Mugabe

HARARE, Zimbabwe (AP):

In a sign of its dire financial crisis, Zimbabwe's central bank said Wednesday it was knocking 10 zeros off the hyper-inflated currency, and President Robert Mugabe threatened to impose emergency laws if businesses profiteer.

Any state of emergency could give the 84-year-old autocrat even more sweeping powers to impose controls on businesses and punish political opponents if power-sharing talks to end the country's political and economic disaster fail.

"Entrepreneurs across the board: Don't drive us further," Mugabe warned in a televised address to the nation. "If you drive us even more, we will impose emergency measures. They can be tough rules."

But in a rare glimmer of possible rapprochement between two sworn political enemies, opposition leader Morgan Tsvangirai said that Mugabe was as "human as everyone else," albeit "in denial" about the problems and violence that have swept the once prosperous southern African nation.

90-minute dinner

Tsvangirai told Britain's Channel 4 News that he had a 90-minute dinner last week with Mugabe - the first meeting in years between the two men - and discussed "where the country is going and what are pitfalls in any future government."

"I am sure that there was a common understanding that there is a need to soft-land the crisis through a transitional process," Tsvangirai said. Meanwhile, South African President Thabo Mbeki travelled to Zimbabwe in yet another bid to mediate in the crisis.

Both Mugabe and Tsvangirai say they won recent elections and should lead the government.

The Zimbabwean economy is in free-fall. Inflation is the highest in the world at an official rate of 2.2 million per cent, but independent economists say it is closer to 12.5 million per cent.

Dropping zeros

Central Bank Governor Gideon Gono announced Wednesday he was dropping 10 zeros from the currency, effective Friday - a move that turns 10 billion dollars into one. A week ago he had introduced a 100 billion-dollar note - still not enough to buy a loaf of bread.

Gono said the new money would be launched Friday with 500-dollar bills. He also said he was reintroducing coins, which have been obsolete for years.

That is a boon for Fungai Matambo, a 33-year-old vendor of airtime for cellphones who said she has kept a large milk pail full of old coins.

"I'm very happy now," she laughed. "In the old terms, I'm a multitrillionaire!"

But she noted there was little to buy in the shops.

Not pleased was John Takawira, 28, who works in an Internet cafe.

"The prices of goods have already started shooting up," he complained. "This is not going to make any change to my poor life."

Gono made the move because the high rate of inflation was hampering the country's computer systems. Computers, electronic calculators and automated teller machines at Zimbabwe's banks cannot handle basic transactions in billions and trillions of dollars.