Wednesday, February 7, 2007

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Things fall apart in Zimbabwe

In the New York Times, Michael Wines chronicles the slow collapse of the state in Zimbabwe:

For close to seven years, Zimbabwe’s economy and quality of life have been in slow, uninterrupted decline. They are still declining this year, people there say, with one notable difference: the pace is no longer so slow.

Indeed, Zimbabwe’s economic descent has picked up so much speed that President Robert G. Mugabe, the nation’s leader for 27 years, is starting to lose support from parts of his own party.

In recent weeks, the national power authority has warned of a collapse of electrical service. A breakdown in water treatment has set off a new outbreak of cholera in the capital, Harare. All public services were cut off in Marondera, a regional capital of 50,000 in eastern Zimbabwe, after the city ran out of money to fix broken equipment. In Chitungwiza, just south of Harare, electricity is supplied only four days a week.

The government awarded all civil servants a 300 percent raise two weeks ago. But the increase is only a fraction of the inflation rate, so the nation’s 110,000 teachers are staging a work slowdown for more money. Measured by the black-market value of Zimbabwe’s ragtag currency, even their new salaries total less than 60 American dollars a month.

Doctors and nurses have been on strike for five weeks, seeking a pay increase of nearly 9,000 percent, and health care is all but nonexistent. Harare’s police chief warned in a recently leaked memo that if rank-and-file officers did not get a substantial raise, they might riot....

Mr. Mugabe’s fortunes appear to have dimmed as well. In December, the ruling party that has traditionally bowed to his will, the Zimbabwe African National Union-Patriotic Front, balked at supporting a constitutional amendment that would have extended his term of office by two years, to 2010. The rebuff exposed a fissure in the party, known as ZANU-PF, between Mr. Mugabe’s hard-line backers and others who fear he has brought their nation to the brink of collapse.

The trigger of this crisis — hyperinflation — reached an annual rate of 1,281 percent this month, and has been near or over 1,000 percent since last April. Hyperinflation has bankrupted the government, left 8 in 10 citizens destitute and decimated the country’s factories and farms.

In it's darkest hour, however, Mugabe's government has come up with a brilliant plan to deal with the situation:
The central bank’s latest response to these problems, announced this week, was to declare inflation illegal. From March 1 to June 30, anyone who raises prices or wages will be arrested and punished. Only a “firm social contract” to end corruption and restructure the economy will bring an end to the crisis, said the reserve bank governor, Gideon Gono. (emphasis added)
Read the whole thing. I have two questions after reading it:

1) Wines also reports the following: "Foreign journalists remain barred from the country under threat of imprisonment, and harassment of Zimbabwean journalists has sharply increased." OK then, Michael Wines, how did you pull this off then? That was just a big ol' raspberry to the Washington Post's Africa correspondent, wasn't it?!

2) One wonders whether South Africa has any kind of cintingency plan for what happens when the Mugabe government collapses.

posted by Dan on 02.07.07 at 08:04 AM


Here's a third question: when will the New York City Council honor Mugabe again?

posted by: y81 on 02.07.07 at 08:04 AM [permalink]

2) One wonders whether South Africa has any kind of cintingency plan for what happens when the Mugabe government collapses.

Dunno about South Africa specifically, but history suggests that imploding african nations are very likely to be invaded by opportunistic neighbors.

This will be largely ignored by the western media, who will instead report on what movie star's marriage is in trouble.

posted by: rosignol on 02.07.07 at 08:04 AM [permalink]

Actually, I think most monetary economists would agree that short-term price/wage controls (along with standard reforms) are the best way to stop hyperinflation. That said, better not to be in such a bad spot to begin with!

posted by: cure on 02.07.07 at 08:04 AM [permalink]

I Read this piece today as well. What a story -- and so troubling! Another question is whether Mugabe cronies will really defect from the ZANU coalition, leaving the supreme leader to the mercy of the mobs? Zimbabwe, in any case, will not get better with such entrenched corruption plaguing the country. A complete collapse, and the falling away of the ancien regime, will be necessary to begin to the nation anew. Perhaps South Africa can lead a multinational effort to restore some semblance of regime performance and system legitimacy.

posted by: Donald Douglas on 02.07.07 at 08:04 AM [permalink]

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