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Zimbabwe's government backtracks on wage freeze before national strike
Associated Press
September 16, 2007

http://www.iht.com/articles/ap/2007/09/16/africa/AF-GEN-Zimbabwe-Wage-Freeze.php

HARARE, Zimbabwe: Zimbabwe's government backtracked on a wage freeze, the official media reported Sunday, just days before labor unions hold a national strike protesting it.

President Robert Mugabe, in a decree Aug. 29, froze wages, school fees and service charges for six months alongside a price reduction ordered in June.

The main labor organization, the Zimbabwe Congress of Trade Unions, called a countrywide strike for Wednesday and Thursday to protest the wage controls and other economic policies that have led to record unemployment and chronic food shortages.

The state Sunday Mail newspaper, a government mouthpiece, said details of amendments to the Aug. 29 decree will be finalized Tuesday to allow for wage negotiations between employers and workers and subsequent pay increases.

"We are working on amendments as far as incomes are concerned," Labor Minister Nicholas Goche told the newspaper.

The government's recent price reductions and other measures to tame the world's highest rate of inflation have left shelves bare across the nation of basic foods and essential goods. Official inflation is given as more than 7,600 percent though independent estimates put real inflation at close to 25,000 percent. The International Monetary Fund has forecast it reaching 100,000 percent by the end of the year.

Acute shortages of food and gasoline have fueled illegal black market trading of virtually absent commodities selling at 10 times the government's fixed prices.

The wage freeze, coupled with the failure of the measures to hold down prices, triggered an outcry from workers and labor groups, core supporters of the opposition Movement for Democratic Change and its founder, former labor leader Morgan Tsvangirai.

Since prices of all goods and services were slashed by about half in June the government has allowed 20 percent price hikes across the board and higher increases in specified cases such as hotel, bar and restaurant charges.

The main labor organization said the wage freeze ensured workers were to remain "engulfed in poverty."

"There is no rationale in freezing salaries when prices of commodities were reviewed upward," the labor federation said in a statement calling this week's two-day strike.

In the past, national strikes have crippled the already crumbling economy even though they have been poorly supported by the 20 percent of workers still in jobs who were frightened of losing them as well as by state harassment of employers and labor unions.

Formal unemployment is about 80 percent. The promised easing of the wage freeze was expected to create fresh demands from embattled businesses for further price increases.

Price cuts were first greeted with widespread popular support, but it has waned sharply as shortages of corn meal, meat, bread and other basic foodstuffs worsened and stores with little to sell drastically cut their opening hours, forcing shoppers to undergo an often fruitless daily hunt for essentials.

Supplies of most goods have dried up, with businesses arguing they are being told to sell products at below costs of production.

On Saturday, the government imposed 60 percent customs duty payable in hard currency on imported clothing and some household appliances.

It insisted the move would stimulate local manufacturing, saying raised hard currency duties of 100 percent of the value of imported cars earlier this year made the imports unaffordable and increased the output of local car assembly companies.

Cheap clothing is mainly imported from neighboring countries for resale at back street shops and flea markets by unemployed women known as "border traders" as their sole source of income.

Previously, import duty on cars, appliances and clothing was negligible.

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