Zimbabwe defiant amid torrent of disapproval
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Emerging Markets

Zimbabwe defiant amid torrent of disapproval

Finance minister claims foreign governments are responsible for economic collapse

Zimbabwean finance minister Samuel Mumbengegwi has blamed the country’s economic meltdown on “colonialism”, and defended Robert Mugabe’s ruinous economic policies, in response to searing criticism by other southern African leaders.In an interview with Emerging Markets in Washington, Mumbengegwi yesterday defended a new “indigenization” bill and denied that the economy is in meltdown.

He did not comment directly on proposals made in August by the Southern African Development Community (SADC) to stave off the terminal collapse in Zimbabwe and the regional destabilization threat it carries. South African president Thabo Mbeki had urged Zimbabwe’s government to ease price controls that have crippled shops and factories and to “reduce the overvaluation of the exchange rate and money supply”.

Mumbengegwi argued that the nation’s inflation, estimated at 10,000% with the currency slumping to 1 million to the US dollar on the black market on Friday, was a British “colonial” plot. “Inflation is solely caused by foreign currencies that are smuggled into the black market through organized channels by the British political parties. They created this instability in hope of creating an internal uprising,” he told Emerging Markets.

Abdoulaye Bio-Tchane, head of the IMF’s Africa department, told a press briefing on Saturday that the country’s command economy is causing ceaseless misery. “Zimbabwe, with its economic potential, deserves to be among the best growing economies and the fastest-growing economies in Africa . This is not the case, and I will continue to call for a different set of policies.”

Zimbabwe is in its ninth year of recession, sparked by the government’s seizure of white-owned farms, with unemployment now at 80% and population relentlessly battered by hunger, poverty and AIDS. The government last month implemented black majority ownership of foreign firms, including mines and banks.

At a Standard Chartered breakfast meeting, Mumbengegwi argued that the emerging markets bank would, like all other foreign firms, have to give up their controlling stakes in order to complete the country’s decolonization process. “This indigenization bill is necessary and will help secure foreign investment”.

Gary van Staden, political consultant to South Africa’s bureau of economic research, told Emerging Markets: “While Mugabe sees no problems, it is South Africa that will have to carry the can when Zimbabwe falls apart, and fall apart it will.”

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