Return to prosperity will be a long road


  A new Zimbabwean government should be able to stabilise the ruined economy quickly, but would face a much bigger task in returning it to sustained prosperity, analysts say, writes Paul Simao for Reuters.

  With President Robert Mugabe in the worst trouble of his 28-year rule, attention is turning to how quickly the economy could be restored if opposition leader Morgan Tsvangirai took over.

  Mugabe’s ruling ZANU-PF party has lost control of parliament for the first time and although the presidential results have still not been released from the March 29 poll, analysts say Mugabe would be humiliated in a runoff against Tsvangirai.

  If Tsvangirai does take power, his first priority will be to reverse an economic meltdown that has given Zimbabwe the world’s highest inflation rate, more than 100000%.

  I think Zimbabwe now shifts from moving down a path of decline to a path of recovery, said Chris Hart, chief economist with South African asset management firm Investment Solutions.

A full recovery is probably only five to seven years away.

 Four of every five Zimbabweans are unemployed and many are battling to stave off malnutrition amid chronic shortages of meat, bread and other necessities. Millions have fled, mostly to South Africa, in search of work and food.

  Mugabe’s government has responded to the crisis by ordering the central bank to print money, reducing the Zimbabwean dollar to a virtually worthless currency.

  Slaying the inflation dragon is likely to be the easiest task for Zimbabwe’s new leadership.

  Tsvangirai has indicated he will clamp down on the excessive growth of money supply and allow the currency to trade on the free market, as was done in Brazil and other nations that tamed hyperinflation.

 

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