By Cris Chinaka
HARARE, July 17 (Reuters) - Zimbabwe's new investment
incentives may help efforts towards economic recovery, but
analysts say the country will not prosper without radical
political reforms.
Finance Minister Tendai Biti announced a raft of import tax
cuts for fuel, capital goods and raw materials in a mid-year
budget review on Thursday and called on the new unity government
to put the battered economy on a path to sustainable growth.
"The measures announced by the minister are very welcome,
but on their own they are not going to help much," said John
Robertson, a leading economic consultant.
"There are serious political issues over farm invasions,
private property rights and governance that need to be sorted
out by politicians to build up investor confidence," he said.
Biti said a unity government formed by President Robert
Mugabe and his arch-rival Morgan Tsvangirai in February to try
to ease a severe crisis had planted seeds for economic growth.
The Zimbabwe economy was expected to grow by 3.7 percent in
2009 after collapsing by about 70 percent, while inflation was
seen at 6.4 percent by year-end, he said, down from 500 billion
percent in December 2008, according to IMF estimates.
Mugabe, 85 and in power since independence from Britain in
1980, says the economy has been sabotaged by powers opposed to
his seizures of white-owned farms for landless blacks.
Biti, who is a member of Tsvangirai's Movement for
Democratic Change (MDC), also said the new administration needed
to convince investors that it can survive and will respect human
and private property rights.
CREDIBILITY AT STAKE
In what appeared to be an indirect attack on Tsvangirai, who
as prime minister has been defending his working relations with
Mugabe as "cordial," Biti said the credibility of the unity
government was at stake and the principal leaders had to respect
the global political agreement that brought them together, "not
only in having tea together."
"We can come up with beautiful policies but if there is no
confidence the economy will not grow much or go far," he said in
his two-hour budget review statement.
Western donors told Tsvangirai during a three-week
fundraising trip to the United States and Europe last month that
they will only come to Zimbabwe's economic rescue when it
creates a democracy and improves human rights after decades of
what critics call repressive one-party rule under Mugabe.
Tsvangirai told his Western hosts that there was no longer
any systematic political violence in Zimbabwe and angered some
of his supporters by dismissing as "isolated incidents" new
invasions of white-owned farms by members of Mugabe's ZANU-PF
party. Critics called it a desperate bid for aid.
Zimbabwe says it needs about $10 billion for its emergency
short-term economic recovery programme and has so far only
managed to raise just over $1 billion, mostly in lines of credit
from other African countries.
Biti says the government is still negotiating with many
countries over aid, including China.
Political analyst Eldred Masunungure said while the economy
was starting to show signs of recovery, it remained fragile and
vulnerable to politicians.
"I agree with those who say the Zimbabwe economy is a
hostage of politics, a hostage of those in government resisting
reforms," he said.
(Editing by Elizabeth Fullerton)
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