The talks broke off yesterday after a tense session at the end of which Morgan Tsvangirai spelt out in clear terms what he was wanting from the talks. All parties are now reviewing their positions and they will come back this afternoon for another session. Mbeki was here originally for two days has now been here for four and this demonstrates the importance he gives to these talks and their consequence for Zimbabwe, South Africa and the region.

This morning my staff told me that the Rand was now trading at Z$90 billion to 1 on the street. Yesterday it was Z$75 billion, a week ago it was Z$25 billion. In my business the average inflation in June was 2,5 million percent - in July it soared to 32 million on average for the month. The news that it might have topped 42 million does not surprise me. How much longer can this go on and why this sudden surge in inflation and the collapse of the currency - we have never seen such conditions.

The State certainly cannot cope with these conditions - they cannot pay their staff and the armed forces. They cannot protect their assets. As this rate the new currency will be worthless in two weeks. Then what do they do?

There is now only one solution to the crisis and that is to do a deal and get international help to sort out the economy. To do that Mugabe and his cronies have to accept that they are no longer in control - power has passed to a new generation of leaders. They can negotiate the best deal for themselves thereafter - but the basics have to be acknowledged and accepted.

If they do not accept this and are not obliged to do so by regional pressure then the consequences for all of us - including those in the regime today, will be dire.

Eddie Cross
Bulawayo, 12th August 2008