Friday, February 27, 2009

See how they have all become US dollar-crazy

February 25, 2009
By Sibangani Sibanda
I FIND it interesting that, just days before the Government of National Unity (GNU) is formed in Zimbabwe, a self proclaimed government whose declared and much vaunted defense of Zimbabwe’s “independence and territorial integrity” is well documented should, at the stroke of a pen, render Zimbabwe’s national currency obsolete.
In a move that appeared calculated and deliberate, a budget, presented by an acting Minister of Finance whose financial credentials are questionable, to say the least, is tabled before Parliament, effectively “dollarising” the Zimbabwean economy. After all, we are told, this is what we have wanted.
The new Prime Minister and the new Finance Minister find themselves inheriting an economy that has just been turned on its head!
Part of the rationale behind allowing every body to trade in foreign currency was that the limited licensing of wholesalers and retailers had been such a success that prices had actually started to come down. That is true. But it is also true that competition in these sectors played a major role in controlling prices. Zimbabweans, long used to buying whatever they can get, suddenly had a choice. Supermarkets that were quick to respond are doing brisk business and their new found buying power means that they can negotiate better prices with their suppliers!
Unfortunately, the new dispensation now allows even the inefficient, mismanaged and much plundered state monopolies to also trade in foreign currency in a “liberalized” environment! They have been allowed to charge what are called “economic” prices in a market in which they are the only players! There is no obligation on their part to actually provide the services that they are charging for either.
Our telephones at home, for example, have not worked for a year, but we still pay rental on the lines, fearing that failure to do so would mean that we get cut off completely and may find it difficult to get reconnected. Now we have to pay those rentals in foreign currency, although I have been told by TelOne, the service provider, that there are no immediate plans to fix our telephones!
At the office, we had the ludicrous situation of the Zimbabwe National Water Authority (ZINWA) - which I thought had ceased to exist - coming to cut our water supply off for non payment. We have not had running water for several months! In any case, our landlords advise that all bills were paid on time. The problem may be in the record keeping of our service provider!
But try telling that to a spanner wielding operative whose only mandate is to shut you down!
The enthusiasm with which these organizations are suddenly chasing payment is surprising, considering that, for years, part of their problem was that they did not collect debts effectively even at a time when they were actually providing services. Most surprising, however, are the levels of charges they are levying for their non existent services. Not only are their charges way above charges elsewhere (TelOne, I understand, is charging US$0.30 per unit); they are far beyond most Zimbabwean pockets. People who are fortunate to make a couple of hundred American dollars a month are finding themselves faced with bills of several hundred – sometimes running into over a thousand - American dollars.
At a time when most people’s life savings in Zimbabwe dollars have reverted to being the paper that Gideon Gono printed on, most Zimbabweans are now not able to afford basic services like telephones, electricity, water, medical aid and so on. Trying to pay those bills means that there will be no money for food, bus fares, school fees – teachers are demanding two thousand American dollars per month – hospital fees and so on. What are the chances that the state monopolies will be able to collect? It seems to me that in their rush to try and recover losses from years of mismanagement and theft, they have pitched their prices at levels where people will not pay not because they are protesting at the high prices (which Zimbabweans never do anyway), but because it is not possible for them to pay.
But why would a government that, for years has obsessed over price controls and affordability of services suddenly let go and liberalize even more than the Western Capitalists that they so hate? I think it is because they want to show that price controls work. They want to gain political capital from the perception that the new government has “embraced” the policies of the Movement for Democratic Change and “look how much poorer you are for it”.
I have decided not to pay those bills. I, like many others, will get cut off and Zimbabwe will go back more than a hundred years, or the parastatals will come to their senses.

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