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Zimbabwe President Ignores Central Bank Governor's Advice

Zimbabwe's Central Bank governor, Gideon Gono, is reported to have sent his government a lengthy reminder of policy suggestions he has offered since 2003 to try to halt the collapse of the country's economy. VOA's Delia Robertson reports from our southern Africa bureau in Johannesburg.

South Africa's Mail & Guardian newspaper has published a document it says was written by Zimbabwe central bank governor Gideon Gono. The document catalogues the economic advice he apparently gave to the Zimbabwean government in repeated attempts to persuade officials to adopt measures aimed at arresting the spiraling decline in the economy. The newspaper says the advice was ignored.

One of the major complaints in the 59-page document, which is available on the newspaper's Web site, is the central banker's advice to do away with price controls. Against this advice, the government has imposed 50 percent price cuts in recent weeks. Professor Tony Hawkins, of the University of Zimbabwe's Graduate School of Management, earlier told VOA, there had, in fact, been an agreement on such measures.

"Remember in January we were going to have a social contract and we were all [government, business and labor] going to agree on price controls and wage controls and so on," he said. "In June there is no such a contract, although the government claims there is one, but there isn't, and government imposes price controls."

Other recommendations in the document include bringing an end to government land seizures, protection of private property, and the privatization of key state owned enterprises. It also urges the government to act vigorously against corruption, to provide subsidies for agricultural production and to get rid of policy inconsistencies.

Economist Hawkins highlighted the difficulties for Zimbabweans face because of the actions of their government.

"Again I think one needs to stress the point, that this is a government that does not tell the truth about anything," he added. "It is very difficult for anyone to try and assess what is actually happening, because the government is in control of all the information, and it won't even publish its money supply figures or inflation figures any longer because it is so defensive."

At the week's end, the government continued its crackdown on businesses that are defying its order to cut prices by half. Some 3,000 people have been arrested, including employees of the cafeteria at the magistrates' court in Harare. Hawkins and other analysts say these measures will ensure that stores are unable to replenish stocks.