Zimbabwe’s 2005 economic prospects are not good. The economy
remains in recession, after having declined by approximately 35
percent since 1998. Inflation is in triple figures and while not
measured through any official statistic, unemployment is very high.
In addition, the country is heavily indebted, with total arrearages
now over US$2 billion, or more than half the country’s GDP.
While the economic slide began in 1997, following a large unbudgeted
payout to veterans of the independence war, it accelerated with
the Government’s introduction of fast-track land reform in
2000. Thus far, 4,000 of 4,500 whites have effectively lost their
farms.
The Government’s resettlement of black Zimbabweans onto these
farms has been chaotic, causing a steep drop in productivity. Once
accounting for one-third of foreign exchange revenue, tobacco output
has fallen from 237 million kgs in 2000 to 65 million kgs in 2004.
Poor economic policies and fear of expropriation have scared away
investment in non-agrarian sectors...
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