Counting Mugabe’s troubles

Comment from The Mail & Guardian (SA), 12 August
Counting Mugabe’s troubles
Eric W Bloch

Zimbabwe’s government has for years pronounced that "Zimbabwe can go it alone!", and, if necessary, would do so, and would be as successful as Malaysia had been in the late 1990s. But, to quote trite but relevant clichés, eventually chickens come home to roost and, as a result, the Zimbabwean leadership has had to swallow the bitter pill of crawling on hands and knees to solicit assistance from others to enable Zimbabwe to extract itself from the economic quagmire to which it has been reduced. The economy has been devastated, contracting by more than a third in the past five years. Almost three-quarters of the employable population are unemployed, an estimated 78% of the populace barely survives at levels below the poverty line, while almost half the population is suffering malnutrition, their incomes being below the food line. Zimbabwe’s balance of payments has been so negative that available foreign currency exchange does not even meet half of its import and other current foreign exchange outgoings, let alone service external debt. More than three million Zimbabweans have left the country to seek employment or other income-generating activities in neighbouring countries and further afield, including the United Kingdom, US and Australia. The immense "brain drain" has further hindered any endeavours to restore the economy to even the lowest levels of economic growth. All these ills were severely compounded by the extent to which government has brought about the decimation of the agricultural sector, which had, for over a century, been the economy’s foundation. Consequently, Zimbabwe is faced with a need to import two-thirds of the nation’s requirements of maize, which is the staple diet of most of the populace, and to import more than half the national need for flour. Then the ills afflicting Zimbabwe were exacerbated by the grossly ill-conceived "Operation Murambatsvina". In the process more than 700 000 were rendered homeless, at the height of winter, and deprived of any income-producing opportunities they had. So parlous has Zimbabwean circumstance become that the government has been forced to swallow its pride. It appealed to South Africa for a loan of $1-billion. All indications are that South Africa was sympathetic to the appeal but, not unreasonably, applied certain conditions, as is normal with any loan. That there should be conditions was too great a blow to the Zimbabwe government’s pride, so, instead of accepting the loan, Robert Mugabe and a large entourage set off to visit Zimbabwe’s special friend, China. To their reportedly great dismay, China was not forthcoming with the $1-billion loan. Instead, it entered into some investment agreements, sold Zimbabwe 60 buses, advanced $6-million for food imports and bestowed an honorary professorship upon Mugabe. Zimbabwe was reduced to only one possibility: to appeal to South Africa again. Although a loan agreement has yet to be signed, and its details made public, informed sources suggest that the loan is only half of that Zimbabwe sought. A loan of $500-million has apparently been agreed to. With diplomatic "double-speak", it is claimed to be unconditional, but it appears that the funding is to become available on a phased basis, aligned to appropriate Zimbabwean actions targeted towards achieving political and economic stability. The first payment will be between $150-million and $160-million, to be applied to reducing Zimbabwe’s arrears with the International Monetary Fund (IMF), which amounts to approximately $300-million. It is expected that such a reduction of the arrears will motivate the IMF board of directors, when it meets on September 9, not to recommend the termination of Zimbabwe’s IMF membership, but to allow the present suspension of membership to continue. The remaining $340-million to $350-million will then be applied to importation of critically needed fuel to an estimated value of about $150-million, and the balance on agricultural inputs for the 2005/06 season, including fertilisers, chemicals, insecticides and seeds (to the extent that present stocks do not suffice). With the Zimbabwean dollars raised from the purchase of fuel and other imports, approximately Z$6,5-trillion will then partially fund "Operation Garikai" (Operation Rebuilding). Although the $500-million loan will give Zimbabwe a substantial interim booost, and the allegedly non-existent loan conditions may bring about a slow-down of further economic decline, or even some limited economic recovery, it is not enough for Zimbabwe’s crucial needs. At least $200-million is needed for food inputs, unless Zimbabwe accepts support from the World Food Programme (which has been offered subject to food distribution being effected wholly by independent non-governmental organisations which would not use the food distribution as a political tool). Yet another $100-million is needed for essential healthcare requisites, including anti-retrovirals, and $200-million more to fund critical and immediate import needs of commerce and industry, mining and other economic sectors.Although the act of lending Zimbabwe $500-million is one of neighbourly generosity, it is also one which recognises humanitarian need and indirectly conveys significant benefits to South Africa. Without political and economic stability in Zimbabwe, South Africa faces potential upheaval and unrest on its borders and a further massive influx of illegal "economic refugees".