36 SECTION 5 NATIONAL ECONOMIC AND SOCIAL TRANSFORMATION 5.1 THE ECONOMIC POLICIES AND PERFORMANCE At independence, the economy was war ravaged and the newly elected government was faced with serious challenges: the need for reconstruction and rehabilitation, the need to fight the economic war which would usher in a balanced ownership of the economy against a two thirds foreign ownership of invested capital, and the need to open up social services which were previously accessed by the minority regime. The extremely high expectations from the general population did not afford the newly elected government the time for the necessary adjustments commensurate with the expected demand for goods and services. Inherent in the opening up of existing social services without corresponding economic expansion is the stretching of such services beyond their hitherto intended capacity, and their consequent inevitable deterioration. The high expectations following the liberation war were so visible that even before the new government was sworn in, the nation was engulfed in nation-wide strikes, a situation which demanded some form of fire fighting both in the social and economic front. There was need for a radical, rather leftist approach to the transformation of the economy in order to meet the high expectations. However, government was cautious in order to maintain international lines of credit , hence it remained practically right wing though rhetorically left. However, as a result of the opening up of the economy to the international world, renewed access to international aid and borrowing from abroad, favourable terms of trade, good weather conditions, excess capacity and increased aggregate demand arising from agricultural and wage incomes, the economy experienced a major boom during the first two years of independence. Real Gross Domestic Product (GDP) grew by 11% in 1980, and 10% in 1981 (ZCTU, 2003). This economic boom resulted in the introduction of liberal policies on foreign exchange allocation, remittance of dividends and profits, and an expansionary incomes policy that contributed to macroeconomic instability. Various economic policies and programmes were tried since independence, as Government continually tried to redress the dualism in both the social and the economic sectors which was characterized by a relatively well-developed modern sector and a largely poor rural sector. The programmes included: • Growth with Equity policy of 1981 • Zimbabwe Transitional National Development Plan (1982-1985) • Zimbabwe first five-year National Development Plan (1986-90).