Source: Breakingviews – Zimbabwe’s renewal hinges on trio of tricky fixes | Reuters
LONDON (Reuters Breakingviews) – As poisoned chalices go, being president of Zimbabwe takes some beating. ZANU-PF leader Emmerson Mnangagwa was declared the winner of the first presidential elections to be held since Robert Mugabe’s removal in a coup. He will find it harder to prevail over the country’s litany of economic problems.
A three-step process could help. First, devalue the currency by 50 percent or more to restore export competitiveness. Second, convince global public-sector creditors, such as the World Bank, which hold over $7 billion of the $9.3 billion of Zimbabwean external debt to allow loans to be repaid over decades, rather than years. Finally, slash the public wage bill, which is equivalent to 20 percent of GDP.
Achieving all this will be near-impossible. A devaluation and wage cuts would stoke the unrest that broke out during the election, whose result is being questioned by the opposition. And institutions like the International Monetary Fund will only lend more money if the government has a credible fiscal plan and devises a plan to repay billions of dollars in arrears on past loans. If Mnangagwa can sort out even some of Zimbabwe’s problems, he will have done a good job.
COMMENTS
Yeah, too bad.
But, no worries, Mnangagwa need only create another “revolution” and declare it to be for the people’s freedom. He can point to the current sordid conditions, declare them intolerable, take up arms against the unfair control by the elite, bomb a few marketplaces, kill the remaining whites, declare the revolution won, and form a new government. Zim will cheer. The West and UN will cheer and pour money into the government coffers… which Zanu-PF can then pilfer, and all will be well for another 30-40 years, or until the next “revolution”.
Uh huh………
Um, which currency is to be devalued?