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Moving forward in Zimbabwe: Reducing poverty and promoting growth
Brooks World Poverty Institute, The University of Manchester
December 11, 2009

http://www.bwpi.manchester.ac.uk/research/ResearchAreaProjects/Africa/

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Executive Summary

Introduction

This report outlines the key elements of a strategy to hasten the recovery process in Zimbabwe. While it recognises the centrality of economic recovery, it links this to a people-centred approach: recovery must generate rapid improvements in the economic and social conditions of the people of Zimbabwe and especially for its poor majority. Improved access to food and employment is central to this strategy and as a result it must be led by agriculture.

This is an independent report produced by a team of Zimbabwean academics and researchers, who seek to stimulate focused debates about the policies that are most likely to help Zimbabwe move forward. Most of these efforts to move forward are being made, and will be made, by Zimbabwe's long suffering and impressively resilient farmers and labourers (women and men). They need the support of the country's elite and middle class - professionals, politicians, public servants and academics - in identifying policies and programmes that deliver rapid gains and lay the foundation for a sustainable future. Development partners, in Africa and beyond, will need to provide technical assistance and finance to assist these efforts.

Following the formation of an inclusive government in March 2009, Zimbabwe is emerging from a decade of socio-economic decline. The gains the country saw after independence in 1980, and particularly the impressive progress in reducing poverty and inequality, have been reversed. Although triggered by a multiplicity of causes, the programme to redistribute land from mainly white commercial farmers to the majority black Zimbabweans in February 2000 is often cited as the catalyst that precipitated an economic crisis, which subsequently became a social crisis. By 2003, some 72 per cent of the population lived below the national poverty line and the living conditions were some of the worst in Africa.

The economy had been in decline since 1996 and has registered negative economic growth at a time when the rest of the world was booming. Disruptions in agriculture due to land reforms explain the decline in agricultural production, while manufacturing went into decline mainly due to a shortage of foreign currency to import raw materials and machinery. Hyperinflation, which peaked at 500 billion per cent in December 2008, totally undermined the investment climate. Alongside this decline in productivity came a catastrophic decline in disposable incomes and employment. By March 2009 unemployment was estimated at a staggering 80 per cent. The decline of employment in low skill sectors like agriculture and construction caused unemployment to rise, especially among low income households. This created a vicious circle of poverty creation. Declining urban earnings undermined smallholder agricultural productivity, as smallholders relied on manufactured inputs from urban centres. This, combined with unfavourable agricultural policies, in turn undermined earnings from smallholder agriculture and rendered many small farmers too poor even to use their land to produce their own food crops.

Data from the three major poverty surveys (the Income, Consumption and Expenditure Survey of 1991, and the Poverty Assessment Study Surveys of 1995 and 2003) are not directly comparable because of methodological issues, but they do suggest that by the time the crisis erupted in 2000, poverty in Zimbabwe was already on the rise. From a low of around 26 per cent in 1991 the proportion of households living below the food poverty (extreme poverty) line rose to 35 per cent by 1995, before a dramatic rise to 63 per cent by 2003. There was a similar dramatic rise in the number of people living below the total consumption poverty line. This increased from 55 per cent in 1995 to 72 per cent in 2003. Since the Poverty Assessment Study Survey of 2003 there has not been any official survey on poverty in Zimbabwe, but some estimates suggest that, by the time the socio-economic crisis reached its high point in November 2008, up to 80 per cent of the population survived on less than US$2 a day. The country had become a world leader in creating poverty.

Provision of key public services also suffered as the government failed to keep education, health services and infrastructure running. By 2006 less than 70 per cent of the pupils made it through to the last year of primary school, compared to 75 per cent at the turn of the millennium. Staff attrition affected the quality of learning. In secondary education the numbers taking 'O' levels declined and only about 14 per cent of students passed five or more subjects (i.e. attained a satisfactory education). Health services and infrastructure were also affected severely. The crude death rate almost doubled from 9.49 in 1992 to 17.2 per 1000 in 2007. Similarly infant mortality, which had declined to 53 per 1000 live births in the mid 1990s, rose to 68 per 1000 by 2008. The only exception was HIV/AIDS prevalence rates, which declined from a peak of 24 per cent in 1998 to about 11 per cent today.

The composite indicators reflect this decline in human welfare. The UNDP's Human Poverty Index was at 17 per cent in 1990, an impressively low figure by African standards. By 2006 it was estimated to have more than doubled to 40.9 per cent. Similarly the country has been sliding down the UN's Human Development Index ranking - from a respectable 52 in 1990, the country was ranked 108 in 1992, 129 in 1997 and by 2005 it was ranked at 155 of the 177 countries. On current evidence it is clear that a majority of Zimbabweans are emerging from this crisis poorer and with fewer assets and capabilities than they have endured at any time since independence.

The formation of the transitional inclusive government has created prospects for stabilisation and can lay the foundation for reconstruction and long-term socio-economic development. One of the key issues the inclusive government needs to be dealing with is the general welfare of an impoverished nation. Experience in post-crisis situations elsewhere in Africa shows that if care is not taken to deliberately formulate welfare policies that directly address poverty, such concerns are soon subsumed under a myriad of problems that the state has to deal with. The inclusive government must prioritise identifying the areas of policy that can quickly stabilise incomes and reduce the number of people living in poverty. In this report we look at the collapse of welfare in Zimbabwe and suggest ways for rapidly improving the lives of the country's poor people in rural and urban areas, so that they can fully engage with the reconstruction process. The main assumption here is that the global political agreement will create the political and economic conditions that will allow the country to move forward.

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