ECONOMIC RECOVERY SUMMARY This report which covers the months of February through July 2010 assesses the performance of Zimbabwe’s inclusive government based on three benchmarks deriving from the inter-party agreement, namely 1) strategies aimed at economic recovery, stabilization and improving food security, 2) establishment of a national economic council and lastly 3) resolution of the land issue. It first looks at areas where the government complied with the tenets of the agreement before considering those areas it failed to live up to the agreement. During the period under review two main issues raised controversy— diamond mining in the Eastern province of Manicaland’s Chiadzwa area and contestations around the country’s Indigenization and Empowerment laws. Other issues of serious concern and directly speaking to the inclusive government’s mandate to stabilize the economy include; a surge in year on year inflation to 6, 1% from the lower levels of nearly -5% at the beginning of the year, tight liquidity, high interest rates, decreasing industrial productivity, erratic supply of service utilities such as water and electricity, low wages, low investor confidence, continued reports of disturbances at some of the farms and poor prices for farm produce, among other things. Growth projections for 2010 have been revised downwards from 7% to 5,4%.2 Positive developments recorded include the introduction of measures to reform and restructure the central bank, revamping the collection of important national statistics, the surpassing of revenue collection targets and efforts to widen the tax base inter alia. Progressive legislation introduced includes, the Public Finance Management Act, the Reserve Bank Amendment Act and the Audit Office Act which are all set to enhance public accountability in the management of national finances. The much talked about Mid Term Plan (MTP) was yet to be implemented as of June 30 2010 despite being announced earlier this year. COMPLIANCE Benchmark 1: Develop and implement economic recovery strategies and plans to address issues of production, food security, poverty and unemployment and the challenges of high inflation, interest rates and the exchange rate. Economic policy: In the first quarter of 2010 the government announced a new economic blue print named the Medium-Term Plan (MTP) to succeed the Short Term Emergency Recovery Program (STERP). Media reports suggest that consultation work which had delayed the implementation of the plan has been finalized. The MTP would be the overall guiding economic framework giving direction to the budget formulation process on the basis of the targeted Gross Domestic Product for the five-year period starting this year until 2015.3 The implementation would rely on three main pillars— foreign direct investment, joint ventures and attracting investment for development of infrastructure4. A few 2  Ministry of Finance ñ 2010 Mid-Year Fiscal Policy Review, 14 July 2010. 3  15 April 2010 on www.zimtreasury.org 4  Cabinet Concerns on MTP Draft Addressed; The Herald, 14 June 2010, pp:b1 CIVIL SOCIETY MONITORING MECHANISM (CISOMM) SIX MONTH SHADOW REPORT ON THE PERFORMANCE OF THE INCLUSIVE OF ZIMBABWE 11