Which is which?

Conflicting signals about investment in Zimbabwe have been flashed by the Confederation of Zimbabwe Industries (CZI), which represents the manufacturing sector of the country, and the International Finance corporation (IFC), the private sector arm of the World Bank, the main architect of the current economic structural adjustment programme.

While the local business community is complaining that business optimism in the country is at its lowest since 1984, a report just released by the IFC paints a completely different picture.

According to an IFC report entitled: Trends in Private Investment in Developing Countries: 1992 edition, Zimbabwe had a 67 percent increase in foreign investment between 1985 and 1990 which was the fourth-highest rise in all Third world countries.

Topping the list was Chile with a 129 percent increase, followed by Papua New Guinea with a 108 percent increase, and Thailand with a 107 percent increase.

The report says private investment has picked up in those developing countries where reform programmes have improved economic conditions and where savings rates have increased usually in response to cuts in the public sector-deficit.

Zimbabwe only started implementing its economic reform programme, which has already been derailed by the current drought, in 1991 and its public sector spending continues to rise and so is its budget deficit.

The CZI, on the other hand, says general business optimism has fallen by 58 percent because of the private sector’s uncertainty about the direction of the economic structural adjustment programme.

Employment prospects have fallen by 53 percent. Optimism in the export field, upon which ESAP seems to be largely hinged, has declined by 24 percent, volume of output by 42 percent, and investment intentions by 37 percent.

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