Zimbabwe's Tsvangirai to take office as PM

HARARE (Reuters) - Zimbabwe's opposition leader Morgan Tsvangirai is due to take office as prime minister on Wednesday in a deal with old rival President Robert Mugabe aimed at saving the ruined country.

The two agreed to share power last year after elections condemned around the world, but their mistrust and continued disagreements held up implementation and have raised questions over how well they will be able to work together.

Implementation of the power-sharing deal only came after increased pressure from Southern African countries.

Mugabe, in power since independence from Britain in 1980, is one of Africa's craftiest political operators. Tsvangirai is a former trade union leader known for fiery speeches, but his leadership skills in government remain untested.

Zimbabweans hope the new government will bring policies to revive a country suffering hyper-inflation, unemployment above 90 percent, food shortages and a cholera epidemic that has killed nearly 3,500 people.

"Expectations are high for Tsvangirai, who will carry the burden of rebuilding the economy, but people will have to be a bit more patient because they will be disappointed," said John Robertson, a leading economist.

Movement for Democratic Change (MDC) leader Tsvangirai said on Tuesday he would focus on creating economic stability and attracting foreign investment, not an easy task given the global financial crisis and the fact that Western donors remain wary over the deal with Mugabe.

He will also need to reverse a crippling brain drain after skilled workers fled Zimbabwe and its shattered economy in droves, mostly for neighbouring South Africa or Britain.

Refugees at a shelter in Johannesburg, who rank among more than 3 million Zimbabweans living in South Africa, were sceptical about a quick recovery and in no hurry to head home.

"You can't talk about a unity government today and see it work tomorrow," Peter Dzingayi said at the Johannesburg Central Methodist church, where thousands of Zimbabweans cram into halls to sleep, spilling on to the street outside.

"Right now we do not have any hope."

Tsvangirai, 56, won more votes than Mugabe in an election last March, but not enough to avoid a second round. He pulled out of the run-off, citing violence against his supporters, and Mugabe, 84, was re-elected unopposed.

Tsvangirai's backers say he has gained valuable experience over the last decade of political and diplomatic struggle, but critics question his decision to leave the country during much of the violent election campaign.

Disaffected members of his party broke with Tsvangirai over 2005 elections, accusing him of dictatorial tendencies.

Tsvangirai is due to be sworn in at 9 a.m. British time and will deliver an inauguration speech at 11 a.m. British time.