'Business is not seeking regime change'.

On 20 July, Zimbabwe's business leaders wrote to the government, via President Robert Mugabe, assuring him and the government that the business sector did not seek regime change in Zimbabwe. "We, the business leaders from the private sector," the letter said, "wish to reaffirm--categorically--our loyalty and commitment to the government and nation of Zimbabwe. We wish to state--without equivocation or ambivalence--that we take no instructions from Zimbabwe's detractors, neither do we have any desire or plans to effect regime change in Zimbabwe. We, as business leaders, recognise that there may be negative elements within our various associations, but we remain confident that the vast majority of businesses in Zimbabwe have the country's national interest at heart." Below, in full, is the business leaders' letter sent to President Mugabe and his government.

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Your Excellency, we, the undersigned Zimbabweans, occupying positions of leadership within the business sector, have resolved to make this submission to you driven purely by our desire to bring about remedies to the current rupture in our economy and in the relations between the government and business.

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We make this submission with the anticipation that you will welcome all voices that, in good faith, seek to resolve the current economic challenges facing the nation. For, indeed, Your Excellency, you are on record as saying: "We are witnesses to the futility of trying to solve our problems in an environment of pointless conflict." We recognise and admit that the current crisis triggered by the launch of the price freeze blitz was, in part, precipitated by the actions of some speculative and parasitic middlemen in the economy, whose actions pushed the cost of foreign currency on the open markets to unprecedented levels, thereby dramatically pushing up the cost structures of business that depend on imported inputs.

We do not condone such speculative behaviour regardless of who the perpetrator is. We note, however, that such negative tendencies tend to thrive on situations of economic uncertainty, economic instability, severe hyperinflation, and foreign currency shortages. Your Excellency, we urge you to recognise that our nation is in the midst of a grave economic crisis of unprecedented proportions. We humbly submit that it is only on the basis of that recognition of the current reality that the government and business can, jointly, focus their collective efforts on addressing, vigorously and urgently, the current undesirable and unsustainable state of affairs. The proposals contained in this paper represent the combined views of the representatives of the following business organisations: (1) Confederation of Zimbabwe Industries, (2) Zimbabwe National Chamber of Commerce, (3) Chamber of Mines of Zimbabwe, (4) Employers Confederation of Zimbabwe, (5) Zimbabwe Council for Tourism, and (6) Retailers Association of Zimbabwe.

Restoration of business confidence

* We urge that the harassment of business people under the current price freeze blitz be discontinued.

* It is our perception that the noble objective of the Price Task Force to bring pricing sanity to the market has been hijacked by criminal elements bent on profiting from the current blitz.

* Lines of communication between the Task Force and its implementation committees on the one hand, and individual businesses on the other hand, are not clear, resulting in confusion and poor implementation of the price freeze directive.

* The cumulative impact of the current blitz has been to severely undermine overall business confidence--a state of affairs that is not conducive to economic stability.

* We note, with appreciation, Your Excellency, your recent call regarding the need for business and government to work together going forward.

* We express our sincere appreciation to the national chairman of the ruling party--Zanu-PF--for meeting us on Thursday 19 July, to give us assurance that the government was keen to engage the business sector to find a way forward.

Private sector commitment to Zimbabwe

Your Excellency, for the avoidance of doubt, we wish to put on record our rejection of any notion that the business sector, per se, seeks regime change in Zimbabwe. We, the business leaders from the private sector, wish to reaffirm--categorically--our loyalty and commitment to the government and nation of Zimbabwe.

We wish to state--without equivocation or ambivalence--that we take no instructions from Zimbabwe's detractors, neither do we have any desire or plans to effect regime change in Zimbabwe.

We state, without hesitation, that our love for our country, our loyalty to its constitution, and our commitment to its future success are no less than that of other patriots. We, as business leaders, recognise that there may be negative elements within our various associations, but we remain confident that the vast majority of businesses in Zimbabwe have the country's national interest at heart.

Over the past 18 months or so, business leaders have worked tirelessly together with government within the framework of the NEDPP [National Economic Development Priority Plan] to proffer solutions to our country's deepening economic challenges.

Indeed--against extraordinary odds--business leaders have succeeded in keeping companies and businesses operational within the most trying environment characterised by: (a) shortages, (b) high levels of inflation, (c) severe disruption to fuel, electricity and coal supplies, (d) a debilitating and accelerating skills drain, and (e) crumbling infrastructure--in particular, water and telecommunications services.

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The resilience of the business sector has been one of the key reasons why our country has not yet collapsed. This, alone, amply demonstrates the crucial role played by the private sector in sustaining Zimbabwe's economy.

We urge that the government recognises the above realities as we, together, join hands to find a common way forward. The private sector is not an enemy but, on the contrary, ought to be regarded as a key pillar sustaining our country's entire fabric.

The current reality

Your Excellency, as loyal and committed Zimbabweans, we have a duty to tell you the truth in the national interest. We have no doubt that the price freeze blitz--in its current form--has put the country in an extremely precarious economic situation.

There are indicators of how dire the situation has become as evidenced by, among other things, the following:

* Widespread shortage of basic goods across the economy. The severe shortage of meat is a case in point.

* Severe and rapidly deteriorating shortage of fuel.

* Rapidly diminishing stocks of imported raw materials required by industry to ensure continued production.

* "Informalisation" of the economy as scarce goods begin to reappear in the informal markets at higher prices.

* The undisguised rush by foreigners to empty our retail sector of goods whose prices have been set at unrealistically low levels, etc.

The recent release of hastily promulgated legislation--particularly, Statutory Instruments 141, 142, 137 and 138 of 2007, have had the following damaging effects:

* Confusion among businesses as to how to apply the price freeze directive due to different interpretations of the law.

* Potentially serious damage to our exports as export markets worry about the sustain-ability of certain imports from Zimbabwe which have been put on a list containing products which may, at a future date, be banned from exporting. Key export markets that have taken years to nurture and secure may be lost unless urgent steps are taken to clarify this situation.

* A rush of people to do cross-border shopping ahead of the 1 August 2007 deadline, thus, compounding an already severely tight foreign currency situation, etc.

Your Excellency, it is our overall assessment that unless urgent measures are taken to correct the current situation, most businesses will grind to a halt in a matter of weeks, not months, as they run out of key imported inputs and fuel. We do not take this observation lightly. It is, sadly, the current reality on the ground.

What needs to be done urgently

Your Excellency, it is our submission that enough foreign currency and fuel must be secured without delay, if the economy is not to grind to a halt. Any measures that do not address this fundamental reality cannot be successful. The options available to us include: Option 1: Seek international balance of payments support. While in the medium term this is feasible and desirable, we are of the view that given our current status within the international community, we are unlikely to secure this within the timeframe that we are looking at. Option 2: Implement a package of measures designed to stimulate the generation of foreign currency from internal sources. We recommend the following measures:

(1) Sale of state assets. The programme unveiled by the government as part of the National Economic Development Priority Programme (NEDPP) initiative ought to be implemented immediately.

(2) Leverage our mining resources. Conclude, as a matter of urgency, the proposed legislation on mining and move to release the huge potential of this sector. We simply are not, as a country, optimising the exploitation of the huge, valuable resources we are sitting on. The country is not a poor nation. We are just poor at exploiting our resources optimally.

(3) De-control the price of foreign currency--Liberalise the exchange rate and allow Zimbabweans in the diaspora and holders of free funds to sell their hard currency through the banking sector on a willing buyer, willing seller basis. The move will, at once, address key distortions in our economy on which all corruption and self-interest thrive at the expense of the needs of the nation. Foreign currency earnings from export and other sectors will be more likely to be channelled into the formal sector than has been the case hitherto.

(4) Restoration of direct fuel imports (DFI) system. We note, with alarm, the announcement regarding the cancellation of the selling of DFI-procured fuel on a coupon basis. To do this before a realistic alternative fuel supply plan is in place to supply adequate fuel to the market, is ill advised and will result in a worsening of the current fuel crisis.

While we fully accept that fuel should be procured efficiently in bulk via the existing pipeline, it must be recognised that the DFI system currently provides a vital lifeline to many businesses (including the financial sector) whose operations would be thrown in jeopardy if the system is cancelled without proper planning.

(5) Reinstate the Social Contract. Your Excellency, we believe that only through the Social Contract can there be a sound, balanced, pricing mechanism that safeguards the interests of consumers while protecting the long term viability of the business sector.

In order to incorporate the work done so far by the Price Stabilisation Task Force, we propose that the Social Contract dialogue goes forward with a recognition of the prices obtaining on 18 June 2007 as the new base from which to go forward.

It is also proposed that in going forward, the social partners--government, business and labour--focus, in terms of the price stabilisation efforts, on the three controlled products and 16 monitored products stipulated in Statutory Instrument 125 of 2003. [These products are: Controlled products--maize meal, wheat flour and bread. Monitored products--agricultural chemicals, including veterinary products; agricultural implements, agricultural seeds, beef, cement, coal, cooking oil, drugs, fertiliser, milk, packaging, salt, stock feed, sugar, tyres and yeast].

We propose, Your Excellency, that the pricing formulae to be negotiated and agreed for these 19 products become the framework for determining pricing mechanism in the rest of the economy. Such an approach would make the task of pricing management easier to implement. Your Excellency, we recommend that the three social partners within the Tripartite Negotiating Forum be directed to reconvene and implement the Social Contract within the next 90 days. We reiterate, however, that unless there is enough foreign currency and energy supplies--the Social Contract will be stillborn, as business cannot guarantee to produce goods and services at affordable prices.

Your Excellency, due to the gravity of the crisis, we strongly recommend that a small crisis management team be set up within the following suggested framework: (a) no more than 10 people, (b) made up of government and business leaders, among others, (c) meeting with the head of state frequently, even daily if need be, and (d) empowered to take rapid executive decisions with a mandate to restore economic stability within 90 days. The model of dealing with economic challenges was utilised to great effect by countries such as Malaysia and China. Business stands ready to second its representatives to the proposed crisis management team, if invited.

Your Excellency, in conclusion, we wish to re-affirm our loyalty to the government of Zimbabwe, our burning desire to see our country get out of its current economic crisis, and our commitment to playing our part, in full, to secure this recovery if we are given the opportunity to make this contribution.

Your Excellency, time is not on our side. The choices we face as a nation are difficult ones but they have to be made. The economy of Zimbabwe can, and has to be, revived but not without urgent and painful decisions.

We, the undersigned business leaders, wish to thank you for receiving our submission. We stand ready to engage you further should you deem it necessary.

Signed by:

C. Jokonya, president, Confederation of Zimbabwe Industries (CZI)

J. Murehwa, president, Chamber of Mines

C. Mtasa, president, Zimbabwe Council for Tourism

W. Zireva, chairman, Retailers Association of Zimbabwe

P. Nyandoro, president, Bankers Association of Zimbabwe P. Chigumira, vice-president, CZI

J. Manyakara, president, Employers Confederation of Zimbabwe

S. Mutasa, executive chairman, TA Holdings

K. Katsande, group managing director, Ariston Holdings

J. Mutizwa, chief executive, Delta Corporation