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World View Podcast - Greg Winter and Michael Wines discuss Zimbabwe
Greg Winter and Michael Wines, New York Times
June 30, 2007

http://www.nytimes.com/2007/06/30/weekinreview/01worldview.html

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GREG WINTER Welcome to the New York Times World View podcast, a weekly conversation with Times foreign correspondents from across the globe.

I'm Greg Winter, a foreign editor at The Times.

This week I speak with Michael Wines, the Times correspondent in Southern Africa, about the disastrous spiral that is Zimbabwe's economy.

Zimbabwe has the very dubious distinction of having the world's highest inflation, officially listed at about 4,500 percent, but estimated by some economists to be many times that. The government, facing an increasingly dispirited population, put forward legislation this week to require that virtually all publicly traded companies in Zimbabwe surrender control to "indigenous citizens," basically, nonwhites who were discriminated against before the end of white rule in 1980. The legislation raises the possibility of a sizeable redistribution of the country's remaining wealth at a time when its economy is collapsing.

Times correspondent Michael Wines has been covering this story and he joins us now from Johannesburg.

Michael, last year when Zimbabwe's inflation was a comparatively enviable 900 percent, you wrote about how the local $500 bill was just enough to buy toilet paper — not a whole roll, mind you, but a single sheet. Now that inflation is five times what it was back then, how are people surviving at all?

MICHAEL WINES Well, they're barely getting by. But there are survival mechanisms in Zimbabwe and have been for a long time because the economy's been on a downward spiral close to eight years now. Probably the main way people get along is from contributions from abroad: people who have left Zimbabwe — potentially millions of them — and gone to South Africa, England, the United States and other countries to find work. And these people send back remittances to families and friends to keep them alive. By some estimates, as many as 50 percent of all Zimbabwean families are getting some money from abroad. And for many it's the main source of income. And for those Zimbabweans who don't get money from abroad, the U.S. dollar has mostly supplanted the Zimbabwean dollar as the means of exchange. You can get the U.S. dollar on the black market if you have Zimbabwean dollars to trade for it. And the rate varies from day to day, sometimes drastically, but usually creeping up a little bit every day. The U.S. dollar and the South African rand, which is also available in Zimbabwe on the black market, are basically the only stable currencies — ones that you know will keep their value, and so you can use them from week to week to buy goods.

A lot of Zimbabweans have also decided that they're not going to use the dollar, or the Zimbabwean dollar or the rand at all and they're simply engaging in barter. Because if you can trade, for instance, a bag of nails for a dozen eggs, you're trading commodities that never lose their value and you never have to get into the inflationary spiral. For all of those Zimbabweans who don't have an income, or even for those who do and are finding it eaten away by inflation, there are ways that they can get along.

GREG WINTER Now, the government has presented its new ownership legislation as a black empowerment plan since everyday citizens, presumably the workers themselves, would own a majority stake in their companies. But to critics, it's merely a ploy for Zimbabwe's president, Robert Mugabe, to shore up his flagging support ahead of elections next year. Now, is there truth on both sides?

MICHAEL WINES Well, it's really hard to tell from outside. But it certainly is true that the notion of turning over control of white-owned companies in Southern Africa to blacks, and to other people who were here before white colonial powers came, is not a novel idea in the least. So in that sense, what Mr. Mugabe is proposing really is not unusual.

For instance, in Johannesburg, in South Africa, where we're based, the South African government has long supported what it calls black economic empowerment. And that's a scheme by which private companies, many of them white-owned, either sell shares in their companies or find ways to transfer large interest in their companies, to black citizens. So in many companies — in fact, I think in most of the major companies in South Africa now, black workers, black managers and outside black shareholders hold large stakes, if not controlling stakes.

In that sense, what Zimbabwe is doing is not particularly unusual.

However, it has to be said that Zimbabwe has sort of a checkered history in this area. In 2000, Mr. Mugabe began seizing white-owned commercial farms here, which were the base of the economy, really, and redistributing them to black peasants and also to many members of the ruling party in Zimbabwe — his party. So it became a form of patronage, a way for him to ensure the loyalty of his own supporters and also to give something to local peasants who would later vote for his party in parliamentary elections and for him in presidential elections. Now, there's going to be another presidential election in 2008 and with the economy in the shape it is in Zimbabwe, Mr. Mugabe is going to face an uphill battle to win.

So it's easy to see how critics would view this as more or less a simple payoff scheme.

GREG WINTER Now let's talk about that. Because the government's plan will surely bring to mind the seizure of those thousands of white-owned farms, some of which were then doled out to Mugabe supporters as a way of rewarding their loyalty. But what was the end result of that redistribution? And do average citizens think it was a good idea?

MICHAEL WINES Well, let's start with the first, whether it was a good idea. I think a lot of Zimbabweans, yes, do think it was a good idea to take these vast white-owned commercial farms, which quite frankly control most of the best land in Zimbabwe and were by far the most productive farms, and to ensure that ordinary people had a chance to farm this land. In fact, South Africa has a similar, although much less drastic program under way right now where they're gradually enabling black farmers to buy land from white farmers. So I don't think that most politicians, white or black, would really contest the idea that land redistribution is not a bad thing. The problem is the way that it was done. By simply seizing these farms without compensation and handing them over to people who either had very little interest in farming or who knew very little about it, what the Zimbabwean government has managed to do is basically destroy the agricultural base of what was once one of the most productive countries in all of Africa. Tobacco production, which used to be a staple of the economy, has dwindled to a trickle. Corn production is way, way down — far below what Zimbabwe needs to feed itself, and Zimbabwe used to be a net exporter.

Many of these farms were never farmed at all. The people to whom they were given simply went in, stripped them of machinery, of irrigation systems, of any goods that could be sold and then went off and sold them on the black market. And in fact, it's been so bad that this year many experts expect that 4 million of the 10 or 11 million Zimbabweans are going to need food aid.

GREG WINTER A few months ago, it seemed that momentum was building for a political opposition in Zimbabwe with a budding protest movement and international condemnation of the government's repressive tactics. But things seem to have quieted down considerably. What's happened?

MICHAEL WINES In a word, not much has happened at all, frankly. There have been negotiations under way in South Africa, overseen by South African president Thabo Mbeki, to try to bring about a reconciliation within the opposition movement, which is called the Movement for Democratic Change. A couple of years ago, the M.D.C., as it's called, split into two very bitterly feuding factions. And they've been unable to unite to face Mr. Mugabe's government and to press for democratic changes.

These negotiations began in March and they have basically been at a standstill until recently, when the two sides managed to agree, at least on an agenda. But the whole idea of these negotiations are to lay the groundwork for free and fair and internationally recognized presidential elections next year, in 2008. And there's very little time, really, for these two sides to get together and strike an agreement that they've been unable to reach in the last eight years.

GREG WINTER Now, Zimbabwe's government is well known and well documented to have truly engaged in a systematic repression of political opposition. But why have Zimbabwe's neighbors in Southern Africa, and perhaps most notably South Africa itself, been so reluctant to criticize Mugabe and his authoritarian leadership style?

MICHAEL WINES Well, there's a lot of speculation about that. And I think, in the case of South Africa, perhaps nobody but Mr. Mbeki and his own advisers really know. South Africa's position is that Zimbabwe's problems are an internal problem, that it's not South Africa's duty to preach to Zimbabweans about how they should run their government and that, if they have internal problems there, then they should settle them amongst themselves. Mr. Mbeki has expressed what he called quite diplomacy, that is not criticizing Zimbabwe but having private meetings in an effort to bring the two sides together toward a solution.

But, you know, Robert Mugabe, for all of his flaws that are pointed out these days, remains really a liberation hero in Southern Africa. He's one of the best known leaders of the early black liberation movement in this part of the world. He fought — helped fight — a guerrilla war during the 1970's to change what was then white-ruled Rhodesia into a black-ruled Zimbabwe, which was then believed to be a democracy. Mr. Mugabe has not been shy about accusing anybody who criticizes him of being a tool of what he calls the white imperialists — the United States and Britain. And so many black leaders are reluctant to criticize Mr. Mugabe because they're going to be tarred as tools of whites.

GREG WINTER You've chronicled how Zimbabwe's demise has created a class of economic refugees who migrate to South Africa in search of jobs only to be exploited or deported by the thousands each week. Do economists see any viable solutions to Zimbabwe's economic troubles?

MICHAEL WINES Well, I was just reading about hyperinflation, actually, this morning. And really there's only one way to cure hyperinflation and that's for the government to change its economic policies. To do that, the government has to first stop printing so much money, which is the basic source of hyperinflation. And secondly it has to start balancing its budget so that it won't have the temptation in the future to print more money to get out of its financial problems. So it really requires a government solution to end the basic economic problem of hyperinflation in that country. And until the government decides to change, there's really not much that can be done.

You know, the other interesting thing about hyperinflation is that it's not only a government-induced problem, but that it's a practice that tends to benefit the government at the expense of ordinary people. Because the government can always print more money to find its way out of a financial problem. And it simply debases the currency that everyday people use to purchase food, housing, electricity and other basic necessities.

So in many ways, you know, it's not in this government's particular interest at this point to stop printing money. Until there is either a change in philosophy or a change to another government that decides that it wants to balance the budget and bring the economy under control, not much is going to happen.

And having said that, even if that happens, and eventually it almost has to, Zimbabwe is going to remain something of a basket case, I think, for a good time to come. And as I said, their agricultural base is basically destroyed. And it's going to take years, if not decades, to rebuild that.

There's been a mass exodus of talented people to other countries. Many of the smartest and most capable managers, educators, physicians and others have left the country and taken jobs elsewhere. And whether they'll come back quickly or not, is really an unknown.

So I think this country really faces a long, long uphill struggle even if it does manage to solve the economic problems it's facing.

GREG WINTER Michael Wines, Times Southern Africa correspondent, thanks so much for speaking with us.

MICHAEL WINES Thank you, Greg.

GREG WINTER And thanks for listening. I'm Greg Winter of The New York Times. We'll be back next week with another edition of World View.


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