Mugabe says corruption threatens Zimbabwe economy

HARARE, July 25 (Reuters) President Robert Mugabe said today his government had defeated what he called attempts by Britain to sink Zimbabwe's ailing economy and overthrow him, but he warned that rising corruption posed a serious threat.

Critics accuse Mugabe of plunging the southern African country into its deepest crisis since independence from Britain in 1980 through controversial policies that the World Bank says have made it the fastest shrinking economy outside a war zone.

Opening a new session of parliament today, Mugabe again blamed Zimbabwe's economic crisis on his political opponents, blaming London for mobilising what he regards as ''illegal sanctions'' by the European Union and the United States.

The 82-year-old Zimbabwean leader accuses Britain of seeking to oust him over his seizures of white-owned farms for redistribution to blacks and said today the drive to isolate his government had failed.

''It is refreshing that the world has now become fully aware of the dishonest and hypocritical anti-Zimbabwe strategy of the current British government,'' Mugabe said.

''We feel proud that we have defeated that strategy which was aimed at the collapse of the Zimbabwean economy and an envisaged regime change,'' he said, adding -- to applause from government benches -- his trademark phrase: ''Zimbabwe will never be a colony again.'' London denies trying to oust Mugabe and the Wests insists it has only imposed targeted travel bans on the ruling elite.

Mugabe's address was boycotted by legislators from the main wing of the opposition Movement for Democratic Change of Morgan Tsvangirai, which said the combative veteran leader had nothing but hollow speeches to offer a country crumbling under his rule.

''He has often delivered empty promises when it is clear his government has neither the concern nor the solutions to resolve the worsening multi-layered crisis,'' Tsvangirai's deputy, Thokozani Khupe, said in a statement.

The MDC has boycotted most of Mugabe's official addresses to parliament since 2000 over accusations that his ZANU-PF party has been rigging elections to stay in power.

Today, Mugabe said Zimbabwe -- which is struggling with the world's highest inflation rate of over 1,180 per cent -- hoped to revive an economy in its eighth year of recession by boosting the key agricultural sector.

Analysts say production in the farming sector has fallen by over 60 per cent in the past six years after the farm seizures, but the government mainly blames the decline on drought.

Mugabe said the government would increase support to the new black farmers to raise food output and exports in a drive to tackle rampant inflation.

But he said growing corruption was threatening Zimbabwe's economic revival programme, and the government would amend its laws to deal with it.

''This scourge has the potential to undermine the very foundations of the country's socio-economic development and, as such, constitutes a potent threat to national well-being,'' Mugabe said.

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