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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

Zimbabwe
The Zimbabwean President, Robert Mugabe, blamed food riots in the country this year on a political conspiracy.

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.


Zimbabwe Congress of Trade Unions leader Morgan Tsvangirai: The government will have to move towards democratisation
The immediate cause of social unrest this year has been rises in food prices, particularly the staple food, maize meal, which the government subsequently overruled.

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


[ image: Price rises have hit ordinary people hard]
Price rises have hit ordinary people hard
The World Bank has also expressed its disappointment at the slow progress of reform in state-owned enterprises, an area where many observers say there is extensive corruption.

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.


[ image: Riots early this year in Harare were sparked by an announcement of food price rises]
Riots early this year in Harare were sparked by an announcement of food price rises
One was a decision to pay more than 200 million US dollars to veterans of the long war to end white minority rule.

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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In this section

Mugabe's long shadow

Political conspiracy or economic mismanagement?

Mugabe's unpopular war

Land battle sets black against white

Mugabe faces economic anger

Meeting Mr Mugabe

Zimbabwe's history: Key dates