Zim facing bleak 2007: expert

HARARE – The new year holds bleak prospects for the overwhelming majority of Zimbabweans reeling under world-record inflation and a meltdown that shows no sign of easing, say economists.

“The year 2007 is bad news already before we have even started it,” said economist John Robertson, dismissing projections by finance minister Herbert Murerwa that Zimbabwe’s four-digit inflation would drop in 2007. Eric Bloch, an economist who runs an independent financial consultancy, said: “The first half of the coming year will be markedly worse than 2006.Inflation will continue to rise, there will be extensive foreign currency shortages and a further contraction in employment.”Bloch said inflation would subside in the second half, but the decline would not be spectacular.Zimbabwe is in the seventh year of an economic recession which culminated in a more than 1 000 per cent inflation rate in 2006, unemployment of more than 70 per cent and perennial shortages of basic goods like fuel and cooking oil and staples.Announcing the 2007 national budget last month, Murerwa said: “The economy is projected to grow marginally by between 0.5 per cent to 1 per cent in 2007.”He said annual inflation which stood at 1 098 per cent in November would recede to between 400 per cent and 350 per cent in the later half of 2007.He attributed the projected change of fortunes to “good weather, stabilising of commodity prices, improved mineral deposits and growing number of tourist arrivals.”Despite various projects to halt the spiral, including a drive to woo new friends among Asian countries after being shunned by the West because of President Robert Mugabe’s policies, the government appears far from winning the battle.Robertson said: “Most of the problems facing the economy are a result of self-inflicted damage we did ourselves and there is no quick way to fix it.”He said the economic woes stemmed from the government’s controversial and often haphazard land reforms in which the state seized at least 4 000 farms from white commercial farmers for redistribution to landless blacks.”We don’t have the money we used to earn from beef and tobacco any more.If the government changes some of its policies, we might get loans from those who are holding back because of the bad policies.”Mugabe said in his end-of-year address in parliament that the country’s economy was recovering as a result of the national economic development priority programme (NEDPP) and the ‘Look East’ policy to forge closer links with Asia.The NEDPP was launched in April to resuscitate the economy by generating foreign currency and promoting tourism, but analysts say the blueprint has so far failed to end the country’s economic woes.Zimbabwe launched the Look East policy nearly four years ago to buttress political and economic relations with Asian countries such as China and Malaysia after the country’s former Western allies turned their backs on Mugabe’s government.Zimbabwe Congress of Trade Unions (ZCTU) secretary-general Wellington Chibebe said calls by Mugabe’s supporters for the extension of the veteran ruler’s term by another two years in 2008 also would also scuttle efforts to mend fences with the country’s former trading partners.Nampa-SapaEric Bloch, an economist who runs an independent financial consultancy, said: “The first half of the coming year will be markedly worse than 2006.Inflation will continue to rise, there will be extensive foreign currency shortages and a further contraction in employment.”Bloch said inflation would subside in the second half, but the decline would not be spectacular.Zimbabwe is in the seventh year of an economic recession which culminated in a more than 1 000 per cent inflation rate in 2006, unemployment of more than 70 per cent and perennial shortages of basic goods like fuel and cooking oil and staples.Announcing the 2007 national budget last month, Murerwa said: “The economy is projected to grow marginally by between 0.5 per cent to 1 per cent in 2007.”He said annual inflation which stood at 1 098 per cent in November would recede to between 400 per cent and 350 per cent in the later half of 2007.He attributed the projected change of fortunes to “good weather, stabilising of commodity prices, improved mineral deposits and growing number of tourist arrivals.”Despite various projects to halt the spiral, including a drive to woo new friends among Asian countries after being shunned by the West because of President Robert Mugabe’s policies, the government appears far from winning the battle.Robertson said: “Most of the problems facing the economy are a result of self-inflicted damage we did ourselves and there is no quick way to fix it.”He said the economic woes stemmed from the government’s controversial and often haphazard land reforms in which the state seized at least 4 000 farms from white commercial farmers for redistribution to landless blacks.”We don’t have the money we used to earn from beef and tobacco any more.If the government changes some of its policies, we might get loans from those who are holding back because of the bad policies.”Mugabe said in his end-of-year address in parliament that the country’s economy was recovering as a result of the national economic development priority programme (NEDPP) and the ‘Look East’ policy to forge closer links with Asia.The NEDPP was launched in April to resuscitate the economy by generating foreign currency and promoting tourism, but analysts say the blueprint has so far failed to end the country’s economic woes.Zimbabwe launched the Look East policy nearly four years ago to buttress political and economic relations with Asian countries such as China and Malaysia after the country’s former Western allies turned their backs on Mugabe’s government.Zimbabwe Congress of Trade Unions (ZCTU) secretary-general Wellington Chibebe said calls by Mugabe’s supporters for the extension of the veteran ruler’s term by another two years in 2008 also would also scuttle efforts to mend fences with the country’s former trading partners.Nampa-Sapa