Back to Index
May 03, 2007
For the country's
first post-Mugabe government, perhaps as early as next March if
elite deal-making unfolds as promised, job number two, after restoring
a semblance of democracy, is economic.
Given the meltdown
of Robert Mugabe's version of crony-statist-capitalism, a system
hostile to the country's poor and working people, the new model
chosen will reverberate across the world.
On the one hand,
the Economist spells out why Zimbabwe should take the advice of
the "Washington Consensus" (a set of orthodox economic policy prescriptions
devised by the World Bank and International Monetary Fund, or IMF):
"Nowhere has withdrawn so swiftly from the global economy, nor seen
such a thorough reversal of neo-liberal policies. The results --
an economy that has contracted by 35% in five years, and half the
population in need of food aid -- are hard to paper over."
On the other
hand, countries such as Argentina, Venezuela, Brazil, Turkey, Indonesia,
and the Philippines are throwing off the IMF yoke, repaying loans
early and thus pushing the institution into serious financial crisis.
Latin American countries veering sharply leftwards, out of Washington's
orbit, little Zimbabwe could become the IMF's next big ideological
South African Communist Party leader Blade Nzimande last month attacked
the "superficial" analysis dominant in the African National Congress:
"During the first decade of Zimbabwe's freedom [1980-1990], the
government legitimately spent vast amounts of money on social services
[health, education, welfare and so forth], but without due regard
to the fiscus and therefore the sustainability of such spending,
[hence] government was forced to turn to the IMF."
is indeed incorrect, for Mugabe adopted structural adjustment at
a time of relative economic health, and by 1995 received the World
Bank's highest possible rating for following the Washington Consensus:
doctors typically blame the 2000-2007 economic crisis on Western
states and institutions angry about land reform, or mythical "sanctions".
In fact, per
person GDP has been falling since 1974, due to the constraints of
a racially biased small economy that under anti-Rhodesian sanctions
overproduced beyond local buying power.
the United States State Department blames "poor fiscal policies
and rampant government spending [and] an illegal and chaotic 'fast
track' land-reform programme".
Rob Davies mainly blames the crisis on wealth accumulation -- "a
peculiarly rampant form of absolute extraction" -- by the ruling
Though the majority
MDC faction, guided by former labour leader Morgan Tsvangirai, has
declared itself social democratic, not neoliberal, suspicions remain
that it may revert to the Washington Consensus.
painfully and wastefully spent $190-million to clear IMF arrears
partially in 2005/06 (leaving $130-million still to repay plus $4-billion-plus
in other foreign credits). But there is no hint of any fresh loans
until he departs -- and then the searing strings attached to an
IMF programme might generate new riots.
the last IMF statement on Zimbabwe, in December: "Going forward,
the key will be first to ensure that sharp cuts are made in real
terms in fiscal spending … Strong fiscal adjustment will need to
be supported by moving a unified exchange rate towards market-determined
levels, removing restrictions on current account payments and transfers,
liberalising price controls and imposing hard budget constraints
on public enterprises."
The last time
the IMF exerted real power over Zimbabwe was when it lent $53-million
in 1999, which was meant to release another $800-million from other
creditors. According to leading IMF negotiator Michael Nowak: "We
want the government to reduce the tariffs slapped on luxury goods
last September, and second, 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."
later, the IMF agreed to increase the loan amount to $200-million,
but 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.
This meant the
IMF encouraged Mugabe to penalise health, education and other badly
defended sectors on behalf of military adventures and business cronies,
and ordered Mugabe to reverse immediately the only redistributive
policies he had adopted in a long time: a ban on holding foreign-exchange
accounts in local banks; a 100% customs tax on imported luxury goods;
and price controls on staple foods in the wake of several urban
That deal quickly
fell apart, however, when fiscal targets were missed. Harare was,
quite simply, broke. The previous year, Mugabe had spent a historically
unprecedented 38% of export earnings on servicing foreign loans,
exceeded that year only by Brazil and Burundi.
IMF statement also called for social security protections, but the
IMF's most essential medicine -- "sharp cuts" in an already broken
state -- will not cure this wretched patient.
the last time civil society generated an economic diagnosis and
prescription was in 2000, alongside a progressive team within the
United Nations Development Programme. Its strategy was developmental,
basic-needs driven and patriotic -- and now needs urgent fleshing
out by organisations such as the Zimbabwe Social Forum, trade unions,
Women of Zimbabwe Arise and churches.
mass democratic movement rose to a similar challenge in 1993, producing
the Reconstruction and Development Programme. Then the really tough
job looms: ensuring accountability of the state to the people.
Bond is director of the University of KwaZulu-Natal Centre for Civil
Society and coauthor of Zimbabwe's Plunge: Exhausted Nationalism,
Neoliberalism and the Search for Social Justice (UKZN Press)
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.