Zimbabwe's road to recovery long, hard

A power-sharing agreement signed in Zimbabwe between those gunning for power was unlikely to bring quick economic relief according to analysts.

The deal, signed between former President Robert Mugabe and political rival Morgan Tsvangirai would see Tsvangirai filling a new post as prime minister. Mugabe would become president again, and a deputy prime minister position would be filled by Arthur Mutambara, a leader of a splinter party.

The once bread-basket of southern African is little short of a basket case after more than a decade of poor rule by Mugabe’s ZANU-PF party saw the country’s economy shrink by at least 65 percent. Inflation reached 11.2 million percent in June.

The historic deal has been seen by many as an opportunity for Zimbabwe to rebuild itself and reclaim the wealth it once had, but Harare-based economist John Robertson said the economy would continue to struggle for years.

“Despite the deal, this year’s economic shrinkage will be worse. Confidence in the country is low. There has been a lot of skills flight. The change is going to be very, very slow,” Robertson said.

The new government would inherit $4-billion in external debt and domestic debt of $79.9-million, as well as a currency that has already had 13 zeroes removed from it in a vain attempt to prop up the free-falling Zimbabwean dollar.

The three leaders have agreed that “the government will lead the process of developing and implementing an economic recovery strategy and plan.”
However, working together may be difficult.

“It looks like Morgan has been cheated in this deal, they (MDC) don't have anything other than to shuffle papers and that’s it,” said Robertson.

University of Harare Professor Anthony Hawkins added that although foreign assistance could mean a growing economy by the first half of 2009, lost productivity would take years to redevelop.

“Getting back to where we were in the 1990s, it would take us another 10 years and getting back to the 1980s, it would take us another 15 years,” said Hawkins.

The International Monetary Fund has already agreed to hold talks with the new government after ending their relationship with Zimbabwe over un-paid debt in 2006, while the European Union has decided against immediately lifting sanctions, saying they would monitor the situation.