Economic outlook gloomy

It is unlikely any significant progress will be made in resolving Zimbabwe's political crisis this year, says The Economist Intelligence Unit (EIU), which predicts that the country's economy will continue to contract. "As a result of the political crisis and poor economic policy, we forecast that real GDP will contract by 13.1 percent in 2003 and 6.1 percent in 2004; inflation will continue to soar, averaging 368 percent in 2003 and 444 percent in 2004," the EIU said. Although a negotiated end to the political crisis would eventually emerge, the process of organising formal talks between the ruling ZANU-PF and the opposition Movement for Democratic Change (MDC) was slow and suffered periodic setbacks, the latest of which revolved around attempts to draw up an agreed agenda for talks. The difficulties in getting the two parties to the negotiating table have been aggravated by the fact that President Robert Mugabe had split international opinion on how to deal with his government, the think-tank said. "To date Mr Mugabe has played a clever hand on the international front... The key to his success has been to keep the international focus on the land redistribution issue. He has argued that his land redistribution policy is needed to correct a historical injustice - an argument that receives a sympathetic hearing from leaders in Africa and other developing countries. "Coupled with his depiction of his government as one that is willing to stand up to Western powers and neo-colonialism, this has shifted the international focus away from the conduct of the 2002 presidential election, human rights abuses and the undermining of the rule of law and democracy," the EIU noted. "Mr Mugabe has also proved adept at offering concessions when needed, and then not implementing them when political pressure subsides. The net effect has been a lack of international consensus on how to handle his regime, although the attitude of some African leaders against Mr Mugabe appears to be hardening," the EIU added. As a result "any talks are unlikely to yield concrete results until 2004". "Meanwhile, food and fuel shortages are worsening, prices are rising rapidly and the economy is collapsing. Rising political tensions due to the repression of the MDC by the government and strikes organised by the MDC could easily erupt into violent clashes between opposition supporters and the security forces," the EIU warned.