Mugabe cranks up pressure on business(14-12-06)

style=”MARGIN: 0cm 0cm 0pt”>HARARE – Zimbabwe’s political and economic crisis is deepening as President Robert Mugabe cranks up pressure against business and the opposition, and continues his controversial drive to punish industrialists and retailers who flout his price controls. Political and economic analysts say Mugabe has compounded Zimbabwe’s gloomy outlook with a swoop of arrests on industrialists and warnings to his opponents that he will not tolerate any protests against his rule, and another vow that his land reforms are irreversible.

There are currently over 6,000 outstanding court cases against business managers in all fields on price control-related issues. They face prison. The government has also capped school fees for all private schools and threatens to jail school administrators who defy the directive.

While Mugabe’s government has kept its eyes and guns on business, the crisis in Zimbabwe’s economy, in its seventh year of recession, appeared to be worsening.

The Consumer Council of Zimbabwe announced last week that a low-income urban earner’s monthly budget for a family of six has shot to $208,714.84 (US$834.86) up from $141,706.79 (US$566.83) in October, a 47,3% increase.

The consumer watchdog said the increase was caused by a 197,9 percent increase in the price of roller meal, a 196 percent increase in the price of cooking oil, 112 percent in the price of washing bars, 95 rice, 91 salt, 85 percent surge in price of margarine and another 50 percent increase in transport costs.

Food shortages are spreading, the Zim dollar continues to crumble in value following sweeping currency reforms in July, and the price of critical health drugs has risen by over 500 percent since October.
“The economy has become a hostage of our politics and there is nothing in our politics to liberate the economy,” said private economic consultant John Robertson.
Eddie Cross, an economic advisor to MDC president Morgan Tsvangirai, said the net effect of price fixing was massive hoarding and black marketeering, along with mounting losses and closures among food suppliers and processors.

“Price controls will create even more difficulties in an already bad situation.”

Price controls have been imposed on bread, maize, cooking oil, margarine, soap, milk, beef, chicken and sugar.