Zimbabwe's misfortune
Not all of Zimbabwe's recent problems are the result of the corrupt schemes and obsessions of President Robert Mugabe and powerful cronies like Defense Minister Moven Mahachi. The country's leaders are certainly a serious impediments to progress, but there are much more formidable structural barriers to economic revival. Patrick Bond The visitor to Zimbabwe is struck by three factors: the populist rhetoric of the nominally "Marxist-Leninist" ruling party; white corporate domination of the industrial, agricultural, financial and services sectors; and the country's persistent inability to break into global markets.
Since independence in 1980, Mugabe steadily condoned an ever-greater role for the private sector in Zimbabwe's development, in the process taking on vast quantities of international debt (whose repayment cost 35% of export earnings by 1987), This process culminated in the 1990 adoption of a structural adjustment programme.
The programme failed decisively. And not just because of the bad droughts in 1992 and 1995. The overall structure of Zimbabwe's economy and society left it ill-suited for rapid liberalisation, extremely high real interest rates, a dramatic upsurge in inflation and large cuts in social welfare spending.
Mugabe often confused matters with rhetoric hostile to the Washington Consensus which underpinned the Structural Adjustment Plan. But behind the scenes, three extremely conservative finance ministers (Bernard Chidzero, Ariston Chambati and Herbert Murewa) followed a fiscally-conservative, deregulatory agenda from 1990-97.
As a direct result of funding cuts and cost-recovery policies, exacerbated by the AIDS pandemic, the brief 1980s rise in literacy and health indicators was dramatically reversed. the stock market reached extraordinary peaks in 1991 and 1997, but always followed by crashes of more than 50% within a few months, along with massive hikes in interest rates.
Manufacturing sector output shrunk by 40% from peak 1991 levels through 1995, and the standard of living of the average Zimbabwean worker fell even further.
Although growth was finally recorded in 1996-97, it quickly expired when international financial markets and local investors battered Zimbabwe's currency beginning in November 1997, ultimately shrinking the value of a Z$ from US$0.09 to US$0.025 over the course of a year. As a result, inflation was imported, leading in January and October 1998 to urban riots over maize and fuel price hikes, respectively.
Mugabe's reactions included a November 1998 claim that he would return to socialist policies. And there were some small hints of reasserted Zimbabwean sovereignty in the face of financial meltdown, such as a mid-1998 price freeze on staple goods and several minor technical interventions to raise revenues, slow capital flight and deter share speculation.
For example, the 1990s liberalisation of a once-rigid exchange control system had created such enormous abuse that new regulations on currency sales had to be imposed. Yet two days after a 5% capital gains tax was introduced on the stock market, a broker boycott forced a retraction. The government was not powerful enough to reimpose full (Malaysian-style) exchange controls — which had been widely expected in the event a January 1999 IMF loan fell through, given the perilous state of hard currency reserves.
As economic grievances and more evidence of political unaccountability mounted, trade union leaders Morgan Tsvangirai and Gibson Sibanda called several successful national stayaways beginning in December 1997. Mugabe's increases in general sales and pension taxes to fund a large pension pay-out for liberation war veterans were vociferously resisted, and government backed down slightly.
An October 1997 threat to redistribute 1,400 large commercial farms (mainly owed by whites) scared agricultural markets, allowed Mugabe extensive populist opportunities to critique worried foreign donors (especially the British), while giving land-starved peasants only passing hope — unrealistic, considering Mugabe's past practice of rewarding farms to political elites. Peasant land invasions of several large farms were quickly repelled by the authorities.
In another unpopular move, Mugabe asent several thousand troops to defend the besieged Laurent Kabila in the Democratic Republic of Congo in mid-
1998. The local rumour was that this was done to protect the investments of politically well-connected Zimbabwean firms. Dozens of the soldiers died in Congo..
The homophobic leader also had to contend with the conviction of his former political ally Canaan Banana, Zimbabwe's first (largely ceremonial) president, on charges of raping at least two male staffmembers, It is claimed that Mugabe had turned a blind eye to the abuse.
By early 1999, government coffers were nearly dry. The IMF sent a highlevel team to negotiate the disbursement of a US$53 million loan (which in turn would release another US$800 million from other lenders). The conditions attached were reported to include a prohibition on acquiring commercial farms unless payment was in full—not just for buildings and infrastructure, as Mugabe had desired-and was made ahead of time. The IMF also insisted on the lifting of price controls by June.
On the positive side, the IMF team gave credence to widespread concerns over a shady privatisation of Zimbabwe's major electricity-generation plant involving a questionable soft-interest loan to a Malaysian firm, and asked tough questions about who was financing the Congo war (Mugabew blaimed Kabila's government and Angola). But this was all in private. The IMF said nothing of substance at the subsequent press conference.
The IMF visit was emblematic in its demonstration of who really holds the reigns over major policy decisions. Zimbabwe was effectively brought back into the fold
But judging by the schizophrenic reaction of the state-owned press and some key black business leaders-initially very critical of the IMF "changing the goalposts" but after the loan was approved, relieved that confidence was now (temporarily) restoredit appeared that Mugabe had come close to the point of no return. Indeed his strident anti-IMF rhetoric at a major December 1998 World Council of Churches meeting in Harare served to pacify, somewhat, growing human rights criticism of his regime. How close to the brink?
Rumours circulated in the South African military about a coup attempt from within the Zimbabwean army. When printed by Zimbabwe Standard editor Mark Chavunduka and reporter Ray Choto in January 1999, Defence Minister Mahachi made hysterical denials, and arranged the illegal detention and torture of the reporters by military police, and then to the detention of publisher Clive Wilson. This "overkill" reaction convinced much of society that the media had stumbled onto the truth.
If Mugabe continues to his suicidal endgame-style of management, the budding opposition will contemplate a run for the presidency in 2000, possibly with Tsvangirai at the head of the campaign.
The National Constitutional Assembly (NCA) has been built patiently, as a kind of popular front, with support from church, human rights and liberal business circles. It resembles the early phaseof Zambia's Movement for Multiparty Democracy.
According to lawyer Tendai Biti the NCA can strengthen the dynamic for opening up political freedoms (maybe even a new constitution), but also improve socio-economic rights.
But the Zambian experience had a downside - the Frankenstein-like metamorphosis of trade union democrat Frederick Chiluba into a neoliberal authoritarian. The NCA contains a range of interests, and some very ambitious people. But the future is not predetermined. If the popular movement is strong, the NCA can win some real reforms. * (Patrick Bond is the author of Uneven Zimbabwe: A Study of Finance, Development and Underdevelopment, Africa World Press, August 1998; order through http:\/www.africanworld.com). The author can be contacted at: Graduate School of
Public and Development Management, University of the Witwatersrand, PO Box 601, Wits 2050, South
Africa. Tel: (2711) 488-5917; fax: (2711) 484-2729 email <[email protected]>
International Viewpoint #310 April 1999 25
* debt