John Simpson

HARARE - Everyone is a millionaire in Zimbabwe.

You have to be, since a loaf of bread at present costs Z$1million - Mugabe dollars, as they are known disparagingly - and a newspaper costs twice that.

And the price of many necessities doubles every few days.

Yet Zimbabweans have found ways to survive. Because it is still basically a rich country, and - because the aid agencies do an excellent job - there is little malnutrition.

There are even traffic jams, even though you almost invariably need dollars - American ones, not Mugabe ones - to buy petrol.

But so many Zimbabweans have left the country and send money back to help their families, that even this is possible.

BBC News is banned in Zimbabwe - I spent a clandestine week in Harare with two colleagues.

We had a great deal of help from local people, who often saw it as their patriotic duty to show the outside world how bad things have become in Zimbabwe.

The greatest threat to us, curiously, was the BBC's popularity there. So many people watch BBC World that there was a real danger that someone like me might be recognised.

During our week in Harare we met slum-dwellers, Aids victims, lawyers, shopkeepers, journalists, academics, political activists and a senior member of President Robert Mugabe's Zanu-PF party.

Every one of them seemed to think that things would come to a head in Zimbabwe this year.

"2008 will be the year of the machete inside Zanu-PF," said one well-placed observer.

Will it? Our senior party figure was able to confirm that Simba Makoni, the former finance minister who fell out with Mugabe over the economy, was planning to stand against him for the presidency.

Makoni has some strong backing. The civil service, the police, the army and Zimbabwe's much-feared secret police, the Central Intelligence Organisation, are all starting to split along factional lines.

Mugabe has faced splits and rivalry before. His method of holding on to power has often been to whip up feeling against Britain and the US.

Eight years ago, Mugabe encouraged the invasions of white-run farms. That is how the catastrophic collapse of the Zimbabwean economy started.

No doubt this time, too, he will accuse Makoni and others of being agents of British imperialism.

But a lot of people felt this was an increasingly tired tactic, which might not work so well again.

There will be no popular uprising in Zimbabwe. The big opposition movement, the Movement for Democratic Change (MDC), has no stomach for it, and the recent violence in Kenya over a disputed election worries many Zimbabweans.

But they hope that the new ANC president, Jacob Zuma, will take a much tougher line with Mugabe than President Thabo Mbeki has done. South African pressure would certainly force Mugabe to step aside.

One political analyst we spoke to thought Mugabe was terrified of being sent to The Hague to face charges of gross abuses of human rights over the years - in particular, the mass killings of people in Matabeleland in the 1980s.

The temptation would be to stay in office and fight, as he has done so many times before.

But a promise that he would be allowed to retire in peace might work.

Mugabe is an exceptionally intelligent man who has survived in power for nearly 28 years.

But every reign comes to an end - and a large number of Zimbabweans think it could happen this year. - BBC News