/ 17 April 2006

Zimbabwe in the throes of an ‘economic meltdown’

Zimbabwe celebrates 26 years of independence from Britain on Tuesday with a shadow of seven years’ economic woes hanging over its freedom day.

Zimbabwe gained independence from colonial master Britain on April 18 1980 after a protracted liberation war against white Rhodesian settlers, with President Robert Mugabe then winning plaudids for his conciliatory attitude to minority whites.

But over the last six years the country of around 13-million people has landed itself in the throes of political and economical upheaval, seeing a 7,1% shrinkage in its economy last year, according to the International Monetary Fund (IMF).

”There is nothing to celebrate on Tuesday,” said Prosper Chitambira, chief economist of the influential Zimbabwe Congress of Trade Unions (ZCTU).

”Economically things are bad. The standards of living and real wages have slumped to 1975 levels. Even politically there is nothing to celebrate, our democratic space is now limited,” he told Agence France-Presse.

Zimbabwe’s relations with the West became strained after Mugabe’s government launched controversial land reforms in 2000, seizing farms from white commercial farmers for redistribution to landless blacks.

Ties worsened when the United States and the European Union imposed targeted sanctions on Mugabe and members of his inner circle following the country’s 2002 presidential election dismissed by the opposition as a fraud.

The country is now operating a budget deficit largely financed by the printing of money. Inflation has also jumped to an all-time high of 913,5% and there are no price reprieves in sight.

”If there is one thing that no responsible Zimbabwean can deny today, it is that our country is in the throes of a devastating economic meltdown,” wrote Jonathan Moyo, Mugabe’s former information czar in a private weekly.

Moyo, who was last year shunned by his former mentor Mugabe when he decided to contest elections as an independent candidate, said the economy was the ruling Zimbabwe African National Union-Patriatic Front’s (Zanu-PF) main enemy.

Moyo said Mugabe ”and his cronies have no solution to the opposition outside [the] brutality of a knee-jerk law and order response of ruling by terror”.

The Confederation of Zimbabwe Industry (CZI) said in a report last month that the hyper-inflation forced most companies to operate at half-capacity because of a lack of raw materials, forex shortages and an unfavourable exchange rate.

”On Tuesday the President Mugabe will address the nation … the party is in good spirits at the moment, we are pleased with rainfall and this year we are looking forward to a good harvest.

The challenge facing us is that of corruption,” said Nathan Shamuyarira, ruling party spokesperson.

Shamuyarira rubbished claims that Mugabe’s government were to blame for economic woes.

”No. The government can’t be blamed for that [the economic crisis]. The advent of the financial crisis was caused by the adoption of the Economic Structural Adjustment Programme introduced by the IMF and the World Bank in the early 1990s,” Shamuyarira said.

”We have continued to hold fort when the Zimbabwean dollar has continued to plummet. Our Reserve Bank should not believe they will be accepted by the IMF, we should develop other routes which is looking East,” he said.

Last month the IMF said it would keep in place sanctions on Zimbabwe because of money still owed the bank, and urged Harare to urgently implement reforms to stabilise its economy. – Sapa-AFP