Cape Town — Zimbabwe's central bank governor, Gideon Gono, has spent more than three years trying to persuade the government to change course and avoid economic collapse, the Mail and Guardian newspaper reports today.
He spelled out his efforts in detail in a 59-page dossier attached to a letter dated July 3 to E.T. Manyika, the Zimbabwean minister responsible for enforcing price controls. The respected South African weekly today reproduced what it said was the first page of Gono's letter in its print edition. It also published what it described as the full covering letter and dossier on its website.
In the letter to Manyika, Gono said that while the Reserve Bank of Zimbabwe agreed that a significant part of the country's high inflation was driven by "speculative" price increases, "we recommend that current efforts be bolstered by the adoption of a holistic package of measures that would uplift the general supply of goods and services in the economy".
He said that since December 2003, the bank had been calling for measures including:
- a boost in productivity on farms "through effective utilization of all arable land",
- privatization of some state entities to raise foreign exchange and enable new private sector investment,
- curbing government spending to keep it from exceeding revenue,
- the promotion of foreign direct investment in areas such as mining and manufacturing.
"Only through a holistic framework can we stabilize prices, without inducing shortages in the market," Gono told Manyika. He attached to his letter a dossier entitled "A Catalogue of Policy Advice Given by the Reserve Bank of Zimbabwe to the Nation."
To read the letter and dossier, see the Mail and Guardian's website at: www.mg.co.za/gono.
