Critically Assess Zimbabwe’s Present (Post Z$) Economic Recovery Programmes. in Your Opinion, What Are the Chances of Their Success?
Introduction
The beginning of 2009 marked the end of over a decade of economic decline in Zimbabwe. The economic indicators decline cut across all key sectors, despite Zimbabwe’s rich resource endowment. Inflation, initially at 100 percent annually between 2001 and 2006, increased to over 1500 percent (McIndoe, 2009). According to IMF estimates, real GDP growth recorded a cumulative contraction of 48% (nearly 5% per year) between 2000 and 2009. Agriculture value added contracted by 86% during the period 2002-2008. Gross national income per capita in 2008 was estimated to be US$360 (compared to sub-Saharan Africa average of US$1,428), making it one of the poorest countries in the world (African Development Bank, 2010). The poverty rate which was already on an increase since 1995 (42 percent) was recorded at 63 percent in 2003 and was estimated to be over 70 percent in 2010 (African Development Bank Group, 2011). According to the economic policy reform proposals announced by the coalition government formed in February 2009, other symptoms of the economic crises as negative GDP growth rates, low productivity capacity, loss of jobs in the formal sector, food shortages, massive deindustrialization and general despondency (STERP, 2009).
This paper uses ‘developmental state theory’ as a basis of assessing economic reform policies proposed and currently being implemented by the Zimbabwe’s coalition government after the demise of the Zimbabwe dollar (Z$) in 2009. The paper considers STERP in March 2009, Medium Term Plan (MTP) in July 2010, and the Three Year Macro-economic Policy and Budget Framework 2010-2012 (STERP II) in the context of this economic theory with a view to assessing the extent to which they bring Zimbabwe closer to the key elements of a develop-mental state. This is taken from the premise on which these policies are anchored. For example, the sixth point in STERP says:
“STERP is an emergency short term stabilization program, whose key goals are to
The beginning of 2009 marked the end of over a decade of economic decline in Zimbabwe. The economic indicators decline cut across all key sectors, despite Zimbabwe’s rich resource endowment. Inflation, initially at 100 percent annually between 2001 and 2006, increased to over 1500 percent (McIndoe, 2009). According to IMF estimates, real GDP growth recorded a cumulative contraction of 48% (nearly 5% per year) between 2000 and 2009. Agriculture value added contracted by 86% during the period 2002-2008. Gross national income per capita in 2008 was estimated to be US$360 (compared to sub-Saharan Africa average of US$1,428), making it one of the poorest countries in the world (African Development Bank, 2010). The poverty rate which was already on an increase since 1995 (42 percent) was recorded at 63 percent in 2003 and was estimated to be over 70 percent in 2010 (African Development Bank Group, 2011). According to the economic policy reform proposals announced by the coalition government formed in February 2009, other symptoms of the economic crises as negative GDP growth rates, low productivity capacity, loss of jobs in the formal sector, food shortages, massive deindustrialization and general despondency (STERP, 2009).
This paper uses ‘developmental state theory’ as a basis of assessing economic reform policies proposed and currently being implemented by the Zimbabwe’s coalition government after the demise of the Zimbabwe dollar (Z$) in 2009. The paper considers STERP in March 2009, Medium Term Plan (MTP) in July 2010, and the Three Year Macro-economic Policy and Budget Framework 2010-2012 (STERP II) in the context of this economic theory with a view to assessing the extent to which they bring Zimbabwe closer to the key elements of a develop-mental state. This is taken from the premise on which these policies are anchored. For example, the sixth point in STERP says:
“STERP is an emergency short term stabilization program, whose key goals are to
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