SOUTH AFRICA / FILE: Zimbabwe's inflation rate has risen to over 3,000 percent

Zimbabwe's inflation, which shot up dramatically in 2006, reached a new record high in April, with the cost of living doubling during that month, according to the head of Zimbabwe's central bank. Inflation has been stoked by chronic food shortages caused by the country's controversial land reforms. Official figures released on Thursday (May 17) showed prices in the southern African country jumped annually to a record 3,700 percent in a stark sign of the economic turmoil blamed on government policies. The cost of living doubled in April -- touching a record 100.7 percent month-on-month from 50.5 percent in March -- while the annualised figure climbed from 2,200 percent previously. The Central Statistical Office said prices of food -- which makes up a third of the consumer basket used to calculate inflation -- domestic power, fuel and public transport fares had contributed to the significant rise in price levels in April. The inflation spiral is the clearest sign of a deep economic crisis, blamed on President Robert Mugabe's policies such as the seizure of white-owned farms to resettle landless blacks. Analyst Chris Maroleng, speaking in Pretoria, South Africa on Friday said he did not see Zimbabwe's current economic decline leading to an immediate regime change, however. "Well, a lot of people have speculated that the Zimbabwean inflation's situations can still become much worse before we see a total collapse in the situation. However, I doubt that the Zimbabwean government or those interested international parties, will allow Zimbabwe which is an important state in Southern Africa, to actually reach that state," said Maroleng, a political analyst at the Institute for Security Studies. Maroleng said the hyper-inflationary environment in Zimbabwe could not be blamed on one particular element of the economy but had more to do with historical situation. " Well, I don't think there's one issue that has led to the hyper-inflationary situation that we see, there are certain historical events that took place that really resulted in the declining of the overall macro-economic situation. But I think a lot of people have blamed government policies by at large that have resulted in increasing inflationary pressure in Zimbabwe. For example, the land reform program really undermined the bedrock of the Zimbabwean economy which was, of course, agricultural production. But at the same time no-one argues that land reform was not necessary, it was simply the implementation of the land reform that was problematic," Maroleng said. Mugabe's government, which blames declining agricultural productivity on poor rains, has declared 2007 a drought year. The situation in Zimbabwe is driving millions of people to leave the country to seek work and a better life elsewhere. Maroleng said the worsening crisis in Zimbabwe was speeding this exodus. "As the economic situations worsens in Zimbabwe we're experiencing a tendency of Zimbabweans move across the borders to seek better economic conditions in neighbouring countries, for example in South Africa," he said. Addressing parliament on Thursday, President Thabo Mbeki said the exodus of Zimbabweans into South Africa was something that had to be accepted. "As for Zimbabwean who enter South Africa legally, well they enter South Africa legally, and there wouldn't be any need to do anything about that, but as to this other inflow, of Illegal people, I personally think it's something that we have to live with." he said. Mbeki, who has in the past been criticised for not being harder on Mugabe, is currently working as mediator between Zimbabwe's rulers and the opposition Movement for Democratic Change (MDC).

ITN Source | May 18, 2007

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