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The
Politics of Crisis and Breakdown in Uganda and Zimbabwe
E.A. Brett
November 2005
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Zimbabwe: From Rational Economic Management
to the Politics of Disorder 1997- 2005
The experiences of Uganda under
Obote and Amin and the last eight years in Zimbabwe are close enough
to suggest that very similar forces were at play in bringing about
the transitions from relatively coherent policy management to the
politics of disorder and breakdown. The Zimbabwe economy was far
better developed than Uganda’s with a strong state apparatus, well
developed capitalist firms in manufacturing, finance and commercial
agriculture, but with even greater racial inequalities inherited
from its settler past. The white regime had systematically excluded
Africans from positions of authority in the state or formal economy
so that the majority of the rural population was confined to congested
communal land, or to wage labour on white farms or white-owned firms.
In 1980 ZANU-PF led by Robert Mugabe
replaced the illegal settler regime in Zimbabwe after a successful
liberation war. It had a majority in Parliament, but gave early
evidence of its willingness to resort to violence to safeguard its
authority by meeting the threat of unconstitutional action from
ZAPU, the minority party representing the interests of the minority
Ndabele tribe with violent repression. ZAPU was then incorporated
into the ruling party so that the country was governed by a de facto
one-party regime from 1987 to the emergence of the Movement for
Democratic Change in 1999. For the next decade it managed a system
based on ‘embedded autonomy’ comparable to the developmental East
Asian states because the political class had considerable policy
making autonomy, but maintained close links with the representatives
of the professional associations that represented the economic elites.
(Evans, 1995; Kohli, 2004)
It chose not to initiate a programme
of nationalisation comparable to those that had taken place in Tanzania
and Mozambique in the 1960s and 1970s, but to follow a right wing
corporatist programme that did not threaten white property rights,
but did maintain and even extend existing controls over prices,
resource allocations and investment. This enabled it to reward key
supporters with state sector jobs and contracts, to guarantee the
survival of the white industrial, agricultural and financial elites,
and to provide the African poor with better social services, food
security and labour rights. A small but relatively successful land
redistribution programme was carried out in the early 1980s, but
only 48,000 people were resettled so it had a negligible effect
on white land ownership or on overcrowding in the Communal Areas.
(Cliff, 2000; Weiner, 1988) The result was some rent-seeking together
with regulatory and administrative constraints that undermined economic
flexibility and long-term growth, but the programme was managed
with enough intelligence and integrity to generate many significant
gains. Economic growth in fact averaged 4.7% between 1980 and 1984
despite a serious drought in 1982, and 4% between 1985 and 1990
and was accompanied by significant improvements in distribution,
significantly increasing support for the new regime (See Robertson,
1992; Stoneman & Cliffe, 1998).
However, the programme also generated
rigidities and shortages that threatened its long-term economic
and political sustainability. State spending was high, licensing
power was used to exclude foreign investment and discourage small
business development, while the protectionist trade regime kept
prices high and discouraged exports (Brett, 2005). Parastatals that
controlled the main utilities and agricultural marketing were well-managed
but still made heavy demands on the state budget and generated large
increases in government debt (Robertson, 1992a). By the end of the
decade it was clear that these constraints were generating a serious
shortage of foreign exchange and suppressing the growth of formal
sector employment at a time when the pool of qualified labour was
growing rapidly. This led to a sudden and radical shift from the
corporatist to a liberal policy regime that was to produce mixed
economic, but highly destabilising political results.
The contrast with the ‘politics of disorder’
stereotype at this point was extreme, since Zimbabwe was not forced
into its Economic Structural Adjustment Programme (ESAP), like most
other African states, but did so from a position of relative strength,
in response to pressures from domestic economic elites, the technocrats
in the Ministry of Finance and continuous pressure from the IFIs
(Herbst, 1992; Mumbengegwi, 2002; Skalnes, 1995). It was designed
to encourage job-creating growth by transferring the control over
prices from the state to the market, improving access to foreign
exchange, reducing administrative controls over investment and employment
decisions, and reducing the fiscal deficit. The programme was a
serious attempt to carry out a serious reform programme that had
the full support of the IFIs that had played an important role in
its formulation.
Unfortunately a combination of negative
external factors (drought and a decline in the terms of trade),
errors of sequencing, and the government’s failure to control the
fiscal deficit, meant that performance overall was worse than it
had been during the corporatist period. Growth continued but at
a lower rate, employment did not increase overall and many workers
were retrenched, while access to social services declined. These
negative short-term results appeared to have generated some positive
long-term gains, since exports, investment and growth had increased
substantially by the end of the period.1
A major debate has raged over the economic
consequences of the ESAP experiment in Zimbabwe that cannot detain
us here.2 What is undeniable, however,
was its politically destabilising effects stemming from increases
in urban unemployment, declining conditions of labour in both the
public and private sectors, access to health and educational services,
and largely drought induced food insecurity among the rural poor.
Following the advice of the IFIs had therefore produced highly ambiguous
economic results and massive political resentment manifested in
growing industrial militancy, unrest in the civil service and a
growth in the activities of many civic organisations. ZANU-PF retained
its political monopoly at the 1996 election, putting its political
hegemony, and ability to resist the demands of special interests
under serious threat. Key members of the regime, including the President
had never fully supported ESAP, while the demands for fiscal prudence
and the reduction in state controls had made it more difficult for
them to dispense the patronage on which it relied for support. The
resulting threats to the survival of the regime then produced a
rapid descent into populist policies that generated very similar
results to those experienced in Uganda in the 1970s.
It made large and unbudgeted payouts
to War Veterans in August 1997, announced its intention to seize
land from white commercial farmers, invaded the Democratic Republic
of the Congo, and imposed tight controls over the exchange rate
in 1998. It over-valued the currency and ran a growing fiscal deficit
to provide services, but also to reward its political supporters
–politically connected business elites and managers of parastatals
were given favoured access to contracts, subsidies and forex. The
loss of the Constitutional Referendum in 2000 and growth of the
MDC led it to encourage violent farm invasions by war veterans and
even occupations of commercial and industrial businesses. This enabled
it to promise land to rural supporters in time for the Presidential
election and secure the loyalty of senior politicians, officials,
judges and army officers by allocating them large farms,
The result was hyper-inflation, the destruction
of personal and corporate savings, widespread bankruptcies, an end
of the tourist industry, and a serious decline in export earning
and food production. All donor support to the government was withdrawn,
although humanitarian aid was still provided through NGOs. By late
2003 the Zim dollar was worth 825 on the official but 8,000 US dollars
on the official markets; inflation was over 500%, fuel shortages
had brought traffic to a virtual standstill, trains had almost stopped
running, and power outages had become a regular feature of daily
life. The MDC organised a series of successful national strikes,
and the government’s loss of control over forex even appeared to
threaten its ability to maintain its control over the army and police
if there was to be widespread civil disobedience. Most observers
believed that its days were numbered.
At the end of 2003 the regime attempted
to restore political order by devaluing currency, raising interest
rates to control inflation, and reduce power and fuel subsidies,and
giving the grain Marketing Board a monopoly over maize purchases.
The government’s access to forex increased, inflation declined and
fuel shortages were temporarily eliminated. These changes alleviated
the problem though also had a significant political downside since
many banks and companies owned by ZANU PF notables that had depended
on political rents were threatened with bankruptcy, although most
were subsequently rescued by access to ‘Productive Sector Loans’,
reinforcing the state’s control over the capitalist class. This
apparent restoration of order, combined with the systematic use
of state power, including a virtual monopoly of food supplies, enabled
the regime to marginalize the MDC and win a two-thirds majority
at the elections held in March 2005.3
However, this political victory simply
compounded the developing economic crisis that had been postponed
by the reforms of 2003. The forex shortage, stemming from the over-valued
exchange rate and destruction of commercial agriculture intensified.
In March the official rate was Z$ 6,000 to the $, the unofficial
about 12,000, by the end of the month it was closer to 18,000, it
is now in the region of 25,000. Fuel shortages have stopped most
road traffic; Growing unemployment and food shortages have forced
the poor into ‘borrowing, reducing the number and size of meals
and skipping meals on some days’ (FEWS NET cited in IRINNEWS.org.
Report 46947 9/5/2005); while even the elite are finding it hard
to buy basic supplies in supermarkets; new investment has ceased
and firms are closing every day.
The regime reacted to these threats with
even more extreme, and even more counter-productive interventions.
It responded to food shortages by introducing sub-economic prices
for basic commodities, only to find that the supermarket shelves
emptied and food was being sold at what were described as ‘exorbitant’
prices by informal traders. Its attempt to control the exchange
rate had also driven most forex, now increasingly supplied by remittances
from Zimbabweans who had been forced to migrate to seek work, into
the informal market. In response it launched ‘Operation Murambatsvina’
(or ‘Drive out Rubbish’) in May in which the police and army launched
a major attack on informal settlements and markets in which
… some 700,000 people
in cities across the country have lost either their homes, their
sources of livelihood or both. Indirectly, a further 2.4 million
people have been affected in varying degrees. Hundreds of thousands
of women, men and children were made homeless without access to
food, water, sanitation or health care (UN, 2005).
This attack not only constitutes a ‘crime
against humanity’ but will also lead to further economic decline,
not only in the urban informal sector, but also in the rural economy
that relied on urban remittances, and in the formal economy that
supplied the informal sector with inputs and services. (See Bracking,
2005)
The manipulation of economic rents and
the use of coercive state power to gain the support of key constituencies
and impose its will on the capitalist class goes some way to show
why ‘business people or voters are still so disinclined to punish
leaders for poor performance’ in Africa (Booth, 2005:494). However,
political stability does not only depend on the ability to manipulate
votes since it is much easier for government to ‘rig an election
than an economy.’4 Confronted with
a growing paralysis in the economic system the budget and foreign
exchange constraint have now forced the regime to look for external
support from South Africa and China, its only supporters with sufficient
resources to give it support. Preliminary reports suggests that
the Mbeki regime has offered to provide financial support, but only
on the basis of policy conditions that would threaten the political
and economic autonomy of the regime. The Chinese have continued
to make positive statements about economic support, but it is unclear
whether they are likely to come up with the billion US dollars that
the regime needs if it is to deal with its food, fuel, fiscal and
foreign exchange crises.
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1. In fact it
averaged 6.5% during 1991, 1994 and 1996, the three non drought-affected
years. (Gunnng & Oostendorp, 2002: 14).
2. See Brett, (2005); Botchwey et al., (1998); Robinson, (2002);
Bond &b Manyanya,, (2002).
3. The government only allowed the election to be monitored by sympathetic
African observers who gave the process a qualified endorsement.
However, widespread irregularities were recorded in a detailed survey
of 105 constituencies con-ducted for a consortium of local NGOs
by the National Constitutional Association. These included the use
of violence by 'ZANU PF supporters, youth militia, and agents of
the State', and 'the political use of food … in 74% of the
con-stituencies sampled. (NCA, 2005).
4. Personal Communication, John Makumbe, University of Zimbabwe..
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