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Zimbabweans queue outside a branch of Barclays bank in Harare, on December 31, 2007/AFP

Kenya

Fears for Zimbabwe economy after Mugabe rout

Investors are bracing for the worst.

“It’s back to extreme volatility,” said Iraj Abedian, CEO of Pan African Investments.

“We can expect fairly radical positions that will have populist support, but which will have huge implications.”

“The land grabs caused chaos in the agricultural sector and it took ten years for it to settle down,” said Abedian.

“The financial sector would have a similar impact. It would cause chaos, but ZANU-PF and Mugabe seem to like that.”

During the last decade Mugabe, once an avowed Marxist, has seized white owned farms and demanded majority ownership of foreign owned mines.

Critics and supporters have argued over whether the farm seizures have successfully redressed colonial imbalances, or just put assets in the hands of Mugabe’s cronies.

Before the measures, 6,000 white commercial farmers owned roughly 45 percent of the land, including the most arable.

After half the white farmers were often violently kicked off, the cereal harvest shrank by 60 percent and overall agricultural production fell by 25 percent.

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Studies since then have pointed to a less bleak picture.

In 2010, Britain’s Institute of Development Studies reported 160,000 households had gained land and smaller farmers were generating surpluses.

But the broader economic impact was devastating.

Aid dried up amid rights abuses and investor confidence evaporated as quickly as cash left the country.

In 2003, Samantha Power, recently appointed US ambassador to the UN, said Mugabe had turned “a breadbasket into a basket case in ten easy steps.”

Shop shelves were empty, which did not really matter, because more than 90 percent of Zimbabweans were out of work and could not afford steep prices.

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