‘Horror of 2008 back as economic meltdown accelerates’

via ‘Horror of 2008 back as economic meltdown accelerates’ – DailyNews Live 12 August 2015

HARARE – Analysts say Zimbabwe has once again hit the depths of humanitarian and economic despair that were last experienced in 2008, when the country’s seemingly unending political crisis precipitated an economic meltdown of monumental proportions which culminated in the death of the Zimbabwe dollar and the establishment of the hope-inducing government of national unity.

Speaking in interviews with the Daily News yesterday, the analysts said the only difference between then and now was that supermarkets were currently full of goods unlike seven years ago — although very few Zimbabweans are able to afford the goods as joblessness and poverty levels in the country increase exponentially.

All the analysts who were interviewed put the blame for the country’s escalating political and economic crisis at the door of President Robert Mugabe and Zanu PF, saying the ruling party had more appetite for its mindless factional and succession wars than resolving Zimbabwe’s myriad challenges and advancing the lives of long-suffering citizens.

Afghanistan-based analyst Maxwell Saungweme said unless “something dramatic” happened very soon, Zimbabwe was in fact headed for a political and socio-economic crisis that was worse than that experienced in 2008 when the country recorded one of the worst inflation levels ever reported anywhere in the world, where shop prices were literally changing by the minute.

“In 2008 we had our own currency to play with, though it was valueless, but this time around we have the US dollar which is hard to get for both the cash-strapped government and the people. Unemployment is also currently much, much higher than in 2008 and getting worse.

“Add to all this the fact that the government is more clueless this time than before, in terms of providing economic reprieve for the people. And donors have also cut back on support to civil society and non-governmental organisations that used to provide life-serving interventions.

“Politically, Zanu PF is more divided than before, to the extent that government is actually dysfunctional. Depressingly, even opposition political parties are also divided and can’t even lobby other governments to pay attention to the situation in the country. This is why I say we are heading for disaster,” a despairing Saungweme said.

Respected academic and political commentator Ibbo Mandaza said with Mugabe in power, there was little hope of the economy reviving any time soon.

“I hope it’s not going there (to 2008) and I hope something can be done. Clearly, we need a political solution, but as long as Mugabe is there, there is no hope,” he said bluntly.

Renowned economist John Robertson said the situation that currently obtained in the country was already “statistically worse” than that which prevailed in 2008.

“I think we’re back to 2008, and in some cases it is actually worse than 2008. On the employment front, the number of people who are unemployed now is worse than we had in 2008.

“Statistics show that we actually have the same employment figures as we had in 1968, almost 50 years ago. While two million jobs were supposed to be created, we only have about 700 000 people employed, of which half of them are employed by the government,” Robertson said.

He said the only reason why most people appeared not to realise the depths of the damage to the bleeding economy was that there were no shortages of goods in shops.

“The purchasing power for 2008 seems to be higher than now because wages were being paid and people had money to buy goods, though the goods were not available. Now people do not have money, but goods are available.

“It’s a process which has many contributing factors such as the cost of doing businesses, which is very high and which means that we can’t compete with imports,” Robertson said, adding that power shortages and poor investment policies had also crippled prospects for economic growth.

Zimbabwe Democracy Institute director, Pedzisai Ruhanya, said while the situation may not necessarily go back to 2008, because of the mitigating factor of the US dollar that was the major currency of commerce in the country — and which meant that those few people who still had jobs and had a steady income could be spared the horrors of 2008 — Zimbabweans should not expect the country’s economy to improve with Mugabe in power.

“The Zimbabwe crisis is fundamentally a political problem. President Robert Mugabe must leave power, as it does not make sense to have a 91-year-old determining the future of the country. Where is his future? We need young and energetic people who have an understanding of the global economy to take charge.

“What we also need to do is to reform the politics of the country. Zanu PF is talking about liberalisation of the economy when they cannot appreciate liberal politics,” Ruhanya said.

Economists told the Daily News earlier this year that average incomes in Zimbabwe were now at their lowest levels in 60 years, and  that more than 76 percent of the country’s adult population was having to make do with less than $100 a month.

This, the economists said, meant that poverty levels in the country had reached “numbing levels”, amid indications that the situation would worsen by the end of the year, as Mugabe and his Zanu PF government continued to demonstrate their inability to fix Zimbabwe.

And according to a recent FinScope Consumer Survey, the country’s deteriorating economic conditions were forcing more and more cash-strapped citizens to live without basic necessities such.

FinMark project manager, Obert Maposa, said the number of Zimbabweans living on the margins was increasing at an alarming rate, with access to clean water, for example, declining in the past four years, with only 29 percent having piped running water compared with 35 percent in 2011.

“The percentage of people who have had to skip a meal due to lack of money went up to 44 percent in 2014, from 29 percent four years ago, while 37 percent have gone without treatment or medicine because of lack of money, compared with 20 percent in 2011,” he said.

As a result, commentators told the Daily News the country’s deepening economic crisis, which was worsening the already high levels of unemployment, necessitated the need for dialogue among political parties in an effort to find lasting solutions to Zimbabwe’s myriad crises.

Economist Christopher Mugaga said with the massive company closures that had been witnessed over the past few years, “it’s only a matter of time before the economy totally collapses”.

“The informalisation of the economy is a good sign of worsening poverty levels in the country.

“There is no way the current government would be able to save the economy without extending a hand to the opposition,” he said.

Mugaga said politicians now needed to swallow their pride and invite all stakeholders to the table as part of efforts to revive the economy.

“The reason why most economies of developed countries perform well is as a result of collective efforts in government.

“The opposition in Zimbabwe must be included in government so that they can play their part in reviving the economy,” he said.