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recipe for recovery
May 03, 2007
is in gross disarray and is declining at a rapid pace. Inflation
has soared to 2 200% according to latest figures, which is currently
the highest rate in the world.
as that record is, realities are even worse, for it is undoubted
that real inflation is markedly greater.
in Zimbabwe is at about 82% of the employable population, notwithstanding
that millions have left to seek livelihoods in neighbouring territories,
and further afield (including the United Kingdom, the United States
contraction in employment is because of agriculture, which was the
economy's foundation, shrinking to less than 20% of levels of 10
years ago and to the closure and downsizing of many factories.
As a result
of intense unemployment and pronounced hyperinflation, an estimated
84% of the population subsists below the poverty datum line, while
a horrendous 57% are believed to exist on incomes below the food
than half of the population is undernourished, suffering malnutrition
and faced with starvation, misery and ill-health, if not death.
The tales of
woe are neverending, for they include a massive inadequacy of foreign
exchange, in the absence of significant foreign direct investment,
lines of credit and much developmental aid, and with vastly declining
As a result,
there are overwhelming scarcities of many essential commodities,
including antiretrovirals for HIV/Aids sufferers, other medications,
petroleum, electricity, industrial inputs and much more.
There is a virile
black market in foreign currency, and in scarce commodities, further
fuelling inflation. The state anticipates a fiscal deficit of $8-billion.
The listing of economic ills could be endless.
an economic transformation is readily possible. The country has
a wealth of assets which, if properly used, can fuel a vibrant economy.
It has fertile land, but that land must be used constructively and
productively. It has vast wealth under that land, including uranium,
platinum, gold, diamonds, nickel, coal, methane gas and more, but
Zimbabwe is extracting very little of it.
It has a unique
tourism resource, including the spectacular Victoria Falls, much
wild life, the Great Zimbabwe Ruins, the Matopos Hills, Lake Kariba,
enthralling Nyanga, Chimanimani and the Bvumba mountains.
economic morass, Zimbabwe still has the second-most developed industrial
infrastructure in Southern Africa and is geographically ideally
located to supply a free trade area with a populace of 326-million
Most of all,
it has 11,4-million people, of which 11,3-million are the most wonderful,
hard-working, willing, aspiring people on Earth, but their lives
are being destroyed by 100 000 others.
will be the foundation of economic recovery and well-being, if the
right enabling environment is put in place.
requires political change. Such change must be either a change of
the political hierarchy or a dynamic change of the present hierarchy's
policies and actions. The prospect of the latter appears to be most
change occurs, an economic metamorphosis requires diverse, prompt,
consistent and committed actions.
First is a need
to recognise that it is illusory to believe that Zimbabwe can "go
it alone". Economic recovery and ongoing economic vibrancy needs
effective and constant interaction with the rest of the world.
To that end,
international relations will have to be repaired. Many countries
have been alienated and rejected, and restoring good relationships,
although not easy, will not be impossible.
Six key actions
are necessary: an absolute respect for human rights must be demonstrated,
international norms must be conformed to and respect for law and
order must be restored.
the judiciary must be shown to be wholly free and independent; there
must be unequivocal observance of, and regard for, property rights
and the country must be willing to accept well-intentioned, constructive
criticisms from the international community.
non-yielding "Look East" policy must be abandoned and replaced with
a reciprocally beneficial "Look North, South, East and West" policy.
and grossly mismanaged land reform programme must be reformed. Few
have disputed that land reform is needed, but it has to be just
and equitable, and enhance agricultural production, instead of destroying
it. It also has to be effected with regard to law and order and
to property rights.
must also honour its bilateral investment protection agreements.
It must encourage and facilitate the return of white farmers to
the lands, while increasing the number of black farmers. All recipients
of land should be selected on merit and not nepotistically.
needs to be substantially devalued, pending allowing it to float,
at an early future date. This will reduce the scarcity of foreign
exchange, while stimulating greater productivity, increased employment
and greater downstream economic activity, as well as enhanced fiscal
Key to economic
recovery is also pronounced economic deregulation and the clamping
down on public and private-sector corruption.
that need to be removed include an absence of "real" interest rates
and a plethora of unrealistic and abused state subsidies.
with these actions, the government must contain its spending, reduce
the excessive number of ministries, embassies, consulates and missions
around the world, and neverending global travels by the political
elite, among many other expenditure excesses.
with these actions, the government must create a genuinely welcoming
investment environment, inclusive of infrastructural redevelopment
and parastatal privatisation.
There is no
quick fix but, if these and other actions are positively pursued,
and especially so within the next few months, they will succeed
and the country will, in time, have a dynamic and vigorous economy.
Eric Bloch serves as an independent adviser to the governor of the
Reserve Bank of Zimbabwe
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