Robert Mugabe’s anti-Western rhetoric has been conspicuous by its absence of late, a sign the 91-year-old leader has mellowed or realised that Zimbabwe may need financial help.
A year ago, the veteran turned to “old friend” China, but behind the official warmth Beijing made clear the days of blank cheques were over, forcing Harare to make repayments on $1 billion of loans made over the previous five years.
Since then, the southern African nation’s economic plight has worsened and Mugabe said he may need the support of foreign creditors such as the International Monetary Fund (IMF), which he likened in 2006 to “the devil” and “a political monster”.
“The economy is in such a dire state and Mugabe’s rapprochement with Western donors is a realisation that he has very few options – even if he may have personal misgivings and it goes against his political beliefs,” said John Robertson, a Harare-based economist.
The government is forecasting growth of 1.5 percent this year but many analysts say Zimbabwe is tilting towards recession – its first since 2008, when hyperinflation clocked 500 billion percent and Mugabe lost his first ever election.
Deflation has taken root as consumer demand shrinks and the economy struggles with a shortage of dollars. Once bustling factories in Harare are now rusty shells, devastated by the 1999-2008 recession that cut GDP by about half.
In addition, the mines are reeling from the fall in commodity prices and a drought has left 16 percent of the population needing food aid. Formal unemployment stands at more than 80 percent and power shortages are getting worse.
“This is the worst since 2008. The economy looks very bleak and there is a lot of negative sentiment,” said Anthony Hawkins, economics professor at University of Zimbabwe’s Graduate School of Management who predicts a 1 percent contraction this year.