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Mugabe summons war veterans as inflation crisis deepens in Zimbabwe
Associated Press
July 06, 2007

http://www.iht.com/articles/ap/2007/07/06/africa/AF-GEN-Zimbabwe.php

HARARE, Zimbabwe: Hundreds of war veterans and ruling party militiamen and loyalists summoned by President Robert Mugabe arrived by the busload at his party headquarters for a meeting Friday as government-ordered price cuts spurred mounting chaos in the economy.

The unusual call on state radio to veterans of the guerrilla war that swept Mugabe to power and ended colonial rule in 1980 came amid fears they would be called on to enforce the price cuts. Veterans and youth militias, known as Green Bombers for their green denim uniforms, were the main participants in the chaotic and bloody seizures of thousands of white-owned commercial farms that began in 2000.

The radio said the loyalists were required Friday for discussions on economic policies at a meeting of the party's central committee headed by Mugabe.

The radio also said the ruling party was to discuss ways to "tighten and intensify" price controls, saying the government made available toll free telephone hot lines for callers to report shopkeepers and businesses in breach of its prices edict.

Last week, the government ordered sweeping price cuts of around 50 percent to curb inflation and stop profiteering and overcharging by businesses. Price inspectors and police have raided stories, warehouses and gas stations to enforce the order, as the falling prices caused stampedes, panic buying and near-riots by impoverished Zimbabweans. At least two store managers have been hospitalized, one with a broken jaw, when they tried to restrain crowds grabbing reduced items from the shelves.

Long lines of cars waited at gas stations still selling scarce fuel Friday after Industry Minister Obert Mpofu warned fuel company staff they faced arrest and seizure of their fuel stocks if the price of gasoline was not slashed by more than half from immediate effect. At least two gas stations in Harare sold out and shut down by mid afternoon, uncertain when they would reopen.

Mpofu ordered them to sell gasoline at 60,000 Zimbabwe dollars to the liter, state radio reported. Oil industry executives said in meetings with the government they argued that minimum "cost recovery" on buying gas and distributing it in the landlocked nation now stood at about 130,000 Zimbabwe dollars a liter.

The new government price translates to US$4 a liter (about US$8 a gallon) at the official exchange rate or 46 U.S. cents a liter (about US$180 a gallon) at the dominant black market exchange rate. The fuel industry price for providing a liter to the pumps is US$8.66 at the official rate and US$1 at the more realistic unofficial rate.

"It looks like the country will run dry in the next few days and everything could come to a standstill. It doesn't make sense," said one fuel industry executive. He asked not to be identified for fear of retaliation from ruling party militants.

In the week since the government ordered sweeping price cuts most shops have run out of the cornmeal staple, bread, meat, salt, sugar and other basic foodstuffs. Some smaller shops have closed. Shelves were bare of basic foods across the capital.

Official inflation is running at 4,500 percent, the highest in the world, though independent financial institutions estimate real inflation is closer to 9,000 percent.

Mpofu, the industry minister, said the excessive price of gasoline raised the prices of all goods and services and said fuel found being sold at above the new price would be forfeited to the state and suppliers faced prosecution, the state radio reported Friday.

The government on Thursday banned bulk storage of foodstuffs and extended price cuts to consumer goods, mobile phone charges, fares on the state airline and car spares.

Bustling shoppers swarmed into a downtown shoe store Friday and congestion on the mobile phone networks made local call connections almost impossible.

State radio said the ruling party's politburo, its highest policy making body, met Thursday and commended the new government task force on prices for bringing down the cost of living.

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