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Speech regarding parliamentary motion on the meltdown of the Zimbabwean economy
David Coltart
September 04, 2007

MR COLTART: We have just been entertained for the last ten minutes by my hon. friend. One thing that Hon Kasukuwere (the Deputy Minister of Youth Development and Employment Creation responsible for the Youth Brigades) has said I think should dominate this debate: namely the question - how do we protect the vulnerable in our society? If we are to be committed patriotic Zimbabweans that question should dominate this debate. The reality is that our current economic situation has never been so depressed and poor people have never been as vulnerable as they are now. This is not MDC propaganda; if you look at the article on Zimbabwe, that the Zimbabwe government sponsored to the tune of US$ 1 million, in the September edition of New Africa magazine you will see some of the statements made in that document support what I am saying.

Let me refer you to part of the magazine; for instance it records that our GDP as a nation is back to the level of 1953. We have lost over 50 years of economic growth in the space of a decade. It is estimated also in New Africa magazine that 80% of Zimbabweans are now living below the poverty datum line including members of our armed forces. Our economy is collapsing. For example gold production last year was the same as our gold production in
1907! It is the lowest gold production since 1907. The last time we had the coal production as low as it was last year was in 1946. These are facts that none of us can avoid. We see the manifestation of these things when we visit the supermarkets which the hon. member has spoken about. The reality is what we have seen in our supermarkets is the symptom of a far deeper cancer in our society.

There has been a lot of debate and a lot of propaganda from the other side of the house about sanctions being to blame. This is of course the chorus from our friends from the other side but the reality is that Zimbabwe should be one of the wealthiest nations in Africa irrespective of the targeted sanctions imposed on the ruling elite. When you look at our human resources, when you consider our highly educated workforce, which is a credit to this government, if you look at the literacy rate of Zimbabweans - which used to be among the highest in Africa - possibly still are the highest in Africa - you will see that we have some of the most productive people in Africa. That is something that we can all be proud of as patriots of this country; we certainly should be. We also have a very motivated work force. We have natural resources that are not found in such abundance per capita in any other country in the world. Once again I refer to the New Africa article; in that articl e you will find a document about our natural resources and minerals. We have the second biggest reserves of platinum in the world. 60% of our nation comprises the particular granite, greystone-granite, in which gold is found. We have nickel, diamond and titanium in abundance - a full range of minerals. This is one of the most beautiful countries in the world. We have one of the Seven Wonders of the World, the Victoria Falls. In other words Mr. Speaker, we have all the resources I have mentioned that should make Zimbabwe a great nation irrespective of any sanctions. We seemingly have had all the ingredients to make a great nation over the last 27 years since independence and yet we are now faced with the catastrophic situation of 7 500% inflation - the official government figure - and 80% are below the poverty datum line, and 3500 people are dying of preventable ailments. The World Health Organisation said last year that we have the lowest life expectancy in the world.

We as patriots need to sit down together and consider afresh this catastrophe as Zimbabweans - whether we are ZANU PF, of whatever faction, whether we are MDC, of whatever flavour. We need to go deep into our history to find when it was that everything started to go wrong.. Why is it that in 1958 we had an economy bigger than Singapore? And yet since 1958 we all, black and white, have managed to reduce this country to the basket status it now suffers from. In my view the problems started well before 1980. The root of our decay can be traced back to many of the policies first implemented in the early 1960s. For example I believe that price control regulations were imposed in the 1960's. Foreign exchange regulations were imposed in the 1960's but most importantly Mr. Speaker what happened in the 60's is that we removed one critical important ingredient necessary for long term sustainable economic growth and that is summed up in one word - democracy.

The Rhodesian Front government, in the pursuance of white minority rule, discarded whatever democracy was developing this country in the 1950s under the leadership of real patriots such as Garfield Todd. Therein lies the root of the economic collapse of this country. The Rhodesian Front bequeathed to ZANU PF an undemocratic legacy including the Law and Order Maintenance Act, an undemocratic Constitution, complete control of the flow of information - the RBC simply became the ZBC and did not change its policies of supporting blindly the government of the day - price controls and exchange control regulations. ZANU PF merely picked up where the Rhodesian Front left off.

Mr. Speaker, it is time, if we are serious about the plight of our nation, that we start to consider the situation of the vulnerable in our society. - [HMS: Inaudible interjection] - Hon. Kasukuwere may not be seeing the plight of the vulnerable in his constituency but I do in mine. I have seen people getting thinner by the week; I can see that thousands of people in Nketa High density suburb have no or little access to food, water, drugs and basic health care. We all need to move beyond rhetoric and consider the plight of the vulnerable in our nation.

Mr. Speaker, my hon. Friend blames everything on sanctions and I want to look at that now. The first point I want to make is that we must consider the history of this country in this regard. We know that in 1966 the United Nations very correctly imposed on the white minority government of Rhodesia comprehensive trade and economic sanctions. They were a censure imposed by the UN of racist policies. They were overwhelmingly enforced. The only countries that breached those sanctions were South Africa and Portugal and partially by some countries like France. The point I am making is that they were comprehensive trade and economic sanctions imposed on the regime led by Ian Smith - [an HON MEMBER: An illegal regime] - yes illegal.

However the fact is that after some 14 years of these sanctions in 1980 the Zimbabwean dollar was stronger than the United States dollar. In case someone thinks I am trying to defend the racist policies of the Rhodesian Front, let me make no doubt about the point I am making. I am not seeking to be an apologist for the Rhodesian Front. The point I am simply making is that despite the imposition of comprehensive trade sanctions over a period of fourteen years on the Rhodesian Front regime, the Zimbabwean economy was nowhere near in a catastrophic state as it is now - [HON KASUKUWERE: It was a white man's economy]- let me respond to Hon Kasukuwere: it may well have been a white man's economy but despite that most people of all races then had basic access to food, water and drugs, which they do not have now. Mr. Speaker, we are dealing with old historic facts. Irrespective of who is responsible for the imposition of the sanctions and what their scope is, the fact remains tha t the present targeted sanctions are not as comprehensive as the sanctions imposed on 1966. This then begs the question: why then has our economy collapsed almost totally under a more benign regime of sanctions now? The reason is simple - the targeted sanctions imposed on the ruling elite are not the cause of our economic woes.

Secondly Mr Speaker the sanctions, such as they are, were first imposed in 2002. However if you look at the pattern of economic decline in this country, we can see the economic decline did not start in 2002 but started in 1997. If my hon. friend is prepared to consider the historic facts, he will see that the Zimbabwean economy started its major decline in 1997. The first thing that started the collapse, as my Hon. friend Mr Mashakada has already stated in his speech moving this motion, is that this government sent Zimbabwean troops, not in Zimbabwe's interests but to protect private mining interests of the ruling elite, to the Democratic Republic of Congo in
1997.

Furthermore, Mr. Speaker, unbudgeted payments were made to war veterans in 1997 which greatly increased the budget deficit and as a result the Zimbabwean dollar plummeted and lost something like three to four times its value in November 1997 - on the day commonly known as 'Black Friday'. If one considers the economic records you will see that there was a further steady decline from 1997 to 2002, five years before sanctions were ever imposed.

Thirdly, Mr Speaker, there is the historical fact that sanctions have not been imposed on the Zimbabwean people but have been imposed primarily on particular individuals. There is, of course, the American measure which prohibits the American government from voting in Zimbabwe's favour in the IMF and World Bank. That however only applies to the American government. It does not apply to the European Union. It does not apply to Japan, China, Canada and many other wealthy countries.

In other words, that provision is limited to one country. In fact it does not prevent the Zimbabwean government from seeking loans from other developed countries and it still has the right to seek assistance from many international financial institutions. The current sanctions regime does not prevent the government of Zimbabwe from seeking loans from any country in the world. The fact that we have battled to get support is not because of American sanctions but because our economic fundamentals are all skewed. In this regard Mr. Speaker Sir, we need to turn to what our neighbours have said and in particular we need to consider what none other than President Mbeki said in his weekly letter to the ANC just ten days ago. He said two things in particular: first was that the Zimbabwe government needs to address the overvaluation of the Zimbabwe dollar. The second thing was that the Zimbabwe government needs to end the quasi-fiscal expenditure which has been hallmark of this go vernment's economic policy over the last few years.

Mr. Speaker if we consider these two aspects of economic policy, we will see these comments go to the very core of what this government stands for. The reason that we have our exchange rate pegged at ridiculous levels - the reason the Zimbabwe dollar is still pegged at $250 to 1 against the US dollar - is because this benefits the ruling elite which is still able to buy foreign currency at these ridiculous rates.

Mr. Speaker, the regulations which require the productive sector to sell a certain portion of its foreign exchange earnings to government at ridiculously low exchange rates are part of this ruinous policy. The tragedy is that much of the foreign currency that is acquired is not used for the benefit of all the people of Zimbabwe. The tragedy - if the truth is told -is that it is political elite in the country which benefits from this policy. The preferential access to foreign exchange at staggeringly low rates of exchange, that bear no relation to the real value of the Zimbabwe dollar, is done at the expense of the Zimbabwean people.

Mr. Speaker, until what President Mbeki said is listened to, until the exchange rate policy is looked at, until we bring to an end the preferential access that certain people have to foreign currency, until we bring to an end the unbudgeted quasi fiscal spending, until we end the irresponsible printing of money, our national economic woes will continue. We need to take into account very seriously what President Mbeki said to the ANC recently.

Mr. Speaker, let me turn briefly to the issue of price control and the Indigenisation Bill. I will not dwell too long on these issues. Let me just say these price control measures were introduced as a knee jerk reaction to the rapid hyper inflation experienced in late June. The tragedy regarding the imposition of the price controls is that just the opposite of what was intended will now happen. Far from this quelling inflation it has already fuelled inflation. There has been some short term benefit to some people but time will show that that is only a small short term benefit because all that has happened is that products that were in the formal sector, and therefore subject to some form of control, are now being sold by the informal sector, the black market sector, and prices are rocketing.

Until, Mr. Speaker, we get back to a situation where the market determines the price of products this price control policy will not be in the interests of impoverished members of our society. We must stop kidding ourselves. This new policy will only increase inflation.

Let me turn briefly to the Indigenisation Bill in response to Hon. Kasukuwere. There is no doubt that because of the historical inequalities and injustices there is a need for balance and fairness in our society. The problem is that this policy as it is being devised will, firstly in my view, not benefit the generality of the people but will only benefit certain people in the ruling elite, which should not be the intention. Until the whole process is opened up, until we can see that assets are going to be transferred to the vast majority of our population, it will not be in the interests of Zimbabwe. We have the land reform programme as a precedent in this regard. We can all see the evidence regarding what has happened in that regard. Mr. Speaker, it is now clear to all objective observers that the main beneficiaries of the land reform programme are those in the ruling elite. The biggest benefit has gone to those political and military leaders who have cherry picked the most productive farms most of which have now been rendered derelict. That is not in the best interests of Zimbabwe. I have no doubt that the same will happen to our businesses if the Indigenisation Bill goes through in its current format.

Let me end by talking about the future of our country. (Inaudible interjections) Mr. Speaker, I have the right to speak about Zimbabwe as much as anyone here. I was born in Gweru in 1957 and my roots in Africa go back to 1820 - so I think I have the right to speak about my country and I will. We need to ask ourselves the question - why is it that Singapore which had a smaller economy than ours in 1958 is now one of the strongest economies in the world and yet our nation during the last forty years has been reduced to the basket status it is now?

Long before sanctions or the MDC became part of the body politic of this country our country lagged behind Singapore. It started lagging behind Singapore in the 1960s when the racist and unjust policies of the white minority government were imposed. In the 27 years of majority rule nothing has changed regarding the deterioration of our economy save that the economy has rapidly worsened. After the last seven years of social, moral and economic collapse we need a national healing. We should not be shouting at each other when hundreds, if not thousands, of people are dying each and every day throughout the country.

We need to recognise where the roots of our national malaise lie. We need to recognise that they go way beyond 1980; they go way beyond ZANU PF's rule. The roots of our problems go back to the time when the brief flicker of democracy that we saw in the 1950s was snuffed out. We need to go back to that time to see whether we can revive that tiny flame of democracy that had started to shine in the 1950s. We all need to transform our nation, collectively, into one we can all be proud of.

We need the following, Mr. Speaker, firstly we need to rekindle democracy in our nation. We need to take concrete steps to root democracy. Integral to that is a new constitution; but it must be a new constitution that we all agree to; a constitution which is owned, which is embraced by all Zimbabweans. It cannot just be a document we agree to in this House; any new constitution must be embraced by all our people. We need to enter into a new contract with each other and the Zimbabwean people (Inaudible interjections) - Mr. Speaker it is a great shame that some of our colleagues cannot listen to this because we are in an unprecedented national crisis - but that is the first point - we need to root democracy in our nation Zimbabwe.

Secondly, Mr Speaker, we need to remove many of the controls over our society and our economy. I would like in this regard to return to Hon Kasukuwere's speech and his example of China. Hon. Kasukuwere spoke about China as a great example. I think we have many lessons to learn from China. There are 4 or 5 provinces of China which are responsible for the bulk of economic growth enjoyed there at present. These provinces have some of the most liberal economic environments one can find anywhere in the world. There is minimal legislation which controls the activities of the private sector - indeed I stress there is less bureaucracy, less red tape for businesses in these provinces than there is in any other country in the world. That is a fact.

In other words, the Chinese Government has embraced the private sector and this has promoted growth in its economy with spectacular results. What we are doing now in Zimbabwe through price controls and through certain provisions in the Indigenisation Bill is just the opposite.

Price controls inhibit the private sector's ability to grow. If we would but embrace the free market that itself controls prices through healthy competition. If we discourage foreign investment in this country, as the Indigenisation Bill will do, we will only guarantee one thing - that much needed foreign exchange will become even scarcer. Without substantial inflows of foreign exchange into our country, we cannot not grow our economy, as we need to.

Mr. Speaker, I guarantee that in China you will find that there are no such prohibitions against foreign investors controlling their businesses. There is no 51% control clause as there is in the Indigenisation Bill in any Chinese law and that is why companies like Nike and Chevron and thousands of multi-national companies have invested in China and have assisted China to achieve the spectacular growth it has.

In conclusion, may I repeat that our nation is in crisis - the resolution of that crisis should transcend partisanship. We need to put our hands together in this House to devise policies than can stabilise our country. We need to devise policies which will bring back our brains. Mr. Speaker, it is unacceptable that we have exported our best brains. Our young people - so supremely talented - are not in this country any longer. We need to devise policies to bring them back, to bring skills back so that we can stabilise and then revitalise our country. We should all work for an economic turnaround and deal with the harsh realities facing our nation rather than engage in meaningless and destructive rhetoric.

Mr. Speaker, if we move away from rhetoric to constructive action I have no doubt that this nation can still be the jewel of Africa - [DR. MUGUTI: It is the jewel of Africa]-No, at present it is not but it has the potential to become that - but that can only happen when all of us move away from all this empty rhetoric to consider the harsh circumstances that the poor are facing in our nation today. Our futile posturing must stop immediately. We must, without delay, devise practical solutions to address this economic and humanitarian catastrophe.

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