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Power
outages strike as finance minister unveils inflation-hit budget
in troubled Zimbabwe
Associated
Press
November 29, 2007
http://www.msnbc.msn.com/id/22026377/
HARARE, Zimbabwe: Zimbabwe's
finance minister proposed cutting taxes for the growing number of
poor, increasing taxes on some manufacturers and cracking down on
the black market as cures for his nation's economic crisis.
Samuel Mumbengegwi's
budget speech Thursday was televised - but unavailable to many here
because of power cuts. Opposition lawmakers jeered when Mumbengegwi
said priority was to be given in 2008 to restoring electricity supplies
and boosting the government's near-dormant rural electrification
program.
Zimbabwe's economic meltdown
has seen official inflation reach 8,000 percent, chronic shortages
of food, gasoline and hard currency, and daily water and power outages
as public utilities fail to replace aging equipment and pay for
imported spare parts.
"The reality is
that we are on our own and need to increase our self reliance,"
Mumbengegwi said. "That will entail endurance."
The chief government
statistician had said earlier this week that goods used in calculating
average inflation were not available in stores across the country
and so the figures, usually issued at the beginning of each month,
would be delayed.
Thursday, Mumbengegwi
told lawmakers hyperinflation remained "a major concern."
He said he aimed to bring inflation down to below 2,000 percent
by the end of next year and predicted a reduction in the overall
budget deficit
11 percent in 2008.
State spending in the
first 10 months of this year exceeded 30 percent of its revenues,
he said.
Mumbengegwi said the
goods shortages were the result of declining production, Western
economic sanctions and what he called "speculative behavior
by businesses."
He announced
a crackdown on black market selling of scarce goods for up to 10
times the government's fixed prices, favorable central bank loan
facilities to manufacturers to boost production and export incentives.
Western nations have
imposed travel restrictions on President Robert Mugabe and ruling
party leaders but say foreign aid, loans and investment dried up
of their own accord in seven years of political and economic turmoil
in the aftermath of the often violent seizures of thousands of white-owned
commercial farms that began in 2000.
The program to hand over
land to blacks disrupted the agriculture-based economy in the former
regional breadbasket.
Mumbengegwi said the
nation was pinning its hopes on a revival of agriculture ahead of
the harvests by April but would still have to import corn and wheat
to cover any shortfalls in local production in 2008.
He said those earning
less than 30 million Zimbabwe dollars a month (US$20; €14 at
the dominant black market exchange rate) would be exempt from income
tax as Jan. 1. The previous line had been 4 million Zimbabwe dollars.
Mumbengegwi announcing
increases of up to 50 percent in excise duty on local beer brands
and cigarettes.
Much of downtown Harare,
where Mumbengegwi delivered his budget in the Parliament house,
was without electricity. Most mobile and fixed line phone services
also were out in the capital on Thursday.
A group of businessmen
at a downtown social club hoping to watch the budget speech on state
television instead listened to it on the radio in a car parked outside.
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