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Zimbabwe
inflation now over 1 million percent
Angus Shaw, Associated Press
May 21, 2008
http://ap.google.com/article/ALeqM5i4kT7pJlnuzY_vpKdTACcQYIPcvQD90Q4G401
Harare - Weary Zimbabweans
are facing a new wave of price increases that will put many basic
goods even further out of their reach: A loaf of bread now costs
what 12 new cars did a decade ago. Independent finance houses said
in an assessment Tuesday that annual inflation rose this month to
1,063,572 percent based on prices of a basket of basic foodstuffs.
Economic analysts say unless the rate of inflation is slowed, annual
inflation will likely reach about 5 million percent by October.
As stores opened for business Wednesday, a small pack of locally
produced coffee beans cost just short of 1 billion Zimbabwe dollars.
A decade ago, that sum would have bought 60 new cars. And fresh
price rises were expected after the state Grain Marketing Board
announced up to 25-fold increases in its prices to commercial millers
for wheat and the corn meal staple.
The economy was on shop
clerk Jessica Rukuni's mind as she left the public swimming pool
in downtown Harare's central park with three disappointed children.
She found the new admission price of 100 million Zimbabwe dollars
- 30 US cents - out of reach. "The point is that it's far too
much for most people who don't get US dollars," she said. Her
income is the equivalent of about one US dollar a day, and her family
has one basic meal daily. The collapsing economy was a major concern
of voters who dealt longtime President Robert Mugabe a defeat in
March 29 elections. His challenger, Morgan Tsvangirai, topped the
poll but did not win the simple majority needed to avoid a runoff.
The two face each other in a second round June 27. Mugabe was to
officially launch his runoff campaign with a rally at his party's
headquarters in Harare on Sunday, the state-run Herald newspaper
reported Wednesday.
The opposition's campaigning
has been hampered by violence blamed on Mugabe's government and
party. The opposition claims Tsvangirai is the target of a government
assassination plot and he has been out of Zimbabwe since shortly
after the March 29 first round. He plans to return to Zimbabwe to
campaign for the runoff once security measures are in place, his
aides have said. Mugabe, speaking as he reviewed graduating police
cadets Wednesday, said the opposition was fanning violence.
Independent observers
have said that while there have been some retaliatory attacks by
the opposition, the vast majority of the attacks have been carried
out by Mugabe supporters. Mugabe accuses the United States, the
European Union and especially former colonial ruler Britain of using
their economic influence to back his opponents and bring about his
ouster. He has severed ties with the International Monetary Fund,
the World Bank and other financial organizations.
Zimbabwe's official annual
inflation was given by the government as 165,000 percent in February,
already by far the highest in the world. The government has not
updated that - the state statistical service has said there were
not enough goods in the shortages-stricken shops to calculate new
figures. The economic decline has been blamed on the collapse of
the key agriculture sector following the often violent seizures
of farmland from whites. Mugabe claimed the seizures begun in 2002
were to benefit poor blacks, but many of the farms went to his loyalists.
"The crunch is going to come when local money is eroded to
the point it is no longer acceptable" in commercial activities
or as earnings, especially by longtime ruler Mugabe's loyalists,
said independent Harare economist John Robertson. Already, more
transactions are being done in US dollars, both openly and in secret.
Manufacturing industries, running at below 30 percent of their capacity,
reported growing absenteeism by workers facing soaring commuter
bus fares.
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