Zimbabwe: Why is one of the world "least free" economies growing so fast?

[Fodla32 3,692]

A very interesting article.  Despite criminal EU sanctions, Zimbabwe has turned its economy around - with a little help from their friends in China:

 

http://www.cato.org/sites/cato.org/files/pubs/pdf/pa722.pdf

 

[Lugh Ildánach 2,352]

The paper suggests that as well as the adoption of the US Dollar as its currency, that foreign money (from the IMF, international aid, Chinese loans) and the move to largely exporting minerals (mining exports have tripled in value in just 2 years), is what is responsible for the growth, and that as such it is largely unsustainable.  The growth however is at least in the government sector rather than the private one.

 

It appears that China now owns the international airports at Harare and Victoria Falls along with Zimbabwe's diamond mines.  At least these national resources were given over to improve the country's infrastructure and not just given away to profiteers for nothing.

 

If we look at the position in Zambia, which relied heavily on copper prices, and when they plummeted this pushed the country's anti-colonialist one party socialist-esque government out of office, the prospects aren't perhaps as good as they might otherwise seem.

[Lugh Ildánach 2,352]

The report also mentions that there is a new law that requires that 51% of all banks, mining companies and insurance companies must be indigenous owned, which doesn't seem to sit well with the assertions that the Chinese now own the diamond mines.

[Laoch na nGael 611]

The paper suggests that as well as the adoption of the US Dollar as its currency, that foreign money (from the IMF, international aid, Chinese loans) and the move to largely exporting minerals (mining exports have tripled in value in just 2 years), is what is responsible for the growth, and that as such it is largely unsustainable.  The growth however is at least in the government sector rather than the private one.

 

It appears that China now owns the international airports at Harare and Victoria Falls along with Zimbabwe's diamond mines.  At least these national resources were given over to improve the country's infrastructure and not just given away to profiteers for nothing.

 

If we look at the position in Zambia, which relied heavily on copper prices, and when they plummeted this pushed the country's anti-colonialist one party socialist-esque government out of office, the prospects aren't perhaps as good as they might otherwise seem.

 

Looks like a short term positive stretch. the only ones how are likely to really benefit in the long term are the Chinese due to their ownership of large amounts of Zimbabwe's natural resources. Its the same in other country's.