Mugabe Decrees No More Price, Wage Increases

Zimbabwe’s misery continues, and the policies that brought the nation its suffering are getting worse. With inflation running at an estimated 7,600% per year (yes, seven thousand six hundred percent), President Robert Mugabe has decided to stop it by presidential decree. According to the state-run Herald newspaper “No one in private or public sectors can now raise salaries, wages, rents, service charges, prices and school fees.” If this can work, why didn’t His Splendiferousness order this before now?

The decree is entirely Mr. Mugabe’s doing, as he didn’t even bring it before the national parliament for approval beforehand. Under the current set up, it can remain in force for 6 months before it needs the legislature’s blessing. Any increase has to be approved by the National Incomes and Prices Commission, which is headed by President Mugabe.

According to the Herald, “The net effect of the charges will be to push inflation down since all increases will be by less than the current inflation rate.” Clearly, no one at the paper passed Econ 101. When prices are frozen or rolled back, store shelves empty. Decreeing an end to inflation is less sensible than old King Knute ordering the tide to go out (and to be fair, he only ordered it to prove to his courtiers that there were limits to his power). People start dealing more and more on the black market. The economy is effectively driven underground while officially supplies dry up.

For example, The Guardian reports, “Lobels Bread, the country's biggest bread producer, has only two days’ supply of wheat and has been forced to cut daily production to 40,000 loaves from 200,000 loaves in May, Lemmy Chikomo, the firm's operations director, told state media.” For the record, Zimbabwe used to export grain to the rest of southern Africa. It isn’t the land; it’s the government. Which is why Morgan Tsvangirai, leader of the biggest faction of the Movement for Democratic Change [MDC] was arrested after visiting shops last month to spotlight the problem of inflation. “He was charged ... with disorderly conduct and he was made to sign a warned and cautioned statement,” Mr., Tsvangirai’s lawyer, Alec Muchadehama, said.

However, this might just be the moment when Mr. Mugabe’s house of cards begins wobbling. It is hard to see the military sitting on its hands when its paychecks stop growing. One may expect special treatment for the army from the National Incomes and Prices Commission, or one may expect reports of plots to remove the president. One doesn't dare hope that such plots would succeed.

© Copyright 2007 by The Kensington Review, Jeff Myhre, PhD, Editor. No part of this publication may be reproduced without written consent. Produced using Fedora Linux.

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