Jan Raath in Harare
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Zimbabwe devalued its currency by 1,200 per cent yesterday in a desperate attempt to bring the world’s highest rate of inflation under control and save the shattered economy.
But economists dismissed the measure as too little too late. They blamed President Mugabe’s policy of forcing businesses to slash prices and freeze wages for bringing the economy to its knees. “What Government devalues by 1,200 per cent?” asked Rob Davies, a Zimbabwean economist. “It’s an amazing admission by the Government that it has done everything wrong.”
The black market exchange rate surged ahead to eight times the new official rate of Z$30,000 to the dollar. “It’s too little, too late,” Mr Davies said. “It is irrelevant. It should have gone to 100,000 or 150,000, or be scrapped. But this is just going to encourage the black market and it will have no impact on reducing inflation.”
Black market traders agreed that unofficial exchange rates would soar even higher. “The black market rate is going to run wild tomorrow,” said an illegal currency dealer. “By Monday it will be at 600,000 to the US [dollar].”
The fluctuations will make it even harder for Zimbabwe to import vital food and raw materials. Samuel Mumbengegwi, the Finance Minister, did not explain to parliament why he was devaluing the currency. Mr Mugabe has previously been fiercely opposed to devaluation, and in 2002 he sacked a finance minister, accusing him of treason for suggesting it.
The country’s stricken business community has been desperate for the Government to relent on a demand that shops and businesses slash prices, often to below the cost of production. The law has been violently enforced and about 10,000 people have been arrested for violating the controls since they were introduced in June. Mr Mumbengegwi said that he was confident the controls would produce “some progress towards lowering inflation”.
He blamed the West for Zimbabwe’s economic woes. Zimbabwe’s rampant inflation was the result of an attempt “to affect regime change by former colonial powers through the use of price increases,” he said.
Yesterday the local baking industry gave warning that the supply of bread was about to run out and that 10,000 workers – half of its labour force – were being laid-off because they were forced to sell bread for less than it cost to bake. The Government has said that it has only a few days’ supply of wheat, and that 36,000 tonnes held in the port of Beira in neighbouring Mozambique is out of reach because there is no foreign currency to pay for it.
Labour unions have also cautioned of impending action over Mr Mugabe’s edict last week that forbade wage increases. Police confirmed yesterday that soldiers had been deployed with police officers into townships to crack down on black market traders.
The police and the army are regarded as among the worst black market dealers, confiscating goods from street traders and then selling them at a higher price. Yesterday, Morgan Tsvangirai, leader of the larger opposition faction, was charged with “conduct likely to cause disorder” after a tour in July of supermarkets stripped bare by shoppers taking advantage of Mr Mugabe’s price-slashing decree. Police said he was followed by a crowd of journalists and photographers, which could have led to disorder.
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I was born in Rhodesia, the third generation of our family and loved it to bits as we were happy and proud Rhodesians. True the world said the country had to have majority rule but the wrong ruler was supported by the west. Ian Smith was a very intelligent person and had he been given the support and chance to prove to the world that he could work with the new parliament today Zimbabwe would not be in this Situation. Once upon a time there was food, hygiene, money that bought food and smiles. Today the situation is such that you live with the stress and troubles of not knowing whether you will have a hot meal or fuel, etc. Where are the pormises made by the west to suppot the Local people should the country end up like this? There are so many black Zimbabweans in the UK - are all these against Mugabe or have they got a way to get residenceship here - please let us know as we have family who are sufferieng in all ways and are hardworking and would not wait for benefits.
Gerald, Luton, UK
Rhodesia was better,
We had jobs, food, hospitals, we had law and order and we were happy.
Mugabe and Nkomo started the problem, we were fighting together black and white against these guys, but the world said no, you must choose, but the world helped Mugabe to be govermant.
One promise he was keeping was if we vote for him we will have plenty of money, but now you see it is like toilet paper. I am lucky now I am staying in New Zealand with other peoples from Zimbabwe, but my family and friends are suffering in Zimbabwe.
Mzala, Hamilton, New Zealand
I would hypothesise (as a casual observer) that Mugabe's regime will tumble quickly in a brief and violent revolution, providing he loses the support of the military. However, if he does have the support of the militray (who seem to profit on the black market) then he may never topple until he dies or is assasinated.
With the popularity of recent movies concerning African atrocities (Hotel Rwanda, Blood Diamond and the Constant Gardener) I'm surprised that thecurrent problems in Africa, and especially a contemporary crisis such as this, are not foregrounded. Even on this website (I get my news here as I live in Japan) the fact that Britney Spears gave a cumbersome performance at an awards show is a far more popular story than this new Mugabe episode.
Matthew, Isahaya, Japan
Interestingly, while I was at a conference in the northern part of SA last week, I got chatting to a delegate from Zimbabwe. I was told by the delegate that African delegates from other parts of Africa were all in favour of what Mugabe has done â and the way in which he has done it. The delegate â who actually lives in Zimbabwe â was utterly opposed to what Mugabe has done and how heâs done it, but could not convince one other African delegate of what what it's like in Zim. It is a climate of real fear where criticising that madman in even the mildest of terms could see you in Chikurubi prison. The delegate told me: âAnd I donât want to go there - you come out only in one way - dead". Perhaps not completely true, but a telling statement nevertheless. So those who suggest Zimbabweans rise up, bear in mind that when you live in a country in which women are arrested and beaten for peacefully protesting against the shortage of sanitary towels, you have a tough uphill battle, so don't judge
Rod, Cape Town, South Africa
It is ridiculous and thoroughly ignorant to say that this is a the fault of the Zimbabwean people for not "standing up for themselves".
The police/army/militia have been shooting people in the street for "not moving out of the way" since the mid 80's. A society of fear has been bred and cultivated for the last 20 years. There can be no opposing such greed from within. The people simply do not have the resouces. The government have forced people into such destitution that they could not afford weapons to form a coup or uprising, even if they were suicidal enough to try.
Some external government must intervene. Altough sadly I agree that this is rather unlikely due to the lack of oil in the country.
Concerned, France,
You say "have yopur say" but dont post all the comments ? dont run somthing like this if you dont have the balls to put peoples comments up.
uig,j,gju, ergrgbvr, UK
The fact that the African Union wholeheartedly supports Mugabe says a lot about Africa as a whole. Let us not be put off by those who would shout racists at us for telling the truth, for without the truth a problem cannot be fixed. And to speak the truth is not in breach of any racial hate laws.
Ian Smith, who at 85 is not so well now, is reported to be shuffling around in South Africa where he is getting treated with a sad expression on his face as he continually mutters, "We all told you so but you would not listen."
Where is the US$ 118million cash coming from for food aid for Zimbabwe this winter? Not my pockets I hope? I gave already in the 25 years I lived in southern Africa. And in 5 years when all the farms have finally been confiscated in South Africa?
B J Deller, Marbella, Spain
Funny how madness and stupiditiy tend to go hand in hand - RISE UP PEACEFULLY ZIMBABWE - NO ONE WILL HAND YOU ANYTHING - YOU HAVE TO TAKE IT SOMETIMES BY FORCE.
rAY, SYDNEY, AUSTRALIA
It's not the West, or the U.N. that needs to wake up, it's the Zimbabwe people who need to take the lead. Let THEM do something to change the situation, instead of being intimidated by this dwarf tin-pot dictator.
Jack Levi, London, UK
What is disconcerting is that the dimwitted politicians in South Africa are looking at emulating Mugabe's policies. Already there are signs of nationalization of land, without proper legal process and at a monetary compensation rate stipulated by the government (which is nowhere near the actual value of the property). Mugabe is still seen by other African countries as a hero, which raises questions as to why the west continues to pour finacial aid into Africa, when they know that those funds are going to be misappropriated.
The present government of ZA is openly supporting the vile attributes of Mugabe's regime, and seeks (long term = 10 years ?) to force the same ideals locally.
A citizen of ZA., Gauteng, South Africa
Do you remember the reluctance of 'white colonials' to hand over power? You dismissed us as imperialist racists... maybe we knew the situation on the ground better than you.
Liberals always simplify complex issues. But the sad reality of Africa is abuse of power. I don't know why, but there always is. We knew Mugabe would be like this, but no one would listen.
And there is nothing 'the international community' can do about it either. Sometimes things have to follow their horrible course.
Zimbabwe, we (the whites) are sorry we were so rude and so selfish, but we didn't steal, we ran things properly and we really did care!
Kiffa, canterbury, UK
In response to David, Sofia, Bulgaria:
The UK has previously offered to help out Zimbabwe for free. We even offered to pay off the white farmers so that there could be a gradual hand over of land to the local populace. The UK has been rudely snubbed publicly on each and every occasion that we have made such offers.
And as for the 'Axis of Good' (sneer as you like) would you prefer the West to go storming into Zimbabwe? Can you imagine the reaction of the other African countries? Theyâd go up in flames. And so would Zimbabwe.
This leaves us with only supplying free food and medical aid (if they will allow us to help in that way) and waiting for the evil despot Mugabe to fall from power. Once he has then Zimbabwe can try and restore itself with the help of fellow African countries and/or the help of the United Nations.
Mike, Portsmouth, UK
The situation in Zimbabwe is pathetic, but I hope nobody shares Colin from Leeds' uninformed comment. There are plenty who have stood up against this lunacy only to be struck down by police batons, thrown in jail and suffer further beatings.
a, london, uk
Why should the international community do anything?
Whatever efforts it makes will just be twisted into something negative.
Best to just let these countries tear themselves apart and let nature take it's course.
andras, cardiff, UK
How can anything be devalued by more than 100%? If my house looses 100% of its value it is worth nothing. What happens at 1200%?
Fred, London, UK
To say the "bigger question is why the Zimbabwe people don't do anything. They have failed to take responsibility and to stand up for themselves", just shows you have no understanding of the situation or how they are oppressed and what the consequences are to those who oppose anything by Mugabe. Whats more the entire situation is yet another example of brittish foriegn policy in Africa, just like Idi Amin's in Uganda, we "assisted" in put him in power - the final straw that broke the countries back is when Mugabe confiscated the "white" farmers lands and thus destroyed the countries ability to feed itself and just set the stopwatch counting down to implosion.
In the days of Ian Smith and Rhodesia when the country was rich with resources and had a strong economy there was no such thing as apartheid, there was law and order to a degree and people had some rights and diplomacy, now something as simple as being found with a book referring to Rhodesia means instant imprisonment or worse.
Fred, London, UK
it is not possible to devalue something by more than 100%
a pedant, london, UK
Mugabe is commiting genocide and should be treated by the world accordingly. Can someone explain why he appears to be doing so with total impunity. and even with approval for some quarters.
M R PRESTON, Weybridge / Cape Town,
The situation in Zimbabwe is pathetic, but I hope nobody shares Colin from Leeds' uninformed comment. There are plenty who have stood up against this lunacy only to be struck down by police batons, thrown in jail and suffer further beatings.
a, london, uk
Jan, if you take a rate of 250 and devalue it to 30,000 what percentage is that? By my calculator, it is 11,900% (Yes, eleven thousand nine hundred percent). I would love to know how you get 1,200%
Eric, Harare, Zimbabwe
The fact that his peers in the Southern African polical elite haven`t shunned him goes to show that Africas problems will never be solved.It is a lost cause of a horse with Mugabe riding in the saddle.
Stephen Kay, basingstoke, UK
I think a bigger question is why the Zimbabwe people don't do anything. They have failed to take responsibility and to stand up for themselves so they are as much to blame for the current situation as anybody else.
Colin, Leeds, United Kingdom
Untill they find oil nobody will give a second look at a country that only 20 years ago had one of the worlds strongest economies...
Michael, London, UL
As Rhodesia this country was the bread basket of Africa, now in so few years it has become the Basket case of Africa
Howard , Basildon, uk
Mugabe does not care as long as the building of his palace is running to shedule.
Polly, Hailsham, UK
When is the international community going to wake and do something about Robert Mugabe?
This man is robbing, torturing, and murdering his own people, and should be arrested and brought before the International Criminal Court and charged with crimes against humanity under Article 7 of the Rome Statute.
Shouldn't the United Nations be able to step in and do something in a situation of such gravity?
Adrian Slattery, London, United Kingdom
If there were substantial oil reserves in Zimbabwe the Axis of Good would have stepped in to change the regime. There aren't. It hasn't. Is this the unacceptable face of capitalism?
David, Sofia, Bulgaria
Once upon a time in Germany hyperinflation took hold , now its happening in Zimbabwe, such a shame that Mr Mugabe cannot accept the blame for his out of control ecomony and has to blame it on the western world. Zimbabwe was and still could be the breadbasket of Africa, yet his power and land grabbing has destroyed a once prosperous country, So what is going to happen next ? are we going to see the rise of an African Hitler ? will Africa fall under the marching jackboots of Zimbabwe's storm troopers , will they start to intern in Concentration camps anyone who disagrees with the party line ?
K Gregg , Hull,
mugabes time is up the grim reaper will act through the people of this beautiful country. The time is now for the army to give back the country to the people it is supposed to protect.
pagani, birmingham, uk