Zimbabwe to pay soldiers, teachers in U.S. dollars

HARARE, Zimbabwe — Zimbabwe tried to combat the world's highest inflation by widening the use of foreign currency Wednesday — the first act of a coalition government that gave the longtime opposition control of much economic policy.

Finance Minister Tendai Biti, a veteran opposition leader, told reporters that some 130,000 soldiers, teachers, civil servants and other government workers will now receive payment in U.S. dollars instead of local currency. The $100 monthly salary will be a raise for most government employees, who had seen their buying power drop to the equivalent of $30 a month because of inflation.

Biti also scrapped licenses required for shops doing business in foreign currency. The change will allow more merchants to legally trade in dollars and South African rand.

But even as the new coalition took its first steps, a judge ordered the opposition's nominee for deputy agriculture minister jailed for at least two more weeks pending trial on terrorism charges.

Prime Minister Morgan Tsvangirai, leader of the opposition Movement for Democratic Change, called Roy Bennett's arrest last week an attempt by factions in the President Robert Mugabe's party to derail the power-sharing deal, which forced several of his top aides to hand Cabinet posts to MDC politicians.

The detention of Bennett and several other opposition figures and independent human rights activists in recent weeks raises the pressure on Tsvangirai to convince supporters that joining a government with Mugabe and his ZANU-PF party was not a mistake.

The MDC called for the release of Bennett and said the new government must assure "Zimbabweans that it respects citizens' human rights."

Critics blame Mugabe — in power for nearly 30 years — for political repression and an economic collapse that has seen worsening hunger, a widening cholera epidemic and spiraling prices.

Ordinary Zimbabweans have long since stopped doing business in virtually worthless Zimbabwean dollars. Mugabe's party partially opened the economy to stable currencies like the U.S. dollar, rand and British pound. Schools and hospitals are allowed to charge in foreign currency. Crumbling power and water utilities also have been charging in foreign exchange. Bus drivers demand fares in foreign currency and even the Herald, the state-controlled daily newspaper, began printing its price as $1 over its masthead last month.

Biti's announcement represented a broadening of that strategy in an attempt to halt the skyrocketing inflation and wider economic disaster.