Trade in Zimbabwe: Changing Incentives to Enhance Competitiveness
Trade in Zimbabwe: Changing Incentives to Enhance Competitiveness
In Zimbabwe trade has been a driver of economic growth, rising incomes, and progressive empowerment of Zimbabweans through rising standards of living and the promise of better jobs. Since 1980, through good years and bad years, increases in exports have been positively associated with increases in national income. Zimbabwe's location and resource base, together with a low-cost but relatively well educated labor force, have endowed it with a naturally high trade ratio built on a diversified base that facilitates using trade as an engine of growth. While trade volumes have rebounded smartly from the deep recession of 2007-2008, these do not offset other worrisome longer-term trends: 1) export growth during the last decade has been lackluster and failed to drive high growth; 2) agricultural exports, other than tobacco, have lost their once dominant role in the region, and are no longer a source of diversification; 3) manufacturing has withered in a continuing secular decline; and 4) Zimbabwe's export basket has become less diversified and more dependent on a narrow range of mineral and, to a lesser extent, agricultural products. In short, exports have become less diversified, less-technologically sophisticated, and less labor-intensive, and ever more dependent on a few large mining activities to provide foreign exchange and employment. This report traces the roots of this poor performance to several policy issues: poor predictability of macroeconomic policy and economic governance has created an unfavorable climate for private investment and trade; a tariff structure that dampens export profitability; industrial policies (indigenization policy in particular) that undermine investor confidence and inhibits private investment; and finally, competition-limiting policies toward services that limit connectivity of Zimbabweans and raise trade costs. The good news arising from the study is that the remedies for these policy shortcomings lie in Zimbabwean hands. If the government were to adopt reforms that reconfigure economy-wide incentives and trade and industrial policies, it could promote sustained growth, economic diversification and empowerment of poor people.
- World Bank United States
- World Bank United States
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air traffic, railway investment, airports, rail track, infrastructure, toll, taxes, traffic flows, fuel consumption, infrastructure rehabilitation, subsidies, wealth, airport operations, airport, passengers, land transport, border infrastructure, multimodal transport, commercial trucks, inspection, bridge, costs of transport, public savings, travel, road infrastructure, police, air transport, greenhouse gas emissions, efficient transport, fares, air transport system, congestion, trip, tax, cars, road traffic, regional transport, transport facilitation, drivers, rail links, road, transport infrastructure, traffic control, trend, international transit, transportation costs, greenhouse gas, registration fees, diesel fuel, transport policy, high transportation, environmental footprint, safety, roads, 330, rebates, air safety, derailments, route, transport management, international air transport, price incentives, car, transportation equipment, road maintenance, road transport services, investments, trading patterns, road network, International Economics and Trade - Export Competitiveness International Economics and Trade - Free Trade International Economics and Trade - Trade Finance and Investment International Economics and Trade - Trade Policy International Economics and Trade - Trade and Services International Economics and Trade - Trade and Transport Macroeconomics and Economic Growth - Economic Growth Private Sector Development - Emerging Markets, air services, rail, private transport, true, rail transport, locomotive, driving costs, ministry of transport, crossing, rail cars, crossings, rail services, transport sector, rail infrastructure, vehicle, trucks, transport industry, airways, transport equipment, rail sector, rail system, international air transport association, costs, railway service, initiatives, rail service, buses, diesel, transit, motor vehicle, motor vehicles, border crossings, profit margins, fuels, traffic volumes, bottlenecks, environmental benefits, economies of scale, transport systems, transport system, transport services, gas emissions, traffic, transparency, tires, routes, training, drivers’ licenses, truck capacity, signals, border management, transport of goods, air travel, capital investment, transport corridors, air traffic control, rail systems, property rights, international airport, road damage, domestic transport, speeds, road toll, international transport, railroad, aircraft, fuel, rail freight, international air services, air transport sector, air, costs of transportation, carriers, average speeds, accidents, high transport, air transport association, trains, freight, road transport, border crossing, excise taxes, policies, driving, air service, transport costs, domestic airports, transportation, rail lines, railway network, rail traffic, freight traffic, 380, 381, emissions, air tickets, excise duty, road system, urban roads, railway, vehicles, aviation industry, infrastructure development, passenger traffic, transport, railways, income tax, transport policies, transport agreement, transport agreements, price distortions, air passengers
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