d a budget review seminar in the capital that the policy being pursued by the Mugabe regime of foistering unviable pricing structures on retailers was a “recipe for disaster” and the evidence of the devastating impact of the policy was widespread with empty supermarket shelves and mounting commodity shortages.
“The government has said ‘we the ruling party want to stay in power’. We will take all measures necessary for us to stay in power,” a participant told the business seminar. “The ruling Zanu (PF) has run out of ideas and might not be able to pull the economy out of the current mess. To suggest that we do away with market reforms because we have no fresh ideas is tantamount to throwing away the baby with the bathwater. We seem to want to reinvent the wheel. Socialism failed in terms of economic policy. Sooner or later we will have to revise our ideas. Markets are ideal for resource allocation.”
The government three months re-introduced price controls on basic commodities and announced a return to a command, socialist economy following allegations that business was colluding with Western powers to hike prices in a plot to incite a restive population, reeling from record inflation, to rise against President Mugabe’s government.
The controls, which has forced a 50 percent price reversal, has led to widespread shortages of mealie-meal, bread, soap and many other basics.
For example, the government decreed that bread be sold at $73,000 a loaf when it costs $154,000 to make. Bakers are refusing to continuing making and selling the bread. The staple is now only available on a thriving black market where it is retailing for anything up to $220,000 per loaf.
Another delegate dismissed government attacks on hoarding of goods whose price has been curbed, saying under current circumstances it was the sensible thing to do.
“If I was a producer of products such as bread, cooking oil and sugar, I would keep my product in the warehouse until I could sell it at a profit. I would not sell at below cost. It doesn’t make sense to do so,” he said.
Confederation of Zimbabwe Industries president Callisto Jokonya said: “The CZI has never agreed to and will never agree to price controls. We believe that they are a short-term measure. Hopefully sooner or later sanity will prevail. Unfortunately it has not prevailed yet.”
Another delegate said when Zimbabwe embraced market reforms in 1990, it was hard having to forgo the system that Zimbabwe had become accustomed to, which had been put in place by the colonial regime.
“Little did we know that 17 years down the road, we would come face to face with the same animal once more.”
Another delegate slammed President Robert Mugabe’s call for a return to socialism.
“The issue of price controls brings back the memory of the days of socialism, a failed policy in terms of economic development of the world. No nation is an island and sooner or later we will have to revise our ideas in favour of ideas that are universally shared across the world.”
Mugabe has threatened to nationalize companies that refuse to embrace his price controls.
A United Nations official said that despite Mugabe’s assertions of a return to socialism, he did not believe that the country was now abandoning private enterprise.
“I don’t think we are moving towards a command economy in Zimbabwe ,” he said. “I think the private sector has played and will continue to play an important role in this country. I think the private sector is still the key engine of economic growth and job creation in Zimbabwe and whatever can be done to promote its growth should be done.” he said.
Post published in: News