Yet now the country is in trouble.

Inflation is rampant, the Zimbabwean dollar has collapsed and foreign investment is down to a trickle.

In what one local commentator calls ``500 days of man-made disasters'', President Robert Mugabe has harshly suppressed riots over food prices, saddled Zimbabwe with an unpopular and unaffordable war in the Congo, threatened leading judges and allowed the army's torture of two journalists to go unpunished.

Just before Easter, McDonald's Restaurants scrapped plans to open in Zimbabwe for at least three years -- after Mugabe'spresidential term ends in 2002. And the United States froze all aid, citing Mugabe's ``bad human rights record and disregard for the rule of law''.

But in the capital, Harare, you could be forgiven for thinking ``crisis, what crisis?''.

True, the mayor has been suspended for mismanagement, the water system badly needs investment and there is a waiting list of more than a year for a telephone. But the million-strong population of the ``Sunshine City'' appears to take almost everything with a sense of humour. Despite the setbacks (including a severe drought at the start of the Nineties), the economy is still growing and tourism is blossoming.

Mervyn Ellis, consultant economist to Stanbic bank, one of the country's biggest, said: ``There is a lot of hope. There is a large, educated black middle class pushing for change. I'm happy to believe the political challenges will be successfully faced.''

On the day the US suspended aid, even Mugabe was in good humour - perhaps because one friend, at least, had notlet him down. On the Wednesday before Easter, the 75-year-old president inaugurated the Rowland Foundation at Harare University, an undergraduate project endowed by the family of colourful tycoon Tiny Rowland, who died last year. With a pounds 3m ($4.8m)budget over its first two years, the Rowland Foundation aims to help tackle one of Zimbabwe's most fundamental economic problems: a shortage of skilled, educated, managers.

It will fund law scholarships, endow a Chair in commercial law, encourage work placements for students and provide resources to give better advice to ministers and civil servants.

In February, law lecturers and students had demonstrated following Mugabe's outspoken attacks on the Supreme Court after it ordered the release of the two journalists tortured by the army. The journalists had written a report alleging a possible military coup. So heads turned when he announced: ``In order for foreign and domestic investment to thrive, there must exist a stable legal framework.''

SinceFebruary Mugabe has not said anything - a silence that has buoyed those who protested. Professor Geoff Feltoe, head of the university law faculty, said: ``The expected crackdown on the independent parts of the media has not materialised, which is positive and a comfort.''

But there is no doubt that Zimbabwe has serious financial problems. After the sudden imposition of a 5 per cent sales tax, tobacco farmers are threatening to take their crop - by far the country's biggest export - away from the official auction to avoid the levy. And, with the war in the Congo, the collapse of the exchange rate and the country's pounds 3bn ($4.8bn) of foreign debt, banks are withholding vital funds needed to finance tobacco production.

Last June, the International Monetary Fund released $50m of an emergency $175m financing. The latest tranche, of $53m, was due to be drawn in March, and last week the Zimbabwean government pulled back from a pointless severing of relations with the IMF and the World Bank because ofprotracted negotiations for its release.

Unless Mugabe withdraws from his Congo adventure, however, and convinces the world that this year's acts of repression were an aberration, those funds look permanently frozen.

Publicly, Mugabe blames Zimbabwe's crisis on ``world instability'' affecting emerging markets, plus the collapse of a maverick local bank. South African hostility - he and Nelson Mandela are rivals - led to the Pretoria government imposing punitive tariffs on Zimbabwean imports.

The seeds of the crisis were sown in late 1997 when, in a volte face, Mugabe agreed pounds 60m ($97m) in compensation for war veterans. With discontent among white farmers over Mugabe's resurrection of land reforms, the exchange rate crashed from Z$14 to the US dollar to Z$38. Food prices rose, provoking riots.

As in most African countries, foreign investment in Zimbabwe is hampered by the unpredictability of government decisions, the rapid imposition, and frequent reversal, of policies based on poor advice toministers. Last year, for example, the budget caused an outcry, and by breakfast the next day it was officially ``subject to amendment''.

To stem the outflow of foreign currency, tariffs on vehicle imports were lifted almost overnight from 40 to 90 per cent, causing chaos for the motor industry.

Anthony Percival, managing director of Nissan (Zimbabwe), says: ``These tariffs were announced on Friday night and came in on Monday morning. But we've taken a positive view. We're committed. We're just going through a re-investment programme right now.''

The telephone waiting list of more than 100,000 people at the state-owned Post & Telecommunications Company is business's other big grumble. The prognosis, however, is not all bad. With the exchange rate now stabilised at Z$38 to the dollar, the stock exchange is recovering from its 1997 crash. Negative real interest rates - headline inflation is 50 per cent, while borrowing rates stand at 45 per cent - mean the shares boom will continue this year. Yet theeconomy - more diversified than South Africa's and split into one-third agriculture, one-third mining and one-third manufacturing - is still likely to grow this year.

Into the millennium, however, the outlook for Africa's erstwhile brightest star looks decidedly unclear. The war in the Congo dwarfs all other concerns. Mugabe has committed more than 6,000 troops to aid Laurent Kabila's regime in the new Democratic Republic of the Congo against Ugandan and Rwandan-backed rebels. His reward has been humiliating losses of men, material and aircraft and a crisis of confidence in the economy.

Wise political heads hope the president will secure his place in history by handing over a safe, pro-western multi-party democracy. With South Africa facing growing chaos, Mugabe may yet emerge from the shadow of his great rival, President Mandela.

-- The Observer News Service