Runaway prices hit hard in Zimbabwe

Runaway prices hit hard in Zimbabwe

LUXURY: Prices now beyond the reach of many ordinary Zimbabweans

• Stanbic predicts economic recovery

• Standard Bank: 'Gono targets achievable'

• Zim inflation deeps below 450pc

• Zim reports 78pc drop in inflation

• IMF team on surveillance mission in Zim

• Makamba nabbed in corruption blitz

• Chiyangwa arrested

By Agencies

PENSIONERS buy a single egg when they shop. School numbers are falling because parents can't afford to feed their children, let alone educate them. One desperate man who couldn't make ends meet chose to pay with his life.

Runaway prices are changing, perhaps for generations, the way people live and die in Zimbabwe, a once relatively prosperous nation now ravaged by the world's highest inflation rate.

Economists and international donors say mismanagement by President Robert Mugabe's authoritarian regime -- especially economic disruption related to his controversial policy of seizing white-owned farms -- is behind an annual inflation rate now close to 400%. The government points the finger elsewhere, at culprits including falling commodity prices.

What's beyond dispute is that the human cost continues to rise.

Zimbabwe once boasted one of the best education systems in Africa. But enrolment is down 30% since 2000, according to the United Nations Children's Fund, because parents are struggling just to feed their children, increasing numbers of whom are forced to work, beg or turn to prostitution.

Mildred Chizema, a secretary, said she and her two children live on what she calls the "zero, zero, one diet" -- no breakfast, no lunch, just one evening meal. She dreads staying home on weekends.

"The kids just gaze at me hoping for something more to eat," she said.

She earns the equivalent of about R450 a month. The Consumer Council of Zimbabwe estimates an average family of four needs at least double that to provide for an adequate diet, basic shelter, clothing and food.

Salaries and pensions are being left behind by galloping prices.

Zimbabwe's official inflation rate was 394,6% in June.

That's down from a peak of 600% earlier this year but remains the highest in the world, with Turkey a distant second at 60%, said Harare economist John Robertson.

As recently as 1997, inflation in Zimbabwe was 18%.

With the help of white-owned commercial farms, Zimbabwe prospered and developed into a regional breadbasket after Mugabe led the country to independence from Britain in 1980. But the economy began to falter in the late 1990s and has teetered near collapse since 2000, when political violence and often-violent farm seizures disrupted agriculture and tourism.

The land seizures, coupled with erratic rains, have crippled Zimbabwe's agricultural sector, which once accounted for a third of its foreign-currency earnings. Unemployment is estimated at 70%.

The government blames declines in commodity prices, corruption in the private sector and negative reporting by the international media, which it says has led to the destruction of tourism.

Authorities say they are fighting hyperinflation by cracking down on corruption and black-market currency sales. But analysts predict things will get worse unless the government can reduce spending and reassure spooked investors.

"We cannot expect price increases to decline," Robinson said.

"With continuing foreign currency shortages, there will also be scarcities of goods to drive up prices."

The very young and the very old are suffering the worst in Zimbabwe.

Doctors report increasing numbers of retirees are suffering from vitamin deficiency because they can't afford fruit, a basket of which can cost more than a monthly pension.

Those who retired a decade ago -- when $1 bought Z$7 instead of Z$5 300 today -- have seen the value of their pensions decline at least twentyfold. Food stores sell a single egg to those who can't afford a carton -- for about Z$1 000, or a fifth of average daily income in Harare.

A women's tennis club in Harare has begun delivering free meals to impoverished pensioners.

One of the beneficiaries of the project, a widower, shot himself earlier this year. He had worked for the government for 40 years planning public works projects.

"After a long working life, he couldn't go on. His pride was hurt," said a family friend who asked not to identified.

Other countries such as Argentina that have experienced hyperinflation brought prices down through fiscal discipline and devaluation, said Robinson, the economist.

But Zimbabwe remains deep in the hole. It has been $290-million in arrears to the International Monetary Fund since 2001 and risks being expelled next year. The government has offered to pay $1,5-million a month.

Bride price, a custom in traditional African marriages, has soared to millions of Zimbabwe dollars in cash and gifts.

A driver with a Harare legal firm paid Z$1 000 to his bride's parents soon after independence from Britain in 1980 -- a considerable sum then.

"She gets angry when I say today she is only worth four slices of bread," he said. -- Sapa-AP
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