The RBZ subsequently increased its rediscount rate from 28,5% to 31,5% as a way of reducing speculative pressures on the Zimbabwe dollar. There were fears that the increase in the rediscount rate was the first of many increases with broad expectations of the rate reaching 40% by mid 1998. The high interest rates not only made it impossible for companies that needed money for expansion purposes but also drained away a large proportion of the working capital of private sector employers, while interest payments severely limited employers' abilities to keep pace with inflation. Despite several recent missions abroad to woo foreign capital, investor interest in Zimbabwe remained disappointing, with the country rated during 1997 as one of the lowest on the list of emerging markets considered as investment opportunities. President Robert Mugabe spoke to investment conferences in London and Paris. Similar missions were previously been held in Europe, the United States, and the Far East. All were described as successes, but what did not materialise was actual investment. The Zimbabwe Government tried to portray the country as a serious contender for investment capital, and took steps to attract investors. Among these was the establishment of a national investment centre, which was praised abroad for dealing with applications. There was relaxation of economic rules in respect of imports and exports, labour and price controls, but there was still little investment. Economists argued that this was because of the unstable domestic economic climate, characterised by high interest rates and inflation. Inflation was about 19 percent, while interest rates were hovering around 30 percent. Foreign investors voiced serious concerns which they saw as being of such great magnitude as to override the investment advantages. At the forefront was the fear of an ever-continuing erosion of the economy, with the attendant high inflation, declining currency values, increasing unemployment, and negative or inadequate economic growth. Coupled with these fears were unfulfilled Government assurances of reduced expenditure, the size of the public service, the magnitude of the defence expenditure, and recent substantial parliamentary and civil service salary increases. There was also concern at the level of corruption (see below). Said economist Eric Bloch: “Zimbabwe has to address the causes of investor scepticism and the grounds for international investment cynicism, ensuring the projected economic advances while strenuously curbing corruption and energetically welcoming desirable, employmentcreating investment". It was thus clear to most commentators that a situation of crisis was developing in the economy, and that this would have effects upon the socio-economic life of the citizens. The pressures began to mount during the second half of 1997. The Government, already under siege from war veterans demanding hefty gratuities and pensions, was suddenly engulfed by a crisis of expectations from all fronts: as well as the veterans, the war collaborators and former political detainees also wanted a piece of the cake. The huge civil service was waiting patiently for its annual bonuses at the end of the year, just when Western donors were demanding that the Government take visible measures to cut back on its spending if it wants aid for its reforms, already delayed by lack of funding. In addition, the Government was under pressure from a private sector increasingly restless about the worsening macro-economic environment, as evidenced by the sudden rise in interest rates and a depreciating currency that threatened to nearly double the cost of imports. On the other hand, the country's balance-of-payments position was worsening, with import cover less than three months, at a time when reserves needed to be boosted in case the country experienced another drought. The Government's immediate concern was to find money, estimated at between Z$3 and Z$5 billion before Christmas 1997, to make lump sum gratuity payouts to an estimated 50 000 ex-combatants, who had only stopped their violent nation-wide protests earlier in the year after securing pledges for the payouts from President Robert Mugabe (see below).