Mugabe vows to save sick economy

July 26, 2007 - 0:0

Strict price controls will continue as Zimbabwe tries to turn around an ailing economy, President Robert Mugabe has said at the opening of parliament.

The country, once the bread-basket of the region, is suffering crippling food shortages and rampant inflation. Mugabe blamed droughts and sanctions for their economic woes and said they faced continued hostility from the UK and her Western allies. A bill to nationalize foreign firms, including banks and mines, is planned. The parliamentary session is the last ahead of elections due by March 2008. President Mugabe said the government had been forced to intervene with price controls last month after an ""astronomical"" rise in the price of basic goods, and would remain committed to them to try and stabilize the economy. Inflation is approaching 5,000% and shops in Zimbabwe are running out of the most basic commodities. ""Our economy continues to face challenges arising from the illegal sanctions imposed by our enemies,"" he told MPs. All this had led to shortages of foreign currency, as well as erratic energy supplies, he said. ----------------New measures On Monday, the former head of the United Nations, Kofi Annan, spoke of a downward spiral of events in Zimbabwe, which he said was ""intolerable and unsustainable"". Economic refugees are arriving in neighboring states like South Africa at a rate of around 3,000 a day. Talks between the ruling Zanu-PF and the opposition MDC to find a political solution appear to have stalled, our reporter says. The MDC wants a new constitution, but the only amendment on the parliamentary agenda could extend the president's term to 2010. The constitutional bill will seek to combine parliamentary and presidential elections and a clause will also give MPs power to elect a new president if a vacancy occurs between elections. The proposed empowerment bill stipulates that no company restructuring, merger or acquisition can be approved unless 51% of the firm goes to indigenous Zimbabweans. It says ""indigenous Zimbabwean"" is anyone disadvantaged by unfair discrimination on race grounds before independence in 1980. Tendai Biti, secretary general of the opposition Movement for Democratic Change (MDC), says that Zimbabweans have become wary about nationalization. (Source: BBC