Wayward policies torpedo Mugabe’s economic recovery plans

HARARE - Zimbabwe's latest drive to revive an economy teetering on the brink of meltdown is bound to fail as President Robert Mugabe defiantly pursues economic policies that have put the country at cross-paths with the global community, analysts have said.
Zimbabwean officials this week l

aunched a National Economic Development Priority Programme – a brainchild of a communist-style committee chaired by Mugabe, which it said would see a reversal of an eight-year recession within 6-9 months.
But analysts doubted the success of yet another blueprint, saying Mugabe’s government was skirting the root cause of Zimbabwe’s crisis by tinkering with peripheral issues.
“It is a big set of promises, some of which are outrageous,” said John Robertson, a Harare-based economic consultant. “It is not the right course that we are taking, we know the problems that we need to address.”
Zimbabwe, once touted as a shining beacon and a model economy for Africa, is fighting its most crippling economic crisis to date, which has been worsened by the withdrawal of international support over policy differences with Harare, such as its forcible seizure of white-owned commercial farms – purportedly for redistribution to blacks.
The crisis is highlighted by the world’s highest inflation rate of 913.6 percent, joblessness above 80 percent, crunch shortages of foreign currency and fuel and grinding poverty.
Analysts were sceptical of the latest economic revival plan, which the government said was crafted with industry’s input.
They pointed to the consistent failure by the government and central bank to meet growth and inflation targets and said there were no guarantees the latest drive would pull the country from its punishing crisis that has angered the majority, whose incomes continue to be eroded every day. 
The revival initiative would see inflows of $2.5 billion flowing into Zimbabwe “either in cash or in the form of investments” within the next 90-days, the government said.
Analysts said the blueprint lacks detail on actual growth and inflation targets and does not say where the government will get resources to support its bid to turn around the economy.
“There is no one who will bring that kind of money or investment when there are no guarantees of the sanctity of property rights,” James Jowa an economist with a Harare financial services house said. “In one breath the government says is not apologetic for its actions and on the other they say they want to mend relations, it is confusing,” he said.
Mugabe’s government has clashed with the West not only over its controversial land reforms, but also over charges that his ruling Zanu (PF) party has rigged key
elections since 2000 and violated human rights, earning the country the title of an “outpost of tyranny” by Condoleeza Rice, United States Secretary of State.
The veteran leader again rattled investors by backing controversial government plans to take over 51 percent of foreign-owned mines. Mining is one of the few remaining sectors with a large share of foreign investors.
Robertson was critical of the government blueprint, saying it put emphasis on the setting up of committees to preside over recovery instead of focusing on real projections which the government would be measured against.
“You don’t create growth by starting committees. What we need is to build factories to create employment and restore confidence in the economy then we can talk of a turnaround,” he said.
Mugabe has predicted Zimbabwe’s economy will grow by between 1-2 percent, the first time since 1999 but analysts predict the economy, which has shrunk 40 percent since then mainly due to a slump in the key agriculture sector, will contract again in 2006.
Zimbabwe has forged ties with China after falling out with the West but there has been little investment coming from the Asian giant. Instead tourist arrivals have fallen 70 percent from Asia, as the government’s “Look-East” policy wobbles.
“Even China will not bring its money without a guarantee of return on investment. I suspect they (Chinese) are interested in the mining sector but there is a danger of breaching existing agreements signed with other companies especially from South Africa,” a Harare banker who declined to be named told ZimOnline.
The government has hinted it wanted to take part of platinum claims owned by Zimbabwe Platinum Mines, a subsidiary of South Africa’s Impala Holdings, and industry officials say China is the likely recipient. – ZimOnline

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