Analysts pointed out that the demands by the veterans could not have come at a worse time, when the Government was battling to cut the fiscal deficit while at the same time boosting expenditure on social services such as health and education, where the state of infrastructural facilities was threatened with collapse. The Government was under pressure from foreign aid donors to maintain its target of achieving a budget deficit of 8,9 percent of Gross Domestic Product (GDP) in the 18 months to December 1998, although still way above its self-imposed target of five percent. In December 1997, the Government, taking measures to raise revenue to fund liberation war veterans' pensions, announced that it would introduce sweeping cost-cutting measures in the public service during 1998 that would include a freeze in salary increments for Cabinet ministers. The measures were to include a reduction in salary increases and the abolition and/or revision of perks and allowances for senior state officials. These moves followed a public outcry over the Government's runaway spending, especially its propensity for luxury amid worsening poverty for the majority population. The Government was forced to withdraw highly unpopular tax increases and to drop the introduction of a five percent war veterans' levy after parliamentarians overwhelmingly rejected a Bill seeking to effect the increases. The legislators were supported by members of the ruling ZANU-PF party and the general public which staged massive anti-tax protests countrywide. The increases were meant to raise funds to finance the war veterans' gratuities and monthly pensions. Finance Minister Herbert Murerwa, who refused to abolish a sales tax increase of 2,5 percent slapped together with the other taxes now rescinded, said he would announce some measures to generate revenue for the veterans' pension payouts in 1998. A sullen atmosphere descended on the country which lead to a nation-wide civil protest against these tax increases. Analysts observed that the failure by the Government to arrest the economic decline and the frightening unemployment crisis had combined to create an explosive situation. Left unchecked, they said, the riots could erupt into social chaos that could seriously challenge the Government’s political grip on the country and also force the Government to introduce draconian measures to curb civil liberties, in turn earning the country the wrath of donors who are closely watching the unfolding events in Harare. According to most analysts, never in the country's history had public morale and business confidence been so low as at the end of 1997. The analysts said the key to restoring macroeconomic stability lay in the Government cutting its wanton expenditure on non-productive items, as well as trimming the bloated public service and selling off its loss-making public enterprises. The Government also had to take steps to ensure that inflation and interest rates came down. Government spending as a percentage of GDP had been as high as 40 percent since the launching of market reforms in 1991, while in the same period expenditure on capital projects had been declining as the state diverts much-needed resources to recurrent spending. The state's debt of over $60 billion in 1997 was so huge that experts estimated that it was spending more than $1 billion a month on debt servicing alone, using up much-needed resources required to restore decaying infrastructure in the health and education sectors. Corruption Corruption became another burning issue during 1997, most dramatically shown in the war veterans scandal (see below]. Over the years, Zimbabwe had been rocked by a series of scandals involving senior Government, ruling party and military officials. The most dramatic was the misappropriation of enormous sums from the War Victims Compensation Fund, from which top State officials and people close to the ruling party allegedly received funds meant for excombatants disabled during Zimbabwe's liberation war in the 1960s and 1970s. Some of the beneficiaries did not qualify for the payouts, according to media reports, and payments from the fund were suspended to allow a probe into the alleged abuses, but were resumed after former freedom fighters took to the streets across the country to object to the freeze. Another case which analysts saw as an indication of high-level corruption was the decision by the Government Tender Board to award a contract for upgrading the international airport to a