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Mugabe under siege
Eddie Cross
July 19, 2005

The past few weeks have been very interesting in Zimbabwe. The G8 summit and the AU meting in Libya have come and gone and all the while the economic and political situation in Zimbabwe has been rapidly deteriorating.

If we had hoped that the Zimbabwe crisis would be dealt with at these summits we were always going to be disappointed. After all we are a minnow in world and even in African affairs and just a "bloody nuisance" everywhere else. But there can be little doubt that at the end of this process of global consultation and internal implosion, Mugabe is now under siege. The question is can he lift the siege, and if so who will help him do so because he no longer has the strength to lift it by himself.

The key events in the imposition of the siege have been the visits to West Africa and South Africa by Morgan Tsvangirai, subsequent consultations at the AU and in Britain on the sidelines of both meetings and then the commencement of a series of pressure actions by the UN - coordinated through the office of the Secretary General. The latter started with a statement in New York by James Morris that the Zimbabwe situation was rapidly evolving into the worst humanitarian crisis in the world. Then a panel of experts in matters concerned with humanitarian issues condemned what was happening here and finally the Director of Habitat - the UN agency responsible for shelter, was dispatched with an instruction that she was to investigate and review the "clean up" operation here and report to the Secretary General.

The latter report is not out but it is clear that its contents have been leaked to key States and this has already spurred the South Africans to urge Mugabe to halt the destruction of informal sector homes and businesses.

But all of this pressure would have not translated into a siege without the evolving economic and humanitarian crisis in Zimbabwe itself. After 7 years of decline in national economic output and a collapse of export activity to less than a third of the level achieved in 1997, the country is no longer generating sufficient resources to either fund government activity or to finance the import of essential supplies. The recent purchase by the State of about US$600 million worth of arms, military equipment and aircraft have just compounded this crisis.

Up to now the worst effects of this fall in economic activity has been muted by falling consumption as both the population and the economy has shrunk and by the ability of the State to obtain credit from the domestic financial markets and South Africa. But as a consequence of the former activity, national debt now stands at an extraordinary level equal to about two years GDP while our foreign debt has continued to grow because we are not servicing the interest it is attracting. This alone now exceeds GDP by at least 40 per cent. This is simply unsustainable and the State continues to soak up domestic borrowings at an astonishing rate.

Government can still print money - the resultant inflation destroys peoples savings and wealth, but if you do not give a damn about either, so what? What they cannot print is hard currency and it is in this sphere where the crunch has finally come. We need about US$3 billion a year in imports to maintain our economy. In the past this came from capital inflows, foreign aid, exports and other sources such as transfers from abroad by Zimbabweans living in other countries. With exports only expected to reach about US$1,1 billion this year and foreign aid virtually non existent and with the failure of the "Homelink" scheme designed to attract cash inflows from the Diaspora into the Reserve Bank system, actual foreign exchange resources becoming available through official channels has shrunk and stood at a mere US$385 million in the first five months of the year.

While official resources through the Reserve Bank system have dried up the Government has clamped down hard on all informal sector activity. This has driven this market underground and diminished returns to the Diaspora resulting in a fall in these receipts and a subsequent fall in domestic spending by local beneficiaries. It has also meant that companies, who had filled the gaps in their procurement programmes with informal sector trader' s assistance, now shunned these routes for fear of prosecution.

As a result Zimbabweans now face a wide range of shortages - flour and maize meal are rationed, soap and soap powder are unobtainable. Vegetable fats and oils are in critical short supply and commonplace items such as matches are no longer available because of foreign exchange shortages. Fuel shortages may be the most obvious of these shortages but they are just one of the mores serious. Medical supplies are critically in short supply as are all protein foods.

Economic activity is now gradually closing down - companies cannot source fuel, raw materials, spare parts and many are faced with closure. Traffic is at very low levels - great for the environment and parking - but bad for everything else. If you produce something you cannot move it to the market. There is so much panic in the country it is reported that when Zambia imported fuel from Kuwait and used the Beira to Harare pipeline to bring it to Harare for subsequent movement to Lusaka, the Zimbabwean government commandeered the consignment and has not paid for it - you can imagine the fury in Zambia and in the international oil industry!

And so Mugabe is under siege - the AU has decided he is a liability, the South Africans want him to go, the UN is about to launch a broadside and the global community has intensified its isolation of the regime. Now the markets are fighting back inside the country and he cannot fight back without external help. To compound these problems the split in Zanu PF is final - the Munangagwa camp has been isolated and pushed out of all power circles. This reduces Zanu to a Zezuru minority Party and further diminishes its chances of long term survival.

Will Mugabe get the help he needs? I doubt it very much, the South Africans want their pound of flesh for every dime and the Chinese are simply too savvy. No one else will even entertain the man let alone give him a billion US dollars. Zanu spokespersons say they need the money to "pay the IMF to avoid expulsion". That is claptrap - there is little or no prospect of the IMF expelling Zimbabwe - for that they would need a majority vote among member States and that is unlikely. No they need the money to lift the siege and to maintain payments on the gravy train. Anyone who does that needs their heads read and does immense harm to the real interests of this country and the region as a whole.

What is needed now is an exercise designed to return Zimbabwe to democracy and the rule of law - the rest will sort itself out in time.

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