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Economic issues
Media Monitoring Project Zimbabwe (MMPZ)
Extracted from Weekly Media Update 2004-44
Monday November 1st - Sunday November 7th 2004

THE government media’s insincerity in reporting the economic situation in the country was exposed by the manner in which they magnified positive highlights of the Reserve Bank governor Gideon Gono’s third quarterly monetary policy review while smothering the sticky issues emanating from his presentation.

The obsession of these media with presenting Gono’s policies as having resuscitated the country’s ailing economy resulted in them censoring his pertinent warnings against fiscal indiscipline, such as unplanned government expenditure.

In addition, they exploited the visit to Zimbabwe by a Chinese government delegation – ostensibly to seek areas of bilateral co-operation – as proof of the economic success story of government’s "Look East Strategy", meant to explore new export markets in Asia.

Symptoms of continued economic decay, illustrated by erratic fuel supplies and a flourishing foreign currency black market, were ignored in an effort to present government economic policies as having steered the country’s economy out of the woods.

Neither did the official media reconcile President Mugabe’s "look-East" policy with Gono’s efforts to court the IMF as part of his economic turnaround strategy.

These issues were only dealt with in the private media. However, like the government media, they also failed to fully report on the recent wave of price increases of most commodities and services amid claims of a drop in the inflation rate to 251,5 percent in September.

Nevertheless, the private media’s coverage of Gono’s monetary policy was more professional, as they evaluated his successes against his failures.

For example, while the Zimbabwe Independent (5/11) quoted analysts as conceding that Gono had succeeded in stabilising the inflation rate, bringing a degree of discipline to the financial sector and has been instrumental in slowing the downward spiral of the productive sector, it noted that the RBZ boss had failed to deal decisively with other key economic problems through errors of judgment or inability to come up with effective policies.

Among these, said the Independent, was Gono’s failure to deal effectively with the "exchange rate problem that has hurt exporters and put some of them out of business", his inability to find a lasting solution to foreign currency shortages and his vulnerability to political manipulation by the ruling ZANU PF.

The paper’s editorial cited government plans to pay unbudgeted gratuities to liberation war collaborators and detainees and compulsorily acquire foreign-owned agro-processing concerns in the Lowveld and Eastern Highlands under the land reform programme as some of the "dangers lurking" in Gono’s efforts to revive the economy.

But the government media avoided these issues.

Rather, The Herald (2/11) remained content to gloss over Zimbabwe’s deep-seated economic problems saying, "the tone set by the RBZ chief Dr Gideon Gono in his maiden monetary policy statement of December 2003 has reaped benefits that have seen our economy on the right direction to normalcy".

Selectively using the fall in inflation, it thus argued, "prices have not been increasing at astronomic levels".

This selective coverage, meant to portray Gono’s policies as the right tonic for the country’s economic woes, further manifested itself in the way ZTV (01/11, 8pm), Power FM (02/11, 6am), The Herald (2/11), the Chronicle (4/11) and even the privately-owned Financial Gazette (5/11), also failed to ask pertinent questions about the viability of the RBZ’s proposed Zimbabwe Allied Banking Group (ZABG), under which all of the country’s collapsed banks would be amalgamated.

The two government dailies observed that the proposed banking group "could arguably be the best thing that has happened to the banking sector", while ZTV quoted economic analyst Albert Machando contending that, like the South African ABSA bank, ZABG had the potential to become a regional giant that would "also help the nation should the foreign banks decide to sabotage the government".

The Financial Gazette (4/11) concurred, saying ZABG "had brought more clarity and removed the uncertainty that had stalked the [banking] industry since upheavals began late last year".

However, Studio 7 (2/11) quoted economist Peter Robinson saying the recapitalisation of collapsed banks at a cost of $2 trillion would cause serious inflationary pressure for the economy.

An unnamed financial writer quoted on SW Radio Africa (7/11) agreed.

Said the writer: "The crisis is that we are going to have a conglomeration of six or seven weak banks moulded into one bank in the hope of creating a stronger one. This doesn’t work. A loose knit conglomeration of small banks that are not strong will also create a bigger bank that does not have a good balance sheet and that cannot be able to survive in a market like ours…"

The Daily Mirror (5/11), the Independent and Standard (7/11) stories raised similar concerns.

Moreover, the Independent (5/11) claimed that Gono had lied to a parliamentary portfolio committee that no bank would collapse, as he had started planning "months ago to form the ZABG by merging collapsed banks".

This drew a vitriolic response from The Sunday Mail (8/10) columnist Lowani Ndlovu.

Ndlovu’s rebuttal of the Independent story was, however, more conspicuous by its personal spiteful insults on the "idiocy" and "kind of stupid conclusion drawn by that newspaper’s dunderheads from what they claimed to be ‘information gleaned from central banks" than for the coherence of his argument.

Earlier, The Herald (6/11) also tried to dismiss the private media’s pertinent criticism of the apparent shortcomings of Gono’s policies by peddling unsubstantiated claims that there was "a sinister campaign to discredit the economic gains scored by Reserve Bank of Zimbabwe governor Gideon Gono", which it said was "fuelled by the opposition MDC, its newspapers, some economists and Western countries".

It then falsely claimed that Gono’s "reforms" had resulted in "constant fuel supplies (and) stabilisation in the foreign currency markets".

However, The Daily Mirror (4/11) disputed such claims, saying the current fuel shortages created "suspicion that the country’s foreign currency woes are worse than the public has been told".

Said the paper: "The Reserve Bank of Zimbabwe has made it clear that given that the country is virtually on its own, the foreign currency allocation priority is fuel and electricity. So, we wonder where the foreign currency allocated to fuel procurement is going".

If the government media were not reporting glowingly on the purported successes of Gono’s monetary policy, they were parading the signing of eight deals between government and the Chinese as indicative of the positive results brought by the authorities’ "look-East" investment drive (ZTV, 4/11, 8pm, The Herald and Chronicle, 5/11).

In fact, ZBC carried about 52 stories extolling the relations between Zimbabwe and China and calling on business people to exploit trade opportunities presented by that country.

The broadcaster even claimed that since Zimbabwe was granted an Approved Destination Status by China, it has recorded a 40 percent increase in the arrival of Asian tourists as at June 30 2004. However, the report did not explain what this percentage represented in real figures.

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