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Empowerment Act, have created significant uncertainty over property rights,
deterring foreign direct investment and lowering consumer confidence.
The MDC has outlined its program to revive the economy.101 The party has
committed to stop printing new money, eliminate price controls, open foreign
exchange,102 and bring in the IMF to assist in reforming the government’s fiscal
policies. Tsvangirai has also floated the idea of replacing the Zimbabwe dollar with
a new currency.103 Some analysts have suggested that the existing dollar could be
temporarily linked to either the South African rand or the U.S. dollar to stabilize its
value. The party’s economic policy stresses a free market approach, and promises to
privatize most state-owned companies, dismantle patronage networks, and simplify
the tax code. In recognition that the government’s bloated budget has contributed
significantly to current economic woes, Tsvangirai has promised a significantly
smaller cabinet, should he become president, as part of a deficit-reduction strategy.
In addition, the MDC has proposed a land audit and a program to “harmonize” landtenure so that those on communal lands can hold an individual title. The party would
consider compensation for those who lost land illegally.
The State Department’s FY2009 budget request states that “If political change
ensues and legislative restrictions are lifted, Zimbabwe will need significant support
from the United States, in coordination with other donors, to reform, rebuild, and
recover.” Western donors, including the United States, met twice in Europe in 2007
to explore reconstruction options, and their representatives meet regularly in Harare
to coordinate existing aid programs. Some reports suggest, however, that there has
been little concrete planning on what this reconstruction support should entail.104
Another donor meeting is expected in Europe in summer 2008, and a pledging
conference may be considered. Norway has pledged a major economic stabilization
package from Nordic countries in return for “a true democratic election” and the
adoption of sound fiscal policies, although the exact amount of such a package has
not been announced. Britain has made similar pledges, and maintains its willingness
to release funds to pay for parts of an orderly land redistribution program if Mugabe
retires and the rule of law is returned. By some estimates, the cost of Zimbabwe’s
economic recovery may be almost $4 billion over a five-year period to cover food
support, land reform, health services and education, infrastructure, balance of
payment and budget support, and emergency aid programs. In the event of political
change in Zimbabwe, ESF funds in the State Department’s FY2009 request would
be directed toward support for “monetary and fiscal policy reform and economic
revitalization, specifically agricultural and private sector productivity and
improvement of the business enabling environment.”
101
See, for example, Morgan Tsvangirai, “Freedom for Zimbabwe,”The Wall Street Journal,
March 21, 2008.
102
The Reserve Bank made a major change to its fiscal policy in May 2008, allowing the
Zimbabwe dollar to float to address hyperinflation. Analysts have expressed doubts that the
government will maintain this policy if the Zim dollar depreciates faster than expected.
103
“Tsvangirai Promises New Zimbabwe Currency,” The Australian, March 28, 2008.
104
Morrison and Bellamy, “The Close of the Mugabe Era,” op cit.
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