Zimbabwe: Disastrous economic situation

The economic situation around here is disasterous. Official figures for inflation are 340% but economic analysts say that the actual figure is over 400%. The government tampers with figures in order to hide the seriousness of the situation. Prices of basic commodities keep going up. Every new stock of goods has a new price sometimes double the old one. For example, the price of a loaf of bread went from Z$300 to Z$1 200 last month. The economic situation is worsened by the crippling foreign currency shortage. The value of the Zimbabwean dollar against other currencies is officially fixed at artificial levels by the government of Z$56 against the $US. This is the main cause of forex shortages and a thriving black market.

Currently there are serious cash shortages of bank notes. Every day there are long queues at banking halls for a maximum withdrawal of Z$5 000 yet some individuals get salaries of Z$300 000 (because of the rampant inflation levels). Many workers have not had their salaries for July to date. The banks get only $500 000 a day from the reserve bank. Once that is finished people have to come the following day and queue again sometimes for up to 4 hours. Workers are now unable to pay rents and rates and also to travel because of the lack of availability of cash. This is a potentially explosive situation as workers are getting frustrated by the government’s failure to find solutions while giving empty promises to inject more money into the market. They had promised to inject Z$50 billion by mid June which they never did. Some think the shortage is intentional because the government wants to ease inflation.

There was violence last week at one of the queues at Berverly bank as people’s patience ran out. The protest was dispersed by the brutal riot police beating up desperate people with baton sticks. Many individuals now do shopping with credit cards but the shops which offer this facility are too few causing long queues there too. Others – especially shop owners and big businesses – have resorted to keeping money in safes further worsening the cash flow situation. To force people to deposit money into banks the government has announced that its changing the current Z$500 note introducing a new one and the current one won’t be in use after 60 days. The economic situation now is where the rich get richer and the poor majority get poorer. Because of shortage of many goods , those who have access to them are taking advantage of those who do not by selling them at exorbitant prices. These are the ones likely to be gaining on the stock exchange.

Micro-finance firms are also gaining on the stock exchange by taking advantage of cash strapped workers by giving loans at interest rates as high as 60%. Other government officials who grabbed farming land are exporting the products to get foreign currency yet the majority are starving. Others are exchanging maize (the staple food here) for soap, clothes , cooking oil etc with peasant subsistence farmers. After this exploitation they then export the grain to neighbouring countries which ironically have better food reserves.

The current political hot issue is the talks between the Movement for Democratic Change (MDC) and ZANU (Mugabe’s ruling party) to form a power sharing government. This is a tactic used by Mugabe in the past to absorb and destroy opposition parties. This is exactly what they did to ZAPU, the main opposition party in the late 80’s when they signed the ’unity Accord’ sealing ZANU’s dominance. However, as a result of the huge instability in the country it is not guaranteed that ZANU’s tactic will have the same effect. The details of talks are being kept secret. To force MDC into talks they levelled false charges against its leaders with penalties of the death sentence if found guilty. The MDC leaders, to save their souls betrayed the masses and workers by agreeing to the talks indicating their lack of commitment to serve the people and their selfish desire for power and prestige. This also showed that they are not willing to suffer for the sake of the majority which they claim to represent. This has had the effect of reducing their support base as people feel betrayed.

The ZCTU(Zimbabwean Congress of Trade Unions) has distanced itself from current events and said nothing concerning these talks. They seem to have decided to carry on as if nothing is happening. The ZCTU actually now seems to exist in name only. There is also talk of Mugabe resigning. Many ZANU PF members have come forward as candidates for the presidency. There were also reports of infighting within ZANU as individual bureaucrats fight to be successors of Mugabe. The majority of people feel its just a tactic to stop mass actions aimed at removing Mugabe from power.

The only sign that Mugabe is under threat is the fact he has passed bill after bill most of them to guarantee his safety if he leaves office. An example is a bill passed which makes a former president over 80 years immune from prosecution.

Our campaigns in the education sector continue. Most people strongly support the principle of free education and health in the wake of the privatisation of these by the government which has led to many people failing to send their children to school. Many also want a system where everyone is accountable independent of social or political position which is totally absent in the current government.

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August 2003