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Wednesday, January 21, 1998 Published at 17:11 GMT
Conspiracy or mismanagement? Economists warn planned appropriation of private farms will hit production badly By Economics Analyst Andrew Walker
White businessmen have been accused of raising prices to cause instability. But there are many other voices blaming economic mismanagement by Mr Mugabe and his government.
But behind this lies a long history of erratic economic performance - poor in some respects and real progress in others, progress that has now come under severe threat. The international financial institutions - the World Bank and the International Monetary Fund - have had concerns about the Zimbabwean economy for many years. There have been persistent and large deficits in the country's trade with the rest of the world and in the government's finances. Government borrowing has often been more than ten per cent of total economic output, or GDP. Reforms patchy
In the 1980s, slow economic growth meant that average living standards declined. Zimbabwe has, however, had plaudits from time to time. The World Bank described the array of structural reforms introduced after 1991 as impressive - these were reforms intended to make Zimbabwe more of a market economy. There have also been important social achievements, in spite of the disappointing economic growth. By 1990, life expectancy had risen to 64 years, and infant mortality, school enrolment and adult literacy were all better than average for a developing country. Economic pressures mount But the underlying economic weakness persisted. Mr Mugabe had to face the risk of a loss of political support and in the second half of 1997 he embarked on a series of measures to restore his strength.
Mr Mugabe tried to pay for it by raising taxes on fuel, electricity, sales and incomes. But it led to a confrontation with parliament and demonstrations by the unions.
Then there were the plans to confiscate 1,500 farms from their mostly white owners. Some economists have warned that farm production would fall by more than a third if the government were to go ahead, with a similar drop in food exports.
Markets take fright Inflation and unemployment have soared and the currency has dropped sharply. There has been a 33% decline in average real wages since the adoption of the economic structural adjustment programme in 1990. Food and fuel prices have continued to rise, while some 30 per cent of the workforce are unemployed. The pressures on President Mugabe show no sign of lessening.
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