> Mugabe's destruction of Zimbabwe plays directly into Mbeki's fantasy of a single pan-African "nation" with its headquarters in South Africa
news.independent.co.uk
>>Rescue package for Zimbabwe would peg dollar to rand
By Basildon Peta in Johannesburg
Published: 10 July 2007
Southern African governments are preparing to offer President Robert Mugabe a dramatic plan to rescue the shattered Zimbabwean economy in exchange for political reforms.
As scores of business executives abandon their Zimbabwe bases, and others are threatened at gunpoint to implement price controls, the Southern Africa Development Community (SADC) has drawn up proposals in which the reserve banks of South Africa and Botswana would make their huge foreign currency reserves available to Zimbabwe.
The aim would be to stabilise the exchange rate of the Zimbabwe dollar and curb hyperinflation so that the country could buy foreign exchange and continue importing essential goods. The rand would effectively prop up the Zimbabwe dollar, which has become almost worthless. It would, however, be conditional on President Mugabe signing up to key reforms as part of negotiations between his ruling Zanu-PF party and the opposition Movement for Democratic Change (MDC), which were due to start at a secret venue near Pretoria yesterday.
Leaked news of the rescue plan comes amid growing alarm among political leaders in the region at the near total collapse of the formal economy in Zimbabwe. Witnesses interviewed from Harare yesterday said armed riot police were storming retail outlets and stores around major cities and towns, and forcing businesses to slash prices by half, sometimes at gun point. Representatives of a South African company listed on the Zimbabwe Stock Exchange are believed to have had an emergency meeting with the South African President Thabo Mbeki to plead for intervention.
At least 33 prominent business executives were fined after spending the weekend in jail for defying an edict to slash their prices by half. They were among more than 1,300 business people arrested for defying the edict imposed after the cost of nearly everything in Zimbabwe quadrupled in a week. The Zimbabwe dollar has depreciated sharply on the parallel market in recent days and inflation is officially pegged at nearly 5,000 per cent but calculated by private economists at more than twice that figure. Basic commodities like maize meal and cooking oil have completely disappeared from most shop shelves since store owners were ordered to roll back prices to those charged as of 18 June. Fuel supplies have also run dry after oil distributors were ordered to sell the commodity at half the price of importing it.
Retailers had been accused by President Mugabe of ratcheting up prices sharply to cause unrest among the electorate and instigate his downfall.
It is understood the rescue package, which has been drawn up by Tomaz Salamo, SADC executive secretary, would in effect give Zimbabwe's monetary control to the South African Reserve Bank.
Sources said it would entail extending the rand monetary area, which currently includes South Africa, Namibia, Lesotho and Swaziland.<< |
