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Desperate time in Zimbabwe
The Economist
July 11, 2007

http://www.economist.com/daily/news/displaystory.cfm?story_id=9466417&top_story=1

ZIMBABWE is an increasingly wretched place and, sadly, will grow more miserable for some time yet. This week an outspoken Roman Catholic Archbishop, Pius Ncube, who has become the strongest voice of opposition in the country, described the economic situation as "life-threatening". That was an understatement. Years of economic collapse, provoked by dreadful misrule, have already taken a huge toll on Zimbabwean lives: the population has been battered by hunger, poverty and AIDS; some 3m people are estimated to have fled abroad; life expectancy has dropped to medieval levels.

Mr Ncube has also called on outsiders—notably on Britain, the former colonial power—to make some sort of (peaceful) intervention to remove the government of the ageing president, Robert Mugabe. But outsiders either lack the inclination to push Mr Mugabe to go, or they lack any effective means of getting him out. Yet until Mr Mugabe's undemocratic regime is replaced, there is no hope of any recovery.

An idea floated at the weekend that an economic lifeline could be thrown from neighbouring South Africa, if the almost worthless Zimbabwe dollar were pegged to the South African rand, is nothing but fantasy. It has already been rejected by Zimbabwe's leaders as a threat to their "sovereignty". The Southern African Development Community (and thus South Africa) said on Wednesday July 11th that it "disassociates" itself from any such notion. In any case the corrupt elite in charge of Zimbabwe is profiting handsomely through currency trading. Nor would South Africa wish to subsidise Mr Mugabe's misrule. Nor, indeed, would it be a simple matter to achieve rapid currency union between South Africa (with single digit inflation) and Zimbabwe (six digit inflation, where notes are worth less than toilet paper).

Yet Mr Mugabe is not sitting comfortably. A recent claim by an American diplomat that economic collapse would provoke regime change within six months carried the whiff of propaganda, but it is inevitably a worry for the 83-year-old president. His people are growing frustrated over the high price of petrol and food, along with their despair at political repression. In the past Mr Mugabe managed to buy off political allies and sustained some popularity (at least in rural areas) by snatching commercial farm land and dishing it out to his supporters. But that trick cannot be repeated. There is some expectation that foreign businesses may be targeted next, but the most valuable ones remaining—mines—will be difficult for Mr Mugabe to grab without upsetting South Africa. That leaves few options.

Instead the president, who famously despises "bookish economics", has decided to outlaw inflation. Price freezes have only been enforced through the arrest of scores of businessmen who are accused of profiteering. The result: shops are bare of basic goods, as businesses refuse to sell more than a minimum of flour, sugar, maize and other items at a crippling loss. There has been panic buying all over the country. In Harare, the capital, crowds wait outside supermarkets ready to rush in and grab whatever they can. Where basics such as cooking oil are available they are rationed by shopkeepers. Fuel is in short supply, with long queues of cars reappearing outside Harare's petrol stations. As factories prepare to close operations their owners, in turn, are being arrested and forced to keep operating.

Choked by hyperinflation and arbitrary restrictions Zimbabweans have had to become increasingly creative to survive. Many of those left behind in the country are staying alive only thanks to remittances from migrants in South Africa, Britain and elsewhere. A local businessman repeats the widely-held prediction that the current system will collapse within six months—and that Zimbabwe, under new management, will become Africa's fastest growing economy. "Then again", he smiles, "we have been saying this for years."

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