International economists are expressing disappointment with the financial reform measures announced December 18 by Zimbabwe's new central bank chief, Gideon Gono.
Multilateral economic organizations were hoping that Mr. Gono's monetary policy statement would contain tangible measures to halt Zimbabwe's accelerating economic decline. Instead, say policy experts, Mr. Gono resisted bold measures that might have included a currency devaluation. He chose to maintain the current, trade distorting system of having two exchange rates one set by the government, the other by the free market.
Exporters, said Mr. Gono, will be allowed to keep half of the their foreign exchange earnings but must surrender 25 percent at the official exchange rate of 824 Zimbabwe dollars to one U.S. dollar. The free market rate is 6,000 Zimbabwe dollars to one. Mr. Gono pledged to restrain money supply growth and bring the current 500 percent inflation rate down to 200 percent by the end of 2004.
The economic message contained no measures that would halt the precipitous decline in food production that is associated with a socially disruptive land redistribution program.
Tajudeen Abdulraheem, a London commentator who heads the Pan African Movement, blames President Robert Mugabe for a land reform that he says has impoverished the people it was intended to help.
"More black people have been killed or continue to be harassed or have been victimized [in the confiscation of white farms] than white people," he said. "What kind of land reform is this that targets the black people that it claims it (the government) wants to return the land to? For me, the issue in Zimbabwe is a governance issue, in terms of an intolerant administration and an intolerant political elite that has been exhausted and is exhausting the country."
Mr. Abdulraheem, a Ugandan, believes the crisis in Zimbabwe has deteriorated to the point where the issue is how Zimbabweans can rid themselves of a leader he compares to Uganda's former president Idi Amin.
"We've been down this road before," he said. "The same thing [as with Amin when he got rid of the Asian traders]. Mugabe is very popular among many Africans simply because we are still stuck in the anti-imperialism, anti-colonialism mold. Many Africans are still stuck at fighting Ian Smith [the former Rhodesian leader who still lives in Zimbabwe], whereas the burden for the majority of Zimbabweans today is not Ian Smith. It is Robert Mugabe and the Zanu-PF regime."
Economists anticipate further distress in Zimbabwe amid predictions that inflation could soon reach 800 percent and unemployment 70 percent. Food production continues to decline and half of Zimbabwe's population is now dependent on food assistance.