Compensation payments to reward ex-detainees launched ahead of elections

The Zimbabwean government's decision to award large compensatory payments this month to former detainees from the liberation war could have long-term repercussions, economists told IRIN. The minister of public service, labour and social welfare, Paul Mangwana, announced last week that former detainees held by the colonial government for more than six months from 1959 will receive a one-off payment and educational and health benefits. The official Herald newspaper reported that at least 6,000 ex-political prisoners, detainees and restrictees "are now set to be rewarded for their contribution to the liberation struggle". Gideon Gono, governor of the Reserve Bank of Zimbabwe (RBZ), warned the government last year, when the Ex-Political Prisoners, Detainees and Restrictees Act was passed, that a large payout could throw plans to reduce inflation off course. The privately-owned Standard newspaper claimed that the once-off payments would be worth Zim $10 million (about US $1,654) each, and could amount to Zim $60 billion (US $9.9 million). There are reports that former detainees are now scrambling to register, which could push the number of beneficiaries to 25,000, potentially raising the bill to US $41 million. Although every person who qualifies will be registered, only those in need of assistance will benefit from the proposed schemes, the Herald noted. Last week the government also raised the allowances and salaries of chiefs and village heads by 150 percent, with effect from January. Most of the former liberation war activists have remained loyal to the ruling ZANU-PF, while village chiefs have been important to the party's strength in the countryside. Economist and member of the RBZ's advisory board, Eric Bloch, said the payouts made more political than economic sense, with parliamentary elections due on 31 March. "That is blatantly an act of vote buying ahead of elections in March, and that will have a negative impact on the government's deficit, as it will have to resort to more borrowing. The decision will counteract the bank's efforts to fight inflation," Bloch told IRIN in an interview. In 1997, the government made a much larger unbudgeted payout to war veterans after they protested their living conditions - a move that had dire economic consequences. Tendai Biti, secretary for economic affairs of the opposition Movement for Democratic Change, claimed, "The doling out of millions of dollars for purposes of political survival is an indication of how insensitive the ruling party is. It does not matter to them if the economy is affected by their ill-advised decisions. All they care about is remaining in power."