Posted on 12/28/2002 1:16:50 AM PST by sarcasm
HARARE, Zimbabwe — In President Robert Mugabe's Zimbabwe, a 7-ounce hunk of cheddar cheese costs more than 14 ounces of the same cheddar cheese. Motorists line up for hours outside gas stations with no gas. Bakers are required to sell regular bread for less than it costs to make it, so instead they sell raisin bread (with a few raisins) or poppy bread (with a few seeds) or twisted bread (with a few twists) at five times the set price.
"It's Alice slipping through the hole. We're living in Wonderland now," said Brian Raftopolous, the chairman of Zimbabwe in Crisis, a coalition of civic groups. "It would be funny if it wasn't so sad."
Mugabe's notoriety stems mostly from his decision to seize productive land from white farmers despite a looming famine. But land grabs are just part of the command-and-control economic regime the longtime president is trying to impose on Zimbabwe.
And bread isn't the only part of "Mugabenomics" that seems twisted. As the government issues an ever-expanding list of financial dictates — most notably price controls on everything from Palmolive soap to T-bone steaks, and currency controls fixing the official exchange rate at about 3 percent of the real exchange rate — Zimbabwe's once-vibrant economy is imploding.
Unemployment is near 70 percent. The stock market has crashed. Inflation is officially 144 percent/year but really much higher, while wages are relatively stagnant in a country where most people earn less than $1 a day. Zimbabwe's $500 bill — worth $9 U.S. at the official rate, or about 30 cents on the street — is known as the Ferrari, because it goes so fast.
The economy is shrinking 10 percent a year, even though the retail and housing sectors are booming; people with money are racing to spend it before it loses value.
The latest joke here is that Zimbabweans have the world's highest IQs: I queue for gas, I queue for bread, I queue for sugar.
High starvation risk
The food shortage facing Zimbabwe is no joke, however. The United Nations estimates 6.7 million of the country's 12 million people are at risk of starvation. The government has a monopoly on grain imports to Zimbabwe, but it is desperately short of foreign currency, so it is now drastically short of food.
Its land-redistribution scheme drove much of the agricultural expertise into exile and handed much of the fertile soil to Mugabe allies who have no farming experience or poor farmers who have no access to seeds or fertilizer.
"They went after the white people, but it's the black people who suffer," said farmhand Abraham Phili, who was evicted from a plantation that lies fallow. "How will I feed my children now?"
Mugabe, a rebel leader who has led the country since independence in 1980, tends to blame his country's current problems on drought, Western colonialism and capitalism, peppering speeches with attacks on greedy entrepreneurs, ruthless markets and the forces of globalization.
For too long, he says, rich nations have exploited poorer nations and dictated their economic policies.
Consolidating control
While Mugabe studied Marxism at the University of London and is commonly referred to here as Comrade Mugabe, most economists say his policies are driven more by authoritarianism than communism. Since voters rejected Mugabe's bid to rewrite the constitution in 2000 — and especially after he retained power in a disputed election marred by violence this spring — Mugabe and his political party, ZANU-PF, have moved to consolidate their control.
That is the common element of all of Mugabe's economic policies.
Zimbabwe now requires its pension funds to deposit nearly half their reserves with the government at paltry interest rates, so inflation is draining away pensions. Banks must buy government debt on the cheap as well. And as of this month, manufacturers must trade in half their foreign currency to the government for Zimbabwean dollars — at the exorbitant official rate — and deposit the rest of the currency in government banks, to be withdrawn only with government permission. The nation's industrial-trade group says half its members might close their doors rather than comply.
"It's tough," said Callisto Jokonya, head of a refrigerator manufacturer. "What you learn about business in books is not practical in this environment. The politicians have their own agendas."
Meanwhile, Mugabe's government is spending half its revenue to pay interest on its debts. The more foreign currency it tries to squeeze out of exporters, the less incentive they have to export — or at least to report their exports to the government. A recent cartoon in a Harare paper portrayed the funeral business as "the only growing industry in Zimbabwe."
"Look, there's only so long you can defy the laws of supply and demand," said John Robertson, an economist in Harare. "It's like defying the laws of gravity. Pretty soon, you're going to come crashing down."
The deepest crisis is the fuel shortage. Zimbabwe had a contract to import Libyan oil, but it missed payments, and the flow has slowed to a trickle. There is hardly any gas in Harare, which has not stopped drivers from lining up at stations for hours upon hearing rumors of gas.
"All we do is look for petrol," said taxi driver Champion Mutari. "It's all anybody does around here."
Mugabe doesn't have that problem. He still rides in an armored Mercedes limousine with tinted windows, surrounded by two dozen motorcycles and sport-utility vehicles with their sirens blaring.
It is now a crime in Zimbabwe to make rude gestures or comments as the motorcade passes.
"It's all about total power," Robertson said. "The economy is just one more way to expand control."
It is now a crime in Zimbabwe to make rude gestures or comments as the motorcade passes.
That's not the half of it.. That's nothing to see him passing on the street.
Wait till people are killing each other over bread crust while even his dogs are eating steak.
Give Walter Williams the night off, you don't have to be an economist to see what went wrong here. What confuses me is why I see Americans advocating these same policies (to a lesser or greater extent) every day.
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