Zimbabwe's economic policy greeted with pleasant surprise

The Zimbabwe government's long-awaited economic policy document released last week has been well received by the business community. But some concern lingers in the vitally important mining sector over Prime Minister Robert Mugabe's plans to set up state-owned minerals and metals sales organization.

The policy paper, entitled "Growth with Equity," emphasized the need for increased participation both by the state and by Zimbabwean nationals -- as distinct from foreign investors -- in he country's economy.

It calls for an end to "imperialist exploitation" and for moves to achieve a greater and more equitable degree of ownership of natural resources, including land. The government will promote participation in, and ownership of, a significant portion of the economy, by nationals and by the state, it says.

It is the most definitive and detailed statement of economic policy to be published by Mr. Mugabe's government since winning the independence elections almost exactly a year ago. Its publication has been carefully timed a few weeks ahead of the March Zimbabwe Conference on Reconstruction and Development -- the so-called Zimcord Donors Conference -- at which the government will be asking the international community to subscribe $1.8 billion to fund the country's rural development program, to pay for facilities damaged in the seven-year guerrilla war, to rehabilitate refugees, and to provide large-scale training programs.

International business reaction to the economic policy document has been broadly favorable, with the Associated Chambers of Commerce of Zimbabwe welcoming publication of the program and industrialists describing the policy paper as "pragmatic."

A spokesman for the Confederation of Zimbabwe Industries welcomed the fact that the government would not "shackle" the private sector.

In all, the document is a retreat on the pre-independence economic policy statements by Mr. Mugabe's party, which were heavily Marxist in orientation. But businessmen were quick to point out that the policy paper is very broad and nonspecific in content, thereby leaving the government free to operate across a broad spectrum of economic policy.

The mining sector was clearly unhappy at the announcement that the state has decided, in principle, to establish a state-owned minerals and metals marketing agency which would, presumably, take over the international export marketing function of both the small and large transnational mining groups.

One mining industry spokesman said he would have been happier to see the government taking over some of the equity in the mining groups than taking responsability for selling minerals. Zimbabwe produces and sells a broad range of minerals, and many different types of sales expertise are necessary, according to industry sources, who believe that the marketing function is one best left to the private sector.

There are plans, too, for the state to influence trading ties in another major respect. This is the plan to establish a "suitable mechanism" for dealing with state trading organizations -- apparently in centrally planned economies. The government appears to envisage an increased level of trade between Zimbabwe and communist countries.

The policy statement says foreign investment will be welcomed in Zimbabwe, especially in rural areas, in fields where the foreign company can supply required technology, in labor-intensive techniques, and in industries which use local raw materials and where exports are generated. It accepts the need for the repatriation of capital and profits by foreign groups. But it says that this will be constrained by the balance of payments position on the one hand and by the country's interest in promoting the reinvestment of profits on the other.

The policy document predicts the retention of import controls "in the short term" for balance of payments and "other" reasons, but in the medium term it says Zimbabwe will use customs tariffs to protect industry.

Government's immediate plans for the economy include the forecast of a real growth rate of 8 percent a year over the 1981-84 period, during which time Zimbabwe hopes to invest some $7.4 billion. More than half of this investment would be carried out by the private sector, thereby entrenching the position of the private sector in the economy despite government's often-repeated commitment to socialism.

Largest investments in this program include the provision of nearly $1.2 billion for rural development, $1.7 billion for energy development, and some $ 750 million for transportation.

Between mid-1981 and 1984 the Zimbabwe government hopes to attract some $3.5 billion in foreign aid and investment. This is one reason why international companies will want to scrutinize the economic policy statement, which was released by the by the minister of economic planning and development, Dr. Bernard Chidzero.

Given the recently announced cutbacks in the US foreign aid program and Britain's commitment to strict control over state spending, economists here believe that the Zimcord conference target of $1.8 billion will be very difficult indeed to achieve. Visiting bankers and aid officials point out that Zimbabwe should try to raise more from commercial banking sources at this stage. Zimbabwe is one of the more prosperous countries of Africa, they stress, and so cannot expect to stand near the head of the line for foreign aid.