As Zimbabwe heads into parliamentary elections on Thursday, economists warn that the economy will worsen unless the political impasse is resolved and the government changes its policies.
Tony Hawkins, an economist at the University of Zimbabwe, said the economy had deteriorated considerably since 2000, when parliamentary elections were last held. “Then we were living with inflation of about 50 percent. Today it is more than double that and it has been as high as 600 percent,” he told Africa Division reporter Cindy Shiner.
“The currency in mid-2000 was still 38 to the United States dollar. It’s now 6,080 to the dollar,” he said.
The government of President Robert Mugabe has accused the West of undermining his policies. “Really what they’re saying is that the West has conspired against them by refusing to allow IMF (International Monetary Fund) and World Bank funding and other donor funding and so on,” said Mr. Hawkins. “It would be very difficult for the Fund or the Bank to lend to Zimbabwe given the kinds of policies that are in place.” He cited an overvalued exchange rate and subsidies on food and other essential goods as examples.
Mr. Hawkins foresees three potential outcomes for the economy after the elections. He said the ruling party could win, receive international recognition and access to funding, which he thinks is unlikely. The opposition could win and embark on economic policies that are likely to have support from the West. Or, he said, the ruling party could win and fail to get international recognition.
“If the Mugabe government wins and it is not recognized then I fear the sort of gradual stagnation of the economy continues and conditions will get slowly worse,” he said.
Zimbabwe says the elections will be free and fair but the opposition and international observers doubt this.