Robert Mugabe has thus far done everything known to bring about an economic collapse in Zimbabwe, and perhaps invented a couple of new twists along the way. Lately, his steps have become as predictable as they are disastrous, with price freezes, confiscation, and the state takeover of foreign assets. Now Mugabe has announced a wage freeze, a move that guarantees an end to any remaining buying power among Zimbabwe’s working class:
Zimbabwe President Robert Mugabe has banned all pay rises without authorisation and given himself extra powers in a new bid to curb the world’s highest inflation rate, state media said Friday.
As part of the measures, all rents, school fees and service charges must be frozen for the next six months.
“No one in private or public sectors can now raise salaries, wages, rents, service charges, prices and school fees on account of increases or anticipated increases in the consumer price index, the official and unofficial exchange rates, or valued added tax and duty,” said the government-controlled Herald newspaper.
One has to be reminded of King Canute, showing his acolytes and fawners on the English shore that he could not stop the tide by his command. Mugabe qualifies as Canute’s polar opposite. He apparently believes that he can stop a 7,600% inflation rate by ensuring that everyone but himself becomes rapidly insolvent.
Already, Zimbabwe has an 80% unemployment rate. That makes a wage freeze almost irrelevant to inflation. Employers won’t have to raise salaries, but if they don’t offer any buying power in return for labor, the labor will cease to exist. Employees will leave in order to look for other ways to subsist, and whatever remains of Zimbabwe’s economy will crash into oblivion.
With no economy, the government will have no revenue. Without revenue, it will have no means with which to pay the armed forces, among others. Soldiers may have some issues with remaining loyal when what little money they have won’t buy them anything at all. Even if they get raises, where will they spend the money? Hardly any retail business can stay open now, and the wage freeze will rapidly start closing doors.
The only economy left will be the black market, in which the government cannot participate. The wage freeze will push the rest of the nation into the underground economy, and new power brokers will emerge outside of government control. Eventually they will control the arms in civil society, and the new warlords will bust Zimbabwe into pieces. It’s the anarchy playbook, where strongmen exist outside of any sense of law and order, and those strongmen impose law rather than the people.
If Mugabe has set out to destroy Zimbabwe, he’s certainly made all the right moves in the exact order necessary to do so. It would make a fascinating laboratory for economic and political incompetence if it wasn’t so tragic and unnecessary.