Military

DATE=8/1/2003

TYPE=CORRESPONDENT REPORT

TITLE= ZIMBABWE / ECONOMY (L-O)

NUMBER=2-306087

BYLINE=PETA THORNYCROFT

DATELINE=HARARE

CONTENT=

VOICED AT:

INTRO: Zimbabwe's informal economy, where most people work, has been hardest hit by the deepening shortage of bank notes. Peta Thornycroft reports from Harare that a cashless society, encouraged by the ministry of finance this week, will not work for most people.

TEXT: Outside a Harare supermarket Friday vegetable sellers said their turnover has slumped by 80 percent since the cash crisis began two months ago. One of the traders said he has been selling vegetables outside the suburban supermarket for 12 years and that he traded in cash.

He said he was saved from starvation by the supermarket, which has long tolerated competition from street traders, because the store is keeping him afloat by cashing checks written by his customers.

But the lucky beneficiaries of a benevolent supermarket are few, and most struggle to survive.

The latest figures show more than 70 percent of Zimbabweans are unemployed, and the number of those losing jobs is rising as more and more businesses close their doors.

Over 400 large factories closed in a year, and the number of failures of smaller businesses is not even recorded.

The Reserve Bank of Zimbabwe and the Ministry of Finance said this week people should use credit cards or check books. But informal traders - those who don't appear in government records -- say they cannot afford to buy check books or even pay bank charges.

On Friday, a week after traditional payday, there were still long lines outside every savings bank and building society, which serves those in formal employment. Most say they managed to withdraw some cash, but even they are dreading the day there will be no income coming in. (Signed)

NEB/PT/MAR/MEM/fc