Zimbabwe faces yet another bleak year

HAVE FAITH: President Robert Mugabe said Zimbabwe's economy was recovering in his year-end speech in parliament. © Unknown.
HAVE FAITH: President Robert Mugabe said Zimbabwe's economy was recovering in his year-end speech in parliament. © Unknown.

HARARE - The new year holds bleak prospects for the overwhelming majority of Zimbabweans, already reeling under world-record inflation and an economic meltdown that shows no sign of easing, economists say.

HARARE - The new year holds bleak prospects for the overwhelming majority of Zimbabweans, already reeling under world-record inflation and an economic meltdown that shows no sign of easing, economists say.

"The year 2007 is bad news even before we have started it," economist John Robertson said, dismissing projections by Finance Minister Herbert Murerwa that Zimbabwe's four-digit inflation would drop this year.

Eric Bloch, an independent economist, said: "The first half of this year will be markedly worse than last year.

"Inflation will continue to rise, there will be extensive foreign currency shortages and a further contraction in employment."

Bloch said inflation would subside in the second half of the year, but the decline would be modest.

Zimbabwe is in the seventh year of an economic recession that brought it an inflation rate of more than 1000percent last year, unemployment of more than 70percent and perennial shortages of basic goods such as fuel, cooking oil and other staples.

Announcing this year's national budget last month, Murerwa said: "The economy is projected to grow marginally by between 0,5percent and 1percent in 2007."

He said yearly inflation, which stood at 1098percent in November, would recede to between 400percent and 350percent in the second half of this year.

He justified his optimism by citing prospects for "good weather, stabilising of commodity prices, improved mineral deposits and growing number of tourist arrivals".

Despite attempts to halt the downward spiral - including a drive to woo new friends among Asian countries after being shunned by the West because of President Robert Mugabe's policies - the government appears to be far from winning the battle.

Robertson said the country's economic woes stemmed from the government's controversial and haphazard land reforms in which it seized at least 4000 farms from white commercial farmers and claimed that it would redistribute them to landless blacks.

"We don't have the money we used to earn from beef and tobacco any more. If the government changes some of its policies we might get loans from those who are holding back because of the bad policies."

Mugabe said in his end-of-the-year speech in parliament that the country's economy was recovering as a result of the national economic development priority programme (NEDPP) and the Look East policy designed to forge closer links with Asia.

The NEDPP was launched in April to resuscitate the economy by generating foreign currency and promoting tourism, but analysts say it has failed to ease the country's economic woes.

Zimbabwe launched its Look East policy nearly four years ago to buttress political and economic relations with Asian countries such as China and Malaysia.

The secretary-general of the Zimbabwe Congress of Trades Unions, Wellington Chibebe, said calls by Mugabe's supporters for the extension next year of the veteran ruler's term by another two years would scuttle efforts to mend fences with the country's former trading partners.- Sapa-AFP

X