Friendless Zimbabwe scrapes the bottom of the financial barrel

Inflation at 139% and growing fast Alan Peat THE ZIMBABWE government is scraping the bottom of the barrel to balance its finances, says Standard Bank economist Dr Henry Flint in a review of the Zimbabwean budget. Also, friends and allies are few, and - even with the support of SA - Flint’s forecast is that it is “unlikely” that new friends will appear out of the woodwork. “The message from the international community is clear,” he said. “Prerequisites for financial assistance are the return of the rule of law, a transparent and just land reform programme, and sound economic policies.” Flint found the policies presented in the 2003 budget “sound” apart from what he described as the minister’s “unconvincing statement” that inflation (currently at 139% and growing fast) would be brought down to 96% next year and single digits in 2004. “Failure, like this, to embrace reality has forced the government to continue on its current path of economic destruction,” said Flint. “Inflation is projected to reach hyper levels soon despite the minister’s forecasts, while the Zimbabwe dollar (ZWD) will continue to depreciate on the “underground” market.” In the meantime millions of people face starvation, Flint added, “and economic activity continues to be strangled by severe shortages of foreign exchange necessary for inputs and artificial monetary aggregates.” He further suggested that - without any significant external financial support - it was unlikely that any “home grown” government initiatives (“however well intended”) would be sufficient to turn the economy and the plight of the population around. “The way things are currently progressing,” said Flint, “it may just be that - instead of being remembered for empowering the people - President Mugabe will be remembered as the man who ruined a beautiful country once among the gems in Africa.”