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ZIMBABWE: Year in Review 2005 - Hard times felt by all
IRIN News
January 12, 2006

http://www.irinnews.org/report.asp?ReportID=51082

HARARE - The enduring symbol of Zimbabwe's economic woes is the queue. A patient line of grim-faced people interminably waiting to get their hands on the most basic of everyday items summed up 2005.

At the beginning of the year it was fuel. The forex-starved government could not afford to import all of the US $700 million a year the country needed. Motorists became accustomed to parking their cars in lines that snaked blocks away from the filling stations - sometimes for days.

That all changed when fuel importation was fully deregulated in August and anybody with enough forex could bring in supplies. Hawkers set up shop on the pavement outside the offices of the state-owned National Oil Company of Zimbabwe, the corruption-tainted former monopoly.

The tools of the trade - a funnel and a five to 10 litre container - became hard to find in shops because they were all in the hands of the small-scale businessmen who gathered conspiratorially at intersections and traffic lights.

The problem for motorists was the price of fuel. Service stations and traders charge Zim $100,000 (US $1.20) a litre, while a high school teacher with a degree and 20 years in the profession earned a net salary of around Zim $3 million (US $38) - the equivalent of just 30 litres.

But the majority of Zimbabweans rely on public transport and the ubiquitous 16-seat HiAce taxi. A crackdown by the police in June on mini-bus operators, demanding proof that foreign currency rules had not been infringed in purchasing the vehicles, resulted in owners parking their taxis rather than risk them being impounded.

The transport crisis meant commuters returned home from work late in the evening and began their day at the crack of dawn. Streams of pedestrians opted to save on transport fares by walking, or cycling, one of the many belt-tightening measures Zimbabweans resorted to.

The orderly queue has become a particularly Zimbabwean response to persistent shortages. Whenever items like the staple maize meal or other basics like soap, cooking oil and sanitary pads appeared on the shelves, they quickly disappeared after cell phone-enabled citizens spread the word.

The government blamed the shortages on hoarding and speculation. And while some bought in bulk to turn a profit, others snapped up whatever appeared in the shops as a prudent response to scarcity.

At the end of the year, inflation had hit 585 percent. The Consumer Council of Zimbabwe (CCZ) said the cost of buying groceries increased almost 10-fold in 2005. It estimated by December a family of six required an equivalent of US $208 a month - far more than most people earn.

"People have cut down on food, they eat one basic meal a day and that's mainly vegetables - I don't know how Zimbabweans have made it this far," commented economist Dennis Nikisi.

Takesure Matarire, a 40-year-old security guard, earns just US $15 a month in a country where health care and education is not free. "I will have to withdraw my two children from school," he confessed. "What I am earning is not even enough to feed them and I have no other option."

In 2005 Zimbabwe was ranked among the world's worst performing economies by the World Economic Forum. Its report cited the continued deterioration of the institutional climate, including the disappearance of property rights and corruption of the rule of law. The government insisted it faced sanctions by western nations over its controversial fast-track land reform programme.

With an unemployment rate estimated at 80 percent, the informal sector acted as a lifeline for Zimbabweans and the real engine of the economy. The government seemed to turn a blind eye to the mushrooming parallel market that took over Zimbabwe's formerly ordered city precincts, flouting byelaws, but providing an income for those with entrepreneurial flair.

Then in May the government launched Operation Murambatsvina ('Clean Out Garbage') - known colloquially as "the tsunami". It was officially aimed at rooting out the blackmarket and criminals, but quickly expanded to encompass unapproved housing owned or rented by the poor, with armed police deployed to enforce eviction orders and government officials insisting that the victims return to their rural home areas.

The opposition condemned the blitz as a deliberate attempt to dismantle their urban support base, and intimidate anyone contemplating taking to the streets to protest plummeting standards of living.

But some analysts noted the crackdown on the blackmarket served as a wrap on the knuckles for some elements within the ruling party after a bruising leadership wrangle, and Murambatsvina also stung the radical war veterans, many of whose members were among the displaced.

According to a report by UN Special Envoy Anna Tabaijuka, 700,000 people were directly affected by the operation, their houses bulldozed and livelihoods destroyed, and called on those responsible to be held to account. UN Secretary-General Kofi Annan described it as "a catastrophic injustice" to Zimbabwe's poorest citizens "carried out with disquieting indifference to human suffering".

Since Murambatsvina the informal sector has cautiously returned to life, and some of those evicted have made their way back to the ruins of their former homes. The illegal forex market that the government tried so hard to strangle is now almost accepted.

Instead of trying to maintain an artificial rate - at the start of the year 1 US dollar to Zim $6,000 - the official rate is now Zim $90,000, almost at par with the informal market's Zim $95,000 to $100,000. Through deregulation the government hopes the blackmarket will bottom out and prices stabilise.

Nelson Moyo (not his real name), a 36-year-old police officer, supplements his salary by running an illegal stall that sells soap, sugar and toothpaste. When he can, he crosses into neighbouring Botswana to buy supplies, and bribes customs officials at the border to waive import duties.

"I know I should be an example of a custodian of the law, but I also have to survive," Moyo explained.

Along with the urban poor, rural Zimbabweans - the bulk of the population - struggled through 2005. And there is every indication things will worsen this year.

In December the UN launched a US $276 million appeal, warning that at least three million people would require food aid as only an estimated 600,000 mt of maize had been harvested, compared to a national requirement of 1.8 million mt. Aid workers have noted numbers in need could climb to five million out of a population of 12 million.

Zimbabwe's fast-track land reform programme of 2000 helped precipitate the country's economic crisis, slashing forex-earning agro-commercial production and throwing hundreds of thousands out of work.

In 2005 the new farmers who had hoped to benefit from land redistribution were still struggling with red tape on bank loans, lack of extension services, and scarce seed, fertiliser and fuel.

The inability of many of them to afford to pay the minimum wage for farm workers deprived them of labour during the critical planting season, and experts have predicted that Zimbabwe will face yet another disasterous harvest this season.

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