By Cris Chinaka HARARE, July 19 (Reuters) - South African President Thabo Mbeki has proposed forming a team drawn from regional bodies and the United Nations to help him mediate in the worsening crisis in neighbouring Zimbabwe. Zimbabwe's main opposition Movement for Democratic Change has refused to recognise President Robert Mugabe's overwhelming victory in a controversial June 27 vote held after MDC leader Morgan Tsvangirai pulled out, citing violence by ruling party militia. The resulting impasse has dampened hopes of halting an economic meltdown that has forced the central bank to introduce a 100 billion Zimbabwe dollar note -- enough to buy two loaves of bread -- in a desperate fight against rampant hyperinflation. Mbeki has been mediating preliminary talks between officials of Mugabe's ruling ZANU-PF and the MDC to resolve the stand-off but critics say he has failed to make any progress and has favoured Mugabe with his soft diplomatic approach. A statement seen by Reuters on Saturday said Mbeki had proposed during a meeting on Friday creating a team representing the African Union, the Southern African Development Community and the United Nations, with which he would liaise in efforts to foster dialogue between Zimbabwe's warring parties. "The Chairperson of the Commission (of the AU) supported President Mbeki's proposal for the establishment of a reference group," the brief AU statement said. It urged Mugabe and Tsvangirai to "honour their commitment to initiate dialogue with a view to promoting peace, stability , democracy and reconciliation of the Zimbabwean people". In a public letter to his supporters, Tsvangirai -- who has previously demanded that an AU envoy join the mediation before his MDC will agree to more substantial talks -- said setting up the new team was a positive step. "We welcome (the) appointment of a reference group of eminent Africans who will work with President Mbeki and the main parties in Zimbabwe to find a peaceful negotiated solution to the Zimbabwean crisis," he said. "We share with the people of Zimbabwe the deep concern that normality and stability must be restored immediately." Tsvangirai won the first round presidential vote on March 29 but official figures showed he failed to get the absolute majority needed to avoid a second ballot. The MDC insists Tsvangirai won outright the first time. CHRONIC SHORTAGES Zimbabweans are suffering chronic shortages of meat, maize, fuel and other basic goods because of the collapse of the once prosperous economy, which the MDC and other critics blame on Mugabe's violent seizure of white-owned farms and other policies. Central bank Governor Gideon Gono said on Wednesday inflation had surpassed 2.2 million percent, but some economists say it is now much higher. In a notice in the official Herald newspaper on Saturday, Gono said the Reserve Bank of Zimbabwe would introduce Z$100 billion special agro-cheques (notes) to help consumers forced to carry large wads of cash even for simple transactions. The most valuable banknote now in circulation is Z$50 billion. Gono said he was also considering raising the amount of cash people could withdraw daily from their bank accounts from the current Z$100 billion, enough at present for two trips on an urban bus or two loaves of bread -- if one can find them. The Zimbabwe dollar, officially pegged at 30,000 to the U.S. dollar before exchange rules were relaxed recently, now trades at about 800 million to the U.S. unit. Besides struggling with shortages of basic goods and services, Zimbabweans spend long hours in bank queues trying to withdraw their money. Two weeks ago a German firm, Giesecke and Devrient, stopped deliveries of banknote paper to Zimbabwe, following pressure from the German government amid international criticism of Mugabe's widely condemned re-election. (Editing by Tim Pearce) (For full Reuters Africa coverage and to have your say on the top issues, visit: http://africa.reuters.com/ )
Former U.N. Secretary-General Kofi Annan (R) gestures next to Archbishop Desmond Tutu during an anti-hunger event in Johannesburg July 16, 2008. African governments and overseas donors must do more to support ...
