Reducing Poverty and Promoting Sustainable Development Through Policy Dialogue

Abstract

Zimbabwe is emerging from a decade of socio-economic decline. The gains the country saw after independence in 1980; particulady the impressive progress in reducing poverty and inequality as well as the high standards in health and education; had stagnated and in some cases been reversed. Although triggered by a multiplicity of causes, the programme to redistribute land from mainly white farmers to the majority black Zimbabweans in February 2000, is often cited as the catalyst that precipitated an economic crisis which subsequently became a social crisis. Zimbabwe's economy had been in decline since the mid-1990s, initially caused by failed structural adjustment policies but later compounded by shortages of foreign exchange (see Figure 1). It became increasingly difficult to import raw materials, spare parts, and fuel, which undermined manufacturing and agriculture, and accelerated a downward economic spiral. Alongside this decline in productivity came a sharp decline in disposable incomes and employment. The economic crisis reshaped the structure of employment and formal sector employment was dwarfed by a burgeoning informal sector. By 2003,72 per cent of the population lived below the total consumption poverty line, compared to 55 per cent in 1995. Hyperinflation peaked at over 200 billion per cent in 2008, which became a year of economic and political crisis.