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Zimbabwe's Ruined Economy Signals End for Mugabe

By Ian Bremmer

Robert Mugabe may finally be losing his grip on Zimbabwe's throat. The accelerated decline of what's left of Zimbabwe's economy might soon leave the embattled president without the cash to pay off those on whom his political survival will depend. As prices spike and waves of Zimbabweans flee the country in desperation, the inner circle of his ZANU-PF party may finally have little choice but to push him aside.

The 83-year old president, in power since 1980, is unlikely to go gracefully. He vows to seek another five-year term in elections scheduled for March. Yet, across his country, high inflation has become hyperinflation. To this point, Mugabe's government has been able to collect taxes and maintain the president's patronage network, buying the loyalty of the army and police. ZANU-PF officials have been able to feed their most useful constituents.

But official estimates now set inflation rates at around 4,500 percent. The real figure is almost certainly much higher. The director of the International Monetary Fund's Africa department warned on July 31 that the figure could reach 100,000 percent by year's end. Prices for consumer goods change several times a day. Meat, produce, eggs, bread, cooking oil and soap have become precious commodities.

Officially, one American dollar buys 250 Zimbabwean dollars, but the black market rate is often 1,000 times higher. A typical pensioner is provided about 6,000 Zimbabwean dollars per month. In Harare, Zimbabwe's capital, a loaf of bread now costs between $Z30,000 and $Z40,000, a pack of chewing gum around $Z15,000.

On June 25, the president launched "Operation Slash Prices," ordering that prices for all goods and services in the country be cut in half. As many as 2,000 vendors, unwilling to sell their entire inventories at a loss, have reportedly been arrested, including dozens of senior-level company managers. Others have simply closed their doors. Much of the country has resorted to barter.

Many of those who are able now drive into South Africa for supplies. By some estimates, as many as 3 million Zimbabweans have crossed into that country and remain there as refugees. South Africans living along the border complain that the human flood has intensified sharply in the past few weeks. Falling life expectancy and the flight of the desperate may well have reduced Zimbabwe's population by more than one-third since the most recent census was taken in 2000.

A gasoline shortage has restricted both automobile traffic and public transportation. For many, the commute to and from their jobs now takes hours. Some walk. Others have stopped showing up for work. If they can afford it, Zimbabweans now buy beans labeled "proudly made in Zambia." A decade ago, Zimbabwe fed Zambians. This indignity reminds them -- if they need another reminder -- how far they have fallen.

The enterprising few profit from black market transactions, but other criminal acts are more violent. There have been several recent cases in which uniformed police have robbed and murdered white Zimbabweans entering their homes. Faced with such anarchy, increasing numbers of people are forced to give up on law and the government, fending for themselves in a scramble for the country's last crumbs.

Robert Mugabe was once lauded at home and abroad for his moderation. In 1980, he helped dismantle Ian Smith's oppressive white-led regime. Once Rhodesia had become Zimbabwe, Mugabe charted a gradualist course toward black dominance of the new country's economy. But by the late 1990s, Mugabe's failure to tackle unemployment and lift millions of black Zimbabweans out of poverty threatened his political survival. To rebuild popular support, he ordered a large-scale state seizure of white-owned land.

The move produced disaster. Farmers who had cultivated the land for generations fled, passing ownership to squatters with little idea how to manage it. Zimbabwe's economy, once among Africa's strongest performers, contracted by more than 30 percent. The arbitrary enforcement of property rights for political purposes drove investors from the country in droves. Inflation spiraled, the stock market plummeted, and the economy is now in ruins.

Mugabe has survived many crises. He's now working frantically to secure a temporary bailout from Libya and other countries that share his anti-Western worldview. If he fails, the government will likely nationalize parts of the country's lucrative mining sector to collect foreign exchange revenues and wring the last drops from the country's natural wealth. New loans might allow him to avert a complete collapse and continue subsidizing those within the country who can ensure his presidency limps along for another several months.

But this time, things may truly be different. The fast-growing wave of refugees may soon force South Africa's President, Thabo Mbeki, to drop the "softly, softly" approach to relations with his old anti-apartheid comrade and finally deprive him of his most valuable political cover. Mbeki's mediation efforts to bring ZANU-PF and the opposition Movement for Democratic Change to political compromise may finally turn toward post-Mugabe planning.

Less sympathetic foreign leaders are turning up the heat. British Prime Minister Gordon Brown is working to build pressure on other African leaders to turn their backs on Mugabe, warning that he will not attend an upcoming summit of European and African heads of states if the meeting's Portuguese host invites the Zimbabwean dictator.

Another ominous sign for Mugabe: Several local newspapers have begun publishing stories that he'll be gone within the next several months -- an explicit sign of defiance. Even some of the president's longtime supporters have publicly called for his retirement.

Mugabe will not go without a fight. He has accused Britain of waging a "terror campaign" against his country. When Zimbabwe's Roman Catholic archbishop, Pius Ncube, called during a recent trip to South Africa for foreign intervention to remove Mugabe, a state-controlled newspaper published photos of him that the president says expose Ncube as an adulterous hypocrite. To keep track of his critics, Mugabe has approved a law giving Zimbabwe's security services the right to tap phone calls and monitor e-mail and faxes as they deem necessary.

But the risk for southern Africa of complete chaos in Zimbabwe may finally have become too great. When Mugabe goes, it will probably be the ZANU-PF elite that pulls the trigger. The president's lieutenants have hesitated up to now because no viable presidential alternative has emerged from among them. They may soon decide that any alternative is more likely than Robert Mugabe to pull Zimbabwe back from the brink.

Ian Bremmer is president of Eurasia Group, a political-risk consultancy and the author of "The J Curve: A New Way to Understand Why Nations Rise and Fall,". He can be reached via e-mail at

(c) Tribune Media Services, Inc.

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