Mugabe swearing in completes his comeback

Five years after standing on the brink of electoral defeat, Zimbabwean President Robert Mugabe will be inaugurated today to extend his 33-year rule with renewed power at home and acceptance from neighboring countries.

Mugabe, 89, won last month’s vote with 61 percent in the presidential race and his Zimbabwe African National Union-Patriotic Front secured a two-thirds parliamentary majority in elections that his rival Morgan Tsvangirai said were rigged. The 15-nation Southern African Development Community last week chose Mugabe to be its next chairman.

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“His tail is up and he’s walking with a definite spring in his step,” Eldred Masunungure, a University of Zimbabwe political analyst, said in an Aug. 19 interview in Harare, the capital. “He has emerged stronger, either by foul or fair play, because it was a landslide victory.”

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Mugabe, using the powers of state, vocal support from the security forces and a well organized campaign by his Zimbabwe African National Union-Patriotic Front, reversed his losing position from the 2008 elections. Then, Tsvangirai was leading after the first-round ballot and Zanu-PF lost its parliamentary majority to the Movement for Democratic Change for the first time since independence in 1980.

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“We are happy that we have dealt the enemy a blow, and the enemy is not Tsvangirai,” Mugabe told Zanu-PF members on Aug. 7. “Tsvangirai is a mere part of the enemy. The enemy is he who is behind Tsvangirai, who is behind the MDC, the British and their allies.”

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Indigenization Policy

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Since his election victory, Mugabe pledged to press ahead with an indigenization policy to give black Zimbabweans control of the economy. The southern African nation holds the world’s second-biggest platinum and chrome reserves, as well as diamond, gold and coal deposits.

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Mugabe is forcing mining companies such as Impala Platinum Holdings Ltd. (IMP) and Anglo American Platinum Ltd. (AMS) and banks including the units of Barclays Plc (BARC) and Standard Chartered Plc (STAN) to cede majority stakes in their local assets to black Zimbabweans or the government.

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He called the program “our final phase of implementing the ideas of the liberation struggle” during an Aug. 13 speech to military officials in Harare.

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In 2000, Mugabe started a program of confiscating white-owned farms that sparked a decade-long crisis in which the economy contracted 39 percent and inflation soared to an estimated 500 billion percent, according to the International Monetary Fund.

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Economic Expansion

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During the past four years of a coalition government, the authorities abolished the Zimbabwe dollar and legalized the use of several currencies, including the U.S. dollar and the South African rand. That helped to bring inflation down to single digits.

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While the economy has expanded in the past four years, it remains fragile. Growth is set to slow to 3.4 percent this year from 5 percent in 2012 after commodity prices fell, according to outgoing Finance Minister Tendai Biti, who is also secretary-general of the MDC.

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“Politically Mugabe may have the game in his hand, but economically he’s got a challenge ahead,” Trevor Maisiri, an analyst with the Brussels-based International Crisis Group, said in an interview Aug. 20. “The economy is his enemy. It doesn’t have enough capital to kick start its own revival, so he relies on foreign direct investment.”

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The main stock index has plunged 21 percent since the election, according to data compiled by Bloomberg.

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Tax Cuts

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The Confederation of Zimbabwe Industries on Aug. 2 asked the government to cut taxes and mint local currency coins to boost domestic consumption. Central bank Governor Gideon Gono on Aug. 6 already pledged to maintain the multi-currency system for the “foreseeable future.”

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There is no sign that the U.S. and the European Union, which criticized the elections as flawed, will lift their sanctions against Mugabe and his close associates that he blames for the country’s economic woes.

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Some Zimbabweans side with their president.

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Mugabe “is the greatest leader we will ever have,” said Tawanda Nyevero, a 43-year old man who sells roofing material in Harare’s Mbare market. “So the west and their local detractors must stop snooping into our affairs. No other African leader will take land from whites and give it to blacks.”