Sat, 05 Feb 2000

Burundi's economy in ruins as war drags on

By Todd Pitman

BUJUMBURA (Reuters): Sipping a cold beer surrounded by colored lights and palm trees on the lawn at Chez Deo, a bar in the Burundian capital, it is hard to imagine the country is in the midst of an economic collapse.

But ask around, and you'll find the word "crisis" on the tip of everyone's tongue.

"Before it was full here every day, every table was taken," says bar owner Deo Bukera.

"But now we have no customers, we are struggling I tell you."

Burundi's economy has been savaged by a six-year-old civil war that has killed around 200,000 people and displaced hundreds of thousands since it began in 1993.

A drought in the north has further cut into agricultural output and crucial profits from coffee sales -- which bring in 80 percent of the country's foreign currency receipts -- have halved because of a fall in prices on the world market.

Compounding the problem, most foreign aid to the tiny land- locked nation was suspended in 1996 after Pierre Buyoya, the current president, seized power in a military coup -- a move which also triggered a regional trade embargo that lasted 30 months.

Hard-pressed for money to keep state institutions running, the government earlier this month raised prices on key consumer goods, including beer, fuel, rice and sugar.

The price hikes -- 34 percent on fuel, 40 percent on urban transport and 14.3 percent on a bottle of locally-brewed Amstel beer -- sparked a two-day strike in the public and private sectors, the first since Buyoya came to power.

"You can't raise the price of beer and not expect people to be angry," said one customer at Chez Deo, where drink sales have fallen by 30 to 40 percent this month alone.

The government concedes the problem, but says it has little room to maneuver.

"In all countries in crisis people have to accept sacrifices," government spokesman Luc Rukingama told Reuters.

"We know people are fighting to survive, but we can't afford to increase salaries because we don't have enough money for that."

Most civil servants earn between 30 to 50,000 francs per month (US$50 to $80) -- and turn to other sources of income to get by.

Across the street from Chez Deo, Bukera points to the lawn of his cousin's house, where maize is sprouting from a tiny plot in the front yard.

"That guy is a civil servant, but he's got to supplement his salary. He's got to grow maize to get by," Bukera said.

Bujumbura residents say civil servants have also augmented their salaries in other ways.

"You need a piece of paper and they (civil servants) ask you for 1,000 francs ($1.50). The government says they have no choice but to raise prices, but they are promoting corruption," said one resident of the lakeside capital.

Buying power has also decreased with a steady depreciation of the Burundi franc, which is worth around half of what it was two years ago.

"Everything we buy is going up and our salaries are the same," said one teacher in Kinindo, a middle class Bujumbura suburb.

"Now we are eating less and less. I used to buy three pieces of bread a day, but now I only buy one and tell my family to share."

Despite the problems, some men still gather in small neighborhood bars every evening, to enjoy a beer and a steaming fish brochette fresh from Lake Tanganyika before returning home to their wives.

"When you have no money, you have to drink to forget," said one customer at Chez Deo. "You want to drown your problems. But these days you look into your glass and see your worries swimming to the surface. The crisis is deep."