Mugabe admits to economic problems

Zimbabwean President Robert Mugabe admitted for the first time on Friday that his government’s policies had failed to arrest the country’s economic decline. Speaking at the opening of a coin minting plant in Bulawayo, Zimbabwe’s second city, Mugabe blamed “domestic and external imbalances” for an unprecedented currency depreciation and economic meltdown, African Eye News reported on Monday.

The 78-year-old president, whose grip on power has been tested by an increasingly outspoken opposition, insisted the economic problems were not unique to Zimbabwe. “Our problems have manifested themselves in the form of high inflation and exchange rate instability, thereby seriously undermining the purchasing power of our country’s notes and coins,” Mugabe said. “The balance of payments also continue to be under pressure, against the background of a widening current account deficit and declining capital inflows.”

Economists reportedly blame the unfolding economic crisis on Mugabe’s unyielding support for the seizure of vast areas of white-owned commercial farms by self-styled war veterans. The invasions and related violence have scared both prospective investors and foreign donors off. Mugabe expressed optimism for economic recovery and suggested that the Millennium Economic Recovery Plan (MERP) adopted at the recent African Union summit provided a blueprint for a Zimbabwean revival. However, some Zimbabwean economists have dismissed Mugabe’s enthusiasm, saying MERP and other economic policies were unlikely to succeed without radical steps to stabilise the agricultural sector and either halt or reverse farm invasions by war veterans.