Recently Zimbabwe entered into a power sharing agreement between two factions of the Movement for Democratic Change (MDC) and ZANU (PF). Despite the signing of this historic agreement, the European Union and the United States are continuing to impose sanctions and refusing to transfer any aid to the newly formed government. The new agreement continues to place the blame for the countrys economic disaster in the hands of the West by the de facto inclusion of a note in the draft constitution agreed to by both parties that, the primary obligation of compensating former land owners for land acquired rests on the former colonial power. The US and EU are right to remain sceptical of any agreement that continues to see the dictator Robert Mugabe at the helm of the country.
Until there are real and tangible democratic reforms that increase economic freedom and civil liberties for ordinary Zimbabwean citizens, international assistance will not be forthcoming given that these funds could potentially be used for other ends. Zimbabwe, once the breadbasket of the African continent, has been reduced to ruins under the despotic rule of Mugabe who has been in power for the last 28 years. Life expectancy at birth has plummeted from 60 years in 1990 to an estimated 34 years, and according to the World Bank, GNP per capita in real terms was lower in 2007 ($340) than it was in 1980 ($599). For several years unemployment has been reported to be over 80 per cent, although realistically its probably closer to 100 per cent. The United Nations estimates that in 2004, 31 per cent of the country was living on less than US$1 a day and approximately 60 per cent were living on less than US$2 a day.
In response to the economic crisis, the Zimbabwean reserve bank has frenetically printed money to support the corrupt and failing government-owned enterprises and to sustain minimal government services. The high growth in money supply has resulted in hyperinflation, officially estimated at 11,200,000 per cent, but probably closer between 20,000,000 and 52,000,000 per cent. Imposed price controls have emptied shops of food and hospitals of basic medicines and other essential devices to perform rudimentary operations.
As a result of starvation, malnutrition-related diseases such as kwashiorkor are increasing at astounding rates, and it is estimated that between 3,000 and 3,500 people die every week from HIV/AIDS and related opportunistic infections. Tuberculosis cases continue to rise and with unreliable and inconsistent TB treatment, the prospects of drug resistant strains of the bacteria worsen. Thousands of people die on a daily basis from diseases that are entirely preventable and curable. For instance, Zimbabwe was once at the forefront of malaria control interventions in Africa and successfully had managed to control the disease for many years. However, with the disastrous economic policies and the resultant hyperinflation, malaria control has been neglected. It has become impossible to plan for the impending malaria season with the costs of commodities and labour spiralling out of control.
The lack of malaria control has not only affected individuals in Zimbabwe, but people residing in neighbouring countries as well. The malaria parasite does not respect political boundaries and with the flow of human traffic over neighbouring country borders, malaria control efforts in these countries will also be put under strain. More specifically, public health facilities in neighbouring countries will be put under increasing pressure as the incidence of malaria cases increase. Now is the time for Zimbabwe to start collaborating with its neighbours South Africa, Botswana, Zambia and Mozambique to co-ordinate spraying rebuild infrastructure and hire expertise before the start of malaria season, which is imminently upon us. The Global Fund, the largest contributor to malaria control programmes around the world could help, but without the necessary checks and balances and the chronic hyperinflationary conditions it is not surprising that they refuse to donate any new money to the country.
According to the latest Economic Freedom of the World (EFW) report the level of economic freedom in Zimbabwe has been regressing rapidly since 1995. For several years Zimbabwe has occupied last place in the report, giving it the dubious honour of being among the most economically repressive and unfree nations in the world. The EFW report shows us that economic freedom and growth are inextricably linked. More specifically, the report objectively determines that the freest economies in the world have average per capita incomes of US$31,480 whereas the least free economies have average per capita incomes of US$3,882. The report also shows that life expectancy is more than 20 years longer in the countries with the most economic freedom compared to those with the least.
The EFW report shows that political rights (e.g. free and fair elections) and civil liberties (e.g. freedom of speech) go hand in hand with economic freedom. The government of Zimbabwe has systematically undermined all of these rights and liberties, resorting to physical abuse and scaremongering tactics in order to intimidate voters in the run-up to elections. The government has also controlled all forms of media with an iron fist, refusing to allow international journalists entry into the country. According to Transparency International, which compiles an annual corruption perceptions index (CPI), Zimbabwe has rampant corruption. In 2005, the Economist's Quality of Life Index ranked Zimbabwe last among 111 countries surveyed. The countries were judged according to their GDP, health delivery systems, unemployment rate and political stability.
In order to restore basic healthcare needs to Zimbabweans and to rebuild the healthcare system, some dramatic and far-reaching political and economic reforms will be needed. Price controls and other artificial barriers preventing the market from functioning must be removed immediately and the Zimbabwean dollar must be replaced by a stable currency, so as to curb hyperinflation. In the future Zimbabwe will no doubt receive donor aid, but aid will not make Zimbabwe wealthy or healthy, that can only come from private enterprise and long-term growth based on the foundations of personal and economic freedoms.
Author: Jasson Urbach is an economist with the Free Market Foundation. This article may be republished without prior consent but with acknowledgement to the author. The views expressed in the article are the authors and are not necessarily shared by the members of the Foundation.
FMF Feature Article/23 September 2008 - Policy Bulletin/12 January 2010
Publish date: 20 January 2010
The views expressed in the article are the author’s and are not necessarily shared by the members of the Foundation.