by Craig J. Richardson
March 18, 2013
Between 2009 and 2011, Zimbabwe’s GDP growth averaged an impressive 7.3 percent, making it one of the world’s fastest-growing countries. Yet the Fraser Institute’s Economic Freedom of the World index ranks it as one of the world’s least economically free countries. This growth was born from three significant economic developments, none of which will foster growth long-term. First, between 2009 and 2011, two-thirds of Zimbabwe’s nominal GDP growth was the result of increases in government expenditures. Second, rich Western countries dramatically increased their infusions of “off-budget” grants to Zimbabwe, and this foreign aid now accounts for nearly 9 percent of its GDP. Last, Zimbabwe’s economy is becoming increasingly dependent on the production and export of raw mineral commodities, which have experienced rapid worldwide price hikes.