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Last Updated: Monday, 2 June, 2003, 15:14 GMT 16:14 UK
Zimbabwe: A tattered economy
By Jeremy Scott-Joynt
BBC News Online business reporter

Zimbabweans run from riot police and tear gas
Riot police broke up Monday's demonstrations
Zimbabwe's economy came to a near-standstill on Monday as businesses shut down in sympathy with opposition calls to demonstrate against the government of President Robert Mugabe.

Not, some observers might say, that it makes much difference.

After four years of land seizures and dubious economics, a country which was once southern Africa's breadbasket is widely seen as a basket case by almost everyone except the Mugabe government itself, with its gross domestic product down 27% on the late 1990s.

A net exporter throughout most of its 23 years of independence, seven million of Zimbabwe's 12 million people are now believed to be at serious risk of famine.

Empty fields

The government's position is that this is the fault of the drought conditions which have gripped the region.

Certainly the drought has hit the whole of southern Africa hard.

But an alternative explanation can be found in agricultural production figures.

Almost all white-owned land - about two-thirds of all the country's good arable land - has now been seized, ostensibly for redistribution to black farmers.

Black farm workers' houses burnt out by so-called 'war veterans'
Black farm workers suffered from the land seizures too
But now the black farmers say they have been left without chemicals or equipment despite promises, leading to a collapse in production.

Cash crops are failing, with the tobacco harvest down to an expected 120 million kg this year from more than 200 million in 2001.

And hundreds of thousands of hectares are being given to Libya and China in exchange for the fuel imports which keep the economy barely afloat.

Others go to government and military figures, who critics say are spending the gains from Zimbabwe's involvement in looting the Democratic Republic of Congo on property in Harare.

But then so is everyone else, since with inflation at 269% - and set to reach 500%, the pessimists say, by the end of the year - property is just about the only sure store of value.

Dry

The fuel situation is another symptom of crisis. Fuel prices have gone up 600% since February to 450 Zimbabwean dollars for petrol and Z$200 for diesel.

Zimbabweans queue outside a bank ahead of the strike
Banknotes, like food and fuel, are in short supply
Mile-long queues are the result, and a further burden on hard-pressed businesses already under pressure by the combination of rampant inflation, an unrealistic exchange rate and government price controls which have worsened shortages instead of easing them.

The Zimbabwe dollar is officially set at an exchange rate of Z$55 to the US dollar - a rate at which a tube of toothpaste can cost more than US$20. That's if you can get any, of course: foreign currency is in short supply, and has been for years.

Exporters, though, can get Z$800 to the US dollar, after the government changed the rules to try to stop them from going under.

The reason? The unofficial rate - the parallel market price, as it is known - is between Z$1,500 and Z$2,000, and that is the price exporters have to pay for their inputs.

Banking on change

Few people can think about that, because even the one in three people who actually have a job have little to buy; the shelves of shops are often bare even of essentials.

And even banknotes are now in short supply.

The Reserve Bank of Zimbabwe is printing banknotes on a three-shift basis, and according to the state media, its governor, Leonard Tsumba, has just stepped down.

According to the government, this is all the fault of the British and of black Zimbabweans in the opposition Movement for Democratic Change who are acting as their "slaves".

Monday's strikes are all part of the same effort at subversion, according to Information Minister Jonathan Moyo.

But the MDC, and the thousands of people backing its call for the national strike, seem to think otherwise.




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