Zimbabwe - expect a cautious trade upswing by year end

IT IS very much a "wait-and-see" situation regarding Zimbabwe immediately after the elections, according to Duncan Bonnett, trade specialist at consultants, Whitehouse & Associates.
"From a trade perspective it's the same wait-and-see attitude that occurs in elections in other emerging countries."
Bonnett suggests that there could be a cautious pick-up in trade towards the end of this year.
"But," he added, "it all depends on the post-election economic policies. Will they maintain fixed pricing and the like, or move to something more pragmatic in fiscal and monetary policy?"
Bonnett, however, expects little change in the immediate future.
"Everybody is sitting back to look at what the Zimbabwe government does," he said. "Will they continue with their land re-settlement programme, for example, and will they put their threat to take over closed companies into practice?"
From the international perspective, much depends on what action the likes of the European Union (EU) and the USA take, Bonnett added. "How widespread will this be, and how will they target their opposition," he said.
But Bonnett doesn't see normality returning to the business environment in Zimbabwe in the short-term. "And the medium-term is dependent on what happens in the next few weeks," he added.
The SA reaction is also likely to be a driving force behind what happens, Bonnett added.
The SA election mission having returned, declaring that the election has been "free and fair", has not done much for SA's credibility, with all the other neutral observers disagreeing with this estimation.
"Why they are so apparently dead-set on supporting Mugabe, I don't know," said Bonnett.
But there is a danger of a flood of refugees entering this country if SA pulls the plug on Zimbabwe - cutting off electricity and fuel supplies, for example.
"Such an action," said Bonnett, "would see Zimbabwe imploding and some three to four million Zimbabweans pouring straight down into SA.
"It's possible the SA government under President Thabo Mbeki feels that continuing with negotiations - no matter how bad the economic or political situation - would be better than possibly causing a civil war on our doorstep."
At the same time, Bonnett feels that the SA government should maintain some sort of credible standing and not be seen in a bad light by the rest of the world.
"They need to make a fairly strong statement," he said, "because they've been so weak-willed up to now."