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Donors won-t cough up without change - Zim future in jeopardy amidst Unity Government impasse
Richard Kamidza, Pambazuka News
May 14, 2009

http://www.pambazuka.org/en/category/comment/56257

Although the two formations of the Movement for Democratic Change (MDC) and the Zimbabwe African National Union - Patriotic Front (ZANU-PF) signed the Global Political Agreement (GPA) on 15 September 2008, tense political squabbling and mistrust delayed the formation of the Unity Government. Series of meetings were then convened by the Southern African Development Community (SADC)-s facilitator and leadership to resolve the political impasse, which culminated in the swearing in of the prime minister, Morgan Tsvangirai and two deputy prime ministers, Arthur Mutambara and Thokozani Khupe on 11 February 2009. Subsequently, ministers and deputy ministers were sworn in and allocated their portfolios as stipulated in the GPA.

The above developments signalled a new beginning to Zimbabweans across the political divide who became optimistic about 'a return to a normal social and economic life as well as free political activism-. Equally jovial about this development was the SADC leadership in particular, and their peers in Africa in general, who heralded the triumph of an 'African solution to the African problem-, which has been systematically discredited for almost a decade by critics, especially from the developed governments and civil society groups. As a result, both the African Union (AU) and SADC leadership demanded immediate withdrawal of 'smart sanctions- against ZANU (PF) officials and their associates in addition to pledging help to the new Harare administration in mobilising the necessary external resources desperately needed to redress social, economic and humanitarian crisis facing the country.

But the western governments demanded 'clear and practical evidence of power-sharing in Zimbabwe- before coming to the party. Similarly, some civic groups and the donor community echoed the same call. In this respect, the donors, foreign governments and civic groups developed a set of benchmarks that also resonate with the relevant statutes of AU and SADC so as to evaluate the inclusive government-s commitment to political and economic transitional processes. The benchmarks include full and equal access to humanitarian assistance; development of macro-economic stabilisation policies; restoration of the rule of law, judiciary and respect for property rights; releasing of all political prisoners as well as an end to political violence; respecting media plurality, democratic process, human rights standards, freedom of expression and assembly; and timely elections to be held in accordance with international standards. They are also demanding 'no cherry picking-, meaning that 'all the principles- should be treated with equal importance as stipulated by the GPA framework. As a result, the inclusive government-s re-engagement with foreign governments and donors entails a return to 'pluralistic democratic processes-. Thus, success in this direction unlocks the necessary financial bailout packages from the international community to support sector projects, technical assistance and budgetary expenditures. In addition, proponents of pluralistic democratic processes are demanding national ownership of GPA in terms of consulting key constituencies such as civil society, business and consumers in designing and implementing any future socio-economic reform agenda as well as political reforms such as the constitutional process.

However, the inclusive government is making slow progress in implementing the GPA, as well as in addressing the concerns of foreign governments, donors and civic groups. Indeed, there is lack of commitment to implement the GPA as well as redressing the above outlined benchmarks, a development that suggests an elusive real power-sharing in Zimbabwe. Unfortunately, this remains an impediment to accessing the international community-s financial bail-out in support of the country-s political and economic transition.

Implementing the GPA is being undermined by failure to resolve all outstanding issues, which the belligerent parties pledged to resolve once in office. Several meetings between the principals (Robert Mugabe, Morgan Tsvangirayi and Arthur Mutambara) to this deal have failed to resolve the contentious issues including the allocation and swearing in of the provincial governors; the appointment of the central bank governor, the attorney general, permanent secretaries and ambassadors; and the release of all the political prisoners. This list has since expanded to include Mugabe-s delaying tactics in swearing in the MDC designate deputy minister of agriculture, Roy Bennett, as well as his unilateral decision to transfer the information and communications technology (ICT) portfolio from the MDC designate minister, Nelson Chamisa, in favour of his party-s candidate, Nicholas Goche. To date, the principals remain miles apart, without any sign of movement in line with the spirit of GPA, despite imminent threats to confidence building process. A further wedge in the inclusive government emerged with the decision to re-detain all 18 political prisoners freed in March on bail, whose conditions they had not violated.

So, donors, western governments, most investors and civic groups have adopted the 'wait and see attitude-, closely watching the resolution of the above issues. Their mistrust is further entrenched by the fact that Robert Mugabe, whose government presided over disastrous policies and programmes that authored the current socio-economic, political and humanitarian crisis, is thought to be deploying delaying tactics in implementing the GPA. The same donors, foreign governments, investors (foreign and local) and civic groups blame his regime for creating the environment that seriously undermined their confidence and trust in the economy, leading to their withdrawal from the country.

But smooth political and economic transition hinges on the implementation of GPA. Ironically both the AU and SADC - the guarantors of GPA - have remained silent, giving an impression of tacit approval to Zimbabwe-s president-s attitude of being non-committal to GPA. Unfortunately, this is crippling all the efforts by progressive elements within the inclusive government, particularly the prime minister and the minister of finance, Tendai Biti, to unlock external resources. Currently, the country desperately needs an estimated US$8 billion to redress current socio-economic challenges including infrastructural development; the revival of industrial activities and the social services sector (particularly education, health and sanitation); and to meet a monthly public service wage bill estimated at US$400 million. The country also desperately needs about US$200 and US$300 million urgent fiscal support and immediate humanitarian assistance, respectively.

Hopes of attracting significant balance of payment (BOP) inflows are fast fading away. To date the country has managed to attract pledges of only US$400 million from African countries. These pledges are not direct cash payments despite potential threats relating to demands for monthly salary review of public servants. Already, teachers are demanding a salary review, a development likely to trigger a wave of salary reviews in the public sector. The country in April 2009 generated about US$54 million against a projected figure of US$140 million, which is inadequate to meet its recurrent expenditure, hence the decision to give all government employees a meagre monthly salary of US$100, regardless of rank. At this juncture, the inclusive government can only plead with the dissatisfied public workforce to shelve nation-wide industrial action until the situation improves. The prime minister told the workers during the Workers Day that 'the government is broke and can not meet salary-related demands-. The situation could have been better had the parties to the GPA put the country first by resolving all the contentious issues, thereby demonstrating to the international community their commitment to share power. The continued impasse stalls progress in political and economic transition, leaving the nation at a cross roads.

As such, at the SADC Summit held in Swaziland on 30 March 2009, Botswana, Mozambique and Zambia pledged to build infrastructure, supply electricity and supply 9000 metric tonnes of maize, respectively. Similarly, South Africa-s bail-out packages included US$2 billion in short-term loans and aid to revive the economy and US$6.5 billion in long-term reconstruction finance. As a result, the country promised to identify bankable projects to be financed through the Industrial Development Corporation (IDC) and the Development Bank of Southern Africa (DBSA). However, the pledges are a drop in the ocean in terms of meeting the financial needs of country-s socio-economic recovery demands. The above pledges also reflect displeasures on the calibre of the incumbent central bank governor, whose quasi-fiscal activities saw him publicly handing out tractors, combine harvesters, ploughs, farm inputs, vehicles and appliances to Mugabe loyalists including officials, MPs and judges as well as raiding foreign currency accounts of civil society organisations, businesses and farmers.

Most countries with the capacity to assist such as the USA and the European Union members have refused to come to the party until 'there is real power-sharing-. Last week meetings between the finance minister, Tendai Biti and the International Monetary Fund (IMF) only resolved to set up the Zimbabwe Multi-Donor Trust Fund (Zim-MDTF), through which global banks and other donors could channel financial resources in support of the country-s economic recovery and development activities. Zim-MDTF wll be managed by the African Development Bank (AfDB), the United Nations Development Programme (UNDP) and the World Bank (WB). This again shows displeasure over the unilateral decision to re-appoint the central bank governor by President Mugabe, hence the issue remains controversial. This also shows lack of trust between donors and the authorities. As such, the fund will be administered by the finance ministry with any expenditure requiring the approval of the donors. Zimbabwe has thus joined such countries like Liberia and Sudan where donors have an oversight on all aspects of fiscal spending.

Zimbabweans have suffered enough, and rightly so, deserve caring and sensitive leadership. Some 'progressive elements in the inclusive government- are mindful of the limited choice associated with re-engaging the international community amid a socio-economic and humanitarian crisis of such magnitude. They fully comprehend the benchmarks and any other conditions attached to any level of financial and technical assistance. As a result, they are making frantic effort to market the country to the international community. They are also trying their level best to counter negative actions that not only undermine the GPA, but also portray the country in a bad light. For instance, the ZANU (PF) minister of tourism, Walter Mzembi castigated the agenda of former war veterans on the land question, which is undermining efforts to market the country. Similarly, the deputy prime minister, Arthur Mutambara clashed with war veterans over continued dispossession of white commercial farmers on the strength of 'dubious offer letters-. Those pursuing farm invasions are labelling 'progressive elements- calling for an end to farm disruptions 'anti-revolutionaries-. It appears that the inclusive government currently lack the teeth to bite forces outside government which display disdain to the new political transition and hence are determined to scuttle the deal.

Donors and investors are looking for value enhancing opportunities that are sustainable and predictable. To date sceptics view the country as too volatile to guarantee minimum protection to invested social and economic capital. There is still lack of respect for private property rights. Land entitlements emerged as the most contested sector, and as before, raise fears that investors may target sectors that may also fall victim to political expedience. This is putting some investors (both foreign and local) at bay. In this instance, South African investors who have shown eagerness to transfer their Rands to Zimbabwe await the outcome of the investment guarantees that is being crafted by the Harare Administration. Those interested in economic investment are also worried about the levels of disposable incomes, which in the event of failing to unlock significant donor resources may in the short- to medium-run limit the necessary stimulus to the economy. Investors are chasing the purchasing power of the population.

Infighting in the inclusive government is sending conflicting messages not only to Zimbabweans, but also to the international community which have the resource basket to support socio-economic growth and development. The "pocket of resistance" has in many instances succeeded in frustrating GPA implementation without any censor by their 'principal - Robert Mugabe-. This reflects lack of sincerity to improve pluralistic democratic credentials as well as ending the resurgence of property rights violations that is undermining all efforts towards confidence building measures. Failure to act is putting the country-s political and economic transition at the cross roads. Among Zimbabweans, confidence in the inclusive government remains in short supply. For instance, some Zimbabweans still squirrel their foreign currency savings abroad fearing that their wealth could be confiscated again 'if Mugabe experiences a sudden change of heart-. There is also growing pessimism from the international community about the sincerity of political actors to the political and economic transitional processes. The begging nation should therefore show practical commitment to implementation GPA. The continued breach of GPA not only put the political and economic transition at the cross roads, but also point to lack of political will to end a decade-long socio-economic and humanitarian crisis. Surely, this is within the political capacity of all the belligerent parties.

On numerous occasions the 'progressive elements- have linked the restoration of the rule of law to the restoration of investor confidence. Indeed, the above are the pillars to confidence building measures. Recently, the Human Rights Watch demanded that "donors should withhold development aid until Zimbabwe improves its rights record by cracking down on violence on white-owned farms as well as intimidation of activists". These are the voices that have significant influence to foreign governments and global donors, which unfortunately, those still resisting transformation have chosen to ignore.

It is therefore justified why donors, foreign governments and civic groups are demanding broad economic and political reforms that support the economic and political transition. Recent waves of farm invasions targeting few remaining white farmers by senior ZANU (PF) officials send a strong message that dent the image of the inclusive administration despite tireless effort by 'progressive elements in cabinet- to re-engage the international community. Some analysts are linking the "pocket of resistance" to the well-thought out strategy and delaying tactics aimed at stalling the reforms spearheaded by progressive elements in government until such time that ZANU (PF) has access to its assets frozen under targeted sanctions or that the foreign governments lift the smart sanctions.

Thus, the country-s challenges show lack of shared political vision for the country. Failure to attract significant flows of external resources in support of the country needs risk shattering the expectation of Zimbabweans that characterised the formation of the inclusive government. This will also dent the image of regional and continental leadership, who systematically support the regime even at its sunset phase. The high rate of poverty and unemployment requires huge inflows from investors as well as donors targeting social and economic growth and development. This the belligerent parties are aware of, and continued political impasse limit the new government-s ability to develop and implement pro-poor macroeconomic policies and/or pro-development strategies capable to absorb an estimated 94% of the total labour force. The country needs massive investment in public works, social and economic infrastructures, social service delivery and industrial activities, which in turn stimulate economic activities leading to more employment opportunities. Significant inflows of resources also facilitate non-partisan citizen mobilisation and participation in public policy formulation and other structural and institutional reforms that are necessary in support of political and economic transition. This also not only ensures the implementation of appropriate mix of polices, but also guarantees a representative voice of the marginalised groups in society as well as the working poor. But until such time the leadership in Zimbabwe commit themselves to the GPA and display practical commitment to serve the people of Zimbabwe, the political and economic transition will remain at the cross roads.

* Richard Kamidza is the Economy in Transition Programme Associate of the Institute for a Democratic Alternative for Zimbabwe (IDAZIM) and a PhD student with the School of Development at KwaZu-Natal University.

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