Zimbabwe: Govt Rejects Downgraded Economic Status

United Nations — The government of Zimbabwe, a country in the throes of a major economic crisis, has rejected a recommendation by a U.N. committee that the cash-starved African nation be "downgraded" to the status of a least developed country (LDCs), the poorest of the world's poor.

The recommendation by the Committee for Development Policy (CDP), comprising 22 U.N.-appointed experts, can be implemented only if the decision is acceptable to the country concerned.

In a letter to the CDP, the government of Zimbabwe said it "does not give its consent to be downgraded to LDC status".

An African diplomat told IPS that some countries view LDC status -- rightly or wrongly -- as "both a political and economic stigma". "I am not surprised that Zimbabwe has rejected the recommendation," he added.

Additionally, an LDC status is considered by some as an admission of failure of a country's economic policies. And in the case of Zimbabwe, President Robert Mugabe has refused to accept failure.

Mugabe, who still commands respect in the African continent, has blamed his country's economic crisis on sanctions imposed by the European Union (EU) -- and prompted by Britain -- in retaliation for his land reform policies which transferred white-owned farms to landless Zimbabweans.

The Zimbabwean president has defended his policy as necessary "to redress the gross imbalances" of British colonialism. The EU has also placed a travel ban barring him from visiting any of the 25 EU member countries.

Currently, there are 50 LDCs, of which 34 are from Africa. Since the General Assembly adopted a resolution creating the new category of LDCs in the 1970s, the number of countries has grown from about 22 to 50. So far, the only country that has graduated from an LDC to a "developing country" is Botswana.

Besides Zimbabwe, the CDP has recommended that Papua New Guinea also be downgraded to the status of LDC. A response from the government of the Pacific Island nation is pending.

As a result of significant economic improvements, however, four countries are now considered "eligible for graduation" from LDC to developing country status: Equatorial Guinea, Kiribati, Tuvalu and Vanuatu.

In a report released last week, the Brussels-based International Crisis Group (ICG) said that in April 2006, inflation officially topped 1,000 percent, helped by the decision to print 230 million dollars worth of Zimbabwean currency to pay international debts and sustain operations.

"Unemployment is over 85 percent, poverty over 90 percent, and foreign reserves are almost depleted. Over four million persons are in desperate need of food. HIV/AIDS and malnutrition kill thousands every month," the report said.

Agriculture, the major source of foreign currency earnings, has been particularly hard-hit. "There are severe shortages of basic consumer items, and the prices of fuel and food are beyond the reach of many," the report added.

Ralph Black of the Association of Zimbabweans Based Abroad says the CDP recommendation to the U.N.'s Economic and Social Council to declare Zimbabwe a LDC signals a renewed effort by the international body to engage in reaching a resolution to the multilayered crisis that has crippled what was once "Africa's breadbasket".

"Finally the Zimbabwean crisis is firmly on the U.N. Agenda," Black told IPS. Most noticeable signs of this fact are the assessments of the U.N. Special Envoy on the affects of Operation Murambatstvina -- which involved the destruction of shanties -- and U.N. Secretary-General Kofi Annan's reported diplomatic involvement in seeking a political resolution to the current impasse.

Clearly, he said, the vulnerability of Zimbabwe relevant to its designation as a LDC is driven on three main fronts.

First, the nation's domestic national income has decreased rapidly over the past three years, mainly due to quadruple-digit inflation.

Second, the country's human assets have been adversely affected by the deterioration of educational standards and decreased enrollment and increased dropout rates, affecting literacy rates over the long term.

Further, Zimbabwe has experienced declining nutrition, adversely affecting mortality rates, especially amongst the most vulnerable segments of the population -- children and those affected by HIV/AIDS. Due to economic constraints, the health delivery sector has collapsed further, exacerbating the national hygiene and wellness and adversely affecting mortality, he noted.

Third, Zimbabwe's economic vulnerability has reached alarming proportions due to the disruption of the agricultural sector's output/production.

Prior to May 2005, he said, it was estimated that 200,000 people were internally displaced as a result of the farm invasions, a situation that was worsened by the Zimbabwe governments Operation Murambastvina, in which it is estimated that 2.4 million people were indirectly affected while 700,000 people were displaced.

An assessment of the facts clearly indicates that the inclusion of Zimbabwe on the list of least developed nations is warranted, he argued.

The challenge in designating Zimbabwe as a least developed nation (LDC) lies in the ability of the United Nations to remove the obstacles to development, by engaging the current government, which is resistant to this development, without upsetting the internal dynamics at play for democratic change, or marginalising the democratic forces within the country.

Asked what benefits would accrue to a country designated LDC, Anwarul Karim Chowdhury, U.N. Under-Secretary-General for LDCs, told IPS that the main benefits are duty-free, quota-free market access and special attention for official development assistance (ODA.)

In addition, he pointed out, the U.N. system as a whole, in particular its funds and programmes, provide increased support to LDCs in terms of resource allocation and technical assistance.

Black said that while the benefits of the proposed declaration are clear, including duty-free exports and increased inflow of international aid, the United Nations must also devise an approach that seeks to encourage the Zimbabwean government to commit to reform without emboldening its intransigence to engaging the democratic forces, nor weakening or undermining the political opposition's road map to reform.

Such a designation, he said, would enhance the profile and capacity of the suppressed Zimbabwean civil society to engage in reconstruction and development, increasing the threat to the current government's grip on power -- hence its reluctance to readily accept inclusion to this class of the poorest of the poor league, Black declared.

On the other hand, the opposition may view this move as undermining their efforts to internationally isolate the Mugabe government in a bid to force talks and broad-based reform. There does not seem to be an easy way out of this crisis.

Ultimately, the United Nations must act decisively to acquit its responsibility to protect the most vulnerable and affected within Zimbabwe.

The elevation of the current economic crisis by designating Zimbabwe as an LDC should be viewed as an encouraging development, Black said.

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