As the people of Zimbabwe steel themselves for another election cycle and their leaders argue over the timing of the poll, international investors are watching political developments with interest. Excitement about the economic opportunities in Zimbabwe, combined with frustration at the lack of good policy options to hasten the departure of President Robert Mugabe, has fueled a growing desire to explore alternatives to the political stalemate.
The European Union has already shown its willingness to open a new chapter in its relations with Zimbabwe. In March, Brussels suspended sanctions against 81 officials and eight companies linked to Mugabe’s ZANU-PF party. It said the move was in response to the successful passage of Zimbabwe’s new constitution. While the United States has yet to follow suit, Washington has been quietly exploring opportunities to re-engage with Zimbabwe following a long period of diplomatic inaction. In April, the former U.S. ambassador to the U.N., Andrew Young, delivered a letter from Secretary of State John Kerry outlining a path to normalized relations, tied to political reforms. In the meantime, U.S. trade with Zimbabwe has been continuing at modest levels in spite of the unrelenting political deadlock, reaching $106 million in 2012.
A look at Zimbabwe’s economic picture shows a modest improvement since the Global Political Agreement ended the 2008 election crisis and ushered in a fractious power-sharing government between Mugabe and Prime Minister Morgan Tsvangirai. Zimbabwe’s economy has recovered ground, albeit from the historic low point of 2008, when real GDP growth stood at minus 18 percent. Growth hovered at just under 10 percent a year from 2009 to 2011 but has since tapered off. Nonetheless, the International Monetary Fund (IMF) forecasts robust real GDP growth of 5 percent this year and 5.7 percent in 2014.