ZIMBABWE ANALYSIS
Jorn Madslien - Business reporter, BBC News.
The power-sharing deal signed in Harare on Monday may eventually secure the peace in Zimbabwe, but it is far too early to talk about prosperity.
The International Monetary Fund (IMF), which turned off the flow of cash to Zimbabwe nine years ago and severed contact with Mr Mugabe's regime in 2006, says it is ready to enter into talks with Prime Minister Morgan Tsvangirai's new government.
"We stand ready to discuss with the new authorities their policies to stabilise the economy, improve social conditions and reduce poverty," says IMF head Dominique Strauss-Kahn.
"I encourage the government to take steps to show clear commitment to a new policy direction and to seek the support of the international community." But with Robert Mugabe staying on as president, this may prove difficult.
Mr Mugabe's presence is expected to hamper the government's efforts to push through a reform programme aimed at fixing the seemingly unfixable - an economy blighted by an inflation rate of more than 11 million per cent, however meaningless that figure is, and where eight in 10 people are unemployed.
In addition, the fact that Mr Mugabe's 28 years in power have not ended with his ousting means Mr Tsvangirai's international supporters are loath to get involved just yet.
"In a power-sharing government, the architects of the economic implosion are still partly in the driving seat," observes portfolio manager Roelof Horne at Investec Asset Management.
"And therefore neither generosity nor austerity will be delivered as enthusiastically as they might have in the case of a fresh start."
Foreign investors are sitting on the fence, even though many of them are eager to gain access to Zimbabwe's platinum and diamond mines, as well as to the grain and tobacco farms that were looted by Mr Mugabe's cronies during the early 2000s.
And both the US and the European Union say they are reluctant to lift sanctions.
In the absence of desperately needed cash from the West, Zimbabwe's war on poverty will be one fought by an army of children lacking in both life skills and life expectancy.
ZIMBABWE'S PLIGHT
Inflation: 11,000,000%
Unemployment: 80%
Life expectancy: 37 years
Malnutrition: 45% of the population
Sources: Reuters, WHO, World Food Programme
Zimbabwe: Facts and figures
Half the remaining population is now under the age of 18, with more than one in four of those being orphans.
Many have lost their parents to an HIV/Aids pandemic that has resulted in early deaths on a vast scale and contributed to an infant death rate of more than 12%.
"Much of the fabric of what once made Zimbabwe an exemplary country has been seriously eroded over the last 10 years," according to Mr Horne.
The average age in the country has nosedived to 37 years from 60 years in 1990, according to estimates by Save the Children, the World Bank and the UN.
Many of those who have not been affected by disease and malnutrition have fled the country's oppressive regime.
And the Zimbabweans remaining in the country - even if they had the money -would struggle to rebuild the country's roads, sewers, houses and hospitals.
"Economic capital, infrastructure, banking capital, human capital and the institutional framework are all in need of recovery and repair," says Mr Horne.
But relatively high literacy rates and education levels, at least by African standards, will not be enough to compensate for the lack of experience. Many simply do not know how to do what needs to be done.
Economists tend to operate with longer time-scales than most people.
So it should come as no surprise that when they say it will take time to revive Africa's worst basket-case economy they mean years - not months.
"Getting back to where we were in the 1990s, it would take us another 10 years," says Professor Anthony Hawkins at the University of Harare. "And getting back to the 1980s, it would take us another 15 years."
And it is going to get worse before it gets better, predicts Harare-based economist John Robertson.
"Despite the deal, this year's economic shrinkage will be worse," he says, and his dire forecast is echoed by Mr Horne.
"No-one should hope for a magical reversal of the economic tragedy that is Zimbabwe."
Many have lost their parents to an HIV/Aids pandemic that has resulted in early deaths on a vast scale and contributed to an infant death rate of more than 12%.
"Much of the fabric of what once made Zimbabwe an exemplary country has been seriously eroded over the last 10 years," according to Mr Horne.
The average age in the country has nosedived to 37 years from 60 years in 1990, according to estimates by Save the Children, the World Bank and the UN.
Many of those who have not been affected by disease and malnutrition have fled the country's oppressive regime.
And the Zimbabweans remaining in the country - even if they had the money -would struggle to rebuild the country's roads, sewers, houses and hospitals.
"Economic capital, infrastructure, banking capital, human capital and the institutional framework are all in need of recovery and repair," says Mr Horne.
But relatively high literacy rates and education levels, at least by African standards, will not be enough to compensate for the lack of experience. Many simply do not know how to do what needs to be done.
Economists tend to operate with longer time-scales than most people.
So it should come as no surprise that when they say it will take time to revive Africa's worst basket-case economy they mean years - not months.
"Getting back to where we were in the 1990s, it would take us another 10 years," says Professor Anthony Hawkins at the University of Harare. "And getting back to the 1980s, it would take us another 15 years."
And it is going to get worse before it gets better, predicts Harare-based economist John Robertson.
"Despite the deal, this year's economic shrinkage will be worse," he says, and his dire forecast is echoed by Mr Horne.
"No-one should hope for a magical reversal of the economic tragedy that is Zimbabwe."
BBC NEWS REPORT.
Labels: Zimbabwe Economy Harare Africa HIV/AIDS Investors Sanctions U.S. West IMF
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