Abstract

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. Document type: Book

Abstract

Abstract

For decades, the benefits of expanding international trade and foreign direct investment seemed unquestionable. However, the COVID19 pandemic, the Russian invasion of Ukraine (and its economic and energy implications for Europe) and the growing geostrategic rivalry between the US and China have been displacing the "neoliberal" paradigm with one that emphasizes the importance of economic security and warns of the dangers associated to the weaponization of interdependence. This article analyzes the implications of this new paradigm for the future of globalization, trade agreements and multilateral trade governance. It focuses, in particular, on how the European Union is attempting to incorporate elements of economic security without adopting protectionist measures, as part of its drive for strategic autonomy.

Resumen

Durante décadas, los beneficios de la expansión del comercio internacional y la inversión directa extranjera parecían incuestionables. Sin embargo, la pandemia del COVID19, la invasión rusa de Ucrania (y sus implicaciones económicas y energéticas para Europa) y la creciente rivalidad geoestratégica entre Estados Unidos y China, han ido desplazando el paradigma "neoliberal" por otro que enfatiza la importancia de la seguridad económica y alerta de los peligros de que una excesiva interdependencia pueda ser utilizada como arma arrojadiza. Este artículo analiza las implicaciones de este nuevo paradigma. Se centra, en particular, en cómo la Unión Europea está intentando incorporar elementos de seguridad económica sin adoptar medidas proteccionistas, en el marco del impulso a su autonomía estratégica.