zimbabwe economy

ZIMBABWEN ECONOMY

Group Members

Names RollnoKunal Sanghvi 66Akshata Satam 67Aditi Sawant 68Vasundhara Sawant 69Palav Shah 70

Zimbabwe History• Zimbabwe is located in Southern Africa.

• Capital: Harare

• Currency: Zimbabwian Dollar

• Occupation: Agriculture and Mining

• Official language: English • Regional languages: Shona, Sindebele

• Natural resources: coal, chromium, gold, nickel, iron, ore, tin and platinum.

• GDP Growth:-3.6%

• Inflation:2,200,000%

• Unemployment:80%

• Main Exports: cotton, tabboco, gold, textile/clothing.

• ExportPartners:SouthAfrica,Zambia,China,Japan,Mozambique,Botswana,Italy,Germany,Netherlands.

• Imports: machinery and transport equipment, chemicals, fuels, electricity

• Import Patners: South Africa, China, Botswana.

Political History

• 1923 – British Colony.

• 1961 – Constitution was formed in favor of

whites in power.

• 1980 – Zimbabwe’s Independence

• 1987 – Robert Mugabe came to Power

• Late 1980’s – Robert Mugabe’s chaotic land redistribution law which caused the economy to cripple and a widespread shortage of basic necessities.

• 1998 – 2000 – Zimbabwe’s involvement in the war in Democratic Republic of Congo.

• 2008 - Election

Inflation

• Zimbabwe in the grip of exponentially worsening economic crisis since 2000

• Inflation accelerating at a very high rate • Inflation surpassed that of all other nations• Hyperinflation bankrupted the Government• Soaring costs• Increasing fuel prices

Currency Devaluation

• There is 60% devaluation in the currency

• Black market

year Official exchange rate

Parallel exchange rate

2000 38 56–70

2001 55 70–340

2002 55 380–1740

2003 55; 824 1400–6000

2004 824–57305 5500–6000,

2005 730–26,003 6400–100,000

2006 85158–101,196(250 revalued dollars)

100,000–550,000(550–3,000 revalued dollars)

2007 250 revalued dollars 30,000 revalued dollars (Sept)

3,000–2,000,000 revalued dollars(4,000,000 revalued dollars)

2008 (Apr) 30,000 revalued dollars

35 -241,750,000 revalued dollars

Unemployment• The biggest fear for the country• Almost 85% are unemployed and

remaining 15% are in government jobs• Loss of half a million jobs• Disguise unemployment• Hampered employment in tourism

industry• Loss of employment in agricultural sector

PRODUCTION

GOLD1998 27,114kg2007 7,017kg

Oil2003 0 bbl/day

Energy2003 8.877billion kwh

IndustryENERGY

EXPORTS 0 kwh IMPORTS 3.3 billion kwh

IMPORTING COUNTRIESD.R.CONGO 9.50%MOZAMBIA 9.00%ZAMBIA 28.5%SOUTH AFRICA 43.0%

OIL

• EXPORTS 0 BBL/DAY

• IMPORTS 23,000 BBL/DAY

EXPORTS• TOTAL EXPORTS USD$ 1.775

• EXPORT GOODS

• COTTON• TOBACCO• GOLD• ALLOYS• TEXTILES

• MAIN EXPORT PATNERS

• SOUTH AFRICA 36.4%• CHINA, JAPAN, ZAMBIA 7.3% EACH• MOZAMBIQUE 4.7%• U.S, BOTSWAVA, ITALY, GERMANY, NETHERLANDS 3.6% EACH

Balance of Payments

Current Account - 425

Balance on goods 158

Balance on services -329

Balance on income -294

Current transfers 40

CapitalAccount 284

Financial Account - 26

Direct investment abroad

----

Direct investment in Zimbabwe

----

Portfolio investment assets

----

Portfolio investment liabilities

-----

Other investment assets -----

Other investment liabilities

-----

Net Errors and Omissions

80

Reserves and Related Items

86

Food Crisis• Land Redistribution Law

• Heavy Rainfall

• Suspension of Private Imports

• The people affected in different regions are as follows:

Matabeleland Masvingo Mashonaland Midlands Harare Manicaland

Human Rights• Police repression

• Child soldiers

• Discrimination

• Human trafficking

Diseases

• Food or waterborne diseases: bacterial and protozoan diarrhea, hepatitis A, and typhoid fever

• Vector borne disease: malaria

• Malnutrition

• HIV/ AIDS

What should be done?

• Political reforms

negotiated settlement on a Tsvangirai-led transitional government.

political agreement between the MDC and ZANU-PF

Tsvangirai-led transitional government with substantial participation by ZANU-PF

• Economic reforms careful management of domestic debt

adoption of new economic policies

balance of payments support

the negotiation of substantial credit lines

exchange rate policy & a move towards positive real interest rates

• Solution to food crisis

close by countries should provide emergency relief

• Reformation of Banking sector

restoration of the ailing banking sector

return the central bank to its traditional role

• Land reforms/ land redistributionNationalize the productive land

Employ farming expert management

The restoration of property rights

The market for agricultural land

Effective isolation from the financial institutions;

• The reticence of farmers & professional to return to Zimbabwemore than three million Zimbabweans have

fled

an injection of external development assistance & technical help with agricultural extension services.

Professional classes return under a new regime if they can see bright prospect in its reformation process.

• Role of IMF & World banksubstantial budget support and balance of

payments

support in the form of long-term loans from the IMF and World Bank

can contribute to help overcome acute shortage of foreign

exchange and earn good export revenues

Thank You

• International support and aid

need to be treated as a disaster zone

assistance to recapitalize the country especially for agriculture."

• Role of faith based organizations bringing democratic change build community civic culture combat illiteracy bring more discipline to an individual’s life &

community brings about a respect for rule of law,

tolerance spiritual, physical and eventually economical

prosperity

• West support

Assistance for creating economic and democratic institutions

Development of incentives for its stable functionality