[Civsoc-mw] {Disarmed} Zimbabwe - Opinion matters: Weekend reading from Kubatana 23 August 2019

Mon Aug 26 11:33:14 CAT 2019

Subject: Opinion matters: Weekend reading from Kubatana 23 August 2019 

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Hello Fam

Zimbabwe's current problems have got a lot of people talking (and writing). Today we share four different opinion pieces, by Brian Raftopoulos, Fadzayi Mahere, Sibusiso Moyo and Tendai Biti, each sharing their take on how we got into this mess, and what will get us out of it.

Action: Read the pieces below and let us know what you think. What is making sense, and what doesn't sound quite right? And most importantly, what is YOUR opinion? What do you think needs to happen to get Zimbabwe back on track? Send us your thoughts on  <mailto:info at kubatana.net> info at kubatana.net or WhatsApp us on +263 779 567 768.

So get reading, get thinking, and have a great weekend.

(And, yes, we'll be back in your inbox on Tuesday with the jobs)

Bye for now,
The Kubatana Team

Repression and dialogue in Zimbabwe: Twin strategies that aren’t working
By Brian Raftopoulos

Since the November 2017 coup that toppled Robert Mugabe in Zimbabwe and the elections in 2018, the regime of President Emmerson Mnangagwa has forged two forms of rule. These have been based on coercion on the one hand, and on the other dialogue.

Following the 2018 general elections and the violence that marked its aftermath, the Mnangagwa regime once again resorted to coercion in the face of the protests in January 2019. The protests were in response to the deepening economic crisis in the country, and part of the opposition strategy to contest the legitimacy of the government.

The response of the state to the protests was swift and brutal. Seventeen people were killed and 954 jailed nationwide. In May the state turned its attention to civic leaders, arresting seven for “subverting” a constitutional government. The repressive state response was felt once again on 16 and 19 August, when the main opposition Movement for Democratic Chance (MDC) and civic activists were once again prevented from marching against the rapid deterioration of Zimbabwe’s economy.

These coercive acts represent a continuation of the violence and brutality of the Mugabe era.

At the same time Mnangagwa has pursued his objective of global re-engagement and selective national dialogue. This is in line with the narrative that has characterised the post-coup regime.

In tracking the dialogue strategy of the Mnangagwa government, it is apparent that it was no accident that key elements of it were set in motion in the same period as the agreement with the International Monetary Fund (IMF) on a new staff monitored programme.

The purported objective is to move the Zimbabwe Government towards an economic stabilisation programme. This would result in a more balanced budget, in a context in which excessive printing of money, rampant issuing of treasury bills and high inflation, were the hallmarks of Mugabe’s economic policies.

The dialogue initiatives also took place in the context of renewed discussions on re-engagement with the European Union (EU) in June this year.

But, Mnangagwa’s strategy of coercion and dialogue has hit a series of hurdles. These include the continued opposition by the MDC. Another is the on-going scepticism of the international players about the regime’s so-called reformist narrative.
Dialogues

Mnangagwa has launched four dialogue initiatives.

*	Political Actors: This involves about 17 political parties that participated in the 2018 elections. They all have negligible electoral support and are not represented in parliament. The purported intent is to build a national political consensus. The main opposition party, the MDC, boycotted the dialogue, dismissing it as a public relations exercise controlled by the ruling Zanu-PF.

*	The Presidential Advisory Council: This was established in January to provide ideas and suggestions on key reforms and measures needed to improve the investment and business climate for economic recovery. This body is largely composed of Mnangagwa allies.

*	The Matabeleland Collective: This is aimed at building consensus and an effective social movement in Matabeleland to influence national and regional policy in support of healing, peace and reconciliation in this region. But it has come in for some criticisms. One is that it has been drawn into Mnangagwa’s attempt to control the narrative around the Gukurahundi massacres. These claimed an estimated 20 000 victims in the Matabeleland and Midlands regions in the early 1980’s. Another criticism is that it has exacerbated the divisions within an already weakened civic movement by regionalising what should be viewed as the national issue of the Gukurahundi state violence.

*	The Tripartite National Forum: This was launched in June, 20 years after it was first suggested by the Zimbabwe Congress of Trade Unions. The functions of this body set out in an Act of Parliament, include the requirement to consult and negotiate over social and economic issues and submit recommendations to Cabinet; negotiate a social contract; and generate and promote a shared national socio-economic vision. The establishment of the forum could provide a good platform for debate and consensus. But there are dangers. The Zimbabwe Congress of Trade Unions warned of the long history of the lack of “broad based consultation on past development programmes”. It insists that "reforms must never be deemed as tantamount to erosion of workers’ rights."

The strategy

In assessing the central objectives of the various strands of Mnangagwa’s dialogue strategy, three factors stand out.

The first is that the Political Actors Dialogue, the Presidential Advisory Council and the Matabeleland Collective were developed to control the pace and narrative around the process of partnership with those players considered “reliable”. Major opposition and civic forces that continued to question the legitimacy of the Mnangagwa boycotted these processes.

Secondly, the formal establishment of the long awaited Tripartite National Forum may serve the purpose of locking the MDC’s major political ally, the Zimbabwe Council of Trade Unions, into a legally constructed economic consensus. The major parameters of this will likely be determined by the macro-economic stabalisation framework of the IMF programme.

When brought together, all these processes place increased pressure on the political opposition to move towards an acceptance of the legitimacy of the Mnangagwa regime, and into a new political consensus dominated by the ruling Zanu-PF’s political and military forces, thus earning them the seal of approval by major international forces.

The MDC has responded with a combined strategy of denying Mnangagwa legitimacy, protests as well as calls for continued global and regional pressure. The MDC believes that the continued decline of the economy will eventually end the dominance of the Mnangagwa regime.

As part of its 2018 election campaign, the MDC made it clear it would accept no other result than a victory for itself and Chamisa. That message has persisted and is a central part of the de-legitimation discourse of the opposition and many civic organisations. The MDC has regularly threatened protests since 2018.
What next

The MDCs strategies have not resulted in any significant progress. The hope that the economic crisis and attempts at mass protests to force Zanu-PF into a dialogue are, for the moment, likely to be met with growing repression. Moreover, the deepening economic crisis is likely to further thwart attempts to mobilise on a mass basis.

The EU, for its part, is still keen on finding a more substantive basis for increased re-engagement with Mnangagwa and will keep the door open. Regarding the US, given the toxic politics of the Trump administration at a global level, and the ongoing strictures of the US on the Zimbabwe government have contributed once again to a closing of ranks around a fellow liberation movement in the Southern African Development Community (SADC) region.

Mnangagwa’s recent appointment as Chair of the SADC Troika on Politics, Peace and Security in Tanzania will only further cement this solidarity.

There is clearly a strong need for a national dialogue between the major political players in Zimbabwean politics. But there is little sign that this will proceed. Moreover, the current position of regional players means that there is unlikely to be any sustained regional pressure for such talks in the near future.

Source:  <https://kubatana.us6.list-manage.com/track/click?u=d06b84a1d2f56ac8eecca6a96&id=99d4e51ed0&e=7eeea5a7d2> The Conversation

Brian Raftopoulous is a research fellow at the International Studies Group, University of the Free State 

We were promised change – but corruption and brutality still rule in Zimbabwe
By Fadzayi Mahere

Emmerson Mnangagwa’s policies have left the country on its knees – and those who dare to protest are met with violence

In the Shona language, Nyamavhuvhu (August) signals the end of winter. The strong winds carry away the frost as they usher in the warmth of summer. With the silent strength of a new season, public discontent towards President Emmerson Mnangagwa’s failing socio-economic policies sweeps across Zimbabwe, manifesting itself through mounting displeasure and the growing threat of civil unrest.

On the streets of the capital, Harare, a middle-aged woman lies unconscious on the asphalt. An uncanny silence hangs in the air, punctuated only by the sound of water cannons patrolling the street and a sea of riot police conversing in hushed tones with each other. The blue-helmeted police, a signature of the Robert Mugabe era, march in straight lines through the central business district. Businesses are closed. Thick clouds of off-white teargas fill the sky. An old, grey-haired man who is left behind by the fleeing crowd is kicked in the ribs by two police officers and dragged by his side. A young man who tries to assist the stricken woman is arrested and bundled into a police truck. Elsewhere, Red Cross volunteers attend to an old woman who has suffered injuries to her head after being beaten.

The protesters had gathered on Friday to express their anger at Mnangagwa’s rule. People are increasingly dissatisfied with the impact of failing economic policies, a broken public health system, the soaring prices of basic goods and the collapse of public services. They had been waiting in preparation for a protest march organised by the Movement for Democratic Change at Africa Unity Square, a garden in the heart of Harare. In this same garden, just a few years ago, Itai Dzamara stood as a lone protester calling for Mugabe to go.

The protesters could not access the square because the police had cordoned it off. Instead, they congregated on a main road adjacent to the square, patiently awaiting the outcome of a court challenge mounted early that morning. The court challenge sought to overturn a police ban that had been instated using the notoriously repressive Public Order and Security Act at the 11th hour, the night before the planned demonstration.

Protesters chanted songs similar to those sung during the liberation struggle. They sat in the middle of the road, in an act of peaceful protest. As they sat, a wave of baton-wielding riot police charged at them in an attempt to disperse the growing crowd. Many, including older people and women, who could not run away as fast as the more youthful protesters, were badly beaten.

The violent police clampdown is just the latest action in a tale of unbroken state repression that continues from Mugabe’s era. In the aftermath of the July 2018 election, the military killed at least six civilians as it drove army tankers through the streets of Harare to quell a protest. Similarly, in January this year, the army fired live rounds at civilians in the wake of a protest against the rising cost of living. At least 12 civilians lost their lives. The perpetrators have yet to be indicted or held accountable for the loss of life, despite a theatrical commission of inquiry launched by Mnangagwa in a bid to repair his already crumbling international image.

In addition to thwarting the freedom to protest, the repression by Mnangagwa’s government has been characterised by the partisan use of security services, tampering with judicial independence, the surveillance and intimidation of activists, sham trials of human-rights defenders, impunity for human-rights-violating security forces – and targeted beatings and abductions of human-rights activists and members of the opposition.

Mnangagwa’s promise of change and reform, much lauded by the UK and Europe at the time of Mugabe’s ousting, has proven to be a mirage. It was argued by the UK and some in Europe that Zimbabwe needed a “strong man”, a Paul Kagame-type figure, to drive economic reforms. However, on this front too, Mnangagwa has failed amid several negative economic indicators: official statistics claim that annual inflation surged to 175.7% in June, although economists project that the real inflation rate is much higher than this. The government has since suspended the official publication of inflation statistics. There have been shortages of food and fuel. There has also been a return to acute, daily power cuts, which often last for 18 hours, with power returning in the dead of night.

The government’s mantra that “Zimbabwe is open for business” has proven to be a hollow epithet, as foreign direct investment remains extremely low and local businesses continue to close shop in the face of a confidence deficit. Corruption remains rampant with little commitment to deal with the perpetrators and recover the looted funds.

Mnangagwa has failed at the most basic political reform. The mask has fallen away leaving in its stead a man more brutal and devoid of character than his predecessor. In the wake of his stewardship lies a country where individuals cannot afford a decent life and are punished for trying to register their growing discontent. It is time for the UK and Europe, who backed Mnangagwa, to stand with democratic forces and innocent, brutalised citizens – not a corrupt authoritarian regime incapable of reforming politically and economically.

Source:  <https://kubatana.us6.list-manage.com/track/click?u=d06b84a1d2f56ac8eecca6a96&id=c8310528be&e=7eeea5a7d2> The Guardian

Fadzayi Mahere is a Zimbabwean lawyer and politician

Economic Isolation is Hindering Zimbabwe’s Transformation
By Sibusiso B. Moyo

Lifting sanctions and increasing international investment will speed land and security sector reform—and enhance the protection of human rights.

Since the election of a new government for Zimbabwe one year ago, the administration of President Emmerson Mnangagwa, in which I serve, has begun reforming our land policies, changing laws, and commencing a new compensation initiative to address the injustices of the recent past. Some commentators, such as Tonderayi Mukeredzi in Foreign Policy, have legitimately questioned whether this goes far enough.

The new land reform program is a work in progress. Where we stand today is not the end, only the beginning - and the destination will evolve as we learn lessons en route.

Immediately, there is the pressing question of compensation for white farmers whose land was taken. By law, the government was obligated to compensate farmers for improvements and infrastructure on the land - not the land itself. In reality, the payments were delayed and piecemeal.

At present, 53 million Zimbabwean Real Time Gross Settlement (RTGS) dollars ($4.8 million at today’s exchange rate) have been set aside in the 2019 budget to begin a comprehensive payment process covering the 4,500 farmers whose land was acquired under the fast-track land reform program. This is already being disbursed to the most vulnerable among the farmers, in close consultation with their representative organization, the Commercial Farmers Union.

In parallel, the government is completing a nationwide evaluation exercise in order to arrive at an overall compensation figure. The farmers have already computed their own figure. What remains, therefore, is for the government and the farmers to conclude ongoing negotiations to reach a final, agreed compensation figure and payment mechanism. I am confident, given existing goodwill and the desire of all parties to resolve the issue of compensation, that we will soon be in a position to go public with an agreement.

The issue of the land itself has been agreed and settled. For farms obtained under bilateral investment treaties, reimbursement shall be for both land and improvements to land. However, domestic deeds must be seen in a wider historical arc, one laden with colonial dispossession and racial subjugation. A select few held the finest farmland in Zimbabwe to the detriment of our society. Then wrong begot wrong under the policy of President Mnangagwa’s predecessor, Robert Mugabe.

Dredging up these emotive memories of reciprocal dispossession is no way forward. We must solve this land question for all groups - and solve it permanently. If we do not, Zimbabwe will remain caught in its past.

While land reform is about righting historical wrongs, it is also about reclaiming Zimbabwe’s mantle as the breadbasket of Africa. Racist laws have been changed to be color blind and ensure that only the best, most qualified farmers tend the land: White farmers can now obtain 99-year leases on the land, rather than the previous limit of five (all the agricultural lands of Zimbabwe are held in trust by the nation), and leases can now be sublet to white farmers, where once it was often blocked.

Nevertheless, Mukeredzi is correct to identify two obstacles in boosting production, both of which the government recognizes: first, whether a 99-year lease (in their current legal form) can be used as collateral to raise capital for reinvestment into the farm, and, second, the vast fertile tracts that lie fallow across the country.

It is not a question of whether the current policies go far enough, but the speed of travel. For instance, tenancies are not bankable, because they are not transferable in the event of a default. To rectify this, a revised leasehold has been agreed in principle with government and the Bankers Association of Zimbabwe. Now this must be ratified into law. At the same time, property rights are being strengthened through their enforcement, with a clampdown on illegal farm seizures.

The government also knows there is too much fallow land. We know we cannot allow those unable to farm control land in place of those who can - any more than we can allow a person with no driver’s license to drive a taxi. Yet we don’t currently know how much fallow land there is.

Good policy begins with measurement. The land audit carried out last year was just the first phase of a comprehensive nationwide survey. A series of issues must be examined: multiple ownership of the same land, oversized farms, uncertain or contentious boundaries, and grazing allocations. A judgement can then be made as to whether the right mix of incentives are in place to encourage the owner to sell or sublet - or whether a more vigorous policy is required.

The preparations for the second audit began at the end of May. Yet as the chair of the Zimbabwe Land Commission has said, a comprehensive audit that tackled all issues would be swifter if not for a limited budget. Across multiple branches of the government’s reform agenda, this is a root problem that slows our progress: We are constrained not by political will but economic reality.

Coping with the human and economic costs of one of the region’s worst-ever cyclones followed by the most severe drought in four decades has not been easy. The fiscal inheritance handed to us by the past president (which we have now turned to a primary budgetary surplus through austerity measures) as well as shortages of foreign exchange reserves that drive inflation have left government resources thin.

Lifting the Mugabe-era U.S. economic sanctions that prevent full international engagement would remedy this problem. Free to enjoy the full benefits afforded by global engagement, Zimbabwe - with its rich mineral resources and land, a highly educated workforce, and solid infrastructure - would thrive. And with it would come a bigger budget to expedite land reform.

This reengagement, Mukeredzi argues, is hampered by the perception of the record on human rights. We in government know we have more work to do, as with much of our reform agenda. Some tragic and lamentable incidents have taken place since this administration came to power. Yet those incidents should not be read as government intent nor obscure the country’s progress. We cannot change the past, only our future.

The six deaths that followed post-election clashes between security forces and protesters is one such event. Immediately, the government instituted an international commission of inquiry headed by former South African President Kgalema Motlanthe and the international human rights lawyer Rodney Dixon.

Before the commission began its work, the president agreed—in an unprecedented move in Zimbabwe—to implement its recommendations. Hearings took place in public and were broadcast on state television. Nobody was protected from subpoena. And the full report of findings and recommendations were made public after being delivered to the president last December.

The fact that nobody has yet been prosecuted does not mean that the recommendations have been dismissed. To be absolutely clear, those responsible will be held accountable. Meanwhile, other changes are in motion.

First, compensation is currently being paid to the families of victims and will be completed by the end of the year. Second, the Access to Information and Protection of Privacy Act has been repealed and is being replaced by three bills to further promote freedom of expression. Third, the Public Order and Security Act - criticized for impinging on freedom of assembly - is being superseded by the Maintenance of Peace and Order Act, which shall bring security forces entirely under the democratic control of the government. And finally, essential reforms have begun in the police and military units: The Codes of Conduct have been rewritten, and retraining—particularly in relation to human rights in policing and service to citizens in law enforcement—is under way.

These reforms could be accelerated with engagement. Not only would a stronger economy mean more resources for these programs; it would also help bring in critical international expertise to aid the retraining of the country’s security services. Lifting sanctions would not signal the exoneration of the government on human rights; rather, it would strengthen protection of those rights and prevent future abuses.

A week may be a long time in politics, but a year in reform is not. The voiding of sanctions would unleash economic growth and speed Zimbabwe’s rehabilitation and renewal.

Source:  <https://kubatana.us6.list-manage.com/track/click?u=d06b84a1d2f56ac8eecca6a96&id=54efddc3a1&e=7eeea5a7d2> Foreign Policy

Sibusiso B. Moyo is Zimbabwe’s minister of foreign affairs and international trade.

History Repeats Itself in Zimbabwe
By Tendai Biti

New President, Same Old Problems

In August 2008, I visited a hospital roughly 100 miles outside the Zimbabwean capital, Harare. Hundreds of patients lay in overcrowded wards and on makeshift beds in hallways and in waiting areas. Outside, hospital employees scrambled to pitch tents in order to accommodate the sick and dying still streaming in from the countryside. Doctors stood by helplessly, unable to do anything without the necessary drugs and equipment.

Zimbabwe was in the throes of a hyperinflationary meltdown. Basic sanitary services had collapsed, unleashing a cholera epidemic that would eventually claim thousands of lives. Two years before, in 2006, President Robert Mugabe’s government had abandoned the Zimbabwean dollar in favor of a new quasi-currency called the “bearer check.” But prices continued to skyrocket and zeros quickly accumulated on the bearer checks. Soon, the Central Bank was printing hundred-thousand-trillion-dollar denominated notes that could barely buy a bottle of soda. Inflation would peak at 500 billion percent in December 2008, the second highest in recorded history after Hungary in 1956.

Mugabe’s ruling party, the Zimbabwe African National Union–Patriotic Front (ZANU–PF), blamed external forces, but the crisis was entirely of its own making. For more than a decade, ZANU–PF had raided public coffers in order to shore up political support. The party ran enormous budget deficits, which it partially plugged by printing money. Such was the habit the ruling party had formed back in 1997. That year, war veterans took to the streets to demand better compensation. Mugabe offered the veterans hefty new allowances, even though the budget had not provided for these. The announcement spurred a dramatic selloff in the Zimbabwean stock exchange and caused the currency to plunge more than 70 percent in a single day.

So began an 11-year decline, during which the economy lost 60 percent of its value. Mugabe’s government spent profligately. It intervened militarily in the Democratic Republic of Congo, at vast expense to the country (but to the profit of many in Mugabe’s inner circle). The economic slide naturally led to political agitation, with sporadic strikes spreading across the country. The country’s main trade union, together with its allies in civil society, formed a political party, the Movement for Democratic Change (MDC). Faced with the threat of an insurgent MDC, Mugabe embarked on a bloody and reckless land reform program. His government seized thousands of farms and turned them over to ZANU–PF loyalists, decimating Zimbabwe’s once vibrant agricultural sector and triggering the kind of economic collapse rarely seen outside of a war zone. By 2008, government debt was unserviceable, social services had disintegrated, and life expectancy had plunged to 32 years for women and 34 years for men.

Not surprisingly, the economic crisis precipitated a political crisis. In the March 2008 general election, the MDC won more parliamentary seats than ZANU-PF and Morgan Tsvangirai, the MDC’s presidential candidate, delivered Mugabe a resounding defeat. The Southern African Development Community (SADC), a regional bloc that played a mediating role in the crisis, acknowledged that Tsvangirai had won, but claimed that he had not cleared the 50-percent-plus-one threshold for a first-round victory — this despite the fact that the Zimbabwean government refused to release the official results for another five weeks.

SADC decreed that a runoff election be held in June, but by then the government had unleashed a horrific wave of violence aimed at intimidating the opposition and its supporters ahead of the planned second round of voting. Security forces and ZANU–PF-linked militias, popularly known as the Green Bombers, killed hundreds of people and displaced thousands of others. As the secretary-general of the MDC at the time, I was arrested on treason charges and accused of having unlawfully declared Tsvangirai the winner. Eventually, SADC forced Mugabe and Tsvangirai into talks that led to the formation of a unity government.

Cleaning Up Mugabe's Mess

When I became minister of finance in the unity government, it was my job to tame the hyperinflation and repair the wrecked economy. By the time I took office in February 2009, there was no escaping dollarization, which meant recognizing the U.S. dollar as legal tender in Zimbabwe. The market had already jettisoned the Zimbabwean dollar and its cousin the bearer check, both of which had become little more than instruments of arbitrage for politicians with privileged access to hard currency. There would be a long-term cost to dollarization, as we knew from other countries that had been forced to take this step. The experience of Panama, El Salvador, Peru, Argentina, and other Latin American countries showed how difficult it is to resurrect an abandoned currency. Those countries that have succeeded in doing so, such as Mexico, Pakistan, and Sierra Leone, have been forced to use the dollar as a peg. The truth is that currencies are only as strong as the public’s trust in them, and where a foreign currency has supplanted the local one, trust can never be salvaged.

Dollarization solved the immediate issue of hyperinflation, but I knew it wouldn’t be enough to restore macroeconomic stability. For that, Zimbabwe needed to slash its budget deficit and begin paying down its burgeoning public debt.Through a carefully managed process of cash budgeting, my team oversaw fiscal surpluses from 2009 until 2012, the last full year of the unity government. At the same time, we lifted cumbersome regulations, including price controls and a minimum-wage regime that had inhibited growth. By December 2009, inflation had fallen to negative 7.7 percent, and for the first time in 12 years, Zimbabwe recorded a positive growth rate, in this case 7.5 percent. The average real growth rate during the unity government’s tenure was nine percent, peaking at 11.9 percent in 2011.

Regrettably, ZANU–PF seemed to forget the lessons of the unity government as soon as it regained power in 2013. After winning an election marred by intimidation and manipulation of the voter rolls, among other electoral swindles, Mugabe’s government reverted to its default setting and embarked on a reckless spending spree that swelled the budget deficit to 25 percent of GDP. To fill the gaping hole in the budget, the government borrowed some $4 billion from the Central Bank over the next four years, far beyond the limits allowed by law. In addition, between 2013 and 2016, it issued over $7 billion in treasury bills, despite being effectively broke. And so it was that by November 2017, when the military toppled Mugabe and installed former Vice President Emmerson Mnangagwa in his place, Zimbabwe was once again on the brink of economic collapse.

Learning the Hard Way

The 2018 general election offered a golden opportunity to reverse course. But instead of the free and fair election that Mnangagwa promised, Zimbabweans got one that international observers called “deeply flawed” and that was followed by a brutal crackdown on opposition politicians and their supporters. Facing threats to my life, I briefly sought refuge in Zambia, from where I was deported back home to face charges of “falsely and unlawfully” announcing the election results—this time, in favor of MDC leader Nelson Chamisa.

Mnangagwa has tried to strike a more business-friendly tone than his predecessor, but his government hasn’t charted a meaningfully different fiscal course. Finance Minister Mthuli Ncube refused to cut the bloated government wage bill, even though it accounts for 95 percent of total expenditure and employs an estimated 200,000 “ghost workers” whose real job is to keep ZANU–PF in power. Instead, he has attempted to increase revenues by imposing regressive taxes on money transfers and increasing fuel levies. Even with these measures, Ncube anticipates a budget deficit of at least four percent of GDP for 2018.

Mnangagwa is also playing a dangerous game with Zimbabwe’s unwieldy currency regime. Back in 2016, following the binge budgets of the post-unity government years, the country began to experience severe shortages of hard cash. To ease the currency crunch, the government introduced a quasi-currency known as the bond note, which was pegged one-to-one to the U.S. dollar. Along with the real-time gross settlement dollar (RTGS dollar), another artificial currency that the government used to repay bondholders, the bond note immediately began to trade at a discount in the black market.

Soon after the election, Mnangagwa’s government tampered with the currency regime again, first requiring separate accounts for U.S. dollars and bond notes (despite maintaining an official one-to-one peg) and then merging the RTGS dollar and the bond note into a single electronic currency, also called the RTGS dollar. It then proceeded to partially liberalize the exchange rate, adopting a new peg of 2.5 to one for the new currency—although its value on the black market quickly fell below that. In June 2019, the government recognized the RTGS dollar as legal tender and rechristened it the new Zimbabwean dollar, while at the same time barring the use of the U.S. dollar. Today, the Zimbabwean dollar is worth around ten cents, and inflation is roaring back, having hit 175 percent officially in June and closer to 300 percent unofficially.

Although these quasi-currencies were ostensibly introduced to provide liquidity, their real value to ZANU–PF elites stems from the arbitrage opportunities they create.

Although these quasi-currencies were ostensibly introduced to provide liquidity, their real value to ZANU–PF elites stems from the arbitrage opportunities they create. Paired with preferential access to hard currency, bond notes and RTGS dollars fuel the patronage system that has kept the party in power for nearly four decades. For the rest of Zimbabwe’s 16 million people, de-dollarization has made things much harder, slashing salaries once earned in U.S. dollars, spurring inflation, and slowing growth. For the second time in Zimbabwe’s post-independence history, most people have had their savings wiped out overnight.

Sadly, the International Monetary Fund has gone along with this strange brand of economics. In May, it issued a staff report that all but endorsed Harare’s attempt to de-dollarize. The report claimed that “significant economic reforms are underway,” even though the promised reforms have yet to materialize. It also turned a blind eye to rising inflation, burgeoning shortages of basic goods, and huge currency distortions. It whitewashed Mnangagwa’s record and glossed over his extralegal path to power, noting that he “headed the transitional government following the resignation of former President Mugabe in November 2017,” despite the fact that he came to power through a military coup. Finally, it claimed that the 2018 elections “were viewed by international observers as mostly peaceful, free, and fair,” which was certainly not the view of the opposition supporters who were brutalized or the international observers who expressed grave reservations. In May 2019, the IMF approved a staff-monitored program for Zimbabwe, which, if the government plays its cards right, could lay the groundwork for a program of debt relief or debt cancellation in the future.

For Zimbabwe, the indicators are stark. The economy is reeling. Underemployment and unemployment are widespread (roughly 95 percent of Zimbabweans work in the informal sector). State utilities have all but collapsed, and electric power cuts out frequently. Lately, the blackouts have lasted for more than 18 hours a day, even as the country suffers shortages of fuel, water, food, and medicines. More than 40 percent of the population — some seven million people — survives on emergency aid from the international community.

Politics is the Answer

Ten years ago, forming a unity government offered a political solution, albeit a temporary one, to the crisis of hyperinflation. A solution to today’s economic crisis must be similarly political. More precisely, it must address the legitimacy deficit of the current administration, which stems from the military coup that brought it to power and the disputed election that kept it there.

A political deal must also provide a framework for the reforms needed to right the economy. Most urgently, it must offer a path away from the multiple quasi-currency regime and back to the U.S. dollar. The government must halt its compulsory appropriation of the U.S. dollar export proceeds, which constricts the supply of foreign currency and hurts Zimbabwe’s export economy, especially in the mining and agricultural sectors. Eventually, the country should transition to the South African rand, which is weaker than the U.S. dollar and would help make Zimbabwean exports more competitive.

Once the monetary environment is stable, the government can focus on cutting costs by reforming the public-sector wage bill and curtailing expenditures that are wasteful or corrupt. These cuts would help pay down the country’s $22 billion public debt, half of which arose from overzealous borrowing from the Central Bank. Zimbabwe needs to pay back its creditors both within the country and outside it: the country is currently $2.6 billion in arrears to international financial institutions such as the World Bank.

Corruption is both a cause and a consequence of Zimbabwe’s economic difficulties, and no reform program can succeed without tackling it. The ruling party and the military still dominate Zimbabwe’s economy, as do vested interests connected to both. Profiteering and rent-seeking on virtually everything with a price tag, from commodity exports to petrol imports, define the country’s economic life. Foreign exchange, fuel, minerals (particularly diamonds, platinum, and chrome), and agriculture have all become citadels of arbitrage and loot. To begin to change all this, the government must liberalize the market and eliminate the need for import permits, which for years have been used to reward party loyalists. To attract foreign investment, Zimbabwe needs to show that it respects the rule of law, including by strengthening property rights and guaranteeing that profits can be repatriated outside Zimbabwe.

The current government cannot be trusted to undertake such a program. That is because ZANU–PF stands to lose from serious reforms, since they would inevitably eliminate the party’s traditional sources of finance, patronage, and control. A transitional government arrangement, akin to the unity government of 2009–13, has to lead the reform effort. To bring one about, the IMF and other major multilateral organizations should offer ZANU–PF incentives to come to the negotiating table—not reward it prematurely as the IMF did with the staff-monitored program. Zimbabwe needs help from its international partners, as well as from neighboring countries and regional blocs, to stave of total economic collapse. First, however, it needs to get its own politics right.

Source:  <https://kubatana.us6.list-manage.com/track/click?u=d06b84a1d2f56ac8eecca6a96&id=cfbd80ef77&e=7eeea5a7d2> Foreign Affairs

Tendai Biti is Vice President of the Movement for Democratic Change in Zimbabwe and served as Finance Minister in the Government of National Unity from 2009 to 2013. He is a co-author of Democracy Works: Rewiring Politics to Africa’s Advantage.

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