Tuesday, September 06, 2005

Finance minister backs free market policies

I gave myself an extended weekend. Took advantage of the fact that Monday was a a holiday in the USA so I didn't post since most of my readers are in that country. I apologize to the rest of you. On with the progress...

I highlighted an incongruity in Mugabe's government in my last post of the week,
"It is clear there is an incongruity in Zimbabwe's leadership. Removed from the unilateralist hulabaloo of the politicians, Zimbabwe's macro policymakers are acting on their acute awareness that the country cannot go it alone. Our economic salvation depends on our ability to salvage our remaining relationships with world business leaders."

In the piece, I focused on Zimbabwe reserve bank governor's monetary policy antics to save an imploding economy whilte staving off the fascist leanings of his bosses in government.

It emerged over the weekend that finance minister Herbert Murerwa sees the light too and he's fighting to convince his marxist comrades to let allow market forces to go unfettered. From the Daily Mirror,
'THE Minister of Finance, Herbert Murerwa, yesterday said the government must dump price controls and allow market forces to determine prices of goods.
In submissions made before the Parliamentary Portfolio Committee on Budget and Finance, the minister also said price controls were not helpful to the country.
“We should move away from price controls. They do not help. It is some of these policies that are creating additional distortions… We are in a globalised village. There is no country that tinkers with this kind of thing,” Murerwa said.
He said the price control of goods such as bread has seen firms facing viability problems and closing shop or in some instances producing the goods, but off-loading them on the black market.
Murerwa said government, which has tended to control prices once the country plunges into an economic crisis, has decided to set up a pricing commission for monitoring the underlying causes of price hikes.
The minister added that he concurred with remarks made by committee member and Makokoba MP, Thokozani Khupe of the MDC, that there was a mismatch between people’s salaries and prices.
The opposition legislator said the standard of living was falling, adding that: “Ninety percent of workers are technically unemployed because their salaries can not last for a week.”'
The development not only signifies another start in positive economic reform, it evinces the realization by some in ZANU-PF of just how dire their predicament is. Off course, many of them like their leader are still living in the fantasy world where one and one don't add up to two.

Here's how Chen Chimutengwende the acting minister of (mis)information colored the conditions that have neccesitated the extension of their reconstruction program, Operation Garikai,"
"The Zimbabwe government has extended the deadline for the completion of its Operation Garikai/Hlalani Kuhle (Stay Well) housing programme to December, due to the slow pace of construction.

Acting information minister Chen Chimutengwende told IRIN the extension beyond the original 31 August deadline had been necessitated by building delays due to shortages of fuel and construction materials.

"Government has extended the programme to ensure that all work is done by the end of the year. We cannot fail to meet the new target," said Chimutengwende.

In July the government announced it had allocated Zim $3 trillion (US $120 million) to the reconstruction programme, the successor to Operation Murambatsvina ('Drive out Filth'), a slum demolition drive the United Nations estimated had affected over 700,000 people.

In a mid-term policy review statement in August, Finance Minister Herbert Murerwa cut the government's commitment to $1 trillion ($40 million) for housing construction and assisting small- and medium-scale enterprises - half of which would be raised through the financial market.

But, Chimutengwende insisted, "Enough money has been allocated to keep the programme running, even with problems like the shortage of fuel and building materials."

Progress has been painfully slow across the country, with reports that only 97 of the 10,000 housing units planned for the Whitecliffe settlement in the capital, Harare, have been built.

Less than 400 housing units were under construction in the Harare suburb of Hatcliffe, where a total of 15,000 units are planned. In Manicaland province in the east, less than 100 houses have been completed out of the 960 earmarked for the current construction phase."

He still refuses to grow up and fess up the reality that they have messed up. The facade is falling apart.

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