ZURICH (Jul 24, 2008) The Mugabe regime's final lifeline is a small Vienna-based software company that helps it to keep printing the money it relies on for its survival.
Jura JSP, an Austro-Hungarian firm with just 50 employees, has been dealing with the pariah government in Harare, letting it keep ahead of its hyperinflation crisis.
Officials at the company yesterday confirmed that they have supplied the licences and software used to design and print the Zimbabwe dollar, but would review this position if required to do so by the EU.
Fresh EU sanctions announced yesterday do not cover all companies dealing with the Mugabe regime, but other firms named and shamed for profiting from the Zimbabwe crisis have cut all links.
The software company lets the regime print the money it uses to pay the army, police and security agents that keep Zanu PF in power. Without access to paper money, Mugabe would face an immediate crisis.
Inflation is running at nearly three million per cent and the country issued the 100 billion dollar note this week, worth only about 14 cents but still the highest denomination.
Economist John Robertson said inflation is the greatest threat to the ruling party and would climb to 100 million per cent within the next month.
"If the software is withdrawn, there is no language to describe what would follow," he said.
Already the paper is running out at the state-run mint Fidelity Printers and Refiners after the Bavarian company Giesecke and Devrient stopped deliveries last week following pressure from the German government. Now Austria and Hungary are expected to come under diplomatic pressure to follow Berlin's lead.
After withstanding years of intense international criticism, targeted sanctions and domestic pressure, a move against the software supplier could be a decisive blow to Mugabe, analysts said. And with crucial negotiations getting underway in South Africa today between the government and the opposition, the timing could be critical.
Opposition Senator David Coltart said: "If the company does stop supplying, then that will show the regime that there is no place to hide and that the game is up. That may then even assist the negotiations."
Yesterday in Harare, paper money was already running out. The embattled Central Reserve Bank has capped daily withdrawals to 100 billion per person -- but this is not enough even to buy a bus ticket or a loaf of bread.
Long lines of people appear from first light at banks throughout the country in a daily battle to survive.
The regime's answer to economic meltdown -- driven by its own looting of state and private assets -- has been to print more and more worthless money, creating unprecedented hyperinflation and the prospect of trillion or quadrillion dollar notes in the coming months.