Having dinner with friends on Monday night one of the other guests commented that the “dollarization” of the economy was just enforcing corruption. The previous week he’d had the electricity cut off for non-payment so he did what we all do. On arriving at the utility’s offices he was ushered in ahead of the queue and a solution was quickly found. For $20 and a lift to his property the power was soon restored. ZESA, the utility, has to accept Zim dollars. As a result the person in the office (others were still on strike) was being paid in local dollars and earning the equivalent $1 a month. No surprise then that he was keen enough to go to work and spot those coming in who were willing to “make a plan”. We were all sympathetic.
Enforcing corruption
18 02 2009Comments : Leave a Comment »
Tags: corruption, dollars
Categories : News & Various
In the news
7 02 2009It seems that Barack Obama will get most of his economic rescue package through the Senate. Nobody knows for sure if it will work but they are going to have to give it a try even if it does create a trillion dollar budget deficit. The Zimbabwe Government has not been paying attention and seems determined to kill off the economy before it can even start. In the process they have also removed another 12 zeros off the Zim dollar; that makes it 28 in just over 2 years. How they will ever restore faith in the local currency is beyond me!
Yesterday, chatting to my local pharmacist, I was told that the Reserve Bank officials had been calling to see that businesses in the area were licensed to deal in real money. Most formal outlets will be charged 12000 USD a year, payable as $1000 a month. This is certainly beyond my limits and I gather that a lot of businesses have simply stopped trading. Informal traders (on the street) will be charged $25 a year so perhaps there will be surge of vendors outside more formal outlets.
Italy is all in a tizzy over the ruling by their highest court that the woman who has been in a vegetative state for the last 17 years be allowed to die with Berlusconi trying to halt the process and the president refusing to sign his decree (as unconstitutional). The Vatican, predictably, in some absurd right to “life” issue would like her to carry on in the vegetative state for as long as modern medicine can keep her that way. This would undoubtedly be a very long time. Withholding sustenance until she dies would not be cruel – she essentially died 17 years ago, but it would certainly be a release for her family from a person they no longer know. The chances of a spontaneous recovery are close to zero. I have it written into my will that in case I enter into such a state with no chance of recovery I be allowed to die. A lawyer pointed out a while back that it has to be a living will so I’d better change it sometime.
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Tags: budget deficit, economic rescue, living will, senate, Zimbabwe Government
Categories : News & Various
Nature of the beast
3 02 2009It made it a little easier after the breakdown on the road to come back to a house that was actually lit up after another 4 day power cut. I dread storms. This one had come through on Thursday and had hit with some force; 20mm of rain in 15 minutes and wind to match. The power lines behind my office had been arcing onto each other but amazingly did not burn through but somewhere else a tree had come down or so I presumed. Anyway, I did get to hear the news before going to sleep and I heard “As Robert Mugabe prepares to share power…” – some chance. After 28 years holding total control he is now going to share? “… SADCC countries are wondering whether to appeal for a complete lifting of sanctions which will make life easier for Zimbabwe’s people” the newsreader continued. I have harped on about this elsewhere and it’s worth repeating; the sanctions are targeted against the ruling party elite and their cronies. A quick trip into town will show that sanctions have little or no effect on the majority of people. Want a Benz? No problem sir! Imported double door fridge with in-the-door ice-maker? Certainly madam! The current financial mess is entirely of the ruling party’s doing.
Also on Thursday there was a budget (we seem to have budgets presented several times a year here). This one was a little different because it was presented in US dollars, probably because no-one understands the words required for the equivalent in local dollars. An uncommon amount of common sense was shown and essentially everyone is allowed to trade in US dollars or any other currency now. This had one of my customers all cock-a-hoop and amazingly optimistic. He seemed to think that it was all but over now and we would see the long promised “turnaround” in six months or so. And yes for a moment I was caught up in his infectious mood. But it still does not answer the question about where the cash is going to come from. We are still a nation of traders and it is going to take a massive cash injection to get us back on our feet. This might be bad timing given what’s going on in the financial world. Yes, he was right on a number of concerns; the money traders will be looking for work, those “farmers” who were benefitting from fuel and fertilizer handouts are unlikely to have much to trade (one was trying to sell him 10t of urea and did not even know what it was for) but we have a very, very long way to go. Forgive me for being sceptical but we have promised this all before.
Austin at the gym is a fairly reliable fellow when it comes to the economic barometer; as well as being a sports doctor he likes to keep abreast of what is going on and the nature of his business keeps him in touch with a lot of opinions. Chatting to him yesterday brought me “up to speed”. Apparently the price for dealing in real money is that we all have to open an FCA (foreign currency account) at the bank and deposit all our takings there. Right. In the past the government has plundered these FCAs regularly and there are still companies owed millions of US dollars – the money is in the account but somehow they just cannot get hold of it. A large proportion of our budget will be funded by a revised Customs and Excise Act. Do they think that the customs officials at the various borders who have been pocketing some R1000 (about $100) a day will now enforce all the necessary duties so that maybe, just maybe, they will get a cheque from the government for say $200 at the end of the day? The list goes on and on – all the incredible lack of forethought that we have come to expect from this government. It gets better though. The MDC with whom ZANU-PF are supposed to be sharing power (it must come about within the next 8 weeks in order for international funds to be released) are supposed to be getting control of the finance ministry and as far as they are concerned this is all just a bit of paper which they may choose to use, adapt or tear up as they see fit! So don’t hold your breath anyone…
Business has picked up quite considerably for me over the past week. Whether this is some sort of optimism in the future I am not sure but it does raise a bit of an issue for me. I will have to spend money that I don’t have in the business for the input costs and to replace worn out equipment. Will I get it back? If this is really a light at the end of the tunnel I don’t mind doing it but is it?
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Tags: customs and excise, FCA, government, real money
Categories : News & Various
Printing real money?
24 01 2009Some outlets in Zimbabwe are licenced to deal in forex (foreign currency). For them it’s been a boon and although they are pricey at least we have been able to get most things. The price they have to pay is a 7% levy on turnover to the revenue authority, and yes, they had to buy the licence too, often for as much as US$20,000. Now they might be a little worried. The government, in an attempt to placate the civil service, will start paying them in coupons redeemable at the aforementioned outlets. These companies will then be allowed to deduct the value of the coupons from the 7% levy. Does this mean that the government is effectively printing US dollars?
- If there was enough US dollars coming in the government would be able to pay the civil servants itself.
- Does this mean that the government does not trust its own collection system?
- Are they just finding a cheaper way to administer their own wages?
- I can promise you it will be abused!
The local press has been abuzz with the Reserve Bank governor’s plan to “randify” the economy i.e. link it to the S. African rand. I could never see this happening unless the South African REALLY wanted to devalue their currency though I was told today that it was scuppered by COSATU (Congress of South African Trades Union). They said only if Bob agrees and is seen to share power. That of course will not happen.
I heard most of this today at work from various customers. One said “I’d love to believe this but..” and then recounted how she’d heard that the army was “promising” a coup within the next month. It’s almost certainly just a pressure tactic – I really don’t’ think that even our army would advertise and impending coup!
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Tags: COSATU, devaluation, military coup, rand, South Africa
Categories : News & Various
Nation of Traders
11 01 2009Just before Christmas I went on a bit of a shopping spree for meat; it’s expensive here and not something I do that much of. Besides, cooking for oneself is tedious at best. Amongst the usual meats on display were chickens. Not ordinary chickens these, these were from Uruguay. Things are bad when we have to import chickens from South America. Not so long ago we produced plenty of our own (we were a net exporter of food stuffs), now we are just a nation of traders.

Uruguay chicken
The joke used to be that the world financial crisis was not affecting us, after all, what economy did we have to be affected? It’s not that simple. ZimPlats, a majority South African owned consortium that is mining one of the world’s richest deposits of platinum some 50km out of Harare has mothballed its second phase expansion and quite a number of other mines have closed operations. The rest of the economy has collapsed without any external assistance.
I bought the chicken as much because I wanted to eat it as just to buy a South American chicken and post the evidence here. Driving back to work I went past a pickup truck selling bags of potatoes. The one on the roof advertising the product was labelled in Portuguese (I was driving and needed to watch the road). The potatoes were definitely not local quality; I am familiar with the potato scab and virus problems that we have in this country and these were massive and clean. So they were either South African potatoes destined for a Portuguese speaking market or from a Portuguese speaking country – which would exclude Mozambique and Angola (too hot). Brazil? Portugal? I guess I should have stopped to satisfy my curiosity.
I had an email today from a friend “spreading the word” that schools will remain closed for another 2 weeks (currently they are on Christmas break). It does not affect me of course as I have no progeny to educate but it does have interesting ramifications. The government teachers, well those that are left, are demanding to be paid in foreign currency or they will not return to work. Now those whose children go to goverment schools have up to now been able to pay in local currency – so are they going to have to pay in real cash? Private schools have been charging in real money for a while now. This is going to be REALLY interesting!
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Tags: chicken, foreign currency, government teachers, traders, world economy
Categories : News & Various
Getting on a bit
10 01 2009On Monday night I attended the 21st birthday party of my cousin’s eldest daughter. I must be getting on a bit as it’s been a few years since I went to a 21st and it must have been one of my contemporaries. Still, it was an interesting evening’s entertainment away from the worries of day-to-day existence in Zimbabwe.
My cousin is one of those people who has done really well in the inclement business environment of Zimbabwe so expense was not an issue. All number of beer brands were piled high in the central bar and he’d gone to some trouble to find his favourite Scotch. We did have a small reminder of the usual hassles when the power went out briefly but otherwise it was a very social event. Us oldies were of course in the minority but it was interesting to see how the youth of today party. Actually, not so different from “my day” and even a lot of the music was the same! They were much better dressed but then I was at university when I went through that era so jeans and T shirt were the dress of the day. I asked my other cousin if we looked that young at 21 and she said, yes, probably!
The rest of the week has been taken up by the usual survival issues, namely a power cut emenating from the same storm that put the power off at the party. Eventually on Thursday I took the contents of my deep freeze over to an absent friend’s house where they have some spare storage space only to get back home to find the power on again. It took another day to come back on at work and in the mean time, we were relieved of some 6000 seedlings. Not slow are the criminal element. I can cope with the loss of the seedlings but the trays in which they are grown are prohibitively expensive. Aluta continua.
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Categories : News & Various
Silly Season
30 12 2008The Christmas/New Year period is often called the silly season in Zimbabwe. People get silly about it; pay ludicrous prices and behave badly. It seems that the silly price part of it has become pretty much embedded in people’s psyche. Yesterday I went in search of some pocket diaries (plain old paper type – we don’t have much use for PDAs here), desk planners and lawnmower blades though the lawn has probably got beyond even my appropriate technology robust mower. The desk planners were not available at any price but at the first outlet I tried they wanted US$55 for three of the diaries! I told them what I thought and declined. The second bookstore I went to had nothing much of anything spread out over a large area.
I did manage to buy three lawnmower blades for $3 each (probably worth about 50c) which was better than another hardware store that wanted $30 for a set with the bolts included. I got caught in a thunder shower for my pains and had to wade back to the pickup through 20cm of water. At least rain at this time of year is not cold. The power was off for the remainder of the day – it has been off more than on since the “Festive” season started. I guess that the lawn will just carry on growing for a bit.
I was chatting to one of my customers this morning and he mentioned that a friend of his had come back from South Africa just before Christmas. Stopping off to buy last minute items in Musina, the town just across the border in South Africa he was struck by how empty the shops all were; Zimbabweans had cleaned them out. I also know that a number of South African companies have set up warehouses in Louis Trichardt, a medium sized agricultural town 100km across the border and a popular shopping point for Zimbabweans. What incentive, my customer wondered, do they have for a resolution to the Zimbabwean crisis?
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Tags: Christmas, New Year, South Africa, Zimbabwe crisis
Categories : News & Various
Musings
29 12 2008I quite often wake up in a black depression. I suppose it’s the stress; the overwhelming presence of a very murky future. I have pretty much accepted that my business is going to close in the next 6 months or so and I don’t have any clear alternatives – a Plan B to use the cliche. I am not totally without alternatives though. I do have a British passport but lying in the misty pre-dawn before my alarm went off rather reminded me of what I least liked about living in the UK some years back – the weather. The constant greyness, the damp and cold. Getting out five pounds in 50p coins and desperately trying to stay warm over the weekend by getting into bed with all my clothes on. Not a lot of fun but at least then I was working towards a goal; getting out of there and going travelling on what turned out to be the best experience of my life! The depression doesn’t seem to last long (I once asked Austin, the sports doctor at the gym, if he had any happy pills. Lots he replied, which one did I want? I said the whole f…. lot would do for starters.) and a short spell on the rower soon cleared the mind a bit and started me thinking about less depressing topics.
I suppose like quite a lot of Zimbabweans I wonder what it would take to get this country back to a resemblance of a functioning state (by U.S. standards and probably a few others we are a failed state). Where would one start? Money, health, infrastructure, rule of law, education the list is long. Co-incidently I am reading a book by Ryszard Kapuscinsky entitled The Shadow of the Sun about his 40+ years as a Polish correspondent in Africa. Most of the time he does not try to analyse, he simply records his experiences in a variety of countries mostly in the northern hemisphere. In talking to various intellectuals (who mostly don’t live in Africa anymore) he notes the following:
“… the strength of Europe and of its culture, in contrast to other cultures, lies in its bent for criticism, above all, for self-criticism – in its art of analysis and inquiry, in its endless seeking, in its restlessness. The European mind recognizes that it has limitations, imperfections, is skeptical, doubtful, questioning. Other cultures do not have this critical spirit. More – they are inclined to pride, thinking that all that belongs to them is perfect; they are, in short, uncritical in relation to themselves. They lay the blame for all that is evil on others, on other forces (conspiracies, agents, foreign domination of one sort or another). They consider all criticism to be a malevolent attack, a sign of discrimination, racism etc. Representatives of these cultres treat criticism as a personal insult, as a deliberate attempt to humiliate them, as a for of sadism even. If you tell them that the city is dirty, they treat this as if you said that they were dirty themselves, had dirty ears, or dirty nails. Instead of being self-critical, they are full of countless grudges, complexes, envies, peeves, manias. The effect of all this is that they are culturally, permanently, structurally incapable of progress, incapable of engendering within themselves the will to transform and evolve.”
It is very noticeable at the moment just how keen the Zimbabwe government is to place all the blame everywhere else. A lot of it is just a cynical buying of time while they look for something else to loot but a fair amount is heart felt. This attitude of criticism being a bad thing (I come across it all the time) is not going away any time soon and only education will solve it but that of course is a long term solution.
He also quotes a Tanzanian intellectual – “Africa needs a new generation of politicians who know how to think in a new way. The current ones must depart. Instead of thinking about development, they think about how to stay in power”. This might be stating the obvious but even in relatively enlightened political climate such as South Africa’s it is heavily entrenched. Witness the recent vote by parliament to disband the specialist police unit The Scorpions which was set up specifically to investigate political corruption!
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Categories : News & Various
An attitude problem
23 12 2008Today was pay day and I was anticipating a bad mood. I was not disappointed.
The labour are paid $35 for a full working month. Part of this is in the form of essential food and goods; maize meal, cooking oil, soap and sugar. It involves a fair bit of foraging. There was also a Christmas bonus of some orange cordial, sugar and salt. Christmas bonuses in this country are incorrectly perceived as a right and on a number of occasions my staff have had to be told that it is NOT a right and they should be grateful for what they are given. My company is doing badly; orders are nearly non-existent and the greenhouses are dilapidated due to the lack of funds. Nevertheless I got a delegation asking for a bigger bonus as the neighbouring company owned and run by my landlord had given the labour a thirteenth wage. I held onto my temper, just, and told them that they should be grateful for what they were getting as a significant proportion of the population were starving. They did not see it that way and no-one has bothered to come and say thank you. I can’t help feeling that this is a filter down attitude from the top echelons of government where everyone is out to get as much as possible.
Quote: “I will never, ever, ever surrender. Zimbabwe is mine!” Robert Mugabe as heard ranting on a BBC radio report recently. I suspect he’s been studying Gollum in one of the Lord of the Rings movies.
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Tags: bonus, Mugabe, ranting, wages
Categories : News & Various