Zimbabwe will drop 10 zeros from its hyper-inflated currency — turning 10 billion dollars into one — the country's reserve bank said Wednesday. President Robert Mugabe threatened a state of emergency if businesses profiteer from the country's economic and political unraveling.

Shop shelves are empty and there are chronic shortages of everything including medication, food, fuel, power and water. Eighty percent of the work force is unemployed and many who do have jobs don't earn enough to pay for bus fare.

One third of Zimbabweans have become economic and political refugees. Another third is dependent on foreign food aid. But Mugabe barred non-governmental organizations from handing out food last month, claiming they were supporting the opposition.

On Wednesday, central bank governor Gideon Gono announced he was dropping 10 zeros from the currency, effective Friday. That comes a week after he introduced a 100 billion-dollar note which was not enough to buy a loaf of bread.

Mugabe went on television immediately after Gono's announcement to warn against illegal money dealings and profiteering.

"Entrepreneurs across the board: Don't drive us further," he warned. "If you drive us even more we will impose emergency measures."

Gono said new money would be launched Friday with 500-dollar bills. He also said he was reintroducing coins, which have been obsolete for years.

Gono said the high rate of inflation was hampering the country's computer systems. Inflation is officially running at 2.2 million percent in Zimbabwe but independent economists say it's closer to 12.5 million percent.

Computers, electronic calculators and automated teller machines at Zimbabwe's banks cannot handle basic transactions in billions and trillions of dollars.

Mugabe has blamed profiteering and sanctions by the United States and the European Union for Zimbabwe's economic collapse. Critics have blamed mismanagement by Mugabe's government and a land reform program that has slashed Zimbabwe's agricultural output.

Both Mugabe and Gono are targeted by the sanctions, which impose travel bans and asset freezes on more than 170 people, companies and farms.

"The country is under illegal sanctions. These are intended to achieve regime change," Mugabe charged. "We must strengthen our will and resistance so we can go through this time of difficulty."

Mugabe went on television just as South Africa's President Thabo Mbeki was jetting in to meet with him about stalled power-sharing talks. Mbeki was greeted by Mugabe at Harare airport Wednesday afternoon. The two shook hands and briefly embraced before leaving together.

Mbeki has insisted the power-sharing talks which started last Thursday were going well and had simply adjourned on Monday.

But several officials said Mugabe's negotiators returned home and opposition leader Morgan Tsvangirai went to South Africa, the venue of the talks, after they deadlocked over who would lead the "inclusive" government under negotiation. The officials spoke on condition of anonymity because all parties agreed to a media blackout surrounding the talks.

"We are still negotiating, we want to succeed," Mugabe said in his televised address. "You find room for compromise but sometimes compromise is difficult ... So things are never easy."

A South African statement said Mbeki would meet with Mugabe and the leader of a breakaway opposition faction, Arthur Mutambara. It said Mbeki met Tuesday with Tsvangirai and his negotiators.

Mugabe and Tsvangirai, bitter rivals, met for the first time in 10 years last week and agreed to have their negotiators hammer out a formula to share power and halt the southern African nation's political and economic disaster. The talks came after three months of state-sponsored electoral violence that killed more than 150 opposition activists, injured thousands of people and drove tens of thousands from torched homes.

Both men say they won elections this year and should lead the government.