Tuesday, February 3, 2009

Total Confusion

Last week we had the ‘budget’ which consisted of ‘vague statements of intent’. The detail was entirely lacking. What was interesting was that the ‘Acting Minister’ was proposing a complete ‘U’ turn on the Mugabenomics of before – now we will have property rights, (but no going back on the land policy which looted most of the agricultural land for and behalf of the ZANU PF hierarchy) a free market economy, disband the pricing commission, pay everyone in whatever currency they like.

Over the weekend we learned that Tsvangirayi and his party have ‘unanimously’ ‘accepted the deal’ and if things go according to plan, he will be our Prime Minister in less than two weeks time. (Of interest, Tendai Biti is now suing The Herald for half a million US Dollars for publishing ‘lies’ about his stated opposition to Tsvangirayi).

Yesterday Gideon Gono gave a Monetary Policy Statement to the nation. More promises of property rights, a free market economy, more Zimbabwe dollar notes as he knocks off another twelve zero’s from the currency and blames everyone but himself and ZANU PF for the ‘disastrous economy’ that we now have. As usual, The West, the IMF and ‘colonialism’ come in for a bashing.

Everyone and anyone can now trade in US dollars – provided of course they obtain a licence from the Reserve Bank at a cost of $US 12,000 per annum in Harare. The biggest retailer in the city has to pay $US 12,000, as does the corner shop that sells knitting needles. Hawkers get away with a ‘one-off’ US$25 licence’. (The solution is of course to buy a hawkers licence and set up shop in front of your retail shop). Smaller towns get away with lower licence fees. Once again, just where these $US are supposed to appear from is a mystery and that the scheme is ‘highly inflationary’ is a given to everyone but Gono himself. He (and government) are simply trying to bring in the $US to pay the civil service.

Those of us who live in the ‘low density’ suburbs will be charged for local government services in $US; those in the high density suburbs will be charged in Zimbabwe dollars. But this pre-supposes that everyone living in the low density suburbs has access to $US and an FCA account with the bank.

The MPS runs into 200 pages – more statements of intent – not much on the ‘how’ it will be done. It is a most depressing document, the first 25 pages of which are devoted to telling the long suffering public that Gono is a hero; everyone else is a villain. He decries ‘corruption’ yet he is at the forefront of it all.

What was a mess before is now a complete mess. The banks haven’t a clue what they must do to make things ‘work’. Neither does the business community. No doubt it will be some weeks before we can see the light of the monetary day. By then there will have to be some retractions, some changes, and probably some ‘no going back’ statements.

And where does Tsvangirayi and his MDC fit into all this? The ‘activists’ are still being held in captivity – somewhere. A story I heard today is that some Non Governmental organisations are still being harassed by the CIO and have had to close their doors to ensure that staff are not ‘kidnapped’. If Tsvangirayi wants to win some political capital he needs to act very, very soon or his credibility will be gone in a flash and a blur.

He needs to get his people freed from captivity, he needs to get rid of Gono very, very quickly and establish a monetary environment that creates opportunity and investment and then, somehow, he must restore law and order.

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