[DEBATE] : (Fwd) Dangers of a social contract with Mugabe

[Patrick Bond]

Zimbabwe: Price Slash Backfires Badly



Charles Rukuni, AllAfrica.com, 4 July 2007
President Robert Mugabe called it a game. But hardly a week after the 
government descended on businesses accusing them of unjustified price 
increases, which it said were meant to effect an illegal regime change, 
most people are realising that it isn't a game any more.

 

If the crackdown was meant to help the poor who are bearing the brunt of 
ever escalating prices, it has backfired badly. Prices of some goods 
have gone down indeed. But the goods have disappeared from the shelves. 
People now have to queue for bread, which at times they may not get. 
Mealie meal is nowhere to be found. Long queues for fuel are back. And 
whenever queues start, corruption thrives as some people try to beat the 
queues.

 

The government has ordered businesses to revert to prices that prevailed 
on June 18 saying this is what was agreed when the government, business 
and labour entered into a social contract aimed at resolving the 
country's economic and political crisis.

 

But while the social contract so far has five protocols, only three have 
been signed. The government, business and labour signed the Incomes and 
Pricing Stabilisation Protocol, the Protocol on Restoration of 
Production Viability and the Protocol on Mobilisation, Pricing and 
Management of Foreign Currency on June 1.

 

The Zimbabwe Congress of Trade Unions (ZCTU), one of the key players in 
the whole scheme, only signed one protocol -- that on Incomes and 
Pricing Stabilisation. Its counterpart, the Zimbabwe Federation of Trade 
Unions, run largely by war veterans, signed all three.

 

The other two protocols are to do with the foundation principles and the 
Kadoma Declaration, which covers a plethora of issues including good 
governance and restoring confidence in the country.

 

A labour expert who has been involved in the technical discussions of 
the protocols said while the three sides are generally agreed on the 
protocols, there still seems to be a problem with implementation. The 
social partners were not given enough time to educate their members on 
what the protocols entailed before they were implemented.

 

"Business rushed to sign the protocols without briefing its members. The 
members rushed to increase prices because they thought prices were going 
to be frozen when the social contract came into effect. So they hiked 
prices so that they would be high enough when they were frozen," the 
expert said.

 

The ZCTU refused to sign the protocols because it did not want to be 
pre-empted by the government before the 96th session of the 
International Labour Organisation (ILO) in Geneva where the main labour 
body had a case against the government for violating trade unions rights.

 

ZCTU president Lovemore Matombo and secretary-general Wellington 
Chibhebhe have been assaulted by the police on a number of occasions.

 

"The ZCTU agreed in principle and could have signed all protocols but 
this would have meant that their case against the government would have 
been thrown out before the ILO conference," the expert said.

 

Government representatives refused to appear before the standards 
committee of the ILO that heard the ZCTU's case but the state was 
chastised at the end of the conference for violating trade union rights.

 

The labour expert said the measures being taken by the government were 
outside the social contract that the three partners signed. "They are on 
a fire-fighting mission," he said.

 

"This arm-twisting approach is not what the three parties agreed to. The 
three parties have not yet agreed on who should be doing what. But 
already the so-called cabinet committee, the TNF (Tripartite Negotiating 
Forum) and the National Incomes and Pricing Commission are stepping on 
each other's toes."

 

Management consultant Luxon Zembe concurred. "It is really a misnomer to 
say we have signed a social contract because the key players are living 
worlds apart. Those in the driving seat have access to cheap resources, 
which they sometimes use for personal benefit. Government buys fuel at 
$435 a litre, everyone else gets it at the market price, which is over 
$100 000. The government obtains foreign currency at $250 to the 
greenback and everyone else gets it at the market price."

 

The government ordered garages to reduce the price of fuel to $60 000 a 
litre but did not explain the basis on which that figure was reached 
because the price of fuel was already above that price on June 18. Most 
garages have therefore, stopped selling the product.

 

Zembe said what was needed was to restore confidence in the business 
sector not to destroy it. But the government is not listening. It has 
ordered the business sector to comply with price controls, threatening 
to take over businesses of those who did not.

 

The ZCTU held a workshop to brief leaders of its affiliates on the 
social contract last week.