Tuesday, January 12, 2010

Economist Says Financial Recovery Programme is Unrealistic

Lance Guma
11 January 2010

Leading Zimbabwean economist John Robertson has argued that the government's Short Term Economic Recovery Programme (STERP II) document deliberately ignores the real cause of the country's economic crisis. Robertson said the recovery plan acknowledged the need for international assistance but fails to show how the mistakes of the past era have been addressed. This he argued will not encourage outside help.

Robertson says the document seeks to blame 'sanctions' for the malaise and yet most of the damage was self inflicted after 'decisions were taken to close down Zimbabwe's biggest business sector (agriculture) and to dispossess the investors who had built this capacity.' He said the importance of farmers who had already transformed agriculture and who used to be relied upon to deliver 'is not acknowledged, not recognised and not admitted.'
Robertson gave the example of the dairy industry saying the STERP II document blamed 'challenges with overall livestock production,' for undermining the industry. He said this is 'simply dishonest.'
'Dairy farming was not undermined by livestock production challenges. It was undermined by the eviction of the owners of nearly all the dairy farms in an acquisition process that destroyed a large percentage of the dairy herds. True enough, "livestock production challenges" did follow, but for reasons carefully avoided in the STERP II document,' he argued.
He said highly skilled dairy farmers used to produce more than 10 times the current volume of milk, and because this was well in excess of national requirements, a wide variety of dairy products could be exported. 'Now that production is about a quarter of the country's requirements, substantial imports are needed.' He said any attempt to revive the sector cannot ignore what got it into trouble in the first place.

Meanwhile a London based think tank, the Economist Intelligence Unit, has also expressed misgivings about the credibility of the economic programmes pursued by the government. They said the STERP II document, which is more detailed than the first one, 'has disappointed many business people and donors, partly because of its generally non-technical approach'.
Different economic turnaround documents published by different ministries have contained conflicting figures on growth and the think tank said this had further discredited government plans. An example used was the projected 40 percent increase in mining output, in the same year that electricity production was predicted to rise by only 3 percent, when power shortages have impacted negatively on the ability of every sector to improve.

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