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Zimbabwe enforces price freeze

Published: 9:25AM Sunday July 08, 2007 Source: Reuters

Zimbabwe police have arrested 17 more business executives for defying an official price freeze, as the ruling party endorsed the government's tough stance on businesses, state media reports.

President Robert Mugabe's government last week ordered prices of basic goods and services slashed by half and deployed a crack enforcement unit, which has arrested more than 200 business people for breaching the price controls.

The move, which sparked panic buying from shoppers who rapidly emptied shop shelves, was taken after prices of many goods tripled within a week.

Inflation, the highest in the world, has rocketed above 4,500% while four in five adult Zimbabweans are jobless.

The official Herald newspaper reported on Saturday that 17 more top company executives were arrested on Friday in Harare and Bulawayo for offences ranging from failing to display prices to overcharging.

Those arrested include managers at fuel stations, who were also ordered to cut prices.

Police spokesman Oliver Mandipaka warned of a broader crackdown on business people and black market vendors, enjoying roaring trade as goods become scarce in formal shops.

"Those people who work in cahoots with economic saboteurs will have themselves to blame because our crack teams will be conducting sporadic raids on all individuals who sell basic commodities in front of shops and in their backyards at exorbitant prices," he said.

"Political gimmick"

The leader of the main faction of the opposition Movement for Democratic Change, Morgan Tsvangirai, said Mugabe's government had run out of ideas to resolve the economic crisis.

Addressing a rally in the working class suburb of Dzivarasekwa in the capital on Saturday, Tsvangirai said the price freeze would compound Zimbabwe's economic woes.

"This is a political gimmick for next year's election, but it is going to backfire because more people are going to lose jobs and they are going without basic goods," Tsvangirai said.

"What we expect are policies that ensure more jobs, more food and a better life for all."

On Friday, the government formally issued a legal instrument for the price freeze, which requires businesses to seek the industry minister's approval before raising prices.

Most shops have run out of basic goods such as sugar, salt, bread and beef as shoppers rushed to stock up, fearing shortages as the price freeze takes effect.

Now the attention of bargain-hunters has turned to clothing shops, which have also been ordered to cut their prices.

Mugabe, facing growing pressure from the crisis, has accused firms of raising prices as part of a plot to unseat him.

The 83-year-old leader has threatened to seize and nationalise foreign companies he accuses of working to sabotage the economy.