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to the real world
August 27, 2013
into the new world order created by a ruthless oligarchy in Zimbabwe,
they are slowly coming to appreciate that they face some real problems.
Firstly they face the challenge of legitimacy. No one believes they
won the election all major western Nations have said that the elections
were a sham, restrictions on the old leadership will remain
and they emphasize that it cannot be business as usual.
Then there are
the economic realities, the Zanu-PF manifesto
- indigenisation, empowerment and jobs are directly in conflict
with each other - if they follow through on their indigenisation
programme, capital flight will continue, new investment will dry
up and existing business will hold back on everything, including
maintenance. Morgan Tsvangirai said they can rig the elections,
but they cannot rig the economy and already the markets are punishing
them. Cash has drained away from the banks leaving many in dire
straights and the economy is again going underground.
The announcement that
people need not pay their accounts to local authorities has shrunk
inflows of revenue, in some cases by two thirds, overall by half.
Councils are unable to pay salaries and to crown it all, the national
coffers are empty and the government has, for the first time since
2009, missed a payroll.
Some two months ago,
after three years of intense negotiation, the process of reengagement
with the multilateral financial institutions started with the President
signing the agreements that initiated a Staff Monitored Programme
with the IMF. If successful this would have resulted in debt relief
for some $13 billion in long overdue debt, a resumption of lending
on a concessionary basis by the Funds and the resumption of ability
to borrow on global markets.
But the programme
lays down stringent and detailed prescriptions for economic management.
It commits the State to greater transparency in all its dealings,
strict monetary and fiscal discipline and limits on expenditure
on major items such as the salaries of the Civil Service. Step out
of line and the penalties will be immediate especially since the
major powers in the IMF and World Bank are the same countries that
are maintaining political restrictions on Zanu-PF leadership and
are deeply disappointed in the failure of regional leaders to contain
the excesses of the old regime; especially the failure of the whole
to deliver a credible democratic transition in leadership.
So the Zanu-PF leadership
finds itself on very thin ice and if they make one wrong step, they
will break through and freeze to death. They simply cannot make
good on their promises to pay higher salaries to Government workers
and the armed forces, they cannot improve allowances and pensions
to war veterans. They have to resume debt collection with tough
penalties and they have to persuade a skeptical business world that
there is life after the elections and under Zanu-PF leadership.
That is a tough call,
on the front page of the Daily News today is a photo gallery of
the panel of candidates for the Cabinet, every one of them shouting
out loud, “here we are, the team that gave you 231 million
per cent inflation in 2008, the team that destroyed the economy
and wiped out the accumulated cash savings of a century of hard
work and enterprise. The team that collapsed the education and health
system, halved our life expectancy and brought us the highest infant
and maternal mortality in the world. This is the team that tripled
our death rate and drove a third of our population into exile.”
These are the
characters that before the GNU
took their human rights away from them, looted the Reserve Bank
of at least $1,3 billion a year, Noczim of $150 million a year and
stole $3,4 billion from NSSA over the preceding two decades. These
are the very people who took probably the most advanced agricultural
system in the third world and smashed it to pieces in a few years;
in the process looting billions of dollars in private and corporate
assets in total disregard to their own laws and the basic rights
of the investors, most of whom lost everything they owned.
Can we really think that
this motley crew, who has just pulled off one of the greatest electoral
heists in history, will keep their hands out of the till, obey the
rule of law and stick to signed agreements? Hardly and until they
demonstrate otherwise they have to contend with a hostile global
environment of their own making, a totally skeptical business community
and a system of economic justice that will punish them instantly
whenever they break the rules. It’s scary.
Already traders are holding
back on credit lines to local retailers, wholesalers and distributors.
Our imports run to $600 million a month and there is a gap between
imports and export earnings of about $3 billion per annum. Much
of this is funded by inflows and remittances but companies provide
local business with informal lines of credit that keep our markets
supplied with product. They do so because they trust their local
buyers and those buyers have been able to pay on time and in full
on a regular basis. Any talk of a resumption of the old fiscal and
monetary regime and these lines of credit will vanish and Zimbabweans
will be back in perpetual fuel and food queues; back to buying bread
in Botswana, good for Francistown, bad for Zanu-PF.
Welcome to the real world.
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