No money for public sector wages

JOHANNESBURG, – Zimbabwe's fiscal cupboard remains bare and the unity government will struggle to meet its wage bill for public sector workers in January 2011, finance minister Tendai Biti told the inaugural Global Poverty Summit in Johannesburg on 19 January.

“For the month of January we have only collected US$64 million and we are supposed to pay $101 million [public sector wage bill]. Where we are going to get the money to close the gap? I don’t know. I have made it very clear that we can only eat what we have killed and no more or no less."

Public sector unions are threatening a national strike and have refused an 18-26 percent salary increase offer by government that would increase the lowest-paid worker’s monthly income from $128 to $160. The unions are demanding a minimum monthly wage of $500.

The Zimbabwe Consumer Council told IRIN the cost of living for a low-income family of six in January 2011 was $503.40.

The unity government, which will mark its second anniversary in February, inherited a near-collapsed state from President Robert Mugabe’s ZANU-PF government, with $4 million in the bank, Biti said. He assumed the post of finance minister on 16 February 2009.

Zimbabwe’s unity government was formed after the violent parliamentary and presidential elections in 2008, when ZANU-PF lost its parliamentary majority for the first time since independence and Mugabe became president after his main opponent, Morgan Tsvangirai, leader of the Movement for Democratic Change (MDC) and now prime minister, withdrew from the poll in protest at political violence.

''There have been failures and successes [by the unity government], but the fact that our people are able to eat, there are [functioning] hospitals, there is clean water, things that outsiders take for granted, is an achievement''

One of Biti’s first acts was to stabilize the currency by abandoning the Zimbabwe dollar and introducing a multiple currency system using US dollars, South African rands and Botswana pula to end hyperinflation.

In December 2008 Steve Hanke, professor of applied economics at Johns Hopkins University in the US and a senior fellow at the Cato Institute, a Washington-based think-tank, estimated Zimbabwe’s annual inflation rate at around 6.5 quindecillion novemdecillion percent – 65 followed by 107 zeros.

The publication of official inflation data was discontinued by Mugabe’s government when it reached 231 million percent.

Biti told IRIN: "There have been failures and successes [by the unity government], but the fact that our people are able to eat, there are [functioning] hospitals, there is clean water, things that outsiders take for granted, is an achievement."

In the first quarter of 2009 nearly seven million Zimbabweans relied on emergency food aid. A cholera epidemic that began in August 2008 and was officially declared over in July 2009 killed more than 4,000 people and infected nearly 100,000 more.

"We [the unity government] have also failed in many areas, with the slow pace of democratic delivery, the slow pace of constitutional development, the slow pace of security sector reform – all those things are failures," Biti said.

"This [the unity government] agreement has been very difficult. Whether it will lead to the collapse of the agreement I don’t know. It is like a marriage. The husband can be cheating, but it does not necessarily mean it will end in divorce," he said.

go/mw