Economic history of Zimbabwe
The Economic History of Zimbabwe began with the transition to majority rule in 1980 and Britain's ceremonial granting of independence.
[2][3] In 2000, the government imposed a land reform program to seize white-owned farms which caused the economy to shrink along with mismanagement, corruption and political instability.
For example, the economic power of the Rozwi Empire was based on cattle wealth and farming, with significant gold mining.
They established trade with Arab traders, in which materials such as gold, copper, slaves, and ivory were exchanged for luxury goods.
The economic slump in the Cape following the Second Boer War motivated many white South Africans to move to Southern Rhodesia, and from about 1907 the company's land settlement programme encouraged more immigrants to stay for good.
A large number of these immigrants were of British working-class origin, with others coming from the Belgian Congo, Kenya, Tanzania, and later Angola and Mozambique.
[8] The government propagated a whole range of new economic policies, introducing a minimum wage and virtually eliminating the right to fire workers.
The need to get permission and licenses for new investment and the dismissal of individual workers imposed heavy time and transaction costs.
The regime did not encourage, and even suppressed, the development of independent new African businesses because of the threat they were thought to offer to ZANU's political monopoly.
[8] This in turn generated a chronic budget deficit, a high tax regime, and a rapid increase in public debt – all of which created a drag on the economy.
First, it suppressed the emergence of a genuinely entrepreneurial African business class and reduced the political support of those that did make their way despite these problems.
By the end of the 1980s there was increasing agreement amongst government elites that new economic policies needed to be implemented for the long-term survival of the regime.
The new policy regime designed by the government and its advisers[11] set out to encourage job-creating growth by transferring control over prices from the state to the market, improving access to foreign exchange, reducing administrative controls over investment and employment decisions, and by reducing the fiscal deficit.
[11] Growth, employment, wages, and social service spending contracted sharply, inflation was not reduced, the deficit remained well above target, and many industrial firms, notably in textiles and footwear, closed in response to increased competition and high real interest rates.
[8] In 1998 Mugabe's intervention in the civil war in the Democratic Republic of the Congo (Kinshasa)—purportedly to protect his personal investments—resulted in suspension of international economic aid for Zimbabwe.
In part through its control of the media, the huge parastatal sector of the economy, and the security forces, the government managed to keep organised political opposition to a minimum through most of the 1990s.
