Zimbabwe Business Watch : Week 41
This week sees many businesses reaching decision time as to obey the law by the letter or not. Business is simply not sustainable given that in most cases prices remain fixed at June 18th levels whilst the economy is experiencing monthly inflation of between 70 and 100%. Risking arrest, company officials are making decisions but clearly violate the law as it stands, as they have no choice other than to allow their enterprise to be destroyed.
Already the Government has used the opportunity to draw more and more people into the elite zone of those protected by the authorities by continuing to allow favoured individuals huge price increases whilst competitors are forced to virtually close. The system pf patronage has now changed its complexion in the business sector.
The Government is bankrupt and is being forced to print even more money to pay striking teachers and more electricity cuts have forced the state power utility to buy hard currency on the street. This has pushed the Zim Dollar even lower and now trades against the Pound at around 1.2 million. The knock-on effect has seen the price of fuel double in 10 days to $850 000 per litre. This will put further pressure on hard-pressed business reeling under what is seemingly a senseless assault.
