Zimbabwe on brink of complete economic failure

Zimbabwe is "closer than ever to complete collapse" as economic meltdown and chronic food shortages threaten to spill over into a regional crisis, according to an independent report.

The Brussels-based International Crisis Group (ICG) said yesterday that Western sanctions had failed to weaken the regime of Robert Mugabe and that "international actors must close ranks" behind South African President Thabo Mbeki's efforts to mediate in the crisis.

Months of talks going on behind closed doors in South Africa between Mr Mugabe's government and opposition leaders have so far delivered no concrete progress, although sources close to the negotiations said they were "optimistic" that a deal could be reached.

Zimbabwe is spiralling out of control with real inflation running at 13,000 per cent, four out of five of the population live in abject poverty and four million others having fled to neighbouring countries, the report said. A campaign led by the military to slash prices has compounded existing food and fuel shortages and conducting any kind of business has become "almost impossible", according to the ICG.

With pressure mounting on Western governments, the think-tank's recommendations add to the impression that the international community has little idea what to do on Zimbabwe.

The report said attacks by Western leaders have been "counterproductive", allowing Mr Mugabe to rail against neo-colonialism, and that targeted sanctions against the regime had been largely "symbolic".

Mr Mbeki's "quiet diplomacy", which has culminated in talks between members of the ruling party and opposition leaders in South Africa, has been widely criticised for providing the Mugabe regime with international cover. But the ICG said this route, while "fragile", offered the only realistic chance of progress.

"South Africa and the other regional countries are the only external actors with a chance to make a difference," it stated.

A senior source close to the talks in Pretoria said: "The parties are more upbeat than they have ever been. There's optimism that there will be an agreement".

Similar noises were made earlier this year after a violent assault on opposition leader Morgan Tsvangirai drew international attention to the crisis. However, expectations that neighbouring countries could persuade Mr Mugabe to end to his 27-year rule were quashed as he outmanoeuvred his opponents and cemented his control of the ruling Zanu-PF party. A campaign of beatings, disappearances and intimidation has so far succeeded in fracturing opposition parties and preventing any large-scale civil unrest.

While South African officials and the ICG spoke of encouraging progress, the Zimbabwean parliament passed a constitutional amendment yesterday allowing Mr Mugabe to name his own successor should he fail to complete another term as president. The amendment presumed that Mr Mugabe, 83, will win re-election in six months' time when the country is due to go to the polls. In an unexpected move the main opposition Movement for Democratic Change (MDC) backed the Bill.

The MDC, which had been pushing for a new constitution that would guarantee basic freedoms, feared the Bill would further centralise power and strengthen Mugabe's grip on the country. It relented after the Justice Minister, Patrick Chinamasa, agreed to changes that watered it down.

They included abolishing the president's power to appoint members to the lower house of parliament, which will have 210 members compared with the current 150, and a further expansion of the upper house to 93 members from 84, with five appointees.

"As a confidence building measure, we do not stand in the way of the constitutional amendment," said Thokozani Khupe, the MDC deputy leader. "But we are in no way abandoning our principle for a new people-driven constitution," she said, adding that the MDC was pressing for the repeal of tough media and security laws that give police wider powers to open mail and monitor the internet.