New govt tasked to grow Zimbabwe economy

By Shen Xiaolei Source:Global Times Published: 2017/12/17 21:33:39

Illustration: Liu Rui/GT


After Emmerson Dambudzo Mnangagwa was inaugurated president of Zimbabwe on November 24, the curtain ultimately descended on the unprecedented coup triggered by the military's intervention in politics.

Though much hailed by the people of Zimbabwe, the Mnangagwa administration has fully realized from this political crisis that they will not gain legitimacy and support unless they are committed to developing the economy, creating jobs and improving livelihoods. Currently, the new government has launched a series of targeted adjustments and reforms, and it has set economic development as a top priority among multiple tasks.

Since he assumed office, Mnangagwa has repeatedly underscored the importance of economic development and job creation. To this end, he asked every ministry to list priority projects and effective measures within the shortest period of time, with an aim to revive the economy and improve people's well-being.

The new president applied a 51-49 percent local-overseas shareholding structure to the diamond and platinum sectors; pledged to recover capital held abroad and offered an amnesty between December 1 and February 28, 2018 for individuals and companies to surrender public funds illegally stashed abroad; called on overseas Zimbabweans to invest back home or promote the image of Zimbabwe in countries where they live and reduced or exempted tariffs for some raw materials used in manufacturing and construction in a bid to enhance the capacity utilization rates of domestic enterprises and increase their foreign exchange through exports.

In politics, Mnangagwa's government highlights the need to streamline the government and mollify intraparty disputes. After Mnangagwa was sworn in, he reiterated the policy to shed excess government staff and compress fiscal expenditure. In his first move, he cut the number of ministries from 27 to 21. Later, Patrick Chinamasa, minister of Finance and Economic Planning, presented detailed measures in the 2018 National Budget Statement. The government will abolish 3,700 posts of youth officers, raise the retirement age of civil servants above 65, restrict commissioners from using vehicles and downsize the number of diplomatic missions, among many other bold moves.

To relieve intraparty contentions, Mnangagwa did three things. First, he paid tribute to his predecessor Robert Mugabe and let all Zimbabweans "accept and acknowledge his immense contribution" to the nation. Second, he urged the public not to take revenge against the G40 faction and called on all party members to unite. Third, he extended the tenure of the country's Central Committee members to 2022 to prevent political factions from scrambling for power.

In addition, Mnangagwa's cabinet has also taken a host of other measures. For example, it pledged to compensate evicted white farmers whose land was seized during the Mugabe era. And it decided to launch all-weather foreign relations based on the "Look East" policy, in an attempt to seek better ties with the West.

Some of these policies have gained results. Exchange rates, commodity prices and inflation rates are kept at a stable level in a relatively certain political climate. The African Export-Import Bank will avail up to $1.5 billion in credit to Zimbabwe and provide guarantees to foreign investors looking to invest in the country.

Nevertheless, the Mnangagwa government is still confronted with several challenges given the prolonged economic stagnation during the Mugabe regime. It is very difficult for overseas investors to restore confidence in investment in Zimbabwe in the short term, so most are taking a wait-and-see attitude. Western countries, despite their promise to deepen cooperation with Zimbabwe, all insist on democratization as a precondition, which apparently is not what the Mnangagwa administration expected.

In addition, as the country failed to issue its own currency, cash shortages will blight people's daily life and economic growth for the near future. And to address a dilapidated transportation network, massive investment is needed to repair run-down urban roads, broaden inter-city arteries and restore rail transportation.

It is, however, noted that both Mnangagwa's policies and the challenges facing the country provide favorable opportunities for the furthering of China-Zimbabwe investment. The Chinese government on December 6 clinched three intergovernmental agreements with the Zimbabwean government, including a concessional loan framework deal and two pacts on unconditional technology transfer. It is anticipated that the two sides will see their bilateral ties further expand in the future.

The author is an assistant research fellow at the Institute of West Asian and African Studies of the Chinese Academy of Social Sciences.

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