Special Report on rising poverty

The tide of statistics marking Zimbabwe's economic decline - inflation at 300 percent, 6.5 million in need of food aid, 70 percent unemployment, "the world's fastest shrinking economy" - eventually blur into incomprehension. But behind the figures is the struggle by ordinary families to put food on the table, send their children to school, and look after elderly relatives. The hardships seem a far cry from when Zimbabwe was the breadbasket of Southern Africa, its infrastructure and skilled workforce the envy of the region. According to the World Bank, Zimbabwe has been experiencing an economic and social crisis since 1997, induced by declining prices for its key exports, poor economic policies, a large fiscal deficit and loss of investor confidence arising from uncertainty about domestic policies. A combination of two successive years of drought, the government's fast-track land acquisition programme, the impact of HIV/AIDS and a collapse in social services left more than half the population in need of food aid in 2002. Recovery has been delayed this year due to another season of erratic rainfall. In addition, the limited availability of seed and fertiliser as a result of foreign exchange shortages, and the newly settled farmers not being able to utilise all their land due to a lack of adequate capital and inputs has worsened the situation, according to a Food and Agriculture Organisation/World Food Programme (FAO/WFP) assessment mission. The agencies estimated that 4.4 million people in rural areas and 1.1 million in urban areas would require food assistance in 2003/04. The urban poor have been largely overlooked in Zimbabwe's food emergency. UN agencies and NGOs are now in the process of preparing an urban vulnerability assessment to map and monitor poverty levels outside the rural areas. "Food security within the urban and peri-urban areas continues to be an issue of major concern due to the rapidly declining economy," noted the latest Zimbabwe Humanitarian Situation report by the UN's Relief and Recovery Unit. "What's clear is that the urban vulnerable definitely need to be included in humanitarian relief efforts this year. The indications are that the coping mechanisms, which are generally more robust [than in rural areas], are being eroded, and some of the effects we've seen in the rural areas - children dropping out of school and child labour - we're seeing in the towns," Chris McIvor of Save the Children Fund told IRIN. "The million dollar question is, how this can be done? I would imagine it would be a mix of ensuring that for those that can afford it there is enough maize in the shops, as part of a joint exercise between the private sector and the government, and a social safety net programme for the most vulnerable, but it would be a complex exercise." Among the challenges would be the identification and targeting of beneficiaries in communities with much less cohesion than rural areas, the issue of government price controls on the staple maize meal, and the distribution monopoly of the Grain Marketing Board.

Zimbabwe Humanitarian Situation Report

The last vulnerability assessment undertaken in the capital, Harare, was in May 2001 by the US-funded Famine Early Warning Network and the Consumer Council of Zimbabwe (CCZ). At that time, the assessment team calculated the Food Poverty Line (FPL), the minimum expenditure to ensure that each member of a four-person household received 2,100 calories, as Zim $2,650 (US $48). Roughly 10 percent to 20 percent of households in Harare fell below the FPL. The CCZ priced a low-income "food basket" for a family of four at Zim $11,000 (US $200). Between 60 to 70 percent of households could not afford to meet those costs, the assessment report said. The poorest households in May 2001 were regarded as those earning less than Zim $4,000 (US $73) per month. They, characteristically, had only one income source, either because there was only one able-bodied person of working age in the household, or because of a lack of capital to start up an informal sector activity. Some households in this group included formal sector workers at the lowest salary levels, such as security guards, shop assistants and factory workers. They often had only two meals per day and most of their calories came from maize meal, with a small amount from cooking oil, sugar and, occasionally, dried fish. The households typically said that they could not afford health care or transport. "Households were clear about the types of shocks that cause them problems. Everyone complained about inflation and the fact that they are constantly battling to keep up with rising prices. Associated with this were specific complaints about devaluation, increases in owners' rates (on housing) and electricity costs, and rising bus fares," the assessment report found. "For those working in the formal sector, the threat of retrenchment and unemployment is a constant worry. In the informal sector, households fear a crackdown by the local authorities on 'illegal' businesses, which can result in businesses losing goods, tools and/or capital. Households in both the formal and informal sectors are vulnerable to the illness or death of, or divorce from, the main income earner, and this tends to result in a major drop in standard of living. "AIDS is a particular threat in this regard. Large, unexpected expenditures (such as on funerals or medicines) also cause major problems for poor households, often forcing them into debt," the report noted. Since the 2001 assessment, there has been a significant deterioration in the economy. The large-scale commercial farming sector now produces only about one-tenth of its output in the 1990s, the FAO/WFP mission report said, which has had serious knock-on effects for the agriculture-dependent country. Most basic products and services are in short supply - bank notes, fuel, electricity, and the foreign exchange to allow the country to import the goods and inputs it needs. Production of the main staple, maize, is estimated at 803,000 mt this season, 61 percent up on last year, but 46 percent lower than in 2000/01, said the FAO/WFP report. In May this year inflation reached 300 percent. The government had projected that it would fall to 90 percent. According to the CCZ, the cost of a food basket for a family of four has jumped to Zim $125,000 (US $151 after devaluation), but an estimated 80 percent of formal sector workers earn less than Zim $20,000 (US $24) a month. The government introduced price controls in November 2001 in a bid to protect consumers from rising costs on basic commodities. In November 2002 price controls were extended to cover a wider range of goods, despite protest from manufacturers who complained that they could not cover their production costs. The authorities, however, were unable to enforce the regulations, and the result was a boom in the black market and shortages in official retail outlets. Under the National Economic Revival Programme introduced earlier this year, price controls have been eased and an unofficial devaluation allowed. New minimum wages are to be introduced, along with periodic utility cost adjustments. The measures are expected to further fuel inflation in the short term. At the beginning of June, the International Monetary Fund (IMF) suspended Zimbabwe's voting rights over differences with the government on economic policy and arrears in debt repayments. "The Zimbabwean authorities introduced some policy measures since early 2003 to arrest the decline in economic activity, including a devaluation of the exchange rate of the Zimbabwean dollar from Zim $55 to Zim $824 per US dollar for most transactions, adjustments in fuel and electricity tariffs, rolling back price controls, and raising interest rates moderately," an IMF statement said. "However, the authorities have not adopted the comprehensive and consistent policies needed to address Zimbabwe's serious economic problems." SEE ALSO: ZIMBABWE: A nurse's tale ZIMBABWE: A policeman's tale ZIMBABWE: A veteran's tale ZIMBABWE: A businessman's tale ZIMBABWE: A teacher's tale