/ 25 March 2008

Economic crisis haunts Zim polls

Zimbabweans go to the polls on Saturday hoping for an end to a chronic economic crisis that has condemned millions to grinding poverty and prompted the exodus of up to a third of the population.

The joint presidential, legislative and local council polls come at a time when the country’s inflation rate has breached the 100 000% mark, at least 80% of the population is living below the poverty threshold while thousands of school-leavers add to ever-growing unemployment statistics.

President Robert Mugabe (84), seeking a sixth term at the helm of the country, is being challenged by former finance minister Simba Makoni, Movement For Democratic Change (MDC) leader Morgan Tsvangirai and obscure independent Langton Toungana.

Godfrey Kanyenze, chief economist of the Zimbabwe Congress of Trade Unions (ZCTU), predicted tough times ahead for Zimbabwe if Mugabe wins.

”The state of the economy is attached to Bob [Mugabe]; if he goes then economy will improve. But if he stays things would continue as they are,” Kanyenze said.

Once host to many international companies, the country has seen many firms pull down the shutters or move to neighbouring Southern African nations.

The ones that have remained are operating at a fraction of their capacity as they battle to procure scarce foreign currency to import spare parts and raw materials.

An estimated three million Zimbabweans have migrated to greener pastures in neighbouring countries, as well as Europe and Australia.

David Mupamhadzi, an economist with the finance group Zimbabwe Allied Banking Group, said one could only tell in the aftermath of the elections what the future holds for the country.

”Investors have adopted a wait-and-see attitude because of the elections, but meanwhile the economy is bleeding,” said Mupamhadzi.

The once vibrant economy, seen as a regional model, is now a shadow of its former self 28 years after attaining independence.

Basics such as sugar and cooking oil are scarce for a population that has to deal with erratic water and power supplies as well as potholed roads and broken sewers.

In a bid to revive the economy, the Mugabe government is expected to launch a five-year economic blueprint called the Zimbabwe Economic Development Strategy (ZEDS) if it retains power.

According to the blueprint, seen by Agence France-Presse, the government says the primary objective of the new policy is ”to facilitate broad-based wealth creation, which is oriented towards poverty reduction and integration of previously marginalised groups of the population into the mainstream economy”.

Mugabe’s government has been battling to tame inflation, at one stage lopping off zeros from the currency and imposing price controls on basic goods — a move which later backfired as this led to mass shortages in shops.

Tsvangirai has promised to reduce spiralling inflation, making the creation of a body known as the Zimbabwe Economic Development Council central to the revival of the economy.

”The Zimbabwe Development Council will raise US$10-billion to transform the economy, re-start our businesses, farms, shops and hotels to create jobs.”

Makoni, who quit as finance minister in 2002 before the economy went into freefall, said he could not wave a magic wand but wanted to ”facilitate the people of Zimbabwe to turn around the economy”.

”I single-handedly will not be able and will not even think of trying to turn around the economy around by myself,” he said in a recent interview.

He sees reviving ties with the West — which imposed sanctions after Mugabe allegedly rigged his re-election in 2002 — as essential to turning the economy around.

Former colonial power Britain, largely blamed by Mugabe for the country’s economic woes, is among those who have promised substantial aid as long as there is a change of leadership. — AFP