July 25, 2007

Commandist measures tried in bid to bring back goods / 5.000 business managers arrested

The Zimbabwe government has been extending commandist economic measures in a bid to bring down inflation and ensure there are goods to buy. But the revival of parastatals and subsidies for failing businesses will not be accompanied by measures to boost production, and only government economists are predicting a fall in inflation as a result.
In addition President Robert Mugabe this week said that more money would be printed to boost service delivery by ministries, repeating a now regular cycle by the central bank.
"We are at war", vice president Joseph Msika said as it became apparent some shops had stopped restocking following the imposition of sweeping price controls. "We will not allow shelves to be empty", he added.
The government has set aside ZD30 billion (US$214,000) to revive the defunct State Trading Corporation to run firms that have either collapsed or were seized. The ZSTC is to work alongside the state Zimbabwe Development Corporation (ZDC) to take over companies engaging in 'economic sabotage'.
The measure runs in tandem with the government's June 27 threats to take over a majority share in foreign businesses in Zimbabwe.
Nearly 5,000 business executives and store managers have been arrested since Mugabe launched his price crackdown four weeks ago. Many shop shelves are now bare of basic commodities like bread, sugar, margarine and the staple maize-meal. But the government has relaxed price controls on some items such as bread and cooking oil. Farmers are being forced to sell at low prices their meat products and cattle to the Cold Storage Commission (CSC), designated the sole distributor of meat products to butchers. (-)

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