Oil's Is Well That Ends Well

Perhaps there is something in the water at parliament (above) and in government buildings, because MDC-T ministers are now busy implementing ZANU PF policies. There is still to be a single policy initiative from the government. All efforts are focused on "control" such as control of prices, which they have now adopted with regards to water, fuel and power.


I mentioned to you a few days back that prices have started going up again in Zimbabwe and if the Exclusive government does not cook them, we will see the first spike in inflation under this government next month.

The main driver appears to be fuel. A litres of petrol now costs anything between US$1 30 and US$1.45. Only last month, petrol was about a dollar per litre and less than that at many service stations.

Engineer Elias Mudzuri, who did wonders as Mayo of Harare, is now in charge of the Energy Ministry. He issued a directive last week telling retailers that petrol is supposed to be sold at no more than US1.10.

The industry responded by hiking the price even more.

You can not blame Mudzuri completely. Zimbabwean are notorious for trying to the government of the day to protect them against anything that comes to mind.

Instead of adopting power-saving measures, such as buying low-watt bulbs, turning geysers off and so on, they cry to government that the Energy Company should be compelled to avoid switching off defaulters.

Mudzuri, therefore, has simply had people go to him, business people as well as ordinary members of his party, who complain that ZESA is being unfair, TelOne is being ridiculous, arrest them if they refuse to bring down the prices and so on.

So we now have the very strange spectacle of a party, the MDC-T, which criticised price controls before joining government and said they would never work because they did not address the fundamental problems, imposing them now from within government.

They are not shy about it, either.

Nelson Chamisa was in The Independent on Friday threatening TelOne and saying he was going to tell them what to charge their customers.

Mudzuri has so far set tariffs for power and now for fuel.

Meantime, Tendai Biti has resorted to taxing anything that moves (and some things that don't).

The opening of the South African border for Zimbabweans to travel visa-free to South Africa saw  customs and duty tariffs go up.

By the way, a full two months after I made the suggestion here on this blog as Tendai Biti and government cried that without aid we are are doomed, I am happy to see that the Finance Minister took my advice.

He has now announced plans to hive off parastatals (government owned companies such as the national airline, NetOne and so on in order to raise finance for the government. It is a clear admission that no aid is coming any time soon from outside.

But this plan is doomed to fail.

The MDC-T, just like ZANU PF, mistakes populism for policy. Hence, it panders to populist sentiment. We need to understand that in order to understand why this plan will fall flat on its face.

First, Mugabe is ideologically opposed to privatisation. He remains a Marxist, after all. So there will be no support for this from there, no matter what they may agree in cabinet.

Second, the MDC itself is a product of Labour and draws support from workers. Although workers neither care about privatisation nor really understand it as a concept, their leadership, the leadership of the ZCTU and the like, have publicly come out against any privatisation.

Even as the Oil Company, NOCZIM, which is owned by government, fails dismally at every turn, the MDC-T base appears not to want this to happen.

An unlikely alliance will develop between the labour bodies and Mugabe's side of government, who do not want any of this to happen either.

Tsvangirai himself, as well, is ideologically opposed to privatisation. He is, after all, a Trade Unionist.

It is important to understand that this announcement is nothing more than the MDC-PF government flying a kite.

They fully expect that it will die a quiet death.

And we will be where we started, having wasting God knows how many months gazing up at that kite.



Comments

  1. increasing price will make the economic conditions worsen

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