Vote may drain Zimbabwe’s finances

Times Staff Writer

Zimbabwe’s economy is so destitute that just the cost of running Saturday’s elections will lurch the nation toward bankruptcy.

Once a regional economic powerhouse and food exporter, Zimbabwe now relies on humanitarian food aid. Its towns and rural roads are lined with children in threadbare rags, or men walking miles, some of them barefoot.

With inflation running at 100,000%, President Robert Mugabe recently announced that prices would remain fixed at February levels. But after printing trillions of Zimbabwean dollars to fund a 700% pay raise for civil servants and gifts of cars and tractors to rural chiefs, the government has been unable to deliver on that promise. Independent economists say inflation has now risen to 200,000% and predict it could rise to a dizzying 500,000% by May.


Even just staffing the 9,000 polling booths puts a severe strain on government finances.

Mugabe’s desperate election spending spree could be his last, analysts predict. The financial implosion could be the beginning of the end for the 84-year-old president, even if he clings to power in Saturday’s presidential and parliamentary elections.

“This is yet to come crashing down on us. It’s a tsunami . . . waiting to crash down in the form of massively high inflationary pressures,” said independent economist John Robertson.

A decade ago, the money pumping through Zimbabwe’s economy was worth $350 billion. Now the nation’s money supply amounts to just $98 million, according to Robertson. “That amount of money is not enough for any important project for the country. If you were to build a shopping center, that would not be enough to finish the job,” he said.

The national debt, meanwhile, stood at 1.4 quadrillion (thousands of trillions) Zimbabwean dollars, up from 22 trillion in January.

Tony Hawkins, another independent economist, predicted that Zimbabwe would need an international rescue package within weeks or months.

“Mugabe, if he wins, would not be around for very long because the economy will force him out,” Hawkins said. “Mugabe is unable to negotiate that kind of package. The price of the rescue package will be for him to step down.”


Many have predicted Mugabe’s downfall as the country lurched into chaos in recent years, but he has proved a wily political survivor who delights in taunting and insulting rivals.

Mugabe, who has run the nation since it became independent in 1980, needs more than 50% of the vote to avoid a second round of balloting. His main rival, opposition leader Morgan Tsvangirai, has seen a surge in support, even in rural areas that are normally Mugabe strongholds.

The wild card is a former member of the ruling ZANU-PF party, Simba Makoni, who is hoping to attract enough backing from disenchanted ruling-party and opposition supporters to come out on top.

A recent poll of nearly 1,700 voters gave Tsvangirai 29% support, Mugabe 20% and Makoni 9%.

Mugabe has warned that he will not tolerate protests from the opposition should it lose.

Reports in recent days of 3 million excess ballot papers being printed have fueled fears that the government will rig the vote. European and American observers have been barred and many foreign media, including The Times, denied accreditation.

Mugabe has presided over the frightening economic collapse. The unemployment rate stands at 80%, education and health systems are decaying, and life expectancy is among the worst in the world. For women, it stands at 34 years and for men, 37, according to the World Health Organization.


Mugabe’s most ambitious policy professed to seek the redistribution of white-owned farms to impoverished black Zimbabweans, but the program begun in 2000 has mainly benefited his cronies and seen the collapse of agriculture, the country’s main source of export income.

Manufacturing shrank 46% from 1998 to 2006. Maize deliveries collapsed to about 11 million last year from 110 million tons in 2000.

In Harare, the capital, long lines of people snake out of banks and along the sidewalks. They waited for hours Thursday in the hope of getting hold of their remaining money.

The lucky ones walked off clutching packages to their chests that looked like bricks. They raced to shops to spend the cash before prices again shot up.

The most anyone may withdraw in a day is 500 million Zimbabwean dollars, about $10 to $12, depending on the exchange rate.

A civil servant named Iphraidge, 38, who got the 700% raise last week, waited in line fruitlessly for five hours, fuming that his wage, which was paid into the account Tuesday, was already being gobbled by inflation. He declined to give his surname, fearing dismissal or victimization.


Wellington, a bank clerk who earns about $37.50 a month, says basic foodstuffs are available only on the black market at exorbitant prices. He also declined to give his full name, fearing victimization.

A Tsvangirai supporter, he said he is filled with hope that the opposition movement leader will oust Mugabe. If Mugabe clings to office, he says, the economy is doomed.

“Everything will be bad: total collapse. He’s lost control of the economy. He’s totally lost control,” Wellington said. “The way I’m seeing it, he will go. People are angry. Even if he clings on, he will be thrown out.”

Makoni, a former finance minister who was thrown out of the ZANU-PF after announcing in February that he would run for president, has predicted that it will take a decade to sort out Zimbabwe’s economic mess.

Hawkins, one of the independent economists, said, “There has to be radical things like a new currency, a big increase in interest rates, removal of the price controls and the obvious priority: stopping the government spending.”