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It's the politics, stupid . . . not the economy
Dumisani Muleya,The Zimbabwe Independent
January 27, 2006

http://www.theindependent.co.zw/news/2006/January/Friday27/4079.html

CENTRAL bank governor Gideon Gono this week presented his fourth quarter monetary policy review statement full of informative technical detail but devoid of political context and hence workable solutions.

Gono appears well-intentioned and determined to pull out all the stops to deliver, but the trouble is how he seems to situate problems facing the country.

To show his good faith, Gono makes appeals for unity, for government officials and everybody to shun corruption, and for the country to avoid racism, regionalism and tribalism. Although some of these issues were perhaps raised on the wrong forum at the wrong time, it is nevertheless necessary to tackle them.

Gono also gave useful information on the state of the economy. While his policy does not deserve the harsh epithet of failure, it raised a number of questions about his ability, in the circumstances, to deliver. It also raised questions about the capacity - or inclination - of government to deal with current economic problems.

Gono appears to lack the courage of his convictions to tackle the political question head-on. Granted, we understand he does not want to cross the Rubicon - and become a casualty of the messy political end game - but a good policy pronouncement without the correct premise and based on a fundamentally flawed rationale is not likely to be helpful.

It is clear Gono - in pursuit of political correctness - has resisted the need to link politics and economics. But claiming that the media and Western sanctions are responsible for the economic crisis while letting the bungling political elite off the hook is downright disingenuous - and Gono knows it.

Equally, flattering army generals and their political principals by quoting their irrelevant high sounding nothings in a serious monetary policy statement is also less than useful.

Gono proceeds in one of his documents from the sublime to the ridiculous. He says he has heard some people proposing a "sanctions tax" to punish Western multinational companies for the sanctions imposed by their governments on Zimbabwe.

This can't be a serious suggestion from anybody concerned about investment. At another level, Gono tried to please international actors by attacking farm invaders and urging Harare to restore good relations with the international community. It was a good proposition but undermined by his underlying political fear of rocking the boat.

It gets worse when the policy measures become ad hoc and are not based on econometrics. Issues like promising a new currency and flip-flopping on the exchange rate, not to mention failures to curb inflation and inject life into the economy, do not help matters.

How does a new currency help to resolve such a deep crisis when macro-economic fundamentals remain skewed?

It is the crumbling economic base and collapsing superstructure that are at the heart of the matter, not these peripheral issues.

The situation is now probably worse than it was when Gono came into office in 2003, but it is unfair and unreasonable to blame him for Zimbabwe's policy and institutional failures. The presidential incumbent and his regime are to blame.

But in the meantime, Gono has left himself rather exposed to criticism which he could easily forestall by pointing out the obvious: that it's the politics stupid and not the economy!

The dividing line between politics and economics is wafer-thin. In fact, they overlap and usually have a symbiotic relationship. That is why the strength or weakness of a state depends upon its political infrastructure and economic capacity. One without the other produces a somewhat dysfunctional state.

Gono must contextualise issues. To ignore the environment and its political dynamics is to miss the whole point!

Zimbabwe is groaning under the weight of an economic crisis and authoritarianism. It is burdened by a government which has long lost the capacity to establish its legitimacy and show a semblance of authority beyond the use of coercive methods.

The parasitic power elite at the helm of the Zimbabwean state are now increasingly relying on repressive apparatuses rather than representative institutions as instruments of perpetuating their rule.

Mugabe's centralisation of institutions and personalisation of power are a serious malady in local politics. That is why democracy, in its basic form, that is procedural form, is refusing to take root in Zimbabwe which is now almost a failed state.

This is the political context where the real problem lies. Printing money on a massive scale and hyperinflation are a manifestation of policy and leadership failures. Gono knows that but lacks the courage to spell it out.

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