Sunday, September 23, 2007

Fantasy land-Zimbabwe's economy is likely to shrink by 12% this year

Zimbabwe is the Chair of the U.N.'s Commission on Sustainable Development.

From the Economist:

Devaluing the Zimbabwe dollar isn't going to solve the economic crisis: GDP is likely to shrink 12% this year, the largest decline since the onset of the crisis in 1999.

Massive devaluation, higher taxes and the admission that the country can only afford 15% of government spending belies the best efforts of Zimbabwe’s finance minister, Samuel Mumbengegwi, to paint a picture of economic recovery. Making sense of the figures unveiled in Mr Mumbengegwi's supplementary budget on September 6th is an art form in itself: not only are there serious discrepancies between the new numbers and those published in the annual budget in December 2006 but the minister said nothing about the government’s quasi-fiscal spending, and made no attempt to explain how interest charges of some Z$13.5trn (US$450m) will be funded.

Mr Mumbengegwi’s main measure was the 99%-plus devaluation of the Zimbabwe dollar from Z$250:US$1 to Z$30,000:US$1. Both the official rate of Z$250:US$1 and the incentive “drought stabilisation rate” for exporters that was introduced in April have been abolished. All taxes and customs duties will now be levied at the new rate, which will boost tax income that has been hard hit by the price controls imposed in June, as a result of which profit tax and VAT revenues have collapsed....MORE

Mugabe leaves Harare for UN meeting
From AFP

From May 2007:

ZIMBABWE may have left 700,000 of its citizens without accommodation by bulldozing their homes, caused millions more to starve after violent land seizures that destroyed farming and so mismanaged its own economy that it has the world¿s highest inflation. But it has been chosen to head a United Nations body charged with promoting economic progress and environmental protection.

Western countries and human rights organisations were outraged yesterday by the choice of Zimbabwe to chair the UN commission on sustainable development. The British government condemned Zimbabwe’s election as “wholly inconsistent” with the body’s aims.

The chair traditionally rotates among regions of the world. It was Africa’s turn this year and the continent chose Zimbabwe as its candidate. “We really think it calls into question the credibility of this organisation to have a representative from a country that has decimated its agriculture, that used to be the breadbasket of Africa and can’t now feed itself,” said Daniel Reif-snyder, the US deputy assistant secretary for environment.

“For Zimbabwe to lead any UN body is preposterous,” said Jennifer Windsor, executive director of Freedom House, an independent nongovernmental organisation....

More at The Australian