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Economic chaos
Media Monitoring Project Zimbabwe (MMPZ)
Extracted from Weekly Media Update 2007-25
Monday June 25th 2007 - Sunday July 1st 2007
July 04, 2007

GOVERNMENT'S latest ad hoc attempts to stop the country's economic slide and other related economic issues dominated the media during the week. They devoted 185 stories to the subject. Of these, 54 appeared on ZBC and 68 in the government Press. The private electronic media carried 21 reports and private papers featured 42. The private media categorically viewed the authorities' order for a 50% price reduction on all commodities and services as economically imprudent and generally indicative of government's policy deficiencies. The official media passively endorsed the move, presenting it as the tonic for the country's ailing economy.

a) Government crackdown on business

The government media poorly covered government's purge of businesses on claims they were championing the West's "illegal" regime change agenda through unwarranted price hikes. None of their reports tested the authenticity of the authorities' allegations against industry. Neither did they assess the economic impact of government's order for the businesses to slash prices of goods and services by half and bring them to the pre-June 18th levels, nor interrogate the authorities' capacity to "nationalise" industries defying their directive. Further, there were no attempts to investigate the effects of the price controls on the availability of products and services or the ramifications of government threats to seize the alleged offending companies on investor confidence.

Rather, the official media appeared content in rehashing and amplifying official justification of the crackdown while masking government's culpability in the soaring cost of living.

As the week opened, the official media, exemplified by The Herald (25/6), seemingly prepared grounds for government's crackdown by continuing their previous week's portrayal of business as the sole cause of the country's economic hardships. The paper just noted that "supermarkets" had "continued increasing prices" without reconciling the development with the country's hyperinflation. Although it quoted National Incomes and Pricing Commission (NIPC) chairman David Govere noting that it "would be difficult to stabilise prices without addressing other economic fundamentals", the paper's tone still remained anti-business.

It was hardly surprising the next day when the paper, the Chronicle (26/2) and Spot FM and ZTV (26/6, 8pm) passively reported Industry Minister Obert Mpofu ordering businesses, including publishers of the official papers (Zimpapers) to immediately halve prices of their products and services. Besides, they failed to challenge Mpofu to prove his allegations that the "unjustified" price increases was "a political ploy engineered by our detractors to effect illegal regime change . . . (following) the failure of illegal sanctions". Likewise, all ZBC stations (27/6, 8pm) and government dailies (28/6) passively reported President Mugabe calling for an immediate stop to the "nonsense of escalating prices", and adding onto his minister's conspiracy claims by threatening to "either nationalise all companies and mines that were involved in the 'dirty game' of regime change".

None questioned the abruptness of the government action, especially as it came soon after government had signed a social contract with labour and business to collectively resolve the country's economic woes. Neither did the government media question the logic of extending the price "freezes" to every industry. Their docile coverage of the confusion bedevilling government's clampdown was equally evident in the way ZTV (28/6, 8pm) reported the government dismissal of NIPC chairman David Govere hardly a month after his appointment. It passively reported Mpofu saying Govere had been "relieved of his duties for acting outside the parametres of his mandate" by entering "an agreement with the National Bakers' Association without consulting the ministry". No attempt was made to reconcile Govere's terms of reference with what he was alleged to have done wrong.

The station simply drowned the matter in government accusations against businesses, saying "manufacturers, determined to defy the government directive, are now reportedly cutting down supplies to retailers in order create artificial shortages . . . "

The Sunday Mail (1/7) also narrowly reported Mpofu dismissing observations that government's price controls were detrimental to the economy, arguing the policy "would not affect viability at all" as businesses were effecting "high mark-ups on products" and were "posting super-profits".

It was against this background that the paper and its counterparts did not investigate the losses businesses have incurred since government ordered the price cuts. Otherwise, the official media simply chronicled the police and pricing commission's raids on businesses that had allegedly defied the government order or 'hid' their goods in warehouses to create artificial commodity shortages. The Sunday Mail, for instance, merely announced that a ZANU PF senator and 20 business executives had been "arrested following a crackdown on over-pricing and hoarding of basic commodities", without explaining the exact law they had breached. Similarly, ZTV (29/6, 8pm) gleefully reported on the 'discovery' of tonnes of stashed sugar by the "price control team" at Fife Avenue shops, which then ordered the manager to sell it at the controlled price "much to the delight of the shoppers". Notably, the shop owner was not identified and neither was he/she sourced for his/her comments.

While the official media seemingly celebrated the crackdown on businesses that allegedly ignored the price cuts order, they did not relate this to Zimpapers' failure to also reduce its papers' cover prices as ordered. Although The Herald (26/6) reported Zimpapers boss Justin Mutasa noting that the company would only reduce the newspapers' prices if price controls were also "stretched to suppliers of raw materials, mainly newsprint and printing inks", it did not view this as criticism of government's lack of basic economic reasoning. And neither did ZTV investigate the ripple effects of the price cuts on producers. It just restricted itself to accusing manufacturers of resorting to "dirty tactics by cutting down on the quantities of products they are supplying to the market".

Only the private media exposed the effects of the purge and government duplicity on the matter. The Financial Gazette (28/6), for example, revealed that although the authorities were accusing business of unilaterally hiking prices as part of Western plots to oust government, they had actually approved "many of the increases" including that of bread. Reportedly, the NIPC had signed an agreement with bakers authorizing the bread price hike.

The paper quoted retailers' representative Willard Zireva dismissing government claims that shop owners were profiteering saying such allegations were "unfair" and dishonest as retailers were recording the "lowest (profit) margin" and only increased prices in response to "what would have happened on the (supply) chain" that "includes other players such as manufacturers and transporters". The Gazette comment also questioned government's attempts to narrowly blame business for price hikes while ignoring "the economic carnage caused by its disastrous . . . policies" and the "cost build-ups in the entire production chain".

Earlier, Studio 7 (26/6) reported economic analyst Luxon Zembe describing the government action as "counter-productive and unsustainable" while MDC's Eddie Cross viewed it as "more evidence that the Zanu PF regime simply does not have a clue as to how to manage the economy" (Zimbabwe Times, 26/6). The Zimbabwe Independent (29/6) agreed, noting that the price reductions were a "populist move designed to win the hearts and minds of a suffering populace". It reported business representatives noting that the price hikes freeze "had created serious distortions in cash-flows" because government had "put a cap on the prices of products but failed to deal with workers' wages". Economist Daniel Ndlela told The Standard (1/7) that the move was likely to "boomerang on the intended beneficiaries" as workers "will lose their jobs while consumers would lose the products".

Unlike the official media, the private Press assessed the implications of Mugabe's threats against industry. For example, the Independent noted that if government was to "follow through on the threat" it "could push out Zimbabwe's few remaining foreign investors ... and . . . see more Zimbabwean products shut out of international markets as buyers look for suppliers unhampered by political problems". The Standard viewed the threats as meant to "browbeat and intimidate everyone into silent submission ahead of next year's elections".

b) Indicators of economic meltdown

The government media's reluctance to question the effectiveness of government's economic policies was also evident in the 48 stories they carried on indicators of economic decay (ZBC [19] and official papers [29]). These comprised the rise in telecommunications tariffs and interest rates; and the continued power and water shortages. All the stories were disjointed and avoided linking the symptoms of the country's economic ills to government mismanagement. In fact, they simplistically blamed all those outside government for the problems while presenting the authorities as vigorously working to address the crisis.

For example, The Manica Post (29/6) supinely reported Finance Minister Samuel Mumbengegwi attributing the country's economic troubles to an "economic attack from the Anglo-Saxon world" that followed "the land reform", which had "led to the cancellation of all credit lines".

Earlier, The Herald (25/6) reported Health Minister David Parirenyatwa making similar claims. The same day Radio Zimbabwe (1pm) evaded connecting business representatives' calls on "monetary authorities to increase the cash withdrawal limits" to government's inability to tame the hyperinflationary environment.

Such professional passivity also saw The Herald (29/6) allow Vice President Joice Mujuru to feign ignorance on the troubles besetting government-run enterprises saying their managers should inform the authorities about their problems so "they can get assistance in time".

Notably, the paper did not view her statements as reflective of government's bad management of the parastatals.

Except for the private electronic media's under coverage of the matter (they carried just two stories), the private papers' 22 stories on the subject blamed the country's economic woes on government's ill-conceived policies. For instance, The Zimbabwean (28/6) noted that the country's seven-year old fuel crisis was due to "foreign currency shortages, corruption at . . . NOCZIM, ruinous economic policies and deteriorating diplomatic relations with key countries". The Independent comment concurred, arguing that the "10 years of severe recession, which had seen the economy "contract by 60 percent" was "a direct product of failed agrarian policies" as well as the "reckless" gratuities government awarded war veterans causing the crash in the value of the local currency.

The differences in the manner in which the media tackled the country's economic distress were also apparent in their sourcing patterns. For example, although the government media appeared to have sourced widely as shown in Fig 1 and 2, most of the commentators were quoted in the context of supporting official claims on the causes of the country's economic problems. For example, all members of the public quoted by ZBC were basically reported welcoming the price clampdown on business.

Fig. 1 Voice distribution for government-controlled press

Fig. 2 Voice distribution on ZBC

The private media's critical approach was mirrored by their attempts to balance the official perspective with alternative views as captured in Figs 3 and 4.

Fig. 3 Voice distribution of the private press

Fig. 4 Voice distribution in the private electronic media

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