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Price Controls and Shortages - Index of articles
Wounding
cuts
The
Guardian (UK)
July 21, 2007
http://www.guardian.co.uk/commentisfree/story/0,,2131463,00.html
It was presented as medicine,
but the shock therapy being applied to Zimbabwe is poison. Three
weeks ago President Robert Mugabe ordered that prices be cut by
at least half. It was a panic response to galloping inflation, which
had reached the point where the price of some goods was rising threefold
each week. But Mugabe's decree is crucifying retailers - filling
stations are being forced to sell petrol for less than half what
they have to pay for it. In the ensuing summer sale, widescreen
TVs, clothes, coffee, meat - almost everything except staple foodstuffs
- have disappeared from the shelves.
While some Zanu-PF
loyalists made a killing, thousands of shopkeepers were arrested
for profiteering. Restocking has become near-impossible. Oil, soap
and salt have run out in rural areas. On Thursday buying petrol
with foreign currency coupons was barred, removing one of the last
ways of filling up the tank. With arbitrary prices already set for
basics from milk to cement (anything from 20% to 50% of the cost
of production), the next step, according to the opposition MP David
Coltart, is to militarise the economy. Zanu-PF are doing to businesses
what they did to the white farms, and the effect will be just as
grim. The price cuts were ordered by a committee of army, intelligence
and police officers chaired by Mr Mugabe and gangs of thugs are
implementing them by force. None of this makes sense for those members
of Zanu-PF with any stake in the future. The rationale behind the
South African-sponsored talks with members of the opposition was
that Zanu-PF stalwarts had more to lose from a collapse of the existing
order than did those outside the party. Better to talk now and manage
transition than lose all, the optimists argued. Since then the talks
in Pretoria have gone nowhere, and last week one side failed to
turn up. The whole operation appears to have been a delaying tactic,
with South Africa's Thabo Mbeki outfoxed by Mr Mugabe. What then
is the party's grand strategy? Zanu-PF bosses own many businesses
that are losing billions of Zimbabwean dollars in the chaos, so
why did they allow fellow party members to drive what was left of
the country's economy off a cliff?
There are no clear answers.
Even if Zanu-PF becomes a military regime, it will not be able to
feed the people. Thousands of Zimbabweans are fleeing to South Africa,
and there will be more as basic foods run out. The last thing South
Africa needs is millions of starving refugees, and yet that prospect
is still not concentrating minds in Pretoria. The US ambassador
to Harare may be right when he claims that Zanu-PF is committing
regime change on itself. But Zimbabwe may have further to fall before
it finally slams into the ground.
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