Zimbabwe gov't eases price controls

Zimbabwe's government will allow hotels, restaurants and bars to raise their rates by up to 50 percent, state media reported Saturday, in a relaxation of a price-cutting policy aimed at taming soaring inflation rates in the economically beleaguered country.

Prices of accommodation and meals had been slashed by half two months ago under a sweeping decree that ordered price cuts on all goods and services. The new rates, announced by the Zimbabwe Tourism Authority, initially will be valid until Sept. 30, the state Herald newspaper reported.

The latest announcement came just two days after a decree from President Robert Mugabe freezing wages and school fees and striking down legal provisions allowing them to be linked to the state's own consumer price index on inflation.

Zimbabwe is suffering its worst economic crisis since gaining independence from Britain in 1980. It has the world's highest inflation, officially at some 7,600 percent, though independent estimates put it closer to 25,000 percent.

Critics blame the meltdown on Mugabe's program of seizing white-owned commercial farms for redistribution to blacks, which began in 2000 and disrupted the agriculture-based economy.

Fast food takeouts, bars and night clubs were included in a list of new prices published Saturday, and hotel accommodation rates were raised according to their star rating.

Five-star hotel room rates were listed at about the equivalent of $60 a night for Zimbabweans, but remained at about $200 for foreigners under a long-standing two-tier system. The price list raised the price of beer and liquor by about a third in hotels, bars and restaurants, but not in shops and liquor stores.

The tourism authority said the increases took into account the government's pricing policy "as well as the viability of the tourism industry." Tourism revenues, once the nation's third-largest hard currency earner after tobacco exports and mining, have plummeted in the last seven years of political and economic turmoil.

The Zimbabwe Congress of Trade Unions condemned the salary freeze.

"The workers are tired of being sacrificial lambs and bearing the brunt of bad governance and bad economic policies," it said in a statement Friday. "We will leave no stone unturned in opposing this ill-thought move."

It said the salary freeze was particularly unjust because workers were forced to buy goods on the black market because mandated price cuts had emptied shelves across the country. Stores have been unable to sell products for less money than they had paid for them.

Fast food outlets were equally hard hit. The countrywide Nando's spiced chicken takeout franchise has shut down its outlets frequently since June as chicken, potatoes for fries, cooking oil and diesel for generators ran out during daily power outages.

At least 7,500 business executives and others have been arrested, briefly jailed and fined since the June 26 price cuts for overcharging.