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Budget and financial anarchy
Media Monitoring Project Zimbabwe
Extracted from Weekly Media Update 2003-45
Monday November 10th - Sunday November 16 2003

As the announcement of the annual national budget draws closer, the country continues to slide deeper into economic chaos. Any hopes that the budget would bring respite to the battered economy were quashed by the private media, which quoted economists pointing out that Finance Minister Herbert Murerwa was unlikely to craft ways that would successfully shore up the economy because of the current incapacitated economic climate characterized by continued government profligacy, lack of foreign investment, galloping inflation and other related ills.

For example, The Zimbabwe Independent (14/11) observed that Murerwa had an "unenviable" task of resuscitating the economy "so long as the Zanu PF last-ditchers preside over his proposals".

It added: "There is no political will at the top to solve the myriad problems the country faces". To substantiate its argument, it made reference to the rude manner in which the Department of Information dismissed objectives of the National Economic Consultative Forum, which convened a meeting last week to discuss ways of solving the country’s economic woes.

The Financial Gazette (13/11) concurred and blamed government policies, particularly the land reform programme, for the present woes in its article, Only urgent action required, not rhetoric. So did The Sunday Mirror (16/11). It called on government to address corruption saying, "…the citizenry will not respond positively…as long as it remains virtually public knowledge that a significant number in the leadership are foreign exchange barons (and baronesses), gold dealers and downright corrupt".

To round up criticism of government policies, The Standard (16/11) quoted economist John Robertson as saying: "If the (Finance) minister is honest, he will say government has failed. The country cannot live on tax revenues." Robertson further observed that since taxation and rising commodity prices had increasingly eroded personal incomes, the only remaining source of money was for the "government to order further printing of money", which will in turn fuel inflation.

The government-controlled media avoided such critical analysis preferring to churn out superficial previews of the budget. For example, ZBC (13/11, 8pm) reported that economists have called on government to come up with a "realistic budget" which would necessitate economic growth. There was no elaboration on what exactly would be a realistic budget. Instead, an economist, David Mupamhadzi, was merely quoted as saying, "last year’s budget was based on the premise of an inflation figure of 96% by year end…when we look at this budget there is need to come up with realistic assumptions". His sentiments were echoed by another analyst, Samuel Undenge, whom ZTV (14/11, 8pm) further quoted as saying last year’s budget "missed most of its targets (because it) was based on unrealistic assumptions." However, ZBC allowed such generalizations to pass without attempting to explain or interrogate their sources on what those targets were.

Rather, ZTV (13/11, 8pm) allowed Information Minister Jonathan Moyo to accuse civic society of causing the country’s economic ills, without substantiating his claims. He was quoted lambasting NGOs saying, "they have created a parallel economy (and) a parallel market." There was no informed analysis of the causes of the parallel market, which is largely blamed on government’s skewed economic policies.

But the government-controlled Press was even more hypocritical in its coverage of the economic ills affecting the country. For instance, The Sunday Mail (16/11) and The Sunday News (16/11) diverted public attention from the real causes behind the economic recession by merely drawing attention to the salary disparities between company chief executives and their subordinates. They did not, for instance, query the source of this distortion, which in actual fact merely mirrors the sorry state of the economy in general. Equally, the papers failed to query government on how it was going to correct these distortions, whether it would rectify the taxation system that has seen the middle level managers fall in the same tax band with the highly paid company executives.

The government-controlled media’s reluctance to expose government’s shortcomings in managing the economy was further highlighted by the way they handled the recent police crackdown and seizure of foreign currency from dealers, members of the public and in some cases, as SW Radio Africa and Studio 7 reported, tourists. The Herald (13/11) and Chronicle (10, 12, 13, and 14/11) simply commended this ad-hoc move and presented it as a lasting panacea to the shortage of foreign currency. In its comment, the Chronicle (10/11) urged the police to "continue with the crackdown" on foreign currency dealers, whom it accused of causing "havoc to the economy" and "cash shortages experienced during the past few months". It concluded: "The war on forex dealers should be stepped up so that we rid the country of these undesirable elements once and for all".

The comment conveniently ignored the fact that government’s fixed exchange rate and the wholesale dismantling of foreign currency generating activities, such as commercial farming over the past few years, were the main factors behind the emergence of the foreign currency parallel market.

This was only raised by the private media, which viewed the crackdown as a futile exercise.
The Business Tribune (13/11) comment observed: "The government may argue that hiking the exchange rate to close that of the parallel market will trigger increases in prices of most basic commodities. Yet the situation on the ground shows that this has actually been the case for the past 18 months or so. Retailers are charging according to what they are buying their currency on the parallel market. So what will be new? Prices of goods in Zimbabwe are going up everyday such that incomes can no longer match the increases".

Its article, Arrests fail to deter forex dealers, quoted Century Bank economist, Moses Chundu, calling on government to come up with "short and long term solutions" saying arresting foreign currency dealers was not the solution, as that would "scare the dealers and force them to go underground to form a syndicate".

The Sunday Mirror agreed. It quoted Louis Kasendeke, World Bank representative for East and Southern Africa as having advised government against arresting forex dealers. Said Kasendeke: "You can not police them under a situation of volatility, a way of dealing with malpractice has to be found, not policing, for even the central bank is rendered invalid".

SW Radio Africa (11/11) also quoted economist Danny Meyer as dismissing the arrest of forex dealers as inconsequential.

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