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This article provides information about the role of Zimbabwe in Developing Southern African economy!
In the past decade, only two developing regions – East and South Asia – achieved per capita income growth of above 2 per cent. Per capita income growth was less than one per cent in Latin America and negative in all other developing country regions. Sub- Saharan Africa was the worst performing region, with per capita income declining by nearly 3 per cent annually.
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This dismal record stands in contrast to the latest IMF estimates, which point to an acceleration of growth in sub-Saharan Africa, from 2.1 per cent in 1994 to 5.0 per cent in 1995 and further to 5.5 per cent in 1996. Assuming that these projections are accurate, sub-Saharan growth is now well above that of the world economy and only marginally behind the average for developing economies as a whole. The southern Africa region – and particularly South Africa and Zimbabwe – are chiefly responsible for this resurgence.
Southern Africa has in recent years witnessed a remarkable graduation from political turmoil towards multi-party democracy and improved governance. At the same time, economic reforms and structural adjustment policies are producing a gradual convergence of economic policies. Across the region, there is a growing recognition of the need to reduce government intervention and enhance the role of the private sector.
These developments point to a new post-apartheid climate of peace and security in Southern Africa, with enhanced prospects for more rapid longer-term economic growth. Viewed from the perspective of the major international capital markets and trading blocs, Southern Africa represents a promising market. At US $ 140 billion, the regional GDP remains relatively small but the potential for growth is considerable.
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Southern Africa represents a unique regional mix comprising the sophisticated Southern African economy, a large population hinterland, and a vast untapped natural resource base with generally under priced assets. This potential has not gone unnoticed, and a substantial turnaround in net foreign direct investment (EDI) flows to the region has already been recorded. Since 1994, both South Africa and Zimbabwe have recorded much larger than expected net inflows of foreign direct investment.
The basic data describing the Southern African economy bears comparison with those of other large and “emerging” economies around the world. The eleven “core” economies of the region represent a population that is already half as large as that of the United States, and will probably equal that of the United States within thirty years.
Its Gross Domestic Product exceeds that of Indonesia and is about two- thirds as large as India. Including South Africa, the region’s per capita GNP (including South Africa) is considerably higher than the East Asia and Pacific average, while if South Africa is excluded, the GNP per capita is slightly below that of India. Notwithstanding the fact that incomes are at least as uneven as anywhere else in the world, there is a sizeable middle class (defined as household income above US $2,484) in Southern Africa.
The size of the South African economy renders it an undeniably important regional force. Although its population represents only 40 per cent of Southern Africa, its gross domestic product accounts for about 75 per cent of the sub-continent’s total production. Up to now, there have been political barriers to South Africa’s integration into the region, but these are being dismantled. South Africa’s democratic transition has elicited a lifting of trade and financial sanctions. Corresponding to this improved access to international markets has seen a re-evaluation of the economic strategy within South Africa. The new government is likely to continue the shift from inward-looking policies determined to use trade as an engine of growth.