Mugabe warning over profiting from economic crisis
Zimbabwe’s president Robert Mugabe threatened a state of emergency if businesses profiteer from the country’s economic crisis.
The move, which could give Mugabe even more sweeping powers to punish opponents in the event that political power-sharing talks fail, came after it was announced Zimbabwe was knocking 10 zeros off its hyper-inflated currency – a move that turns 10 billion dollars into one.
“Entrepreneurs across the board, don’t drive us further,” Mugabe warned in a nationally televised address after the currency announcement last night. “If you drive us even more, we will impose emergency measures... They can be tough rules.”
But in a glimmer of possible rapprochement in Zimbabwe’s political turmoil, opposition leader Morgan Tsvangirai revealed that he met Mugabe last week for the first time in years and discussed the “pitfalls in any future government” that might emerge from the negotiations.
He did not indicate their meeting produced any agreement, however.
In a conciliatory gesture, Mr Tsvangirai told Channel 4 that his long-time rival is as “human as everyone else.”
However, he added the president is “in denial” about the economic problems and political violence that have swept this once prosperous southern African nation.
Central Bank Governor Gideon Gono announced he was dropping 10 zeros from Zimbabwe’s currency, effective from tomorrow. The move comes a week after the issue of a 100 billion-dollar note – still not enough to buy a loaf of bread.
Mr Gono said the new money would be launched with 500-dollar bills. He also said he was reintroducing coins, which have been obsolete for years, and told people to dig out their old ones.
That could be a boon for Fungai Matambo, a 33-year-old vendor of airtime for mobile phones who said she has kept a large milk pail full of old coins.
“I’m very happy now,” she laughed. “In the old terms, I’m a multi-trillionaire!”
But, she noted, there is little to buy in the shops amid chronic shortages of food, medicine, power and water.
Mr Gono acted because the high rate of inflation was hampering the country’s computer systems. Computers, electronic calculators and automated teller machines at Zimbabwe’s banks cannot handle basic transactions in billions and trillions of dollars.
Inflation, the highest in the world, is officially running at 2.2 million per cent Zimbabwe but independent economists say it is closer to 12.5 million percent.
Economist John Robertson said the new bills would soon be worthless since the rate of inflation continues to skyrocket. What costs one dollar at the beginning of the month can cost 20 dollars by the month’s end, he said.
“This is attending only to the symptoms of the problem. The real problem is the scarcity of everything driving up the prices... The government has not only caused the scarcities but damaged our ability to fix the problem.”
At the root, he said, is the damage to the farming sector, along with government raids on the state pension fund and foreign currency bank accounts of businesses.
Mugabe blames the economic collapse on profiteers and on sanctions by the United States and the European Union.
The worsening conditions have eroded the popularity of Mugabe, who has ruled for 28 years and was long revered for leading Zimbabwe to independence in 1980.
He finished second in a March presidential ballot behind Mr Tsvangirai, but won the June runoff after his rival dropped out after violence killed more than 120 opposition activists. Both men now claim the presidency.
In his interview with Channel 4, Mr Tsvangirai said the two leaders had a 90-minute dinner together last week.
“I am sure that there was a common understanding that there is a need to soft land the crisis through a transitional process,” he said
South African President Thabo Mbeki flew in to Zimbabwe yesterday in yet another bid to mediate in the crisis.
Power-sharing talks that began last week have deadlocked over Mugabe’s insistence that he lead any unity government and over what position Mr Tsvangirai should hold in a new administration, according to officials.
“We are still negotiating; we want to succeed,” Mr Mugabe said in his broadcast address. “You find room for compromise but sometimes compromise is difficult.”
Mr Mbeki told reporters after meeting with Mugabe that talks would resume on Sunday in South Africa.
Mr Tsvangirai’s party said yesterday that two more opposition supporters were killed last week, allegedly by Mugabe’s followers.
“The deaths show that there is no sincerity on the part” of the ruling ZANU-PF party, the opposition said in a statement.
But in his interview, Mr Tsvangirai softened his rhetoric about Mugabe, whom the opposition has blamed for the widespread violence.
“He is just as human as every one of us, that he has similar concerns, although, of course, I think he is ignorant, and/or chooses to be in a denial stage as far as violence is concerned,” he said.
