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Catalysing
a new wave of resistance: Will Thabo Mbeki revive Robert Mugabe
and reinstall the IMF
Patrick
Bond
Extracted
from Pambazuka News 226
October 20, 2005
http://www.pambazuka.org/index.php?id=29958
The Zimbabwean
economy has contracted by 50% in the last five years, inflation
stands at 255% and unemployment hovers at 75%, say economists. Recently,
there was much controversy over a proposed $500m loan from South
Africa to Zimbabwe in order to prevent Zimbabwe's suspension from
the International Monetary Fund (IMF). However, South Africa made
it clear that the loan was available only if Zimbabwean President
Robert Mugabe reformed economic policies and changed his politics.
Patrick Bond critically examines the politics surrounding the proposed
loan agreement and South African president Thabo Mbeki's vision
that the IMF can be used as a tool for "normalisation" of Zimbabwean
society.
Consider these wise words from a leading African National Congress
politician: ‘As we speak, the neoliberal orthodoxy sits as a tyrant
on the throne of political-economic policymaking. The dominant social
and economic forces are doing their utmost to hegemonise the discourse
- both materially and in respect of how developmental processes
are to be institutionalised and theorised. Among other things, they
use such transnational governmental organisations as the International
Monetary Fund (IMF), the World Bank and the World Trade Organisation
to shape the discourse within which policies are defined, the terms
and concepts that circumscribe what can be thought and done.’
This quote, from an April speech, is worth keeping in mind; its
author (revealed at the end of this article) knows well of what
he speaks. In between, though, we will consider the main way in
which the region’s dominant social and economic forces intend to
hegemonise political transition in Zimbabwe. The objective seems
to be to bring the IMF back into play, for the first time since
1999.
It may surprise some readers, but a decade ago, Robert Mugabe’s
regime was in fact a successful protégé of Washington
financiers. In 1995, the World Bank gave his government the highest
possible rating in its scorecard of neoliberal orthodoxy: ‘highly
satisfactory’. This followed fifteen years of arm twisting by the
Bank and IMF, leading to the Economic Structural Adjustment Programme
(ESAP).
Things began to go badly wrong for Harare’s elites soon thereafter.
From 1996-2000, a series of overlapping worker/peasant/student/war
veteran rebellions became a serious threat to Robert Mugabe and
his ruling Zanu(PF) party. This in turn resulted in a zig-zag economic
policy based on a mix of carrots and sticks, combining frontal attacks
on poor and working-class urban Zimbabweans with fiery anti-imperialist
rhetoric.
At the heart of Harare’s fiscal crisis are Mugabe’s expensive carrots
to disgruntled sections of society: large new pensions for tens
of thousands of Liberation War vets (previously ignored or repressed)
from September 1997; periodic payolas of various kinds to the army
and police, including license to loot the Democratic Republic of
the Congo during the late 1990s civil war; on-again/off-again price
controls from 1998, in order to prevent further ‘IMF Riots’ (which
had broken out periodically during the 1990s); occasional gifts
to key constituents during the early 2000s, such as very inexpensive
rural electricity; and state-sponsored land invasions immediately
following Mugabe’s defeat in a constitutional referendum in February
2000, as the opposition Movement for Democratic Change became a
threatening electoral force.
The sticks we have learned much more about these past months. They
don’t need recounting in detail, but include, in the words of South
African Communist Party (SACP) general secretary Blade Nzimande,
‘the wanton destruction of homes and community facilities’ for more
than a million of the urban poor, and ‘anti-democratic legislation,
including legislation directed against the right to assembly and
against media freedom’.
Durable nationalism
Mugabe’s alliances have generally been maintained the past five
years, and both external and internecine rebellions have been crushed.
Regular predictions that the ruling party will fragment - mainly
due to ethnic factionalism - never reach fruition. After three decades
of control over Zanu(PF) and six years’ experience harassing a strong
opposition party, Mugabe has an even stronger grip on his politburo.
Evidence of his dominance during this period includes the expulsion,
demotion or jailing of figures with substantial regional or sectoral
powerbases.
However, with Mugabe apparently now unable to raise basic hard currency
for importing petrol, food and other vital necessities, the time
is ripe for the next stage of what might be termed ‘exhausted nationalism’.
When Simba Manyanya and I began using this phrase in 2002 as shorthand
for Mugabe’s incapacity to deliver a higher standard of living,
it was not clear that the nationalist project could be reinvigorated,
at least in a manner the masses would find compelling.
We cited Frantz Fanon’s Wretched of the Earth: ‘A bourgeoisie that
provides nationalism alone as food for the masses fails in its mission
and gets caught up in a whole series of mishaps. But if nationalism
is not made explicit, if it is not enriched and deepened by a very
rapid transformation into a consciousness of social and political
needs, in other words into humanism, it leads up a blind alley.
The bourgeois leaders of underdeveloped countries imprison national
consciousness in sterile formalism.’
The problem of ‘exhausted nationalism’ also applies to South Africa,
where SACP deputy secretary Jeremy Cronin once translated it as
the ‘Zanufication’ of the African National Congress (he was hurriedly
forced to apologise). In turn, this is why the vigorous debate now
underway on lending to Mugabe is so revealing. For it appears that
Mbeki and the IMF have, to borrow the quote above, successfully
shaped the discourse within which policies are defined, and indeed
a proposed loan of $500 million from South Africa to Zimbabwe may
circumscribe what can be thought and done.
There is no better example than Pretoria spokesperson Joel Netshitenzhe’s
comment that the loan could ‘benefit Zimbabwean people as a whole,
within the context of their program of economic recovery and political
normalisation.’ Much of the debate in South Africa concerns whether
Pretoria is putting sufficient – or indeed any – pressure on Harare
to reform, as Netshitenzhe refuses to comment on speculation that
both political and economic liberalisation are conditions for the
proposed loan.
Mugabe spokesperson George Charamba revealed the process on August
14: ‘We never asked for any money from South Africa. It was the
World Bank that approached Mbeki and said please help Zimbabwe.
They then offered to help us.’ According to the World Bank’s own
press service, a Pretoria-based Bank economist, Lollete Kritzinger-van
Niekerk, confirmed that her institution ‘is not ready to thaw relations
with the ostracised Harare’, hence Mbeki’s backchannel. A reported
$160 million out of Pretoria’s proposed loan was meant to repay
the IMF, with the rest earmarked for importing (from South Africa)
agricultural inputs and petroleum.
But in Zimbabwe there is, in reality, no ‘normalisation’ under way,
if by which is meant Mugabe’s agreement to hold serious democratisation
talks with the Movement for Democratic Change, to run genuinely
free and fair elections, to unban the media and revoke extremist
laws, to recall fascistic security forces to the barracks, and to
provide emergency food and shelter in a non-politicised manner to
the millions who urgently require it.
In any case, Mbeki has repeatedly shown that these objectives are
unimportant: by propping up Mugabe in the United Nations Human Rights
Commission, by public commentary downplaying repression and vote
theft, by silence at key junctures and by sending biased observation
teams to monitor elections. Mugabe himself publicly rejected even
the idea of negotiating with the MDC.
Setting the fake ‘reform’ rhetoric aside, what is instead revealed
by the current crisis is another of Fanon’s insights, namely that
Zanu(PF)’s sterile formalism now sharply contradicts further capital
accumulation by Zimbabwe’s parasitical ruling class, a key faction
of which desperately requires foreign exchange.
For the impoverished Zimbabwean masses, there is no economic bailout
on the horizon, much less democratic leverage, only a choice of
which financiers will worsen austerity in future years: the predictable
money mandarins of Washington, or the new subimperialists of Pretoria,
backed by a gullible media and superficially critical opposition
parties, or both.
IMF squeeze on the Zimbabwean poor
Consider the first lot, the Bretton Woods Institutions. Beginning
in September 1980, when Zimbabwe formally joined, the role of the
IMF was never to benefit ‘Zimbabwean people as a whole’. As York
University’s radical economist Colin Stoneman explained, ‘In encouraging
borrowing, the IMF recognised that it had as yet no means of exerting
leverage on Zimbabwean economic policy.’ What was that leverage?
Five examples are illustrative:
- By early 1982, finance minister Bernard Chidzero – later to head
the IMF/Bank Development Committee – denied that ‘the IMF would
impose any conditions as Zimbabwe was already restructuring its
economy.’ Though it was ‘a sensitive issue not for public debate,’
Chidzero made statements to Parliament claiming ‘devaluation of
the dollar is not imminent and is not being contemplated.’ Less
than three months later, Chidzero announced a 20% decline in the
currency, admitting it ‘had been under consideration for some months.’
- In late 1982, interest rates were raised dramatically, a move
Chidzero pointed out with pride to the World Bank in private correspondence.
- In March 1983, an editorial by the government-owned Herald observed
that ‘Zimbabwe has a democratically elected people’s government
and therefore, the people, its supporters have the right to know
what the IMF asked of this country.’
- By 1984, Zimbabwe was paying vast proportions of export earnings
to cover foreign loans, in part because of apartheid destabilisation
of the region. As Stoneman put it, ‘there can be no doubt that Zimbabwe’s
payments crisis was partly caused by South Africa, and that this
was the means whereby the IMF gained a lever on Zimbabwean economic
policy’.
- The IMF soon terminated its $315 million line of credit due to
Harare’s budget overruns, forcing more painful austerity. By early
1985, Mugabe complained of ‘pressure from the IMF to cut government
spending on education and defence but the government has a way of
overcoming this pressure’. Yet within a few years, Zimbabwe’s vaunted
education programme was indeed under threat as Bretton Woods cost-recovery
policies gained momentum.
The Bretton Woods Institutions applied neoliberalism across a variety
of sectors, and applied heavy pressure on Mugabe to continue his
ineffectual ‘willing seller, willing buyer’ rural land policy. At
last month’s land summit in South Africa, Mbeki told the audience
that Zimbabwe’s failure to embark upon land redistribution prior
to the chaotic takeovers of 4000 white-owned farms from February
2000, was because ‘They slowed down to get the negotiations in this
country to succeed’ since South Africa’s white farmers would be
‘frightened’ about the transition to democracy.
In reality, Harare’s 1993 Land Designation Act was ‘shelved,’ as
Zanu(PF) member of parliament Lazarus Nzarayebani complained in
late 1994, because ‘it is not in conformity with the World Bank
and IMF’ and instead served government only ‘to save its face’.
In fact, South Africa’s first ANC land minister, Derek Hanekom,
invited the same World Bank team that was preventing Zimbabwe’s
land reform during the early 1990s, led by Robert Christenson, to
guide post-apartheid policy. (That policy was also characterised
by willing seller, willing buyer neoliberalism, and in August was
publicly recognised as a failure at a major state-sponsored land
summit.)
What of the last batch of IMF credits to Zimbabwe? Did these contribute
to the welfare of all Zimbabweans, and promote peace and democracy?
The opposite conclusion is more logical. The IMF’s $53 million loan
in 1999 was meant to release another $800 million from other lenders.
The IMF’s stated objectives were straightforward: reversal of both
the luxury import tax and price controls on staple foods.
Details were confirmed in a March 1999 statement by leading IMF
negotiator Michael Nowak, ‘There are two issues outstanding and
these have stopped the IMF from making the standby credit available
to the country. These issues are, one, we want the government to
reduce the tariffs slapped on luxury goods last September, and secondly,
we also want the government to give us a clear timetable as to when
and how they will remove the price controls they have imposed on
some goods.’
Five months later, the IMF agreed to increase the loan amount to
$200 million, but two more conditions were reportedly added: access
to classified Democratic Republic of Congo war information and a
commitment to pay new war expenditure from the existing budget.
According to an IMF official, ‘The Zimbabweans felt offended, shocked,
but they all the same agreed to give us the information, we got
all the clarification we wanted. They had no choice... We have had
assurances [that] if there is budgetary overspending, there will
be cuts in other budget sectors.’
In sum, the IMF gave permission to penalise health, education and
other badly-defended sectors on behalf of Mugabe’s military adventures
and business cronies, and also ordered Mugabe to immediately reverse
the only redistributive policies he had adopted in a long time:
a) a ban on holding foreign exchange accounts in local banks (which
immediately halted the easiest form of capital flight by the country’s
elites); b) a 100% customs tax on imported luxury goods; and c)
price controls on staple foods in the wake of several urban riots.
That deal quickly fell apart, however, when fiscal targets were
missed. Harare was, quite simply, broke. The previous year, Mugabe
had spent an historically-unprecedented 38% of export earnings on
servicing foreign loans, exceeded that year only by Brazil and Burundi.
With foreign debt at $4.92 billion, fully $980 million was repaid
to foreign creditors, while donor aid fell from its 1995 peak of
$310 million to just $150 million. But due to compound interest
rates, barely a dent was made in the total foreign debt outstanding.
The IMF continued giving advice to impose austerity, both from its
Harare office and via periodic high-level missions from Washington.
The 2000 mission called for ‘tight monetary and wage policies… privatisation,
civil service reform and trade liberalisation,’ according to the
Herald newspaper.
By mid-2001, finance minister Simba Makoni confessed to the Southern
Africa regional session of the World Economic Forum in Durban, ‘We
are committed to fulfilling these obligations, but it’s clear that
our economy is in no state to generate sufficient funds to clear
these arrears.’ As a result, by mid-2005, Mugabe had run up repayment
arrears of $295 million to the IMF, and more than $1 billion to
other lenders, including the World Bank and African Development
Bank. The total foreign debt that is either in arrears or will come
due in the next decade is $4.5 billion, far more than the national
GDP in a given year.
Was Zimbabwe punished for failing to make most foreign debt payments
since 1999? To almost everyone’s surprise, Mugabe was able to get
away with the de facto default. No new long-term credit has been
available, to be sure, but nor did the US Marines or other hostile
military forces invade so to collect collateral, as was the practice
a century earlier against defaulting Latin American countries.
Instead, once Zimbabwe fell into deep arrears to the IMF, a convoluted
official procedure began, culminating a few months ago in the threat
of expulsion. From 2001, the Zimbabwean finance ministry scrounged
$1.4 million each quarter to make token payments on the debt, but
from mid-2003 through 2004 found $16.5 million to send the IMF.
This was also the point at which Zimbabwe ran out of petrol and
many other essential imports.
Diplomatic scuffling
By August 2005, Mbeki assumed that his offer of a $500 million credit
could influence the course of an elite transition, aiming at installing
a neoliberal, low-intensity democracy regime. That model would slightly
sideline Mugabe by 2008 at the latest; permit Zanu(PF) to retain
power – possibly in a government of unity by coopting MDC leaders
- with the friendlier face of a technocratic president (former neoliberal
finance minister Simba Makoni is usually tipped for the job) even
if Mugabe still controlled the ruling party itself; and then open
the economic borders up much more to Johannesburg capital.
Mugabe didn’t play along. Showing an impressive resilience and desire
to hold on to maximum power at all cost, he visited China in August
and then snubbed Mbeki in a brutal diplomatic manner. At an African
Union (AU) meeting in Addis Ababa, according to the Sunday Independent,
Mugabe built an alliance of other leaders to ‘defeat a South African
tactical move to win two permanent seats for Africa on the United
Nations security council… Mugabe, Egypt and others spoke out against
a compromise deal which South Africa had helped forge between the
AU and the so-called G4, a coalition of four other nations seeking
permanent seats on the security council - Germany, Japan, India
and Brazil.’
‘Mbeki argued strongly at the AU summit in Addis Ababa in favour
of the compromise as the only realistic way to get Africa permanent
seats. But the Mugabe camp prevailed. The summit rejected the compromise
deal that AU and G4 foreign ministers, including SA’s Nkosazana
Dlamini-Zuma, agreed on at a meeting in London… Mugabe and others
argued against this, saying the lack of a veto would relegate African
permanent members to "second-class status".’ Fortunately,
the second-class citizenship he sought in the UN Security Council
was not offered at the September heads of state summit. Hence a
more serious fight can be waged at some stage, instead of legitimising
a UN under Washington’s thumb.
This brings us back, though, to Mbeki’s vision that the IMF can
be a vehicle for normalisation. As Nzimande reported to a Congress
of SA Trade Unions central committee, the SACP was ‘extremely concerned
about the danger of a loan amounting to little more than extending
the crisis-ridden shelf-life of anti-worker, anti-poor authoritarian
policies and practices. We call on our own government to show the
maximum resolve in ensuring that there are very clear requirements
attached to any loan. These requirements must include guarantees
that the loan will not be squandered on elite consumption or repression.
But the requirements must also embrace a much wider package of commitments
with clear time-lines… These wider issues are, in fact, essential
for resolving the present financial crisis.’
And then Mugabe pulled a card from his sleeve no one thought he
had: in September he came up with $135 million from having scrounged
all foreign currency available, and he paid the IMF a substantial
downpayment, enough to earn a six-month reprieve on the expulsion
threat. Mugabe promised $50 million more by March, and vowed to
repay the full amount. (No one outside Pretoria really believes
the IMF would expel Zimbabwe, given that China and many African
regimes would oppose this in the IMF executive, where 15% of the
vote would be enough to veto such a move.)
By all accounts, this was an insane gesture. Even the white business
spokespeople who are most aggrieved by Mugabe’s dirigisme were opposed
to the payment. The only explanation is Mugabe’s ego: it is so gargantuan
that, under pressure from Pretoria, he ignored the extraordinary
sacrifices being made by his citizens these past months, with every
commodity in short supply, simply to massage his pride at repaying
the IMF.
South African government officials were also surprised, and continue
to maintain that negotiations for the additional $500 million are
on track, merely delayed a bit. The Cabinet had made one other similar
loan to a country so as to repay the IMF, three years earlier. It
was Joseph Kabila’s unelected regime in the Democratic Republic
of the Congo, and the $45 million loan by Pretoria allowed Kabila
to clear enough of the old Mobutu arrears. Those debts should be
declared ‘Odious’ in international law, but their payment by Pretoria
gained Kabila a new IMF credit at the cost of renewed IMF control
over the Congolese people.
The extent of Mbeki’s own commitment to getting the IMF back into
Zimbabwe was revealed on October 15. Addressing a forum of African
Editors, he explained, ‘We had indeed said that we were ready to
assist, and the reason we wanted to assist was because we understood
the implications of Zimbabwe's expulsion from the IMF. What it would
mean, among other things, is that everybody who is owed something
by Zimbabwe would demand immediately to be paid. You would even
get to a situation where they would seize anything that was being
exported out of Zimbabwe because of that debt.’ This is utter nonsense,
as the IMF has never acquired much less used such power. Many creditors
presently dealing with Zimbabwe have various forms of security,
because the government’s likelihood of nonpayment has been demonstrated
for six years already.
By the way,
returning to our opening quote, it was Pretoria’s local government
minister, Sidney Mufamadi, who in April this year warned that the
IMF molds ‘the discourse within which policies are defined, the
terms and concepts that circumscribe what can be thought and done.’
There is no better example of this than Pretoria’s latest subimperial
gambit in Zimbabwe, combining high finance and venal politics.
But let’s also pause to consider Mufamadi’s own borrowing from the
World Bank, in a loan that directly places Bretton Woods advisors
in dozens of municipalities. The World Bank website gives away Mufamadi’s
game: ‘The Municipal Financial Management Technical Assistance Project,
totaling $15 million is the only active World Bank loan to South
Africa. It supports the building of financial management capacity
in more than 40 key municipalities around the country. The World
Bank country office is also supporting the government in … [its]
oversight role in municipal public/private partnerships.’
On the same site, the Bank brags about its ‘support to Johannesburg’s
iGoli’ (the city’s privatisation policy), allegedly a ‘model’ for
South Africa. In reality, Africa’s largest water corporatisation
quickly became a world-renowned site of brutal disconnections, prepaid
meters and substandard sanitation for low-income townships – as
well as heroic resistance by the Anti-Privatisation Forum and Jubilee
South Africa, which combined to protest Paul Wolfowitz’s Johannesburg
visit in July.
In contrast to activists, the key politicians prefer to ‘talk left,
walk right’. Once we dispense with the rhetoric, this surreal financial
game of hide-and-seek from the IMF unveils imperial/subimperial/dictatorial
power relations uniting Washington, Pretoria and Harare. It remains
for critics of the regimes to pursue a democratic, anti-neoliberal
strategy – and too, for international protest against the Bretton
Woods Institutions to now intensify.
* Patrick Bond directs the University of KwaZulu-Natal Centre
for Civil Society: http://www.ukzn.ac.za/ccs;
he is author of ‘Uneven Zimbabwe: A Study of Finance, Development
and Underdevelopment’ (1998) and coauthor of ‘Zimbabwe’s Plunge:
Exhausted Nationalism, Neoliberalism and the Search for Social Justice’
(2003). This article is excerpted from a longer version in the US
journal ‘Against the Current’.
* Please send comments to editor@pambazuka.org
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