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crisis to fuel social unrest in Zimbabwe
December 19, 2005
Zimbabwe is likely to drift towards social unrest in 2006 amid
signs of no respite in the six-year-old free-fall of the country's
once-robust economy and deteriorating political conditions, analysts
at 502.4 percent and living standards deteriorating, analysts say
the conditions are ripe for a violent social upheaval unless something
drastic is done by the government to arrest worsening economic hardships
marked by shortages of basic commodities.
annualised inflation is forecast to hit 700 percent within the next
few months, driven largely by the rapid depreciation of the local
dollar. The Zimbabwean unit has depreciated from around 26 000 against
the United States dollar in October on the official market to about
80 000 against the greenback at present.
rate on the thriving but unofficial parallel market is even higher
at around 100 000 Zimbabwe dollars to the US unit. The illegal foreign
currency black-market remains the surest source of hard cash for
both individuals and the corporate world.
think the litmus test for President Robert Mugabe and his government
during the coming year will be how to handle the emotive issue of
civil service salaries and working conditions.
uniformed forces, teachers, health workers and other civil servants
have dominated the news in the past two weeks, with the government
acknowledging these were low and needed to be revised upwards.
"I foresee economic
instability and more strikes as the government fails to raise enough
money to pay salaries. This could lead to social unrest if not addressed
properly," says Harare-based economist John Robertson.
and some legislators are pushing for a salary adjustment of at least
500 percent in January to cushion government workers from economic
This may, however,
not be possible because the government is broke and also due to
the restrictive budgetary regime that Finance Minister Herbert Murerwa
proposes to pursue next year.
Murerwa, government ministries will be required to stick to strict
budgetary targets and all recurrent expenditures (which account
for 75 percent of the state budget for 2006 and of which salaries
are a major component) must be financed from available revenue resources
and no borrowings will be entertained.
say crisis-weary Zimbabwe should, therefore, brace up for a plethora
of industrial actions by civil servants and other workers, a development
that will further worsen the situation in a country already hit
by economic and political problems.
the rate of inflation to double next year, worsening the plight
of ordinary citizens and companies.
"We are also
going to witness further shrinkage in tourism," Robertson warns.
Tourism Authority - charged with the marketing of the country's
tourism facilities - recently painted a gloomy picture of the state
of tourism, saying that arrivals were down during the first nine
months of 2005.
inflation forecast spells doom for exporters and importers who will
have to contend with a steep depreciation of the Zimbabwe dollar
in coming months. The exchange rate tracks movements in prices.
Zimbabwe's gloomy prospects for 2006 are the unsavoury prospects
of another poor harvest, this time not due to natural phenomena
but as a by-product of six years of skewed economic and political
that for the first time since the country embarked on the destructive
land reform programme in 2000, Zimbabwe, already battling severe
food shortages, will next year start experiencing the real consequences
of pursuing its widely-condemned agricultural policies of the past
of an above-normal season, most farmers are unlikely to get inputs
such as seeds and fertiliser on time.
"I think we
will have the worst agricultural harvest because there is no fuel,
seeds and fertilisers for farmers. Prices of other inputs have sharply
gone up," explains Robertson.
It is estimated
that Zimbabwe has foregone more than US$1.5 billion in unearned
tobacco proceeds since 2001 - a direct result of the expropriation
of former white-owned farms and the subsequent chasing of the farmers
from their properties.
is now paying a heavy price for the disruptions caused by the land
reform exercise as the new owners of land are either inexperienced
or have no resources to feed the entire nation.
Jowa says he does not see any meaningful investment inflows until
"sanity prevailed especially in the agriculture sector."
Jowa said: "Reports
of ongoing disruptions of farming activities will continue to dampen
confidence in the agricultural sector. As such, no meaningful investment
initiatives should be expected until sanity prevails in the sector."
2006 does not hold much hope for Zimbabwe because of constraints
faced by the various economic players.
estimates that the key agricultural sector will expand by 14.8 percent
during the 2005/06 season to anchor the projected overall economic
growth of between two and three-and-a-half percent in 2006.
indicated that it will expend a lot of energy on strengthening extension
services and procurement of livestock vaccines in 2006 in its quest
to bolster agricultural production.
believe that the continued collapse of companies will add to the
pressure on the government during 2006. At least 33 export companies
shut down this year, according to the Export Processing Zones Authority.
that there are more and more people requiring a slice of the limited
resources that the government is able to give out as social welfare
benefits," explains an analyst with a stock broking firm.
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