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Zimbabwe: Statements/Analysis, 2
Zimbabwe: Statements/Analysis, 2
Date distributed (ymd): 000514
Document reposted by APIC
+++++++++++++++++++++Document Profile+++++++++++++++++++++
Region: Southern Africa
Issue Areas: +political/rights+ +economy/development+
+security/peace+
Summary Contents:
This posting contains (1) on-line starting points for background
and analysis on the current crisis in Zimbabwe, (2) an article by
Patrick Bond on the history and political economy of the crisis,
(3) a statement by the Congress of South African Trade Unions
(COSATU), and (4) a brief update on the economic situation from the
UN's Integrated Regional Information Network. Another posting sent
out today contains statements on the crisis from the Advocacy
Network for Africa (ADNA) and the African Studies faculty of
Michigan State University.
+++++++++++++++++end profile++++++++++++++++++++++++++++++
Selected Web Links
E-Zim Current news and links
http://www.e-zim.com
Zimbabwe government
http://www.gta.gov.zw
Movement for Democratic Change
http://www.in2zw.com/mdc
Zimbabwe Mirror (SAPES)
http://www.africaonline.co.zw/mirror
BBC Background and News
http://news.bbc.co.uk/hi/english/in_depth/africa/2000/zimbabwe
Guardian Special Report
http://www.guardianunlimited.co.uk/zimbabwe
APIC/ECA Roundtable Panel
Zimbabwe's Farm Workers and the New Constitution
http://www.africapolicy.org/rtable/ded0002.htm
Additional Newspaper and Background Links
http://www.niza.nl/uk/press/zimcrisis.htm
Africa News
http://www.africanews.org/south/zimbabwe
Additional Sources
http://www.africapolicy.org/featdocs/southern.htm
Zimbabwe's Crisis Showcases Reasons for Bank/IMF Protest
by Patrick Bond
From ZNET Daily Commentaries, April 28, 2000
http://www.zmag.org
In Zimbabwe, President Robert Mugabe appears to have taken leave
of his senses, potentially plunging his country of 12 million into
civil war. What does this have to do with the mid-April protests
against the World Bank and International Monetary Fund?
Confusingly, Mugabe excels in IMF-bashing, famously telling Fund
staff to "Shut up!" late last year. Yet from independence in 1980
until quite recently, he followed their advice unfailingly.
Indeed, just five years ago, Zimbabwe was Washington's newest
African "success story," as Harare adopted economic policies
promoted by Bank and IMF lenders, and even conducted joint
military exercises with the Pentagon.
Things fell apart quickly. Southern African diplomats are shaking
their heads in frustration at Mugabe's quick-shattering Good
Friday promises--made to Thabo Mbeki and other local leaders--to
tone down racial rhetoric, reverse land invasions of 1,000 white
farms, and sort out financial matters with the Brits, IMF and
donor governments.
Is Mugabe deranged, or instead playing out a tragic logic
partially of his own making, but partially imposed from above?
Under the very real threat of losing parliament to the labor-led
Movement for Democratic Change in coming elections, he resorts to
authoritarian populism: egging on a few thousand land invaders so
as to restore memories of the 1965-80 struggle against Rhodesian
colonialism, a period when his Zimbabwe African National Union
(ZANU) truly represented a mass-popular movement dedicated to
reversing settler-colonial land ownership.
Yet early on, perceptive ZANU watchers identified two major
problems: the party's class character and its likely realignment
towards foreign capital.
Political scientist Rudi Murapa (currently president of Africa
University, Zimbabwe's second-largest) wrote in 1977 of an
alliance between "a politically ambitious petit-bourgeois
leadership, a dependent and desperate proletariat and a brutally
exploited and basically uninitiated peasantry."
Forecast Murapa, "After national liberation, the petit-bourgeois
leadership can abandon its alliance with the workers and peasants
and emerge as the new ruling class by gaining certain concessions
from both foreign and local capital and, in fact, forming a new
alliance with these forces which they will need to stay in power.
Of course, lip service commitment, a la Kenya, to the masses, will
be made."
Accusations that ZANU "sold out" are justifiable,
technically--given not only the steady rise in corruption, but the
fact that most of the land and other wealth redistributed since
1980 has gone to cronies not the masses--yet are deeply
unsatisfying. The same will be said of the African National
Congress, as it was in Zambia of Kenneth Kaunda and likewise his
successor Frederick Chiluba.
However, assailing petit-bourgeois acquisitiveness--which also
motivated white Zimbabweans to loot their compatriots' land and
labor beginning in 1890--risks downplaying the second factor: the
role of global financial pressure.
Once anti-Rhodesia financial sanctions were lifted, Zimbabwe made
bad policy choices and succumbed to armtwisting by Washington.
Finance minister Bernard Chidzero (who later chaired the IMF/Bank
Development Committee) borrowed massively at the outset, figuring
that repayments--which required 16% of export earnings in
1983--would, he insisted, "decline sharply until we estimate it
will be about 4% within the next few years."
The main lender, the World Bank, concurred: "The debt service
ratios should begin to decline after 1984 even with large amounts
of additional external borrowing." This was the economic
equivalent of a sucker-punch, for in reality, Zimbabwe's debt
servicing spiralled up to an untenable 37% of export earnings by
1987. Loan conditions quickly emerged. By 1985, the IMF pressured
Mugabe to cut education spending, and in 1986 food subsidies fell
to two-thirds of 1981 levels.
Similarly, genuine land reform was stymied not only by the
"willing-seller, willing-buyer" compromise with Ian Smith's
Rhodesians at Lancaster House, but by the World Bank's
alternative: showering peasants with unaffordable micro-loans.
From a tiny base in 1980, the Bank's main partner agency granted
94 000 loans by 1987. But without structural change in
agricultural markets, the Bank strategy floundered, as 80% of
borrowers defaulted in 1988 notwithstanding good rains.
Analyst Ibbo Mandaza lamented in 1986, "International finance
capital has, since the Lancaster House Agreement, been the major
factor in the internal and external policies of the state in
Zimbabwe."
Agreed Thandike Mkandawire, head of the Geneva-based United
Nations Research Institute for Social Development, "It seems the
government was too anxious to establish its credentials with the
financial world."
The macroeconomic situation worsened when Chidzero persuaded
Mugabe to ditch Rhodesian-era regulatory controls on prices and
foreign trade/financial flows, liberalizing the economy through
an Economic Structural Adjustment Programme (ESAP) in 1991. ESAP
was supposedly "homegrown," but World Bank staff drafted much of
the document, which was substantively identical to those imposed
across Africa during the 1980s-90s.
ESAP brought immediate, unprecedented increases in interest rates
and inflation, which were exacerbated (but not caused) by droughts
in 1992 and 1995. As money drained from the country, the stock
market plummeted by 65% in late 1991 and manufacturing output
declined by 40% over the subsequent four years. Amazingly, the
Bank's 1995 evaluation of ESAP declared it "highly satisfactory"
(the highest mark possible).
More vulnerable than ever before, Zimbabwe's currency then came
under fierce attack during the 1997 East Asian crisis, falling 74%
during one four-hour raid after Mugabe joined the DRC conflict and
paid generous pensions to protesting liberation war vets.
Reacting to growing unpopularity and two Harare food riots, Mugabe
finally invoked three pro-poor policies in 1997-98: reimposition
of price controls on staple foods, conversion of corporate foreign
exchange accounts to local currency, and steep luxury import
taxes. (He also foolishly cemented the Zimbabwe dollar's value too
high.)
The IMF and donors are explicitly withholding hard currency until
these three policies are reversed. So Zimbabwe spends its hard
currency repaying foreign lenders, and can't afford to import
petrol. The harder the economic pressure bites, the more Mugabe
staggers politically.
What lessons from Harare? Evade hard-selling foreign bankers. More
aggressively--and honestly--redistribute wealth and land. And
avoid structural adjustment policies that worsen inequality,
stagnation and vulnerability. Will leaders in the Movement for
Democratic Change, and for that matter also in Pretoria, take
heed?
Regardless, more protesters--including Harare's church-based,
anti-debt activists--are joining the global campaign to shut the
IMF and World Bank, precisely because of mounting evidence of this
kind, from Zimbabwe and across the Third World.
- Johannesburg-based academic Patrick Bond is active in the
Jubilee 2000 movement, and authored *Uneven Zimbabwe: A Study of
Finance, Development and Underdevelopment* (Africa World Press,
1998) and *Elite Transition: From Apartheid to Neoliberalism in
South Africa* (Pluto Press, 2000).
Patrick Bond
email: [email protected] * phone: 2711-614-8088
home: 51 Somerset Road, Kensington 2094 South Africa
work: University of the Witwatersrand Graduate School of Public
and Development Management PO Box 601, Wits 2050, South Africa
email: [email protected]
phone: 2711-488-5917 * fax: 2711-484-2729
COSATU (Congress of South African Trade Unions)
http://www.cosatu.org.za
COSATU statement on crisis in Zimbabwe.
COSATU has been monitoring the events in Zimbabwe over the past few
weeks with growing concern. It is crucial, both for that country
and the entire Southern African region, that stability and the
rule of law is installed in Zimbabwe.
We are once again distressed at the kind of coverage these events
have got in the South African media. It seems that our journalists
and editors are bent on covering this issue as purely a race
issue. White farmers who have been attacked and killed have had a
lot of coverage in our media, while we hear very little about
black farm workers and black members of the MDC who have also been
attacked and killed. We are not convinced this is purely a race
issue. Do whites own all farms? Have any black farmers been
attacked? What does the unity of white farm owners and black farm
workers say about racism in that country?
Moreover, there has been little attempt to analyse why these events
have started now, just before the Zimbabwe elections. Only a few
journalists have looked at class issues surrounding these events.
For example, what happens to the workers if farms are confiscated
or occupied. Has there been any attempt to redress the land
question and create tenure security for those who have lived and
worked on these farms for a long time. Why has the land
redistribution programme not been implemented after all these
years?
We believe these are some of the crucial issues which should be
raised in the media. We hope that journalists investigate these
crucial topics, and refrain from creating a red herring leading us
to believe the issue is narrowly one of black people attacking
white people in Zimbabwe.
In the meantime COSATU condemns any acts of violence and
unlawfullness. We call on the government of Zimbabwe to install
peace and the rule of law to that country. We hope the issue will
be speedily resolved.
ZIMBABWE: IRIN Focus on a grim economic outlook
IRIN-SA - Tel: +2711 880 4633; Fax: +2711 447 5472; e-mail:
[email protected]
[This item is delivered in the English service of the UN's
Integrated Regional Information Network humanitarian information
unit, but may not necessarily reflect the views of the United
Nations. For further information, free subscriptions, or to change
your keywords, contact e-mail: [email protected] or Web:
http://www.reliefweb.int/IRIN . If you re-print, copy, archive or
re-post this item, please retain this credit and disclaimer.]
JOHANNESBURG, 3 May (IRIN) - As Zimbabwe's foreign payment arrears
climb to an estimated US $400 million, economists told IRIN on
Wednesday the economic outlook for the country remained poor in
coming months.
Meanwhile, the Bankers Association of Zimbabwe met on Wednesday to
find a way to enable an "unofficial" devaluation of the Zimbabwe
dollar so that growers of tobacco, the country's key foreign
exchange earner, will be able to make some profits.
Although they declined immediate comment on the outcome of the
meeting, commercial bankers have said they realised that tobacco
profitability had been seriously affected by the pegged rate of 38
Zimbabwe dollars to the American dollar. Zimbabwe is the world's
third largest producer of tobacco
An easing of the exchange rate for tobacco
When the annual tobacco auctions opened last week, farm
occupations, political violence and the exchange rate saw volumes
of tobacco delivered for sale drop by over 60 percent, according to
the Zimbabwe Tobacco Association (ZTA).
"This is also an issue which was discussed at yesterday's cabinet
meeting on the current political situation," said Eric Bloch, a
leading economist in Zimbabwe. "My view is that they want to get
the tobacco floors to pay the farmers at the parallel rate of
roughly 46 to 48 Zimbabwe dollars to the American dollar, so that
the profit will go to the growers."
The official pegged rate, in force for 15 months, has been a source
of complaint in all sectors of the economy, while bankers have said
that they have been powerless to go against the wishes of the
government.
Debt default
Bankers and economists have warned that the foreign payment arrears
raises the prospect of Zimbabwe defaulting on its external debt of
approximately US $4 billion.
"Although our import bill has been held back quite a bit in the
last four or five months," said another Zimbabwe-based economist,
John Robertson, "we might have to default. A devaluation is very
necessary and it will cause inflation, now close to 60 percent, to
rise." He said the official exchange rate had also had a negative
impact on other key foreign exchange earners such as gold and
ferro-chrome.
The danger of rising unemployment
"Zimbabwe is facing a very, very serious economic situation," he
said. Robertson said the impact of the economic crisis on the
industrial sector was bound to push up unemployment, currently at
55 percent, quite soon. "At this level it is dangerous and
unemployment levels will become more dangerous if we allow this to
continue. This is a very anxious time indeed."
The economists also cited concern that Zimbabwe could find itself
unable to finance fuel imports agreed last month. In March, the
state-owned national oil company of Zimbabwe owed foreign suppliers
US $60 million, South Africa said its national electricity utility,
Eskom was owed US $16 million.
Economic crisis likely to worsen in coming months
Bloch said the economic situation was likely to grow worse over the
next three months until after the parliamentary elections when a
new government, whether or not Mugabe's ruling ZANU-PF maintains
its 20-year grip on power, will follow a more pragmatic programme.
"Instead of talking about recovery, a new government will have to
concentrate on implementing an economic rescue package. That is
what I hear lately from politicians of all shades, both in ZANU-PF
and the opposition Movement for Democratic Change (MDC)," he said.
A road to recovery
They believed, he said, the road to economic recovery lay firstly
in an end to Zimbabwe's expensive military intervention in the
Democratic Republic of Congo (DRC); a cut in government spending by
at least 25 percent; the privatisation of parastatal companies;
incentives for expatriate business; investment incentives and a
relaxation of expatriate employment rights, and an end to tight
exchange rate controls.
"We would then see IMF payment support, a lifting of the World
Bank's suspensions, as well as an end to the Danish and Dutch
freeze on aid programmes," Bloch said. "Gradually lines of foreign
credit could be renewed so that eventually we can get out of the
foreign exchange trap we are in. Only then, after at least 18
months, will the international community begin to consider debt
relief."
This material is being reposted for wider distribution by the
Africa Policy Information Center (APIC). APIC provides accessible
information and analysis in order to promote U.S. and international
policies toward Africa that advance economic, political and social
justice and human and cultural rights.
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