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Zimbabwe slump unprecedented : World Bank
SABC News
July 27, 2005

http://www.sabcnews.com/africa/southern_africa/0,2172,109128,00.html

Zimbabwe's rapid economic decline over the past six years is likely unprecedented for a country not at war, says the World Bank's director for the country. In an interview with Reuters yesterday, Hartwig Schafer said reversing the decline would require major economic restructuring, similar to policies that helped rebuild former Soviet states also endowed with infrastructure and human resources. "I can't think of a country that has experienced such a decline in peace time," said Schafer, blaming poor government policies. "The major reasons for (Zimbabwe's) decline are the breakdown of agricultural productivity and distortion of economic policies," he said. Government seizures of white-owned farms to redistribute them to landless blacks and allegations of vote rigging in elections have isolated Zimbabwe from the international community and prompted the country to seek aid from neighboring South Africa and China.

A recent World Bank study on Zimbabwe's agricultural sector said the government's fast track land reforms had redistributed 80% of farmland and improved racial distribution of agricultural property but had increased poverty. The report said the land reform program coincides with deepening political and economic crisis which saw GDP shrink by more than 20% since 2000, while agriculture registered a cumulative decline of 26%. The programme's impact on agriculture had the effect of displacing 30% of farm workers who are now destitute and living as squatters.

The report, dated February 28, 2005, said 70% of Zimbabwe's 11.6 million people were living below the poverty line as per capita gross domestic product had plummeted 30% since 1999. The report, based on a study conducted in the country in 2004, also said the government's fiscal crisis had led to a "devastating reduction" in access to social services, at a time when it was most needed, while the impact of HIV/Aids was worsening. Restoring agricultural productivity would be a first step to helping Zimbabwe stop its economic free fall, said Schafer. "It wouldn't change things overnight but it would stop the economic hemorrhage and help the country get back on an upward path," he added. Once the mainstay of the economy, agriculture contributed 40% to Zimbabwe's national exports, made up 18% of the gross domestic product, employed 30% of the formal labour force and 70% of the population.

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