Bitterness and unease in bankrupt Zimbabwe

Courtesy BBC

After 30 years in power, Zimbabwe’s veteran leader Robert Mugabe said this week he was ready to stand for another term as president. BBC Africa correspondent Andrew Harding finds Mr Mugabe’s party in angry mood, and others – the white minority and the former opposition MDC party – full of foreboding.

The law intends to redistribute more wealth to the black population

It has been a grey, drizzly week here.

In the wealthier suburbs of Harare, Zimbabwe’s shrinking white population is once again feeling nervous.

Pat, who runs a small hairdressing salon, and whose family has lived here for four generations, is finally planning to leave.

They don’t want us “whiteys” here any more she says. The writing is on the wall.

Pat has been spooked by a new law, introduced this week, which is supposed to correct the enduring economic legacies of colonialism, and give black Zimbabweans a controlling stake in almost all companies.

The main focus is Zimbabwe’s rich mines and its industry.

But the indigenisation law also seeks to prevent white people from owning things like hairdressing and beauty salons.

In a few years, says Pat, we will be like an extinct species. They will come for our houses next.

The reaction may well be extreme.

Many white Zimbabweans have been slow to acknowledge the debt they owe to the black majority here. Economic empowerment is clearly necessary.

But after a decade of economic chaos, horrific violence, and the brutal seizure of white-owned farms, it is easy to understand why so many Zimbabweans – of all colours – are hair-trigger tuned to expect the very worst.

Bitter words

Our children are dying because of sanctions Saviour Kasukuwere, Zanu PF

Saviour Kasukuwere does not exactly try to smooth the waters.

“You people,” he almost spat at me, as I sat in his office on the ninth floor of the squat grey building that houses President Mugabe’s Zanu PF Party.

Mr Kasukuwere used to be a member of Mr Mugabe’s notorious state security.

He is a hardliner and a rising star.

“You British, you could learn a lot about democracy from us,” he says with a thin smile.

Mr Kasukuwere, a tall, heavy-set man, was at primary school when his country won full independence from Britain 30 years ago.

Unlike Mr Mugabe’s generation, he did not fight and suffer for freedom. But, full of passionate intensity, he seems to wallow in his bitterness.

In his eyes, and words, everything can still be blamed on what he calls the “genocidal” West.

Zanu PF’s current preoccupation is with what it calls “Western sanctions”.

The state media makes it sound like some overwhelming economic blockade.

“Our children are dying because of sanctions,” says Mr Kasukuwere.

But as diplomats and economists here point out, the reality is less extreme.

The European Union is currently imposing a travel ban on 198 individuals. Thirty-five companies are also frozen out.

“This is about Mrs Mugabe not being able to shop in Paris,” one diplomat put it. “Zimbabwe can’t borrow money, not because of sanctions, but because it owes $6bn, and can’t pay it back because it systematically wrecked its own economy.”

Train smash

Within Zimbabwe’s unity government, sanctions are a poisonous issue – one of many.

The unity government, formed after bitterly disputed elections, has survived a year now – President Mugabe’s Zanu PF sharing, or at least pretending to share power with its enemy, the Movement for Democratic Change (MDC).

“It’s a train smash, warfare every day,” one MDC minister told me.

But the government has survived and on some issues is clearly making progress.

The MDC is hoping now to water down the new indigenisation law in order not to scare away foreign investors and potentially plunge the economy back into chaos.

The 2008 elections saw MDC supporters beaten and killed

Both parties are now gearing up for new elections – possibly next year. It is the only way to settle Zimbabwe’s political deadlock once and for all.

The sanctions issue and the indigenisation law, are key campaign themes for Zanu PF.

If the MDC tries to question either of them – it is accused of being a stooge for colonial Western interests.

The MDC can probably handle that sort of criticism. It has got a strong support base, and at least one recent opinion poll showed it would crush Mr Mugabe and his party at the polls.

Any credit for the economic stability achieved here during the past year, seems to have gone to the MDC.

But the party is not nearly as well organised or ruthless as Zanu PF.

We are floundering, one MDC insider told me dejectedly. And of course, past experience in Zimbabwe shows that elections here are won by intimidation, not popularity.

Unless we have foreign peacekeepers to protect us, it will be another bloodbath Senior MDC official

In 2008, Zanu PF orchestrated a campaign of terror – killing and beating MDC supporters – in order to hold on to power.

Now at the age of 86, after 30 years in office, President Mugabe has announced he is planning to run for yet another term.

Elections could be held next year, he says.

Mr Mugabe controls the police and the army, and under the current constitution, most of the electoral infrastructure.

Will he play fair this time?

We are heading towards another big fight, a senior MDC official told me anxiously.

Unless we have foreign peacekeepers to protect us, it will be another bloodbath.

Police battle illegal Russian gamblers

A picture from a police video shows officers catching staff and gamblers red-handed

Illegal gambling has spread rapidly across Russia since a new law came into force last July banning casinos and slots machines in towns and cities, according to a senior police officer in an exclusive interview with the BBC.

Col Oleg Bolderov of the economic crimes department of the Russian police said they had carried out thousands of raids over the past eight months.

“We have closed down 70 casinos and 4,000 slot-machine arcades… and have brought 600 criminal cases against those trying to organise this (illegal gambling),” he said.

A police video of one of the raids given to the BBC shows heavily armed officers dressed in black, breaking into an illegal casino and catching the staff and punters red-handed.

Brandishing automatic weapons, two police officers stand over a poker table busy with startled gamblers.

But despite the crackdown, well-placed sources connected to the formerly legal gambling industry say underground gambling dens continue to flourish in the capital, Moscow, and in St Petersburg, while in more far-flung cities very little actually changed when the law came into force last July.

‘Gambling rife’

There are also allegations that some senior police officers are actively offering to protect illegal casinos in return for huge pay-offs.

“We were approached by a police official who told us that for $400,000 per month we could stay open,” said one source who wished to remain anonymous.

In parts of Russia, gambling remains rife. Why? Because of corruption Col Oleg Bolderov

Even Col Bolderov admits that authorities are fighting a losing battle against the continuing huge demand for gambling as well as against corrupt officials.

“One of the most probable explanations for the rise of illegal gambling is corruption,” he says.

“In our police department, we do our best to close down underground casinos and slot-machine halls and we have some success.

“But in parts of Russia, gambling remains rife. Why? Because of corruption.”

In the centre of Moscow it is easy to find slot-machine arcades operating openly, although slightly more discreetly than before.

And it took just a few phone calls to arrange a visit to an illegal casino.

I was told to leave my bag behind to ensure I had no recording equipment or cameras with me.

Lucrative industry

The owner then led me through corridors and heavy doors, which could only be opened using special security codes, into the casino.

It was not large but it had pristine poker tables, a roulette wheel and hi-tech slot machines.

At the bar, a lone gambler, his back turned to me, nursed a drink.

The police have had some success in closing gambling sites down

According to industry sources the illegal casinos were up and running just four months after the ban came into force.

The new law, which should have put an end to gambling in Russia’s towns and cities, was pushed through by the former president and now Prime Minister, Vladimir Putin.

Casinos and slot-machine arcades had come to dominate city centres with their gaudy neon entrances.

The gambling industry, which was resurrected after the collapse of the Soviet Union almost twenty years ago, had grown to be worth around $6bn (4.4bn euros, £3.9bn) a year.

And the number of addicts was also growing.

Too remote

The government’s plan was to banish gambling to four specially-designated zones in the remotest regions of the country.

But the zones were so remote that none of the big casino operators was prepared to invest the huge sums of money required to have the slightest chance of attracting gamblers to travel so far.

So for the most part, they remain empty plots of land.

In a forlorn ceremony earlier this month however, one casino in one of the regions did finally open its doors.

It is at least a two hour drive from the nearest city and airport, in the middle of nowhere in the far south of the country.

No other casinos have been built so far in any of the regions.

Already there are calls for the law to be revised on the basis that it has simply driven gambling underground and provided corrupt officials with yet another opportunity to solicit bribes.

Leaner GM emerges from bankruptcy

General Motors (GM) says it has emerged from bankruptcy protection after creating a “new GM” made up of the carmaker’s best assets.

GM chief executive Fritz Henderson said it was the beginning of a “new era”.

The leaner GM will own four key brands including Cadillac and will be 61% owned by the US government.

Mr Henderson said negotiations were continuing “around the clock” to conclude a deal to sell GM Europe, which includes Opel and Vauxhall.

Mr Henderson said that GM would take the “intensity, decisiveness and speed” of the bankruptcy process and apply it to the new company.

“We will be profitable, we will repay our loans as soon as possible and our cars and trucks will be among the best in the world,” he said.

A smaller GM is being created with a reduced workforce, smaller dealer network and less debt.

‘Cautiously optimistic’

Industry analysts interpreted the short timeframe of the bankruptcy as a good sign.

GM BRANDS BRANDS STAYING Chevrolet GMC Cadillac Buick BRANDS GOING Pontiac* Saturn# Saab# Hummer# Opel# Vauxhall# *= to be discontinued/# = to be sold

“It is the smaller, leaner, tougher, better cost-focused GM,” said George Magliano, an automotive analyst with consulting firm IHS Global Insight.

“But they still have to deal with the problems that they faced longer-term.”

Analysts argue that GM will need to change what it offers consumers and produce more cutting-edge vehicles.

“I’m still cautiously optimistic – they still need to put a product out there that everyone is excited about purchasing,” said Pete Hastings, analyst at Morgan Keegan.

“The challenge in the future is how to approach a marketplace that has been burned by GM,” he added.

The firm lost its title as the world’s largest vehicle-maker in January.

Toyota sold 8.97 million vehicles in 2008, while GM’s global sales had dropped to 8.35 million vehicles.

The new GM will operate with 27,000 fewer US employees and operate 13 fewer US car plants compared with last year.

It will operate the strongest parts of the old company, with only its Chevrolet, Cadillac, Buick and GMC brands remaining. Others such as Hummer and Saab are being sold off.

The company’s logo will remain the same; blue with white GM letters underlined.

Loan repayment

RECENT ROAD TO GM BANKRUPTCY Feb 2008: GM posts $38.7bn loss for 2007 and plans to cut 74,000 union jobs Sept 2008: GM has 100th anniversary Dec 2008: US state offers $13.3bn in loans to GM and Chrysler; Canada offers $3.3bn Feb 2009:GM posts $31bn loss for 2008 March 2009: The White House requests a new viability plan from GM and calls for boss Rick Wagoner to resign May 2009: Reaches deals with US and Canadian unions. GM bondholders approve restructuring June 2009: GM files for bankruptcy July 2009: GM emerges from bankruptcy

GM said it planned to repay its government loans before the current 2015 deadline.

The firm is getting $60bn (£37.3bn) in financing from the US Treasury, which gives the US government a 61% share in the new GM, while the United Auto Workers union will have 17.5%.

Canada’s government will have a 12% share and GM bondholders will own about 10% in the new company.

GM said it hoped to float the company on the stock exchange again “as soon as practical”.

The US government has said it does not want to be involved in the day-to-day running of the carmaker.

The company also said it was exploring a partnership with online auction site eBay to make it easier for customers to buy its cars.

Rocky road ahead

GM filed for bankruptcy protection on 1 June, saying it would be forced to liquidate if the plan was not approved.

The plan was strongly supported by President Barack Obama and GM’s 40-day bankruptcy ended two days earlier than that of its cross-town rival Chrysler.

However, it is unlikely to be smooth sailing for the two carmakers.

US car sales have been hit hard as the financial crisis has made it harder to get credit and made consumers reluctant to make big purchases.

During the past six months, car sales in the US have fallen by more than 30%, while in Japan they have declined 20%.

Empty aircraft fly from Bangkok

Thousands of passengers have been stranded by the protests

About 40 empty planes have flown out of Bangkok’s international airport after authorities reached a deal with protesters camped there for seven days.

Thousands of travellers have been stranded since anti-government groups took over two airports last week.

The deal allows a total 88 planes to be flown out to other Thai airports, where it is hoped they can evacuate some of the blockaded tourists.

The crisis has economically damaged the country since it intensified last week.

Thailand’s deputy premier for economic affairs is reported to be meeting senior figures in commerce, industry and tourism today to discuss the damage being done.

As the backlog of stranded foreigners grows with each day, foreign embassies are beside themselves with frustration.

Foreign airlines

A spokeswoman for Airports of Thailand said: “Thirty-seven aircraft have left Suvarnabhumi (international airport) since the first aircraft of Siam GA (a regional airline) took off on Sunday evening.

“International airlines will have to contact us to take those stranded aircraft out of Suvarnabhumi.”

Twelve planes belonging to foreign airlines are stranded at Suvarnabhumi, as well as 29 from Thai Airways, 16 of Thai Airasia, 15 from Bangkok Airways, and 22 aircraft from other airlines.

With thousands of British citizens among the estimated 100,000 travellers, a spokesman for the UK’s Foreign Office said: “Bangkok’s two main airports remain closed but airlines have been able to arrange flights and transfers to and from alternative airports.

“Some British nationals have been able to fly out but not in the necessary numbers.

“We have continued our consultations with airlines and Thai authorities…and action is being stepped up to enable people to travel in greater numbers, for example via Chiang Mai.”

Chiang Mai, in the north, is 700km (435 milies) by road from Bangkok, while the other option – Phuket, a resort in the south – is 850km (530 miles).

France has said it will send a “special plane” to fly its citizens out of Thailand on Monday, with “those in the most pressing situations…given priority,” AFP news agency reported.

Air France-KLM has already said it would fly travellers out of Phuket.

A few airlines have been using an airport at the U-Tapao naval base, about 140km (90 miles) south-east of Bangkok.

On Sunday more than 450 Muslim pilgrims stranded at the international airport were taken by bus to the base where they were to board a plane for the annual Hajj in Saudi Arabia.

Spain and Australia have been arranging special flights to evacuate their citizens.

Thailand’s tourist industry is losing an estimated $85m (£55.4m) per day, and the government warns that the number of foreign tourists arriving next year may halve, threatening one million jobs.

The protesters from the People’s Alliance for Democracy (PAD) are a loose alliance of royalists, businessmen and the urban middle class.

They opposition want the government to resign, accusing it of being corrupt, hostile to the monarchy and in league with exiled former Prime Minister Thaksin Shinawatra.

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Thousands stranded by XL collapse

The collapse of the UK’s third largest package holiday group has left tens of thousands of Britons stranded abroad.

The decision to place XL Leisure Group into administration has also left thousands of staff facing the axe.

Chairman Phil Wyatt said he was “totally devastated” by the failure which has grounded XL’s 21 planes. The company flies to about 50 destinations.

There are 67,000 stranded who booked directly with XL, and another 23,000 who booked via other companies.

The Civil Aviation Authority(CAA) also said the firm had 200,000 advance bookings.

‘Sad day’

CAA EMERGENCY HELPLINE Customers abroad: +44 (0) 2891 856547 Customers in the UK with advance bookings: 0870 5900927

“We’ve made every effort, myself and my fellow directors, to find new funding for the business – and it’s a very sad day for me personally. I am totally devastated,” XL chairman Phil Wyatt said.David Clover, a spokesman for the CAA, said it was making arrangements to help customers of the four tour companies within the XL group.

“In respect of people who are currently abroad we’re making arrangements and working very closely with the travel industry to organize repatriation flights.

“Clearly though, with XL Airways no longer operating, we’re having to bring in substitute aircraft to bring people home.”

He said package deals are covered by the CAA’s Air Travel Organizers’ Licensing (Atol) scheme and those customers will be offered repatriation flights or their money back if they have an advance booking.

Struggling

However, those who booked directly with the airline or XL.com – who are in the minority according to the CAA – will face a fee.

Anyone yet to take their flights should check their insurance policies, and with their banks or credit card companies about refunds, he added.

XL – which carried 2.3 million passengers last year – is the latest travel business to face financial difficulties, as the industry struggles with high fuel costs and an economic downturn.

But an agreement has been reached whereby Straumur investment bank has acquired XL’s German and French subsidiaries, which Straumur considers to be financially viable and sustainable businesses.

They will continue operations as separate commercial entities.

Share prices in holiday firms TUI Travel and Thomas Cook were up 6% and 7% following the collapse of their rival.

Economic downturn

“As the travel industry matures in Europe, there was always going to be pressure on those operating in the mid-market,” said Lastminute.com chief executive Ian McCaig.

A statement on the XL group’s website said: “The companies entered into administration having suffered as a result of volatile fuel prices, the economic downturn, and were unable to obtain further funding.”

XL COMPANIES XL Leisure Group XL Airways UK Excel Aviation Explorer House Aspire Holidays Freedom Flights Freedom Flights (Aviation) The Really Great Holiday Company Medlife Hotels Travel City Flights Kosmar Villa Holidays

BBC travel correspondent Tom Symonds added that the industry would be facing an “enormous challenge” as it deals with the fall out of XL’s collapse.

“XL wasn’t just an airline it was a fundamental link Britain’s package holiday industry,” he said.

“Getting these people to and from their holidays will be an enormous challenge not least because of the shortage of aircraft caused by so many airline collapses in recent weeks.

“XL can’t use its own airliners for among other reasons it has no insurance now.”

The CAA said it was working with the travel industry to bring stranded holidaymakers home, and denied it had been responsible for the grounding of XL’s planes.

Airlines BA, Easyjet, BMI, Flybe and Ryanair have offered to fly some of the stranded passengers home.

Easyjet chief executive Andy Harrison told that its fuel efficient planes had helped it cope with the high cost of aviation fuel although on Thursday it said it would cut up to 60 jobs to remain competitive.

Fuel pressures

Mr Wyatt added that spiralling oil prices had increased the firm’s costs “year-on-year by over $80m”.

“So where many people have been making hay with high oil prices, this is the repercussions of that hay – 1,700 people potentially out of work today in the UK,” he said.

Rival TUI warned that rising fuel costs meant that “airlines with less than robust business models” – such as XL and Futura – were now failing.

It added that the government should take steps to ensure all holiday companies must belong to the Atol scheme, which offers package holiday makers financial protection.

In the US, one flight from Orlando to Manchester managed to set off, while one bound for Gatwick was grounded. A source at the airport said accommodation was being found for the “distressed” passengers.

In the UK, air traffic control prevented three XL aircraft from taking off from Manchester Airport.

The XL group, which is based in Crawley, West Sussex, runs an airline and owns several travel companies, including Travel City Direct, Medlife Hotels Limited, The Really Great Holiday Company, Freedom Flights and Kosmar Holidays.

‘Going nowhere’

The company flies mainly from bases at Gatwick, Manchester and Glasgow airports.

Travel writer Simon Calder warned that many thousands of XL customers hoping to fly to the Caribbean, Mediterranean, North Africa and North America, from airports across the UK in coming weeks and days “simply won’t be going anywhere”.

Jim Duwaine, from Portsmouth, said he was given the news when he arrived at Gatwick where he had been due to catch an early morning flight to Menorca.

HELP OFFERED TO XL CUSTOMERS Flybe – offering flights for 90 euros (£71.50) BA– offering a one-way discount Easyjet– flights offered for £75 BMI – provided aircraft to CAA for transport people home Ryanair – has offered spare plane to CAA for transport

He said: “Absolutely devastated. Got up at midnight planning on going on holiday, but got let down, unfortunately. We’re here, just trying to get some other flights, but it’s not looking good. I think everyone else has got the same idea.”

Other holidaymakers have said they have been quoted vastly inflated prices for replacement flights.

Robert Spurgeon, of Norwich – an XL customer who had been due to fly to Tenerife from Gatwick – said: “We’ve not been told anything but my wife’s been quoted £2,000 for alternative flights.”

Also among those affected are a 130-strong choir on tour to Canada from Wales who were booked on Zoom and lost £50,000 when it folded last month, and then re-booked with XL.

XL is the current kit sponsor of West Ham United but football club said it would end the sponsorship deal and play on Saturday in an unbranded kit.

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Are you struggling to make your way home from your holiday destination? Have you paid for a holiday that you may not be able to take? If you were an employee of XL what are your views? Send us your comments

Easyjet’s passenger numbers rise

Eayjet’s passenger traffic is up despite difficult market conditions

Easyjet has said that the number of passengers it flew in August this year rose 24% on the same month last year.

Europe’s second-largest budget airline said it transported some 4.6 million passengers in August 2008, compared to 3.7 million in August 2007.

Aer Lingus also saw an increase, flying 8.8% more passengers this August than in August 2007.

On a rolling 12-month basis to August 2008, Easyjet increased passenger numbers by 16.6%.

The number of seats filled also increased to 91.3% from 87.4% last August.

At Aer Lingus the load factor was 80.5% in August, a slight dip on 81.7% a year ago.

Easyjet shares were down 2% at 1005 BST, while Aer Lingus shares were down 0.9%.

Industry turbulence

The figures for Easyjet and Aer Lingus are relatively strong compared with those released on Friday by Scandinavian airline SAS.

SAS, which is partly owned by the governments of Denmark, Sweden and Norway, said traffic for August measured in revenue passenger kilometres, fell 0.7% and demand was weakening further.

Airlines worldwide have been effected by the economic deceleration and several airlines, including business airlines Silverjet, Maxjet and Eon and budget airline Zoom, have folded.

According to the International Air Transport Association (IATA), global airlines will post losses in the region of $5.2bn (£2.96bn) this year and $4.1bn in 2009.