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Zimbabwe in crisis

Marketplace Contributor Jul 9, 2007


Scott Jagow: There are few countries in worse economic shape than Zimbabwe. Inflation is around 4,000 percent. Many people blame corruption and mismanagement by Robert Mugabe’s government. Mugabe’s latest response is to force business owners to cut their prices or be arrested. Joining us is reporter Gretchen Wilson. She’s in South Africa. Gretchen, why is Mugabe doing this?

Gretchen Wilson: President Robert Mugabe says that high prices are a form of sabotage by the private sector to undermine his economy. So he’s ordered businesses to cut the price of goods by 50 percent or face nationalization. So right now government militias are reportedly going from business to business demanding that prices be slashed and more than 1,300 business owners have been arrested reportedly.

Jagow: These people that have been arrested, what are they saying?

Wilson: They’re saying ‘look we are buying a product at price X, say, so to make a profit we need to sell it at X plus 1 but what’s happening is that these militias are kind of going from door to door demanding that these places be opened and buying up all of these goods at the prices they’re setting themselves.

Jagow: OK they’re buying them up and then doing what with them?

Wilson: Well the theory is that they’re going to be hoarding these products so that if you want to have certain products you’re going to have to go to the representatives in your community who are linked with the government. And economists are now saying that by Friday there won’t be any food left in the country to buy and that gasoline is expected to be all dried up and out of the country by Wednesday.

Jagow: Is anyone outside of Zimbabwe helping out here?

Wilson: There’s speculation, there was a report in a South African newspaper yesterday that there are maybe plans to link Zimbabwe’s currency to the South African currency. If that were to be the case, it would create a sense of stabilization but it’s really unclear whether that’s a feasible option.

Jagow: All right, Gretchen Wilson joining us from Johannesburg, thanks so much.

Wilson: Thank you so much.

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