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Cholera Is Raging, Despite Denial by Mugabe - NYT

December 12, 2008
Cholera Is Raging, Despite Denial by Mugabe
By CELIA W. DUGGER

HARARE, Zimbabwe — Cholera swept through the five youngest children in the Chigudu family with cruel and bewildering haste.

On a recent Saturday, the children had chased one another through streets that flow with raw sewage, and chattered happily as they bedded down for the night. The diarrhea and vomiting began around midnight. Relatives frantically prepared solutions of water, sugar and salt for the youngsters, aged 20 months to 12 years, to drink.

But by morning, they were limp and hollow-eyed. The disease was draining their bodies of fluid.

“Then they started to die,” said their brother Lovegot, 18. “Prisca was first, second Sammy, then Shantel, Clopas and Aisha, the littlest one, last.”

A ferocious cholera epidemic, spread by water contaminated with human excrement, has stricken more than 16,000 people across Zimbabwe since August and killed more than 780. President Robert G. Mugabe said Thursday that the epidemic had ended, but health experts are warning that the number of cases could surpass 60,000, and that half the country’s population of 12 million is at risk.

The outbreak is yet more evidence that Zimbabwe’s most fundamental public services — including water and sanitation, public schools and hospitals — are shutting down, much like the organs of a severely dehydrated cholera victim.

Zimbabwe’s once promising economy, disastrously mismanaged by Mr. Mugabe’s government, has been spiraling downward for almost a decade, but residents here say the free fall has gained frightening velocity in recent weeks. Most of the nation’s schools, which were once the pride of Africa, producing a highly literate population, have virtually ceased to function as teachers, whose salaries no longer even cover the cost of the bus fare to work, quit showing up.

With millions enduring severe and worsening hunger, and cholera spilling into neighboring countries, there are rising international calls for Mr. Mugabe to step down after 28 years in power. But he seems only to be digging in, and his announcement about the epidemic’s end came just a day after the World Health Organization warned that the outbreak was grave enough to carry “serious regional implications.”

Water cutoffs are common and prolonged here, but last week the taps went dry in virtually all of the capital’s densely packed suburbs, where people most need clean drinking water to wash their hands and food, essential steps to containing cholera. On rutted streets crowded with out-of-school children and jobless adults, piles of uncollected garbage mounted and thick brown sludge burbled up from burst sewer lines.

The capital’s two largest hospitals, sprawling facilities that once would have provided sophisticated care in just such a crisis, had largely shut down weeks earlier after doctors and nurses, their salaries rendered virtually worthless by the nation’s crippling hyperinflation, simply stopped coming to work.

Inflation officially hit 231 million percent in July, but John Robertson, an independent economist in Zimbabwe, estimates that it has now surged to an astounding eight quintillion percent — that is an eight followed by 18 zeros.

The situation has deteriorated to such a degree that soldiers — Mr. Mugabe’s enduring muscle — rioted last week on the streets of the capital, breaking windows and looting stores, after waiting days in bank lines without being able to withdraw their meager salaries from cash-short tellers. A midlevel officer who participated in the mayhem, but spoke on condition of anonymity for fear of prosecution, said troops were enraged that they could no longer afford to buy food or send their children to school.

“As we talk, children of chefs are in private schools learning while ours are playing in dusty roads,” he said bitterly, using the local term for the people in power.

Rumors about this extraordinary unrest in the army’s ranks have circulated feverishly, with some speculating that the rioting was staged to justify imposing a state of emergency. Others hoped it finally signaled the beginning of the end for Mr. Mugabe.

Still, the Mugabe government’s ability to clamp down on dissent seems intact. The police quelled the riot. Sixteen soldiers now face a court-martial. Beyond that, about 20 opposition party activists and human rights workers have recently disappeared. Last week, armed men abducted a well-known human rights activist, Jestina Mukoko, at dawn while she was barefoot, still in her nightgown and bereft of her eyeglasses and as her teenage son looked on helplessly.

Political analysts have long predicted that Mr. Mugabe’s hold on power — which he has refused to loosen since September, when he signed a power-sharing deal with his nemesis, opposition leader Morgan Tsvangirai — would be broken only after the economy completely imploded and daily life became intolerable.

But as the endgame of the octogenarian Mr. Mugabe’s rule plays out, the human tragedies mount.

In a country with the terrible distinction of having the second highest proportion of orphans in the world — one in four children has lost one or both parents — the closing of schools and hospitals is hitting these most vulnerable children mercilessly.

Aisha Makombo, 15, has been raising her 11-year-old sister, Khadija, since their mother died of AIDS last year. An expressive girl with a soft, round face, Aisha, who is H.I.V. negative, has been struggling to get drug treatment for Khadija, who is now sick with AIDS.

She took her little sister, so stunted she appears half her actual age, to Parirenyatwa Hospital, the nation’s largest referral hospital, last year, but crucial test results needed to qualify Khadija for life-saving medications were inexplicably misplaced.

On a later visit, Aisha was told the machine that performed the tests was broken. Now the hospital is virtually closed. Aisha said she was referred to private doctors who demanded payment in South African rand or American dollars, but the girls had no money.

Aisha’s eyes filled with tears as she explained that she had been able to obtain only cotrimoxazole, an antibiotic used to treat opportunistic infections, for her little sister.

Aisha used to escape the sadness of her life by going to school, but two months ago the teachers at her high school stopped showing up.

“She didn’t bid us farewell, she just left,” Aisha said of her math teacher, the one she misses most of all. “At first, we thought she would come back, but then we gave up hope.”

Aisha now scrambles to barter her labor for food, while her little sister, too weak to work, attends a small school run by a nonprofit group. Last week, Aisha started a four-day job, bent over in a field, readying it for planting. In exchange, she was to get two pounds of flour and a bottle of cooking oil, as well as a shirt and blouse for Khadija.

The girls pray together each night before going to sleep in the tiny, grubby, windowless room they share. The small house belongs to their grandfather, but he admitted it was Aisha who provided the food for him and her 45-year-old uncle who sometimes steals the cornmeal she earns, as well as the girls’ clothes to sell secondhand.

Yet the girls say they cling to their dreams. Aisha’s is to be a doctor, Khadija’s a bank teller, each hungering for what the sisters do not have — health and money for medicine and food.

Zimbabwe has one of the world’s highest rates of H.I.V. infection, and now a raging cholera crisis. But with the economic collapse decimating revenues needed to run the country’s public health systems, mortality rates among cholera victims here are five times higher than in other countries, public health experts said.

Mr. Mugabe’s government — in its pursuit of power and money — has also contributed to both catastrophes, analysts say.

Earlier this year, the government jeopardized $188 million in aid from the Global Fund to Fight AIDS, Tuberculosis and Malaria by taking $7.3 million the organization had donated and spending it on other, unrelated expenses. Only at the 11th hour, under threat that the money would be withheld, did the government reimburse the Global Fund for the missing funds.

And two years ago, the government took control of Harare’s water and sewer systems from the opposition-controlled city council, depriving the local government of a crucial source of revenue to keep services functioning.

“The real motive was to dilute the influence of the opposition Movement for Democratic Change and cripple them financially,” said Justice Mavezenge, an officer with the Combined Harare Residents Association, a civic group.

Last week, even Mr. Mugabe’s mouthpiece, the newspaper The Herald, castigated the state-run water authority for running out of chemicals to purify Harare’s water supply — chemicals it said could have been trucked in from South Africa in less than 24 hours.

The United Nation’s Children’s Fund and international donors have stepped into the void. They have begun trucking 50 tankers of fresh water into the most densely settled suburbs and will be providing water treatment chemicals for the city over the next four months, said Unicef’s acting country director, Roeland Monasch.

But some aid officials fear that the epidemic will be impossible to contain because of the failing water and sanitation systems in places like Budiriro, the Harare suburb where the Chigudu children died and where half the country’s cases have occurred.

“We’re not going to be able to control it,” said one aid agency adviser, speaking anonymously for fear of retribution. “The likely scenario is that people who get sick in places like Budiriro will go home for the festive season and you’ll get flash points all over the rural areas.”

Cholera stole the five Chigudu children in just two days, on Nov. 17 and 18, and the grandmother and aunt who helped care for them died just days later. Their father, who returned home just hours after the last of his children died, got his first inkling of unspeakable calamity when his youngest ones weren’t there to clamber all over him as he walked in the door.

“I will never get my children back,” he said.

The death toll mounts each day. Chipo and Tecla Murape rushed their orphaned 5-year-old niece, Moisha, to the clinic in Chitungwiza, a city just south of Harare, last week. Nurses told the family the veins in the girl’s arms had collapsed because she had lost so much fluid. No doctor ever saw her, her relatives said, and the nurses never hit a vein. Moisha, a shy, but friendly girl, instead drank rehydration fluids.

Throughout the day, she complained of a terrible thirst and a stomachache. On the advice of clinic workers, her aunts did not even hold her hand as she lay dying, fearing infection. After night fell, the nurses said there was nothing more they could do and suggested that Moisha’s relatives take her to the city’s hospital, some two and a half miles away.

But there was no ambulance. Tecla Murape, 42, swaddled Moisha to her back and set off hurriedly for the hourlong walk, her heart pounding with worry. Under a dark, moonless sky, she took a shortcut through a maize field, leaping across yet another putrid sewage spill. By the time they arrived, Mrs. Murape’s clothes were soaked with Moisha’s watery diarrhea. Hours later, Moisha died.

Gov Patrick on Stimulus Plan for Massachusetts

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Greek PM calls crisis cabinet meeting

Greek PM calls crisis cabinet meeting

By Kerin Hope in Athens

Published: December 7 2008 12:39 | Last updated: December 8 2008 20:30

Costas Karamanlis, Greek prime minister, called an emergency cabinet meeting on Monday night amid escalating violence in central Athens with rioters setting fire to dozens of buildings around the parliament square.

Mr Karamanlis was expected to declare a state of emergency as police struggled to control a third day of riots in half a dozen cities around Greece.

In Athens the situation deteriorated after nightfall when masked youths broke up a peaceful protest march by the leftwing opposition Syriza party, throwing firebombs at two luxury hotels and a bank branch.

Thousands of Greek youths on Monday took part in a third day of violent protests following the killing of a 15-year-old boy by a police officer in a students’ district of Athens.

Earlier as police fired teargas at the rock-throwing demonstrators in central Athens, shoppers fled into a nearby metro station. The central square overlooking the parliament building emptied after police buses blocked access to traffic.

Undeterred by the violence, two leftwing political parties staged separate protest meetings followed by a march to parliament.

Alecos Alavanos, leader of Syriza, which is supported by many young Greeks, called for the resignation of the centre-right government.

“There was no justification for what happened. The conservatives cannot stay in power after this,” he said.

Greek authorities appeared ill-prepared to handle the sustained protests, with many government buildings left unguarded in Athens and other cities.

Several government offices had to be evacuated after fire-bomb attacks. Police said more than 60 shops, banks and dealerships were damaged over the weekend.

Business in the city centre of Athens ground to a halt.

Many shops with smashed windows opened as usual.

“In these times businesses can’t afford to turn any customers away,” said George Sofronos, deputy president of the city’s retailing association.

George Alogoskoufis, finance minister, said the government would pay compensation for damage to property.

Authorities fear more street clashes, with a teachers’ walk-out set for Tuesday, to be followed by a full-fledged public sector strike on Wednesday.

The teenager, Alexandros Gligoropoulos, died after being hit by bullets fired by a police officer on Saturday night.

Copyright The Financial Times Limited 2008

Vladimir Putin lashes US for economic failures

Vladimir Putin lashes US for economic failures

Philippe Naughton

The Russian Prime Minister Vladimir Putin lashed out at the United States today for what he said was its inability to deal with the financial crisis affecting the global economy.

In remarks unlikely to go down well in Washington, Mr Putin was especially critical of Congress's rejection of a $700 billion bank bailout – a rejection that hit Russian financial markets particularly hard.

“Everything that is happening in the economic and financial sphere has started in the United States. This is a real crisis that all of us are facing," the former president told a government meeting in Moscow.

“And what is really sad is that we see an inability to take appropriate decisions. This is no longer irresponsibility on the part of some individuals, but irresponsibility of the whole system, which as you know had pretensions to (global) leadership."

Highly leveraged Russian companies have been hit hard by the credit crunch, which has made it virtually impossible to secure borrowing abroad.

The main Russian stock indices are more than 50 per cent down from their May peaks, far outstripping losses on more mature Western markets, and trading has been repeatedly suspended over the past two weeks.

Analysts say foreign investor confidence has been hit by Russia's actions during the recent conflict in Georgia, as well as the Government's attitude towards Western energy companies trying to operate in Russia and other former Soviet states.

Mr Putin said today that Russia would allocate 175 billion roubles (£3.85 billion) of budget funds in 2009 to support the domestic financial market.

*** Several organs, including this one, continually use the photo of Putin with the tranquilized tiger and hint he killed it *** whimsy? ***

Lesson From a Crisis: When Trust Vanishes, Worry

October 1, 2008
Economic Scene
Lesson From a Crisis: When Trust Vanishes, Worry
By DAVID LEONHARDT

In 1929, Meyer Mishkin owned a shop in New York that sold silk shirts to workingmen. When the stock market crashed that October, he turned to his son, then a student at City College, and offered a version of this sentiment: It serves those rich scoundrels right.

A year later, as Wall Street’s problems were starting to spill into the broader economy, Mr. Mishkin’s store went out of business. He no longer had enough customers. His son had to go to work to support the family, and Mr. Mishkin never held a steady job again.

Frederic Mishkin — Meyer’s grandson and, until he stepped down a month ago, an ally of Ben Bernanke’s on the Federal Reserve Board — told me this story the other day, and its moral is obvious enough. Many people in Washington fear that the country is starting to spiral into a terrible downturn. And to their horror, they see the public, and many members of Congress, turning into modern-day Meyer Mishkins, more interested in punishing Wall Street than saving the economy.

All of which may be true. But there is good reason for the public’s skepticism. The experts and policy makers who so desperately want to take action have failed to tell a compelling story about why they’re so afraid.

It’s not enough to say that markets could freeze up, loans could become impossible to get and the economy could slide into its worst downturn since the Great Depression. For now, the crisis has had little effect on most Americans, beyond their 401(k) statements. So to them, the specter of a depression can sound alarmist, and the $700 billion bill that Congress voted down this week can seem like a bailout for rich scoundrels.

Mr. Bernanke and his fellow worriers need to connect the dots. They need to use their bully pulpits to teach a little lesson on the economics of a credit crisis — how A can lead to B, B to C and C to Depression.

Let’s give it a shot, then.

•

Why are we talking about the Depression, anyway?

Almost no economist thinks that even a terrible downturn would look like the Depression. The government has already responded more aggressively than it did in Herbert Hoover’s day. So a Depression-like contraction — a 30 percent drop in economic activity — is highly unlikely. The country is also far richer today, which means that a much smaller portion of the population is living on the edge of despair. No matter what happens, you’re not likely to see shantytowns.

But the Depression is still relevant, because the basic mechanics of how the economy might fall into a severe recession look quite similar to those that caused the Depression. In both cases, a credit crisis is at the center of the story.

At the start of the 1930s, despite everything that had happened on Wall Street, the American economy had not yet collapsed. Consumer spending and business investment were down, but not horribly so.

In late 1930, however, a rolling series of bank panics began. Investments made by the banks were going bad — or, in some cases, were rumored to be going bad — and nervous customers besieged bank branches to demand their money back. Hundreds of banks eventually closed.

Once a bank in a given town shut its doors, all the knowledge accumulated by the bank officers there effectively disappeared. Other banks weren’t nearly as willing to lend money to local businesses and residents because the loan officers at those banks didn’t know which borrowers were less reliable than they looked. Credit dried up.

“If a guy has a good investment opportunity and he can’t get the funding, he won’t do it,” Mr. Mishkin, who’s now an economics professor at Columbia, notes. “And that’s when the economy collapses.” Or, as Adam Posen, another economist, puts it, “That’s when the Depression became the Great Depression.” By 1932, consumption and investment had both collapsed, and stocks had fallen more than 80 percent from their peak.

As a young academic economist in the 1980s, Mr. Bernanke largely developed the theory that the loan officers’ lost knowledge was a crucial cause of the Depression. He referred to this lost knowledge as “informational capital.” In plain English, it means that trust vanished from the banking sector.

The same thing is happening now. Financial markets are global, not local, today, so the problem isn’t that the failure of any single bank locks individuals or businesses out of the credit markets. Instead, the nasty surprises of the last 13 months — the sort of turmoil that once would have been unthinkable — have caused an effective breakdown in informational capital. Bankers now look at longtime customers and think of that old refrain from a failed marriage: I feel like I don’t even know you.

Bear Stearns, for example, was supposed to have solid, tangible collateral standing behind some of its debts, so that certain lenders would be paid off no matter what. It didn’t, and they weren’t.

The current, more serious stage of the crisis began two weeks ago today, after the collapse of Lehman Brothers and the Fed’s takeover of the American International Group. Those events created a new level of fear. Banks cut back on making loans and instead poured money into Treasury bills, which paid almost no interest but also came with almost no risk. On the loans they did make, banks demanded higher interest rates. Over the past two weeks, rates have generally continued to rise — and these rates, not the stock market, are really what you should be watching.

The current fears can certainly seem irrational. Most households and businesses are still in fine shape, after all. So why aren’t some banks stepping into the void and taking advantage of the newly high interest rates to earn some profit?

There are two chief reasons. One is fairly basic: bankers are nervous that borrowers who look solid today may not turn out to be so solid. Think back to 1930, when the American economy seemed to be weathering the storm.

The second reason is a bit more complex. Banks own a lot of long-term assets (like your mortgage) and hold a lot of short-term debt (which is cheaper than long-term debt). To pay off this debt, they need to take out short-term loans.

In the current environment, bankers are nervous that other banks might shut them out, out of fear, and stop extending that short-term credit. This, in a nutshell, brought about Monday’s collapse of Wachovia and Glitnir Bank in Iceland. To avoid their fate, other banks are hoarding capital, instead of making seemingly profitable loans. And when capital is hoarded, further bank failures become all the more likely.

The crucial point is that a modern economy can’t function when people can’t easily get credit. It takes a while for this to become obvious, since most companies and households don’t take out big new loans every day. But it will eventually become obvious, and painfully so. Already, a lack of car loans has caused vehicle sales to fall further.

Could the current crisis lift — could banks decide they really are missing out on profitable investing opportunities — without a $700 billion government fund to relieve Wall Street of its scariest holdings? Sure. And is Congress right to fight for a workable program that’s as inexpensive and as tough on Wall Street as possible? Absolutely.

But in the end, this really isn’t about Wall Street. It’s about reducing the risk that something really bad happens. It’s about limiting the damage from the past decade’s financial excesses. Unfortunately, there is no way to accomplish that without also extending a helping hand to Wall Street. That is where our credit markets are, and we need them to start working again.

“We are facing a major national crisis,” as Meyer Mishkin’s grandson says. “To do nothing right now is to do what was done during the Great Depression.”

E-mail: leonhardt@nytimes.com.

Unknown terrain for economy

Unknown terrain for economy

By Robert Gavin and Casey Ross, Globe Staff | September 30, 2008

In an example of how fragile credit markets have become, the state of Massachusetts yesterday tried to borrow $400 million to make its routine quarterly local aid payments to cities and towns. State treasury officials said the credit markets abruptly froze midday, leaving them $170 million short. The state will have to use its own funds to complete the local aid payments, draining the state's balance to extremely low levels.

"I don't think any treasurer alive could say they've ever seen anything like this," said Timothy P. Cahill, the state's treasurer. "There have always been cash shortages, but you could always go to the market and get more. This is the first time we haven't been able to do that."

Cahill said he believes the credit market will in effect remain shuttered today as the nation's largest lenders hold on to their cash amid uncertainty over plans for a federal bailout. In short, the House's rejection of a $700 billion Wall Street bailout plan takes Massachusetts and the rest of the US economy into territory that few policy makers and analysts wanted to explore.

It tests the forecasts of Federal Reserve chairman Ben Bernanke and Treasury Secretary Henry Paulson that failure to approve the plan will dry up credit markets, damage the financial system, and send the fragile US economy spiraling into a deep recession. The economy may yet muddle through, analysts said, but the risks of a catastrophic downturn have risen.

"We're in a recession now, and the numbers show the recession deepening," said Lyle Gramley, a former Federal Reserve governor and senior economic adviser for national financial services firm Stanford Group. "If it doesn't turn around soon, we're heading for the worst recession" of the post-World War II era.

The federal bailout proposal called for the government to spend up to $700 billion to buy mortgage-based securities and other holdings from financial firms. The idea is to boost confidence in those companies by taking the troubled investments, whose values have been sapped by the subprime mortgage market meltdown, off their books. Banks and other financial firms have stopped lending money to one another, afraid that their counterparts may have large holdings of such mortgage-backed assets, and could be in the same danger that caused firms such as Lehman Brothers to file for bankruptcy.

"These markets have to be stabilized somehow, " said Eugene White, economics professor at Rutgers University. "If we get into a downward spiral of credit tightening, more people will lose jobs, they'll stop buying goods and services, and we're in a recession that will be hard to get out of."

White said the collapse of the financial system and the subsequent drying up of credit created such a spiral in the early 1930s, turning the economic downturn into the Great Depression. He said the House's failure to act could be compared to the Fed of that period, which largely stood on the sidelines during a wave of bank failures. "We need government to come in and take decisive action," White said.

Several large financial firms have collapsed in recent weeks, including Lehman Brothers, which filed for bankruptcy, and Washington Mutual, the national savings and loan bank seized by regulators. Insurance giant American International Group and mortgage giants Fannie Mae and Freddie Mac were taken over by the federal government before they, too, collapsed and possibly pulled down the broader financial system.

The situation, however, is nowhere near as bad as in the 1930s, in large part because the Federal Reserve today has acted aggressively, analysts said. The Fed has cut interest rates by more than 3 percentage points in a little more than a year, and, working with other central banks, pumped hundreds of billions of dollars into credit markets to keep the global financial system operating. Yesterday, the Fed and foreign central banks acted to pump hundreds of billions more into the financial system.

The rejection of the bailout package leaves the Fed on its own, analysts said. After rushing to prevent the collapse of firms such as AIG and Freddie and Fannie, and combating panic across global markets, Fed officials and the Bush administration sought the bailout as a comprehensive approach to shore up the financial system.

William Niskanen, an economist at Cato Institute, a libertarian think tank in Washington, said a case-by-case approach would be best. He said some large financial institutions might yet fail, but ultimately the economy needs to work out the excesses of the housing and credit bubbles without massive government intervention.



The Fed, however, can still help the economy avoid a deep downturn by aggressively cutting interest rates, said Brian Bethune, an economist at Global Insight, a Waltham forecasting firm. Lower interest rates encourage businesses and consumers to borrow and spend, which boosts economic activity.

Bethune said the Fed needs to cut its key interest rate, which now stands at a historically low 2 percent, by half or three-quarters of a percentage point. It could provide an additional boost by coordinating its rate cuts with foreign central banks.

"This puts the onus on the Fed," Bethune said. "The game isn't over, but it's halftime and we're down three touchdowns."

Robert Gavin can be reached at rgavin@globe.com, Casey Ross can be reached at cross@globe.com.

WaMu is largest U.S. bank failure

WaMu is largest U.S. bank failure


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