As Zimbabwe shops with stolen cash, millions starve

For the Christmas season, Barbours department store in First Street, central Harare, has extended its shopping hours. Gilded smiling half-moons on red crêpe paper put customers in the festive spirit.

On the third-floor children's department, there is a crush round the till. Harassed mothers in the latest fitted-denim skirts from South Africa watch toddlers eyeing an American punchball set. There is a selection of Barbies and some Fisher Price-imitation lorries.

One little girl with tight braids clutches a giant pink teddy bear. Price: ZWD$101,000 dollars (£71), three times the average monthly wage.

Welcome to President Robert Mugabe's Zimbabwe, land of famine and food shortages. Or luxury, depending on where you look. Things have changed little at the venerable Barbours since the 1950s except that now there is barely a white client in sight. Wandering through Harare these days is like taking a stroll through Cloud Cuckooland. On the one hand there is the poverty and desperation. Millions in Zimbabwe are going hungry. The World Food Programme (WFP) has been forced to cut rations for 2.6 million people after donors failed to contribute sufficient funds.

"It is tragic that these cuts have come at a time when people are normally celebrating the festive season, but if we are not given food or cash by donors, then we are simply unable to meet their food needs," said Mike Sackett, the WFP regional director for southern Africa.

Inflation has reached 619 per cent: that is the level the government will admit to. Independent analysts say that it is much higher. Unemployment is more than 70 per cent. Last week, reports said a homeless woman in Mbare township sold a four-month-old baby for £3.

But there is also money. New money. Beverly Hills-style mansions are going up along Crowhill Road, in the exclusive Borrowdale Brooke suburb. Shiny new Pajeros and 4x4s trundle nose-to-nose out of town on Friday nights, despite official fuel shortages. The acting mayor, Sekesai Makwavarara, has just ordered herself a new vehicle worth Z$200m although thousands of Harare residents lack safe drinking water. Her party, the Movement for Democratic Change (MDC) has virtually disowned her; many think she is a Mugabe mole.

Food is plentiful, for enough cash. Moneyed shoppers, black and white, patronise Borrowdale Brooke's new Spar superstore. On offer this week were Albany Christmas mince pies, giant focaccia bread and fresh oysters. In this marble-floored heaven, it is hard to believe more than five million Zimbabweans are headed for starvation. So where is all the money coming from? Some comes from diplomats and foreign aid workers. There are several thousand in Harare. Their hard currency fetches up to 10 times its official value when traded on the parallel market. That makes life cheap.

And the rest? "It's mostly stolen money," says John Robertson, a local economist. He cites speculation, black market trading and shady deals in the Democratic Republic of Congo. "There have been a lot of activities that would not be allowed to continue if everyone was working to acceptable standards of honesty."

He says some of the people living in Borrowdale Brooke suburb are "colonels and army officers" who would never be able to afford that kind of standard of living on their official salaries alone. "I think a great many people would have a hard time explaining to a decent tax collector how they bought something that would have taken five lifetimes to pay for." Mr Robertson says those with government connections may get scarce US dollars at an old fixed exchange rate of 55 to one, which they can then trade on at 6,000 to one. Senior government cronies also get tax-free imports. Luxury goods can be imported cheaply and sold on at enormous profit. Zimbabwe is believed to have the biggest market for luxury vehicles on the continent, after South Africa.

Four miles away, Glen Lorne's Town and Country store is busy, but few shoppers bother with baskets. Most clutch just one or two items: a packet of Lacto (sour milk), two bread rolls or a bag of carrots. Few will be eating chicken and rice this year, the traditional Shona Christmas fare.