Page last updated at 22:27 GMT, Monday, 14 April 2008 23:27 UK

No quick fix for Zimbabwe's economy

Analysis
By Jorn Madslien
Business reporter, BBC News

Morgan Tsvangirai
If he takes control, Morgan Tsvangirai will need the help of Zimbabwe's people

More than two weeks after Zimbabwe held its elections, the dithering over the result shows little sign of ending.

Meanwhile Africa's worst basket-case economy continues to flounder, without a leader to take stock of what needs to be done.

In terms of statistics, Zimbabwe's plight is pretty much immeasurable.

Figures such as a rate of inflation of more than 100,000% and an unemployment rate said to be in excess of 80% are startling, but also largely meaningless.

After 28 years under Robert Mugabe, emotive terminology such as utter despair and desperate destitution describe the situation in Zimbabwe better than any maths and statistics can ever do.

This is certainly the case for the 700,000 people who have been robbed of everything, even their homes in urban slums that were razed by Mr Mugabe who had deemed them an embarrassment.

Morgan Tsvangirai's Movement for Democratic Change (MDC) party is expected to ultimately take control of the country.

And his political ally, Washington Ali, former chairman of the MDC, appears optimistic.

He told BBC News that the party had "learned from the past" and adopted a five-year reform plan that "would take into consideration both the economy, the security of the country, the investment - basically bringing the economy from the dead weight it is at the moment".

Human resources

There is plenty of work to do.

ZIMBABWE'S PLIGHT
Inflation: 100,000%
Unemployment: 80%
Life expectancy: 37 years
Malnutrition: 45% of the population
Sources: Reuters, WHO, World Food Programme

Roads and sewers must be repaired. Power supplies must be restored. The homeless need roofs over their heads. The wounded, the famished and the mentally scarred will need treatment.

In economists' terminology, the nation's human capital has been massively depleted.

There are even doubts about the actual size of its population - estimated at some 13 million people, though migration and early deaths on a vast scale mean nobody can say for sure.

Millions of those able to do so have fled to seek better lives abroad and to provide for relatives back in Zimbabwe.

Beggar in Harare
Homeless and starving people hope the situation will change quickly

Life expectancy has plunged to 37 years from 60 years in 1990, World Bank and UN figures indicate - though this is largely due to the HIV/Aids pandemic.

Infant death rates have soared to more than 123 per 1,000 in 2004, the latest year when figures were available, from 59 less than a decade ago.

Half the remaining population is now under the age of 18, according to Save the Children estimates. More than one in four of those under 18 are orphans, many of them because their parents have died from HIV/Aids which, according to the United Nations Development Programme, kills 3,200 people per week.

So there is a great shortage of experienced managers who can lead the effort.

And although literacy rates and education levels are relatively high, at least by African standards, many workers will nevertheless lack the skills to get the jobs done.

Agricultural revival

Zimbabwe's farms are in a similarly sorry state.

Man helps sick get to hospital in Zimbabwe
The sick will need treatment

Looted by Mr Mugabe's cronies during the early 2000s from white farmers - many of whom had stayed when Ian Smith's white minority-ruled Rhodesia became Zimbabwe in 1980 - the country's most productive grain and tobacco farms have been either actively wrecked or sadly neglected.

Farm failures have hampered the nation's ability both to feed its people and earn foreign currency. More than eight out of 10 people survive on less than $2 (1) per day and almost half the population suffer from malnutrition.

So although an agricultural revival is both desirable and feasible, it will require skills and experience that in most cases have left the country. Foreign assistance will be required.

But even so, farm reform will be hugely controversial. Some 4,000 white-owned farms were forcefully handed over to landless black people under Mr Mugabe, often to his supporters.

So expect disputes over land ownership.

Natural wealth

Zimbabwe's lucrative mining sector is in better shape and could offer a great economic boost for the country.

Gold digger in Zimbabwe
Digging for gold could help Zimbabwe recover

Zimbabwe has massive reserves of platinum, believed to be the second-biggest in the world and operated by Zimbabwe Platinum Mines and Mimosa Platinum Mines and Impala Platinum. Anglo Platinum is developing a new mine in the Midlands, Unki.

Rio Tinto is active in diamond mining in the country, Zimasco Consolidated Enterprises owns the country's largest ferrochrome producer, and there are activities by major gold mining companies.

But resource development in Zimbabwe has declined in recent years, with many mines closing.

Costs have been pushed higher by strict exchange rate regulations and operating the mines has been made difficult by the collapsing infrastructure and the growing economic crisis.

Tourism is another potential source of foreign earnings for Zimbabwe, though it could take time before travellers return.

Yet the underlying fundamentals of Zimbabwe's economy, resource base and even parts of the corporate sector remain reasonably robust.

Many foreign investors are sitting on the fence, eager to get in - provided that Mr Mugabe's Zanu-PF party is ousted,

Aid, loans or other economic assistance from the likes of the International Monetary Fund, the World Bank and the European Union should supplement an anticipated inflow of foreign investment.

But much like the wranglings over the election, when it comes to the economy, nobody expects a quick fix.


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