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ANALYSIS-Zimbabwe bank chief voices govt fears on crisis
Chris Chinaka, Reuters
January 26, 2006

http://www.alertnet.org/thenews/newsdesk/L25633259.htm

HARARE - Zimbabwe's central bank governor rang the alarm on the country's crumbling economy this week in a frank account which analysts say shook officials by airing fears of possible food riots and political unrest.

President Robert Mugabe's government is mired in its worst crisis since independence from Britain in 1980, fighting food shortages, triple-digit inflation, a jobless rate above 70 percent and shortages of foreign currency and fuel.

Reserve Bank of Zimbabwe Governor Gideon Gono -- known as a Mugabe favourite -- cut through the government's usually rosy self-assessment in his monetary policy statement this week, giving a rare public warning of possible food riots and slamming bureaucratic inaction.

Political analysts said Gono's stark forecast revealed deepening fears within Mugabe's inner circle.

"The import of his statement is that beneath the veneer of a brave face, there is underlying fear of political unrest," said Eldred Masunungure, chairman of the political science department at Harare's University of Zimbabwe.

"The fact that they are now discussing their fears in public is a demonstration of the growing anxiety," he said.

John Makumbe, a political commentator and a critic of Mugabe's government, said Gono, who has been head of the central bank for two years, decided to publicly air his problems with the government out of frustration.

"What we saw ... when Gono talked about riots and so on was a mirror of the political fears in Mugabe's government," he said.

Gono, regarded as one of Mugabe's trusted technocrats, said mineral-rich Zimbabwe had potential but needed to boost farm output, which has fallen by half since the government started seizing white-owned commercial farms six years ago.

"The country is ... standing on the edge of a cliff which threatens to irreversibly take us downhill if we do not boldly move forward with speed to address most of our shortcomings," he said in his speech to hundreds of business and political leaders on Tuesday.

Mugabe, accused by the West of pursuing hardline domestic policies, has deployed riot police to crush demonstrations since violent protests broke out against his government in 1998, and analysts say his opponents are largely cowed.

But Gono said the country's army chief was concerned and had recently warned him that the central bank had to ensure adequate food supplies for a country where millions are surviving on food aid.

"To quote the wisdom of General Constantine Chiwenga, 'a hungry man is an angry man', and he said we must do everything to ensure the army does not one day have to face angry hungry people on the streets," he said.

Gono said the government had finally pledged to end farm invasions by ruling party supporters -- blamed by critics for the decline in food supplies -- and to do more to respect private property rights.

He also said Zimbabwe had to tackle graft and rebuild its ties with the international community, including the World Bank and the International Monetary Fund, which this week has an inspection mission visiting Harare.

John Robertson, a private economic consultant and business commentator, said while Mugabe regards the IMF as a hostile institution, he has allowed Gono to try to mend fences and win crucial aid in the hope of staving off further economic decline.

"I don't know whether the political fears that Gono was talking about will force the government to do more although those fears have been around for a while," he said.

"But on their record, I don't think they will be able to do enough and in time," he added.

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