Inflation is likely to bring Zimbabwe’s economy to a standstill within six months with the possible paralysis of President Mugabe’s Government and civil unrest, international aid agencies warned their staff yesterday.

The country’s plight is likely to force Mr Mugabe to introduce emergency rule, said a group representing 34 organisations, including the United Nations, the International Federation of the Red Cross and Oxfam.

The warning came as the country’s consumer watchdog reported that the cost of living for an average urban family had risen by 66 per cent last month. In April inflation stood at a record 3,700 per cent. The internal memorandum from the Heads of Agencies Contact Group is the first evidence that international organisations are taking steps to prepare for a collapse.

“The memorandum is talking about a situation where there is no functioning government or a total breakdown,” said an agency official, who asked not to be named. “It is saying it is inevitable, not just a possibility. Our head offices have to know. Not many people have experienced this kind of crisis.” The document says that inflation will continue to snowball. “Thus economic collapse is expected before the end of 2007,” it adds.

By that point the Zimbabwean currency will have become unusable and shops and services will “substantially cease to function”. This is likely to be followed by “increased unemployment with concomitantly increased crime and possible civil disturbances”.

It points out that presidential and parliamentary elections are due by the end of March next year, but adds: “If the country is unable to function, it is difficult to see how these can be held.”

The Zimbabwe Doctors for Human Rights said last week: “It can no longer be said that the health service is ‘near collapse’, It has collapsed.”

The memorandum says that member organisations are forced to pay staff weekly as price increases outstrip wages, and before long staff will have to be given daily increases. It also urges that experts with experience of places such as Iraq or Afghanistan be recruited to advise staff in Zimbabwe.

Mr Mugabe’s reaction to the deepening crisis grows increasingly bizarre.

This week he presided over the handover of 925 imported tractors, 35 combine harvesters and a range of other sophisticated equipment that cost $25 million (£12.5 million) of foreign currency. As far as it could be established, the recipients are all politicians.

“Today we are proud masters of our political and economic destinies,” he said.

In crisis

80%: unemployment

£130: GDP per capita

-4.4%: growth

39: years life expectancy

700,000: people had homes and businesses destroyed by the Government in 2005

27: years with Robert Mugabe in power

$0: funds left for the Zimbabwean Army to pay for rations

Source: Times archives; CIA

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