Government Price Controls Choke Zimbabwe Government-imposed price controls in the southern African nation of Zimbabwe have left grocery store shelves virtually empty and gas pumps dry. The prices dictated President Robert Mugabe are often below the cost of production, forcing many businesses to close and leaving residents stranded and hungry.
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Government Price Controls Choke Zimbabwe

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Government Price Controls Choke Zimbabwe

Government Price Controls Choke Zimbabwe

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MADELEINE BRAND, host:

This is DAY TO DAY. I'm Madeleine Brand.

JAMES HATTORI, host:

And I'm James Hattori.

In a few minutes, well, we all know what road rage is. Now, getting serious about meter maid rage.

BRAND: But first we go to the African nation of Zimbabwe, where today is a national holiday. There's not much to celebrate though. Residents are coping with an economy that has ground to a halt. Gas pumps are dry, store shelves nearly empty. It's because of government-imposed price cuts. In many cases the cuts are below the cost of production, forcing businesses to close.

HATTORI: Zimbabwe's president, Robert Mugabe, ordered the cuts a month ago to combat hyperinflation estimated to be as high as 9,000 percent per year.

For a first-hand account, we're joined by a journalist in Zimbabwe we first heard from several weeks back. We're calling her Lee. For her protection we're not disclosing her identity. Welcome back to DAY TO DAY.

LEE (Reporter): Thanks for having me.

HATTORI: What have you seen over the past few days? How bad are things getting?

LEE: Well, James, as you mentioned, this is a major holiday weekend in Zimbabwe. And because of this price control crisis, supermarkets, especially in the outlying areas of the country, are totally devoid of anything. Literally one supermarket I visited had a couple of dozen items on their shelves. It was the large supermarket. And not any of these items were even edible.

There were things like matches and school exercise books. There was no food whatsoever. And that situation at that grocery store is mirrored across the country. Also, as we drove around the country, crowds and crowds of commuters were waiting at bus stops, waiting for buses that never arrived.

Because it is a holiday weekend, everyone tried to get back to their rural homes from the large cities. And they tried to take money and food back to their families. But because of this price control crisis, there were no buses. There were no taxis. Because there was no fuel, people are now not bringing in fuel because obviously they cannot afford to because the government is trying to force them to sell it at a price that is not viable to sustain.

HATTORI: How long have these food problems been going on? I mean, are people beginning to starve?

LEE: Everywhere we go the locals say that they are hungry and suffering. In areas that are not pro-Mugabe's government they have not had food aid in months because the government only allows the food agencies such as World Vision to operate in certain areas that are Mugabe's stronghold.

Everywhere you look the people are painfully thin. They are lethargic. A lot of them have AIDS. A lot of them have other severe illnesses. They are downtrodden because this is a police state. And now that there are these price controls, there is nothing for them to eat. They cannot even buy anything out of the shop if they do have the money.

HATTORI: President Mugabe says the cuts in prices were necessary to fight inflation and stop profiteering. And in fact they've arrested thousands of violators. But are there signs that this policy might work or that the economy will turn around?

LEE: For one week it was as though it was Christmas in July; that's what everyone was calling it because suddenly bread was half the price than it was. Will this help the economy? It is, in fact, crippling the economy. Apart from the fact that businesses are basically closing their doors for fear of bankruptcy because they cannot afford to replace their stock, the government has now also threatened to nationalize some businesses.

There is a bill going through parliament which states that business owners must give 51 percent of their companies to people the government deems worthy. And of course knowing the history of the Zimbabwean government, that is causing a lot of consternation in the business community. And as a result, anyone with any skills is leaving in droves. They're immigrating illegally to places on our borders like South Africa, Botswana and Mozambique, just to try and get some work and earn some decent money because this economy is the worst in the world.

HATTORI: Yeah, there are reports that millions have fled Zimbabwe in recent months. Give us some context now. Mugabe has been in power for more than 27 years and not so long ago the country was one of the more stable and prosperous countries in Africa. What's happened?

LEE: All these problems go back to around 2000, when the government seized the farms, and since then things have gone from bad to worse, not to sound cliched. Zimbabwe used to be able to feed itself and other nations surrounding it, it used to actually give food and be able to sell food to other countries.

Now we are relying on food aid, and we have presidential elections coming up next year, which usually means that things are only going to get worse. Until then, the human rights violations will get worse. The opposition parties will not be allowed to meet in public. They will be forced to operate underground. And until March next year everyone is just waiting for something to happen.

HATTORI: We're talking with Lee, a journalist from Zimbabwe. Thanks for joining us.

LEE: Thank you.

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