Search

In past four years, the World Bank, in close cooperation with the Government of Zimbabwe, and the support of international partners - has carried out a number of studies and technical assistance activities in key areas of the socio-economic recovery. In line with Bank’s Africa strategy of fostering Africa’s economic transformation and poverty reduction, the overall goal of these studies has been to support broad-based development of Zimbabwe by facilitating evidence-based debate and policy-making. As a new government for 2013-2018 is about to take function, sectoral teams at the World Bank have distilled key analysis from those studies, and prepared the short policy notes. The policy notes attempt to summarize the main findings, challenges, constraints, and lay out policy options. While the past decade of hyperinflation and weak economic management has undoubtedly eroded a significant share of Zimbabwes physical and human capital, these can be rebuilt with the combination of sound economic policy and proper incentives to private sector investors, both domestic and foreign. It is therefore imperative that, however policymakers choose to proceed with regard to the future direction of the economy, they deliver well-articulated, credible, and stable economic policies. Such policies will enable and unleash the creative energies and entrepreneurial spirit of the private sector, the one that has delivered so often in the past. The policy note highlights the breadth and complexity of challenges in fostering long-term development. Addressing these challenges is a long haul task that will require a good sense of overarching priorities, as well as strong commitment to long-term objectives and policy consistency.

This paper assesses the potential impacts of the removal of agricultural and other trade distortions using a newly developed dataset and methodological approach for evaluating the global poverty and inequality effects of policy reforms. It finds that liberalization of agriculture will increase global extreme poverty (US$1 a day) slightly and by almost 1 percent if other goods trade is also liberalized; but the number of people living on less than $2 a day will fall by almost 1 percent. Beneath these small aggregate changes, most countries witness a substantial reduction in poverty while South Asia where half of the world's poor reside will experience an increase in extreme (but not moderate) poverty incidence due to high rates of protection afforded to its unskilled labor-intensive agricultural sectors. The distributional changes also are projected to be mild, but again exhibit a strong regional pattern: inequality falls in Latin America, which is characterized by high initial inequality, and rises in South Asia, has relatively low income inequality.

This chapter begins with a brief summary of economic growth and structural changes in the region since the 1950s and of agricultural and other economic policy developments as they affected the farm sector at the time of and in various stages after independence from colonial powers. The chapter then summarizes estimates of the nominal rate of assistance (NRA) and the relative rate of assistance (RRA) to farmers delivered by national farm and nonfarm policies over the past several decades, as well as the impact of these policies on the consumer prices of farm products, using the project's methodology (Anderson et al. 2008). The final sections point to what the author have learned and draw out implications of the findings, including for poverty and inequality and for possible future directions of policies affecting agricultural incentives in Africa.

This paper examines the economics of farm decisions to prevent and control infectious livestock disease. In the case of diseases with costly control tolerating some level of disease is often rational to the producer. Public policy intervention is based on future value and public good aspects of disease control which can lead to a discrepancy between private and public action thresholds. Producer incentives for disease management can be changed through new technologies that lower the cost of prevention or control, subsidies or cost sharing of control measures, or on the consumer side, a change in public desire for disease risk-free products that changes relative prices. Economists can incorporate appropriate epidemiology of a given disease in economic models to inform policy-makers on optimal value or method of subsidies that would prove most effective to make private incentives compatible with public policy goals.

Economic problems and a severe drought negatively affected Sudan, a largely agricultural country. Prior to the drought, the Government enacted a series of policy reforms to improve agricultural productivity and increase exports, including adjustments in exchange rates, higher producer prices, institutional changes in the irrigated subsector, and reduction of consumer subsidies on wheat bread, petroleum products, and sugar. The structural diversity of Sudan's agricultural sector in terms of locus of decisionmaking, input and output price determination, and use of imported inputs, however, worked against across-the-board reform. The severity of the drought also blunted the effects of policy changes--reducing agricultural production, increasing food dependency on foreign suppliers, and causing massive population dislocation. After the drought, policy options remaining open to the Government focus on achieving higher export earnings and a greater degree of food self-sufficiency.