Back to Index

This article participates on the following special index pages:

Defiant Mugabe's new restrictions push Zimbabwe economy further toward collapse
World Politics Review
August 06, 2007

http://www.worldpoliticsreview.com/article.aspx?id=998

LONDON -- Alighting from his vintage Rolls Royce limousine with a cursory nod to the mounted ceremonial guard that escorted him to the steps of Zimbabwe's parliament July 26, Robert Mugabe was every inch the defiant and bombastic African leader, telling the West to "go hang" after imposing another round of travel restrictions and sanctions on his penurious country.

Bearing with him a sheaf of economic bills to support the latest price-stabilization scheme for a country bare of virtually every necessity for daily life -- from food to fuel to foreign exchange -- the 83-year-old president railed against "Western detractors . . . [who] unashamedly [trample] upon the rights of weaker states while resorting to self-serving notions of democracy and human rights as a veneer of legitimacy for their ill conduct."

Such fiery rhetoric cannot feed the 11 million people of Zimbabwe, who are fleeing the sinking country at a rate of 4,000 per day for the greener pastures of southern neighbor South Africa. Nor can it obfuscate the dire state of a nation that just eight years ago was a breadbasket for southern Africa, its massive commercial farms so redolent with grain and produce that it was able to support a profitable export market as well as provide ample food for its people.

"It's like a funeral is enveloping the country; the mood is of resignation and desperation, " Sydney Masamvu of the International Crisis Group told WPR in an exclusive interview.

"When I talk to my mother, who is 76, she asks me, 'where are we going? How long can this go on?'"

The bills introduced in parliament July 26 are the second phase of an exercise begun in June to offset the inflation-induced price hikes of the meagre goods still available in shops around the southern African country.

They were followed July 29 by an announcement by Mugabe that his government would print more money to fund government projects, thereby insuring the increasing worthlessness of Zimbabwean currency.

Prices on staples such as rice, cooking oil, flour and canned goods were slashed in half to curb inflation, estimated at around 6,000 percent on an official index suppressed by the government.

The latest forecast, released last week by the International Monetary Fund's director for Africa, Abdoulyae Bio Tchane, shows year-on-year inflation could hit 100,000 percent by December.

Shopkeepers have taken to leaving price tags off of commodities in anticipation of daily and sometimes hourly price hikes: One customer told the Associated Press that while waiting in line to buy bread, the price rose twice.

But the price slashes -- mandated by the authoritarian government and supervised by baton-wielding police officers -- have sparked panic buying and fostered a climate of fear among merchants who cannot afford, or refuse, to comply.

One gas station owner estimated his losses at over $1.2 million in three days due to the price cuts, according to the Financial Times, having been forced to sell fuel at half the price it cost to import.

Others have been arrested and harassed for overcharging: Nearly 5,000, including the country's top businessmen, have been thrown in jail, however briefly, joining the few members of the political opposition, led by longtime activist Morgan Tsvangirai, who dare speak against the increasingly autocratic and kleptocratic Mugabe regime.

"The lack of political leadership feeds and compounds the paralysis: If this were a normal country, the situation would be fertile ground for a political uprising," said Masamvu.

"This economic collapse needs a political response, but that is not happening because there is a vacuum of political leadership."

The measures announced by Mugabe constitute more of the same blame-slinging and deflecting of responsibility, designed to capture the loyalties of an increasingly desperate and skeptical population, by a government whose often-violent land seizures from white farmers in 2000 are seen by the international community as the main reason behind Zimbabwe's precipitous decline.

The new laws, expected to be passed by the rubber-stamp parliament by September, will tighten government control over the economy by forcing the remaining private companies to sell up to 51 percent of their shares to black Zimbabweans.

In anticipation of this iron-fisted economic regime that would also establish a National Incomes and Pricing commission that will set prices and wages across all economic sectors -- even as the formal unemployment rate crests beyond 80 percent -- two dormant state companies are to be revived to serve as acquisition mechanisms.

Speaking before the announcement to parliament, Trade and Industry Minister Obert Mpofu assured the country that his ministry had been allocated "enough funds to ensure that industry does not collapse," the Financial Times reported.

Such fund allocation is of dubious provenance, coming, no doubt as part of the central bank's credit creation through the frantic printing of currency that has financed government spending.

(For comparison's sake: when Mugabe became prime minister in 1980, the Zimbabwe dollar was worth $1.50. After the introduction last week of a new, Z$200,000 note, worth about US$1, consumers bitterly note that, with the price of toilet paper at Z$30,000 per roll, it is cheaper to use paper currency.)

"We do not want to kill you but to make your business viable. Once you are in business and happy, you will also leave us to run the country," Mpofu was reported to have told businessmen.

"We want to build some kind of an orderly business environment. I will hate to reach a stage where I will be forced to take over the companies from you, but if you do not co-operate that is what is going to happen and this is the position of the government.' '

Such a threat bolsters concerns among small business owners and foreign companies that the government is preparing to take over their interests under the guise of implementing the Indigenisation and Economic Empowerment Bill.

But since much of the business still functioning in Zimbabwe is within the hands of a small slice of the elite -- most of whom are longtime members of Mugabe's ZANU-PF party -- there is little outcry at a further consolidation of the country's financial interests.

"There is a lot of talk about the internal struggle within ZANU-PF, but the reality is that it is limited," noted Masamvu. "These people made business empires out of Mugabe's patronage so there is a line they will not cross. Their struggle is not born from a need for democratic change: it is to ensure a new leadership to sustain their business empire."

None of this would be necessary, according to the man who has spent the last 27 years in power and shows no signs of loosening his grip, if Zimbabwe had not been plagued by drought and aggression from a hostile Britain and her allies, all of whom have suspended aid and turned their backs on the country despite the obvious need of its people.

"Our economy continues to face adverse challenges emanating mainly from the illegal sanctions and successive droughts whose effects in turn are, inter alia, foreign currency shortages, and erratic energy and power supply situations," Mugabe said in his speech to open parliament last month.

"In these circumstances, the inexplicable price and rent hikes, which were apparently welcomed and encouraged by our regime-change proponents compounded the situation further and thus invited Government intervention. "

Optimistic critics of the octagenarian leader suggest that such brash pronouncements will only hasten the demise of the already fragile economy. Recently departed U.S. Ambassador Christopher Dell told reporters at the airport in Harare as he was leaving that there will be a total economic collapse in Zimbabwe by the end of the year.

In a farewell interview with an independent newspaper in June, according to the Associated Press, Dell added that the government was "doing regime change to itself."

Such strong words have not been backed by much international diplomacy. The African Union has taken its cues from Zimbabwe's largest trading partner and ally, South Africa, in following a longtime "softly, softly" policy of quiet diplomacy instituted by President Thabo Mbeki.

"South Africa will be indebted to Mugabe forever, politically, because of his role in helping to end apartheid," noted Masamvu. "So while South Africa has more economic mileage, Mugabe has more political mileage. That means that South Africa cannot do what the rest of the world says it wants to be done, which is impose sanctions. It really will defend quiet diplomacy even if it has become mute diplomacy."

And with the opposition cowed into submission through violence, harassment and indiscriminate arrests, and Mugabe unlikely to brook opposition for the nomination in elections slated for March, any change in Zimbabwe's fortunes may come too late.

The impact on the population cannot be understated, even with the exodus of tens of thousands of civilians each month.

The USAID-funded alert system, Fewsnet, reported this month that there is a "general consensus" that Zimbabwe's cereal production will have to be complemented by imports of more than one million metric tons to meet the country's needs for next year.

Arrangements have been made with Malawi to import 400,000 tons of maize, with 70,000 tons already received. But without the necessary foreign exchange reserves to pay for the needed cereals, the country faces a food crisis of its own creation.

The World Food Program, meanwhile, has launched an urgent $118-million appeal for emergency funds to feed an estimated 3.3 million people in coming months.

"People are battling to make ends meet on an hourly and daily basis, so any election, against this backdrop of human suffering, will only produce a stalemate," said Masamvu.

"Right now, the biggest opposition to Mugabe is the economy. He can rig the ballot as he has done for the last seven years, but he cannot rig the economy."

Lauren Gelfand is a freelance journalist and commentator with a special interest in African issues.

Please credit www.kubatana.net if you make use of material from this website. This work is licensed under a Creative Commons License unless stated otherwise.

TOP