Zimbabwe's economy veered closer to the brink on Monday with no end in sight to chronic shortages of food and gasoline, and predictions of a standstill in routine business within days.
Police and government inspectors continued cracking down on shopkeepers and sales managers accused of defying orders to slash prices by half in a desperate attempt to halt rampant inflation.
Shelves were bare of cornmeal, bread, meat and other staples, and witnesses said many shops and suppliers were cleaned out by convoys of ruling party supporters coming in after police and inspectors began enforcing the price cuts on June 26.
"The crunch can't be far off," said economist John Robertson.
Factories, stores and gas stations have been unable to replace goods sold at below the original cost. The sudden drop in prices has sparked panic buying, stampedes and near-riots by impoverished Zimbabweans.
Fuel stock have run out, putting an end to the long lines of cars at gas stations. On Monday, the government ordered private commuter buses to cut fares by three-fourths, promising bus owners they would be able to buy subsidized fuel from the state oil procurement agency.
But many ignored the directive and simply abandoned their routes. Businesses reported higher absenteeism, with workers failing to arrive at their jobs.
"We are incurring huge losses. We can't go on like this for much longer," one industrialist said. "We won't be able to pay our VAT [value added tax], which runs into the billions each month. We'll have to lay off quite a number of our people very soon," he said. "We've shot ourselves in the foot this time."
He asked not to be identified.
President Robert Mugabe said on Friday that the government would target uncooperative managers and seize factories that scaled down their operations.
More than 1,300 businesses have been charged and fined over the past two weeks for defying orders to slash prices in half or hoarding goods, police said.
Several of 33 top company executives arrested in recent days were fined up to Z$100 million (US$6,600), court officials said on Monday.
Economists predicted that shortages would worsen dramatically across the board.
"Retailers who can't recover the money they spent on their goods are not going to carry them anymore, and manufacturers who are not allowed to charge more than their production costs are going to stop making them," Robertson said.
By the end of next week, "we won't have much mobility anywhere and we will have run out of options" as gasoline tanks run dry and gas stations and stores go out of business, he said.
Last week, the government announced it was reviving the long-defunct State Trading Corp to run businesses that had collapsed or were commandeered. The corporation itself collapsed in the 1980s through mismanagement.
Police spokesman Oliver Mandipaka said the crackdown was "not a gimmick and will be sustained at all costs to stop consumers being ripped off," state radio said.
Mandipaka appealed to rural villagers and farmers "to compliment government efforts by reducing prices of cattle so butcheries can operate viably," radio said.
Beef, a traditional favorite in the diet of Zimbabweans, disappeared from shops more than a week ago.
Cattle herds already have shrunk drastically since the seizures of thousands of white-owned farms disrupted Zimbabwe's agriculture-based economy in 2000.
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