The economic rescue package for Zimbabwe, touted at the Southern African Development Community (SADC) summit in Lusaka last week, is a non-starter, economists and political commentators argued this week.
They said that at least $15-billion would be needed to restore Zimbabwe’s collapsing infrastructure and revive commercial agriculture, the mainstay of the formal economy. The region could not foot this bill and Western ”development partners” would not come to the party unless Zimbabwe democratised and introduced rational economic policies.
This week Finance Minister Trevor Manuel told Parliament that South Africa would not waste its taxpayers’ money bailing out Zimbabwe. A South African government official told the Mail & Guardian nothing would be achieved by ”technical” economic measures when the root of the crisis was political.
Added a diplomatic source: ”The international community is not interested in propping up [President Robert] Mugabe, nor in addressing the symptoms rather than the causes.”
At the SADC summit regional leaders appeared to reject any trade-off between reform and economic assistance, with President Thabo Mbeki insisting there would be no conditions.
The summit merely noted a report by SADC executive secretary Tomaz Salomao calling for political and legal reform, civil service overhaul, economic liberalisation, the entrenchment of the rule of law and property rights among the conditions for economic aid, which would include energy and loan finance.
The lack of decisive action was seen to reflect a rift between a pro-reform grouping, including Zambia, Botswana and Tanzania, and hardline Mugabe allies, including Namibia and Angola, who argued that the Salomao proposal amounted to an International Monetary Fund-style structural adjustment programme.
Regional finance ministers were asked instead to draft a recovery plan in consultation with the Zimbabwe government.
However, the M&G has established that no date has been set for a meeting of finance ministers, while it appears that the South African treasury has not started working on a plan. ”Our understanding is that the SADC merely flirted with the idea of a bail-out,” said one diplomat. ”There’s nothing concrete.”
Amid diplomatic forecasts that Zimbabwe’s formal economy might have disintegrated entirely by year-end, Zimbabwean officials said report-back meetings would not take place before November.
A new Zimbabwe Reserve Bank report measured annual inflation at 7 634% in July, while unofficial estimates place it as high as 13 000%. The government stopped publishing inflation figures in April.
Two Zambian ministers gave strong indications that Mugabe had his way at the summit. Ng’andu Magande, Zambia’s finance minister, said only pressure from elder statesmen — such as Nelson Mandela — could force things to be ”done differently without anybody losing out”.
And the country’s information minister, Mike Mlongoti, said the region ”can’t pressure Zimbabwe because it is a sovereign state”.
Returning from the summit, Mugabe seemed buoyed by what he described as ”a good meeting”. However, on Wednesday he postponed the scheduled launch of the Zimbabwe Economic Development Strategy, the latest in a string of economic blueprints he has touted as solutions.
And in Parliament, Zanu-PF finally set in motion ”empowerment” legislation, which will localise control of all foreign-owned businesses. Critics say it will damage the economy further.
On the cards also is a Constitutional Amendment Bill that will provide for simultaneous presidential and parliamentary elections which, critics say, aims to allow Mugabe, rather than the electorate, to pick a successor if he steps down mid-term.
Mbeki gave the summit an upbeat account of the SADC-sponsored mediation between Zanu-PF and the Movement for Democratic Change (MDC), but recent developments suggest a different scenario. Last week Zimbabwean Justice Minister Patrick Chinamasa told Zambian state television that he saw no reason to negotiate with the MDC.
Voter registration in Zimbabwe, which ended last Friday, was a further setback for Mbeki’s aim of ensuring free, fair and universally endorsed elections next year. The MDC said registration centres had deliberately been limited in opposition strongholds to enhance the prospects of a Mugabe victory.
A spokesperson for the Zimbabwe Electoral Commission rejected MDC calls for an extension of voter registration, saying ”time is running out”. Only 80 000 new voters were registered in three months, the commission disclosed.
Iden Wetherell, an editor at the Zimbabwe Independent, argued that no economic rescue package could succeed without the participation of the donor community — principally the United Kingdom, United States and the IMF. And the donors ”would not help until Mugabe goes”.
Wetherell pointed out that in regular ”Article 4” talks with Zimbabwean leaders, the IMF had consistently urged sweeping reforms, including a serious attack on inflation, which did not involve printing money.
Administered prices were anathema to the world body, while every Article 4 report had emphasised the need to entrench property rights to regenerate commercial agriculture, which had suffered a 60% decline since 2000.
Zimbabwean economist John Robertson estimated that at least $5-billion was immediately required to prevent the collapse of water, power, road and other infrastructure. Even if such an infusion was possible, Zimbabwe’s massive skills exodus restricted its ability to use aid.
Last year Norman Reynolds, former adviser to Zimbabwe’s finance minister, put the cost of recovery at $15-billion.
Robertson argued that South Africa, which favoured a regional initiative, would be extremely reluctant to carry the can. A further deterrent to lending would be Zimbabwe’s inability, perhaps over a 10-year period, to service loans.
No sanctions
There are no international sanctions against the Zimbabwean economy — despite persistent attempts by Robert Mugabe’s regime to blame sanctions for the country’s economic collapse.
A document said to have been written by President Thabo Mbeki before the SADC summit — subsequently disavowed by the South African government — specifically blamed British sanctions for Zimbabwe’s economic woes.
The reality is that the European Union (EU) as a whole — not just Britain — and the United States have frozen assets and imposed visa bans on a tiny group of Zimbabwean high-ups seen as undermining democratic and human rights norms.
In 2002 the EU listed 131 individuals ”who engage in activities that seriously undermine respect for human rights and the rule of law in Zimbabwe”, including government ministers, senators and Zanu-PF politburo members. This was renewed in February this year.
They are prevented from entering or transiting the EU and their assets there are frozen. The British High Commission said this week that the United Kingdom had frozen bank accounts holding £172 000.
In addition the EU has banned all military cooperation with Zimbabwe, including arms sales.
Two United States presidential orders, in 2003 and 2005, list 128 individuals, starting with Mugabe, whose assets are ”blocked” in the US. They are understood also to be subject to visa bans. Last year Zimbabwe had a $55,7-million trade surplus with the US. It also has a trade surplus with Britain — Drew Forrest