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Zimbabwe On
Verge Of Collapse

By Linda Young AHN News Writer

HARARE, Zimbabwe (AHN) - Analysts say that hyperinflation in Zimbabwe will bring about a complete economic collapse within the next six months. Such a standstill could lead to civil unrest that can paralyze President Robert Mugabe's government, according to a warning international aid agencies gave their staff members.
Inflation in Zimbabwe soared to a record 4,530 percent in May and the cost of living for an average family in an urban area rose by 66 percent last month.
The respected Heads of Agencies Contact Group representing a 34 aid organizations that include the United Nations, the International Federation of the Red Cross and Oxfam issued the warning in an internal memorandum. It is the first sign that aid groups are preparing for the nation's collapse.
The bluntly worded memorandum is "talking about a situation where there is no functioning government or a total breakdown," said an agency official who asked not to be identified, the Times reports.
"It is saying it is inevitable, not just a possibility," he said. "Our head offices have to know. Not many people have experienced this kind of crisis." The document says that inflation will continue to snowball, adding, "economic collapse is expected before the end of 2007."
The memorandum noted that aid agencies are forced to pay workers twice a week and will have to give raises after inflation continues to erode purchasing power. According to reports from the BBC, some employers are paying workers part of their wages in food, signaling a return to a barter economy and further dampening hope that stability will return to the currency.
The memorandum foresees a time when the currency will be worthless, shops will close, services become unavailable, unemployment and crime soar and civil unrest break out.
It notes that electricity use was cut to four hours a day so that farmers could operate. Food production is critical and observers say the bad economic conditions were created by President Mugabe's decision to seize farms from white landowners.
AHN has previously reported on the crisis in Zimbabwe's health care system where doctors have gone on strike for better conditions and wages and nurses have been unable to report for work because they cannot afford bus fare. The health care system has already collapsed, according to Zimbabwe Doctors for Human Rights.
Although elections are set for March 2008, analysts say that it will be impossible to hold free and fair elections if the nation collapses before then. President Mugabe has been in power for 27 years while the nation currently suffers from an 80 percent unemployment rate and a negative growth rate of -4.4 percent annually.


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