Chaos in Zimbabwe price stand-off

NATIONAL Bakers Association also agreed to cut the price of bread by half as long as millers reduced the cost of flour

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LONG-SUFFERING Zimbabweans faced chaos in shops and businesses Thursday as the government vowed to enforce drastic price cuts of around 50 percent.

Managers addressed chaotic lines of shoppers at check out counters who were demanding clarification on prices.

Most goods, including bread, meat and milk were not reduced. In one store, the same brand of local beer was marked at two different prices on separate shelves.

The cheaper beer was delivered earlier in the day, after the partly government-owned National Breweries announced a 50 percent drop in their charges, store workers said.

State radio said late Thursday the independent National Bakers Association also agreed to cut the price of bread by half as long as millers reduced the cost of flour, enabling bakers to stay in business.

Chain store executives were huddled in management meetings and held talks with government officials through the day.

"In a nutshell, we are being told to sell a product for less than we paid for it. It means we won't be able to replace it when existing stocks have gone. It makes no sense, ask any school arithmetic class," said one executive.

He asked not to be identified in case of being accused of defying the state and facing arrest.

The government has warned business and shops a crack unit of security personnel — seen to include secret police agents — has begun monitoring prices and will have powers to enforce price cuts that include powers of arrest.

Uniformed police armed with automatic rifles and a machine gun were seen questioning one harassed store manager in northern Harare on Thursday.

On Tuesday, the government ordered sweeping reductions on a range of goods. Gas stations were told to slash the price of scarce gasoline by up to 70 percent. Except for a handful of gas stations licensed to sell petrol to holders of hard currency coupons, most regular gas stations were closed Thursday.

Industry Minister Obert Mpofu said in an announcement Thursday the government extended price controls to all goods and services in addition to those of basic commodities listed Tuesday.

He did not specify new reductions on particular goods but said the mandate of a prices monitoring task force was extended across the board to guard against profiteering and overcharging.

Official inflation is given at 4,500 percent, the highest in the world. Private financial institutions estimate real inflation to be 9,000 percent.

New official inflation calculations are expected to include reduced prices even if they are not fully enforced or if quoted goods disappear from the shelves.

President Robert Mugabe, addressing a state funeral on Wednesday, accused businesses of profiteering and raising prices to foment civil unrest in support of a Western-backed campaign to oust him through "regime change."

He repeated threats the government would seize businesses and mines he said were in "the dirty game" of regime change and broke exchange control laws by withholding hard currency earnings from state coffers.

The nation's worst economic crisis began after the often-violent seizures of thousands of white-owned commercial farms disrupted the agriculture-based economy in 2000 in the former regional breadbasket.

The meltdown led to acute shortages of food, hard currency, gasoline, medicines and most basic goods. Up to four million Zimbabweans, one fourth of the population, are expected to need food handouts before the middle of next year, U.N. officials estimate. - AP

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