Economic Freedom of Zimbabwe

Topics: Tax, Zimbabwe, Robert Mugabe Pages: 4 (1061 words) Published: March 26, 2012
Zimbabwe’s economic freedom score is 22.1, making its economy the 178th freest in the 2011 Index. Its score has increased by 0.7 point from last year, reflecting gains in four of the 10 economic freedoms. Zimbabwe is ranked last out of 46 countries in the Sub-Saharan Africa region and is the second least free country in the 2011 Index. The Zimbabwean economy is characterized by instability and volatility, both hallmarks of excessive government interference and mismanagement of the economy. The country’s fragile economic infrastructure has further crumbled under a tyrannical and oppressive regime. The financial system, which has suffered from repeated crises, is failing. The lingering impacts of years of hyperinflation have crippled entrepreneurial activity, severely undermining the country’s economic potential. The government has used the Reserve Bank of Zimbabwe to finance deficit spending and provide direct loans to state-owned enterprises. A corrupt and inefficient judicial system and general lack of transparency severely exacerbate business costs and entrepreneurial risk.

When it became independent in 1965, Zimbabwe (previously known as Rhodesia) had a diversified economy, a well-developed infrastructure, and an advanced financial sector. The white minority eventually agreed to majority government, and Robert Mugabe became prime minister in 1980 and president in 1987. Faced with growing popular dissatisfaction, Mugabe has sought to retain power through political repression and corruption. In 2008, his party lost its majority in parliament, and Mugabe won the runoff election when opposition leader Morgan Tsvangirai withdrew after widespread intimidation directed against his supporters. Under a power-sharing agreement, Mugabe remains head of state, the cabinet, and the armed services. The economy has stabilized a bit, and allowing foreign currencies to be used for all transactions has curtailed inflation. Agriculture has been crippled by...
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