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Zimbabwe Troubles, Neighbors’ Woes - 2001-08-28


Instability in Zimbabwe has begun to have far-reaching implications for its neighbors. At a recent meeting, southern African leaders warned they were concerned that Zimbabwe's troubles could hurt their own, already struggling economies. But that spillover effect is already happening. Businesses in the South African border town of Messina have taken a serious hit over the last year.

There are still a few customers in this discount clothing store in the small town of Messina, located about 12 kilometers from the Zimbabwean border and a six-hour drive from Johannesburg. But according to employees, there are not nearly as many customers as there were this time last year. One worker estimates business has fallen off by 35 percent. Another employee says it might be even more than that.

Peter Chauke works the cash register. He says many Zimbabweans used to come across the border to shop in his store. But with the dramatic devaluation of the Zimbabwean currency, he says they just cannot afford his products anymore. "Yeah, you know because the Zimbabweans, most of them are our customers," he says. "They buy things here [which] they go sell in Zimbabwe. So their currency went down and they find it very difficult to buy like before."

Up and down the hot and dusty main street in Messina, business owners and employees tell the same story many of their customers used to come from Zimbabwe, but simply cannot afford to shop on the South African side of the border anymore.

Part of the problem is the parallel currency market in Zimbabwe. At the official exchange rate, one U.S. dollar is supposed to buy 55 Zimbabwe dollars. About a year ago, it did. But on the black market today, the going rate is more than 250 to one. The Zimbabwean currency loses more ground almost every day, and it has experienced a similar fall against the South African rand.

One shopkeeper, who did not want to give her name, says the situation in Zimbabwe is hurting anybody who does business in Messina. She said, "I think all the business are feeling it. Even the food shops."

But it is not just the loss of Zimbabwean customers that is hurting the economy in Messina. This is the last town before the Zimbabwean border, and a steady stream of tourists used to stop here on their way to holiday destinations north of the Limpopo River. But not anymore. Tourists are staying away from Zimbabwe now, and so they are staying away from Messina as well.

Rinie Bekker runs a film and camera shop, which has always depended on the tourist market. "Business is bad, Ms. Bekker says. "My business has dropped 60 percent. The only tourists we've got here now are the hunters, that are hunting in Messina area. But tourists going through to Zimbabwe for holiday,[there is] nothing."

Ms. Bekker says things got so bad in April, she thought she might have to close her business. The only thing that saved it was hunting season trophy hunters are still coming to Messina in their search for big game. But she says there is yet another way the Zimbabwe crisis is hurting her business because it is hurting the South African currency, the rand. It has lost about one-third of its value against the U.S. dollar over the last year. Economists blame the fall partly on a spillover effect from Zimbabwe.

Ms. Bekker has had to raise her prices three times this year because she buys all of her film and developing supplies from overseas. She risks losing even her local South African customers if her rates go up much more.

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