"Last week we could not afford bread. This week we cannot get bread," said a Zimbabwean worker last October, after President Robert Mugabe imposed price cuts on basic foods that drove most producers out of the market. But Mugabe had a solution for that too: "The state will take over any businesses that are closed. We will reorganize them with workers, and at last the socialism we (always) wanted can start again." Bit by bit, the facade of democracy and moderation that Mugabe had constructed in Zimbabwe for the past two decades has fallen away, exposing an angry and frightened 77-year-old dictator who would rather bring the temple down around his ears than yield power gracefully. As the violence against opposition parties and the white minority and the assaults on the media and the courts have grown, Zimbabwe's reputation has been sinking as fast as its economy - and it's dragging a whole region down with it. Zimbabwe, a country of 11 million people whose main source of income is agriculture, really matters only to Zimbabweans. South Africa, with four times as many people and enormous symbolic importance as the only developed country in the African continent, matters much more. The two countries have little in common except a border, but their fates are linked, because the global markets are as ignorant as they are prone to panic. Caricature leader Just as a debt crisis in Argentina can stampede investors into a panic-stricken exodus from markets throughout Latin America, so a political crisis in Zimbabwe can lead them to treat the whole of southern Africa as "unstable". Since Mugabe unleashed the crisis in Zimbabwe less than two years ago, South Africa's stock market has tumbled, its currency has halved in value, and foreign investment has collapsed - even though it is a stable democracy with completely orthodox economic policies. It is mostly Robert Mugabe's fault. Once revered as a liberation hero and respected as a man who had put his own Marxist and authoritarian instincts aside for the good of his people, he has become, in the words of Desmond Tutu, former archbishop of Cape Town, "almost a caricature of all the things that people think black African leaders do". Five years ago, Zimbabwe was a model of development in Africa: a relatively poor country where most people nevertheless had access to education and basic health care, and some hope of a better future. Now there is 100 percent inflation, no foreign exchange, and the looming prospect of international sanctions. Three-quarters of Zimbabweans live in abject poverty, and a 40 percent fall in agricultural production this year, directly due to the political violence, means many face actual starvation. Yesterday's man How has this happened? It is mainly due to the fact that after 21 years of Mugabe's rule, the country has outgrown him. He always ran a de facto one-party state behind a democratic facade, but just as he was planning to crown his career with a new constitution enshrining one-party rule, a democratic opposition emerged in the country. The mainly urban-based Movement for Democratic Change fought for the rejection of the new one-party constitution in a referendum in February 2000, and its victory was a profound shock for Mugabe. Suddenly, his own power seemed in question. He responded by launching the wave of government-sponsored political violence that has since devastated the country. Despite all the intimidation and vote-rigging, Mugabe's Zanu-PF party came within a whisker of losing last April's parliamentary election. The MDC could still win in March if pressure from South Africa, the European Union, the Commonwealth and the United States forces Mugabe to accept international monitoring of the election. Robert Mugabe is yesterday's man, and today's Zimbabweans (thanks largely to his policies) are better educated and more sophisticated than their parents' generation. As an official inside the Central Intelligence Organization said recently: "We can read the writing on the wall. There's a lot of document shredding going on."