Wednesday, January 28, 2009

The Looming ‘Budget’

Tomorrow the ‘Acting Minister of Finance’, Patrick Chinamasa, is going to present his ‘budget’ to Zimbabwe. This is going to be very interesting. The teachers are holding out for the $US, the railway workers have been on strike for the past couple of weeks holding out for their $US, one assumes that Army and the Police have also been promised the currency of their dreams as well as every worker and manager who is not receiving them right now.

Tsvangirayi is being set up by the ZANU PF electronic and print media for the kill with his un-named ‘insiders’ telling us that Tsvangirayi and the majority of his inner circle have agreed to take part in the GNU while his deputy, lawyer Tendai Biti is the deviant holding out for better offers from Mugabe. The whole piece is most probably a pack of lies dreamt up by ZANU PF propagandists such that when Tsvangirayi eventually comes out with his ‘no deal’ he will be accused of his usual dithering and pandering to the west.

The real problem Tsvangirayi faces is what can he sell to his supporters and what can he not sell to them? At a lunch today the black members of the group suggested that Tsvangirayi will lose any legitimacy he has with his supporters if he goes into the GNU while one white member of the group felt very strongly that Tsvangirai must accept the deal, warts and all.

The ‘budget’ and what it can and cannot deliver is now the key to the next step in our Zimbabwean saga. Chinamasa, who probably can’t multiply 2 x 2, ably assisted by the RBZ, is said to be coming up with a ‘new deal for the civil service’ where they will be paid in $US promissory notes that will be exchangeable for goods (and services?) at licenced US dollar trading outlets. Who will accept these fake notes, for that is what they will be? Will the civil servants accept them in good faith? If they do will the licensed traders, who have to import almost everything they sell using real US dollars or real SA Rand, readily accept them?

Not likely given the recent track record of the government and their promises of ‘more money for the worker’

And where and how are all these mythical US dollars going to appear from? Of interest perhaps is that my government pension was paid into my account on the 23rd of January and was paid in Zimbabwe dollars (what a surprise!) and has increased from 2.5 billion in December to 3.4 trillion in January. Today the street is trading at between 4 and 40 trillion to 1 US dollar!

Wednesday, January 21, 2009

What Happens Now?

The ‘Talks’ came and went without agreement from Tsvangirayi. Clearly he is the one holding out for a better deal, while Mugabe, it is reported, has made several (minor) concessions.

In the meantime schools are still closed, the banks are collapsing with alarming rapidity as they cease to do business, the soldiers don’t have their US dollars. Neither do the teachers and policemen or the many other civil servants. Tel-One, the monopoly telephone provider issued statements to customers in ridiculous amounts of US dollars but then had to relent when it was pointed out to them that the majority of their customers don’t have access to US dollars. They itemised telephone line rental at USD 20 a line but failed to provide any tariffs and had the cheek to demand payment in advance for ‘next month’.

There are expectations from everyone that they should be ‘paid in US dollars’, be they individuals, corporates, parastatals or central and local government authorities. The fact is that what USD is around is in cash! They are not traded through the banking system, one cannot write cheques in USD. There is a very limited supply of US dollars that circulates amongst the ‘haves’, the ‘haves’ being licensed traders and unlicensed traders in the informal economy. The expectation that ‘everyone must have them’ is misguided in the extreme.

To make matters worse for all of the ‘have-nots’, the Zimbabwe dollar has moved from 2.5 trillion to 1 USD to 10 trillion to 1 USD in the past 24 hours!

Could it be that ‘government’ has been stalling on the schools issue, the payment of teachers, soldiers and policemen on the misguided belief that Tsvangirayi will agree to taking part in the ‘GNU’ and suddenly the fiscus will be awash with all the US dollars it needs to pay everyone? But it hasn’t happened and it is unlikely to happen in the near future.

In the meantime Barak Obama has been sworn in as the new US President and some remarks in his acceptance speech were clearly aimed at Mugabe and Zimbabwe.

“To those leaders around the globe who seek to sow conflict, or blame their society's ills on the West - know that your people will judge you on what you can build, not what you destroy. To those who cling to power through corruption and deceit and the silencing of dissent, know that you are on the wrong side of history; but that we will extend a hand if you are willing to unclench your fist. To the people of poor nations, we pledge to work alongside you to make your farms flourish and let clean waters flow; to nourish starved bodies and feed hungry minds.”

Mind you, it will take a long time for these words to sink into the sick psyche of ZANU PF and their leader. They still believe with all their hearts and minds that they are on the right side of history.

Until then………!

Monday, January 19, 2009

“Good Faith”

As a prelude to ‘more talks with Tsvangirayi’ scheduled for today the Mugabe "Government" (a reminder - we do not officially have any kind of government in Zimbabwe) has arrested more ‘MDC Activists’ allegedly bent on ‘treason, sabotage or terrorism’ – or perhaps all three and today I read a report that suggests that if Tsvangirayi does not come into Mugabe’s version of an ‘inclusive government’ he too will be arrested for ‘treason’.

Mugabe thinks Tsvangirayi should ‘join the inclusive government and we can sort out the detail later’. This must be some kind of Mugabe joke. Mugabe and ZANU PF have NEVER EVER made a statement in good faith or committed an act of good faith. ‘Good faith’ does not exist in their internal psyche. Margaret Thatcher should have learned that in 1979-80 and a whole host of people in between then and now, but clearly very few people have learned it. Certainly not Thabo Mbeki, but then ‘Good Faith’ may not exist in his psyche either. Today he has a chance to prove it or not.

Wednesday, January 14, 2009

The Return

I’m back!

While I’ve been away Jestina Mukoko has been found in police custody. So much for the word of the police that they did not know of her whereabouts. Other activists have been found. So called ‘confessions’ have been made by several activists but one of the activists has spilled the beans with the detail as to how it was all done through severe torture and manipulation.

Observance of human rights is deteriorating rapidly and everyone in the security and judicial services seems to be involved one way of the other. But who cares about human rights in Zimbabwe? Nobody it seems.

On the economic front when I left The Zimdollar cash rate was trading at 100 million to 1 USD. Today it is trading at 100 BILLION to 1 USD. The cheque rate, the OMIR rate and whatever other rates exist at are beyond my calculating ability. To try and explain just how bad things are, today I found that a deposit of 144 quadrillion had been paid electronically into my personal account. On investigation I discovered this was a dividend from Old Mutual. At the cash rate this is valued at just over $US4, 000. At the ‘cheque rate’ it is probably valued at $US4.

I made an attempt to see just how much cash I could draw. On being told that the windfall was a dividend payment to me personally, the bank teller said I could draw one trillion. But then she said she did not have any cash to give me. From my company account (if they had the cash) I could draw 50 million. What use this is to anyone is a mystery.

I went to another branch of my bank. They had some cash. They let me have all of it with a smile and ‘this is your lucky day’. I walked out with 120 billion in five notes. I went into the city and did some business. My car was cheerfully ‘watched over’ by a street kid. When I came back I gave him one of the 20 billion dollar notes. He took it but clearly what he really wanted to see was either US dollars or SA Rand.

The schools have been refused permission to re-open, mainly because the government doesn’t know what to do. The excuse is that the Grade 7 results are ‘not yet available’ but schools may re-open on the 26th January. You can bet the Grade 7 results won’t be available then either. The teachers have refused to mark them until they get paid a proper salary. The teachers, we are told, want 2.5 thousand USD a month.

Private schools then said they would re-open in spite of the ‘rule’ from the Ministry of Education. Government responded by threatening the private school authorities with arrest and imprisonment if they flouted the rule. Two schools opened. Heritage school at Borrowdale Brook and St Georges College next door to the President’s residence. Heritage was promptly invaded by soldiers who sent everyone home with the comment: - “Until we get paid in USD you will not re-open the school’. St George’s authorities told government that they answered to The Vatican, not to the Zimbabwe government and were allowed to remain open. What a fiasco.

More on soldiers, hot rumour has it that the entire company at Cranborne Barracks tore up their payslips in front of their officers yesterday.

Government is said to have approached the SA Government asking to be included in the South African Rand Monetary zone. SA has said yes, no problem, but we will control the Reserve Bank of Zimbabwe, not you. So what next?

On the ZBC one can hear diatribes of hate against the MDC, The British, and now for good measure because it is popular thing to do, the Israelis.

Is it really near the end? How can the RBZ and Mugabe wriggle out of this latest economic crisis? So far they have been innovative but every decision they have made has failed to see the long term consequences of their decisions, starting of course, with the unbudgeted payout to war veterans in September 1998.

Watch this space!