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Zimbabwe, Economy

Zimbabwe’s economy is well balanced between market agriculture, mining, manufacturing, and tourism, with a considerable subsistence-farming sector. Before the arrival of European settlers in the late 19th century, the peoples of the region practiced mixed farming (raising both crops and livestock), with cattle ranching predominating in the drier south and west. Gold mining and trade supplemented agriculture. The arrival of Europeans led to the growth of the commercial farming sector. Much of the best land was taken over by white settlers, who grew maize (corn) or fruit or practiced mixed farming. By the 1930s, however, the mainstay of settler agriculture was tobacco. Large numbers of low-paid Africans worked settler farms, many recruited from Mozambique. Gold mining continued, but the development of a large mining and industrial sector only took off after World War II (1939-1945), when Southern Rhodesia (as Zimbabwe was then called) benefited from large-scale investment that flowed into the colony. A wide range of mining enterprises were begun, exploiting the colony’s chrome, asbestos, and copper deposits, and an industrial sector developed producing consumer goods and even heavy steel manufactures such as railway locomotives.

The international community imposed economic sanctions on Rhodesia when its white government declared independence in 1965. This resulted in further diversification of industrial production, particularly in the sector of consumer goods, as local producers sought to beat the sanctions by servicing the demands of domestic and regional markets. However, the civil wars in Mozambique and Angola in the 1970s and 1980s limited those markets and cut off direct routes to the sea. After independence in 1980, Zimbabwe joined the Southern African Development Coordination Conference (now the Southern African Development Community), a regional economic bloc. However, the country faced strong competition from South African industries and agriculture suffered from severe drought for much of the 1980s. In the early and mid-1990s the end of the civil war in Mozambique and the transition to majority rule in South Africa coincided with improved climatic conditions and led to a rapid development of tourism as another arm of the Zimbabwean economy.

Debt has risen since independence and has been accompanied by high rates of inflation, which averaged 27 percent annually in the period of 1990-2000. In 1990 Zimbabwe agreed to an International Monetary Fund (IMF) Structural Adjustment Program aimed at reducing government control over the economy, lowering inflation, and encouraging investment. Government expenditure was reduced, and unemployment rose sharply as a result. In 2000 Zimbabwe had an estimated gross domestic product (GDP)of $7.4 billion, or $590 per person.

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