Zimbabwe - Domestic policy
Mugabe's political and economic policies have run amok of internal and international pressures, signaling a loss of control if not perhaps the beginning of the end of his regime. Following the March 2002 elections, the government faced a three-day strike called by the Zimbabwe Congress of Trade Unions (ZCTU) to protest political violence against opposition supporters. Morgan Tsvangirai, who refused to enter into negotiations with the government, was called back to court on charges of treason, and has been on trial. Some analysts speculated that with President Mbeki's pressure, a government of national unity might be formed. Attitudes on both sides, however, have been unmovable, and Mugabe has utilized the police, army, militias, and intelligence services against the opposition, leaving them with little to lose. On 18–19 March 2003, the MDC organized a strike that shut down most cities. Mugabe and ZANU-PF are pursuing a strategy of undermining the MDC by intimidation, election rigging, restrictions on civil liberties, and arbitrary arrest. Meanwhile, the unions and the MDC opposition will no doubt step up their attacks and attempt to rally popular support against Mugabe. A military coup cannot be ruled out.
The political crisis has been a disaster for the economy. Zimbabwe has been an exporter of food, but the unfortunate convergence natural and human-made conditions have resulted in food shortages and food lines. Droughts and land repossession and redistribution have created conditions for insufficient production making Zimbabwe a net grain importer. The government is establishing mechanisms to distribute farm inputs, but it will not be enough, or soon enough to alleviate maize and other food shortages. Businesses and factories have slowed to a two to three-day workweek. From 2001 to 2004 (est.), agriculture production will have declined by 43%. Manufacturing production over the same period will have declined by 37%. Zimbabwe's real GDP shrank by 7.3% in 2001, 12.1% in 2002, 8.8% in 2003, and is expected to decline another 4.7% in 2004. Inflation reached 74.5% in 2001, 134.5% in 2002, 304.5% in 2003, and is expected to increase by 176.8% in 2004.
The Minister of Finance, Herbert Murerwa, has outlined the main elements of the government's proposed new economic policy, the National Economic Revival Program (NERP). NERP involves a partial devaluation of the Zimbabwe dollar, but it does not address the key issues of the budget deficit and lack of confidence in the government. Owing to the government's need to spend more on food imports, and farm inputs, the deficit is likely to remain high. In 2002, the fiscal deficit was 10.5% of GDP, and is predicted to be 13.2% in 2003 and 12.4% in 2004.
As for the worsening AIDS pandemic, no clear end is in sight. If Mugabe were to leave office, the international community most likely would supervise fresh elections and mentor Mugabe's successor closely until the economy recovered. Changes to the government's fast-track land reform program would also most likely be seen favorably by the IMF, which would result in an agreement with them.