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Zimbabwe is currently facing the worst economic crisis in its history. The inflationary rates are in an all time high while unemployment rate is more than ninety percent. The current economic crisis has been caused by various factors which can be described as economical, social and political. The land reforms which were undertaken by the government in the early years of this decade have contributed greatly towards economic meltdown in this country.
The white owned farms were major producers of the export products in this country which heavily relies on agriculture for its survival. Agriculture and mainly export industry collapsed leading to massive loss of jobs and foreign currency. (Bond, P and Masimba, M, 2002 13) The mismanagement of economy and grand corruption has made Zimbabwe to be shunned by the investors. This has denied the country the much needed direct investment funds which are very crucial in the creation of employment and upkeep of the economy.
The prevailing political situation has made the matter worse as the environment is not conducive for investors. Government decision to control prices has made the economic crisis to deepen as producers are have abandoned the manufacturing and production in general in fear of making massive losses due to the government control in an economy which was previously highly liberalized. Natural calamities and diseases have acted as catalyst to the prevailing economic condition as the government spends funds to mitigate these problems.
(Richardson, C, 2007 34) Addressing Zimbabwe economic problems may not be an easy task but solutions must be found to save this country from total collapse. Political and economic reforms must be put in place to turn the economic round. Political reforms will go a long way in restoring foreign investors’ confidence helping in bringing in foreign currency and the creation of employment for the people of this country. Inflation need to be tamed down to make this country a haven of investment once again.
The government must be committed to implement policies which will work towards turning the economy around. Liberalization of the markets is one policy which might see the economy up again. This will bring competition in the markets something that is crucial towards creating employment and satisfying the local and international demand of the Zimbabwe products. The foreign currency market needs to be freed to address the economic imbalance. Unwarranted printing of the money should be discouraged as a measure to check the inflation.
The international financial institutions can save the country from its woes through advancing credit which can help in reduction of inflationary rates. The financial assistance should be properly monitored to ensure that it is used as intended, that means that the government must be accountable to the people as it only through transparency and accountability will progress be realized. Revocation of the land reforms instituted earlier will go along way in boosting commercial farming in this country.
The land owners should be guaranteed safety and incentives which will make them undertake the crucial role of providing food for the country and for the export markets. It may take long to bring back the economy on track again but all this can be achieved if there is a will. (Clemens, C and Moss, T, 2005 53)
Bond, P and Masimba, M, Zimbabwe Plunge, London, Merlin Press (2002) Richardson, C, Linking Rainfall and GDP Growth in Zimbabwe, African Affair, Oxford University Press (2007) Clemens, C and Moss, T, Costs and Causes of Zimbabwe Crisis, Center for Global development (2005)