Regional economies under serious threat after Friday’s sham poll

By Alex Bell
30 June 2008

As Zimbabwe’s economy continues to spiral out of control, concern has also been raised about the economic stability of the country’s neighbours.

Once touted as a beacon for southern Africa, the Zimbabwean economy has been ravaged by inflation, currently estimated at around 4 million percent. However, Zimbabwe’s economic downfall has not seen the end of the Mugabe regime, whose policies are to blame for the outrageous inflation figures. Further economic pressure also seems unlikely to change the situation, following Mugabe’s ‘win’ in last week’s one man poll.

The burning question now is how likely the economies of the Southern African region will remain stable, not only with the imminent flood of refugees into neighbouring countries, but also the inevitable pulling away of foreign investment in a region that has done little to end the Zimbabwean crisis.

The South African rand has steadily weakened in the weeks leading up to the Zimbabwe election run-off - a fact that has been attributed to President Thabo Mbeki’s quiet support of his friend, Mugabe. The security of the 2010 World Cup, which South Africa is set to host, is also coming under threat, with pressure groups calling on FIFA to remove the honour from Mbeki’s country because of his role in the Zimbabwean crisis.

At the same time, the economies of the rest of the region are also at stake. Economic analyst, Bekithemba Mhlanga told Newsreel on Monday that the SADC region is under serious threat economically and there are “already economic implications because of the declining interest in Zimbabwe”. Mhlanga said foreign investors, with an interest in Africa as a whole, “will start blanking the entire region instead of just Zimbabwe”. He said the “security of investment across the region is at threat” until circumstances in Zimbabwe change.

Mhlanga added that Zimbabwe is essentially the key to economic stability in the region, and voiced concerns that military intervention and a growing belief that civil war is imminent, will only further dissuade foreign investors in the region and in Africa as a whole.