IMPACT OF ZIMBABWE’S DECADE OF ‘DYNAMICS IN REVERSE’ ON ITS EXPORTS PERFORMANCE AND POVERTY

Abstract

This paper takes a look at Zimbabwe’s economy during the decade of 1999-2008 characterized by consistently negative GDP growth rates through the lenses of its export performance. It shows that no sector of the economy was spared from the devastating impact of macroeconomic instabilities, an ill-designed land reform combined with disregard for private property and erosion of the rule of law. It is estimated that total exports in real terms per capita were between 67 percent lower in 2008 than they were a decade earlier. And unskilled labor intensive exports experienced the largest contraction contributing to the loss of employment. Recent increases in volumes of exports and GDP in 2009-2012, following the restoration of macroeconomic stability, were too low to compensate for earlier losses: real GDP and exports per capita in 2005 US dollars stood at 60 and 62 percent of their peak levels in 1998. Given that Zimbabwe could take advantage of a rapidly growing import demand in South Africa as well as capital and technical expertise, the largest boost in exports came from platinum group metals, mostly nickel, extracted by South African owned companies. Some portion of falling exports in EU markets was redirected to South Africa, which emerged as the largest exports market for Zimbabwe and continued to be its major supplier of imports.