Tripartite forum hoping to reach consensus on economic plan

Zimbabwe's Tripartite Negotiating Forum (TNF), comprising representatives of government, labour and business, may be close to signing a deal on price and wages control to curb runaway inflation and rejuvenate the country's ailing economy. The TNF met on Thursday to consider a proposed Price and Incomes Stabilisation Protocol, which includes commitments by the government to reduce inflation - currently running at nearly 600 percent - to 80 percent by the end of 2006. The government also aimed to cut the budget deficit to less than five percent of GDP, while business would agree to maintain prices at a agreed-upon levels, and labour would agree to contain salary demands. However, one key stumbling block remains - the proposed inclusion of a poverty datum line (PDL) minimum wage of Zim $15 million (US $156). According to the Consumer Council of Zimbabwe an average low-income household needed Zim $17.6 million ($182) to meet basic monthly needs. Zimbabwe Congress of Trade Unions spokesman Molamleli Sibanda commented: "I would say there was agreement on almost the entire document but there were disagreements in one area, where the employers were opposed to the issue of the PDL - that it should not be included in the protocol ... but ZCTU and the government disagree. The three parties agreed that the technical committee should go back and clarify the issue and, hopefully, [when the TNF reconvenes] on 3 February, the three parties can sign the protocol." However, economist Dennis Nikisi said it would take more than just a Price and Incomes Stabilisation Protocol to sort out Zimbabwe's spiralling economic crisis. "Employers are saying the minimum wage is not going to be realistic - few companies will be able to pay their employees [the minimum wage] without raising the price of goods on the market. Also, most of the cost of production is pushed by the rate of exchange: in the absence of a steady supply of foreign currency, how are we going to ensure that input costs are going to be controlled, so that industry can maintain prices?" he asked. Shortages of foreign currency and fuel were factors businesses had no control over. "At the end of the day, it's about stabilising the forex market by ensuring we've got a sustainable supply of that commodity, which to me is the be-all and end-all of our economic woes. We can debate about this and that, but these are external factors beyond the control of companies and individuals," Nikisi noted. He said Zimbabwe had to re-engage the international community in order to win back International Monetary Fund (IMF) and World Bank support. "We need a kind of Marshall Plan - this current strategy of wanting to exist in isolation, hoping that things will work out, is a pipe-dream."