laugh or to cry when I
heard this.
The brutal truth is that many of the specialised manufacturing companies of
foreign origin have actually survived by virtue of their foreign parentage.
Without the support of foreign parent companies through the provision of
plant, equipment, spares and through various concessionary arrangements,
many of these companies would collapse overnight, regardless of whether the
State Trading Corporation is involved or not.
Now, more than ever before it is time for a sober reflection on the present
crisis and enlist all stakeholders, Zimbabweans with the interest of the
country at heart, to put their heads together to seek a lasting solution.
What we have in this country are common challenges and problems and we need
to work together to meet them.
Statements such as the one by outgoing US Ambassador Christopher Dell
predicting that our inflation rate would shoot to 1.5 million percent
precipitating the imminent collapse of the government within six months are
not helpful to the Zimbabwean cause beyond exacerbating the panic and
desperation of those they are targeted at.
The point is that there are so many unknowns in our present predicament.
http://www.fingaz.co.zw/story.aspx?stid=682
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