Zim is not so far gone that it can't be saved

The economy is in crisis, but it is not doomed to fail. (Graphic: John McCann)

The economy is in crisis, but it is not doomed to fail. (Graphic: John McCann)

A landslide victory by Zanu-PF in Zimbab­we’s elections in 2013 resulted in its comprehensive recapture of the state.

The endorsement of the results by the Southern African Development Community, the Common Market for Eastern and Southern Africa, the African Union and the United Nations confirmed Zanu-PF’s grip on power. It also symbolised Zimbabwe’s readmittance into the international community, although the United Kingdom, the European Union, the United States, Australia and others were concerned about the credibility of the polls.

A new government has been formed and the most immediate issue for Zimbabweans at home and abroad, and for the international community, is the economy. Addressing the economic problems will dominate the Zimbabwean agenda until the next election in 2018. The economy is in crisis, but it is not doomed to fail.

Many international actors want to bring closure to more than 17 years of political crisis in Zimbabwe. The invitation by the EU to President Robert Mugabe to attend the EU–Africa summit in Brussels in April signalled both a response to African pressure and the desire to normalise relations.

Mugabe, however, decided to boycott the summit. On February 20, the EU also agreed to suspend most of the sanctions on Zimbabwe except in the defence sphere and on Mugabe and his wife Grace (until a review in February next year).

Memories of a near-decade of economic crisis from 2000 to 2008 are still vivid, and debate continues in and between Europe and the US over how quickly bilateral relations should be fully normalised. Some believe that meaningful change will not occur in Zimbabwe until the 90-year-old Mugabe no longer ­governs, hence the extension of the personal sanctions.

Given the results of the 2013 election, the lifting of most EU sanctions and the continued economic challenges facing the country, Western re-engagement with Zimbabwe must be accelerated now rather than after presidential change.

Although inter- and intra-party political disputes will continue, the Zimbabwean government can no longer blame the West for the country’s continued economic underperformance. The economy stabilised under the Government of National Unity (GNU) that was in office from 2009 to 2013, but the resulting economic growth was “dead” growth – impressive figures that did not lead to any substantial increases in human development indicators or employment. The last 18 months of the GNU actually saw a contraction of the economy, with reduced growth, increased inflation and unemployment and underemployment.

Economic crisis
Whether the deepening of this economic crisis is a result of the disputed 2013 polls or whether the new Zanu-PF government inherited an economy that was already in accelerated decline remains disputed. What is certain is that Zimbabwe faces daunting but not insurmountable economic challenges.

The past year has seen more business closures in Zimbabwe than at any time since 2008; emigration has increased, as has the cost of living; and poor service delivery remains a national bone of contention. To improve the economy, the government needs to engage and partner with local stakeholders. It must also upgrade its portfolio of international economic relations.

The policy options for the government are increasingly limited as a result of the liquidity crisis. Zimbabwe, which endured an austerity economy under the GNU, now has to respond to a crisis economy in many sectors.

Some of its problems are long-standing: the adoption of the multi-currency system in 2009 ceded monetary policy to international actors, the declining tax base dramatically reduced the fiscal policy space, and a decade of uncertainty has resulted in low levels of investment, a diminished consumer base and a reduction in the manufacturing sector. Corruption is also a major problem.

But there are some positive indicators. The government, through its dialogue with the local and international business sector and other stakeholders, and through its re-engagement drive, has indicated that it is taking the economic challenges seriously.

The normalisation of Zimbabwe’s international relations with the West is essential for economic recovery. The electoral legitimacy debate will continue to divide Zimbabweans and the international community alike, but the reality is that, for the time being, Zanu-PF is the dominant force in Zimbabwean politics.

The opposition, civil society, the business sector and other voices are important but engagement with the Zimbabwe government is pivotal. This should be cautious, thoughtful and not uncritical. At the same time, Zanu-PF needs to learn from its past mistakes and to acknowledge that Zimbabwe’s future will be increasingly determined by its own tactical decisions. With the suspension of most sanctions and associated measures, anti-Western rhetoric will harm re-engagement efforts.

Just as the EU has reached out to improve relations by suspending most of its sanctions, Zimbabwe should reciprocate, demonstrating that it is serious about re-engagement, including through domestic governance and economic reforms and pro-poor policies.

The economy
Although Zimbabwe faces an economic crisis, the picture is not one of total disaster. There are numerous institutions, organisations and businesses that are functioning through smart strategies, competent management, and good leadership and partnerships.

Zimbabwe’s re-entry into the global system brings with it the challenge and opportunity of engaging potential investors in terms not of ideological divisions but of competitive advantage. If it is to attract investment, it must demonstrate that it is a worthwhile business destination and partner in a global economy crowded with competitor nations.

This includes clarifying indigenisation provisions for business and supporting a land audit.

The government’s economic blueprint, the Zimbabwe Agenda for Sustainable Socioeconomic Trans­formation, should be accompanied by a complementary document outlining immediate key challenges to implementing this vision and a road map showing how the government proposes to address this over the next 12 to 18 months.

With the economic stakes so high, and with growing economic interdependence, constructive engagement between Zimbabwe and the West should entail a process to end all sanctions and targeted measures, as well as a pragmatic dialogue that recognises mutual interests and responsibilities.

The process of suspending sanctions is already well under way, with only those on Mugabe and his wife and on imports and exports of defence equipment remaining in place. Western policy should move away from singling out Zimbabwe and become more regionally focused.

Zimbabwe’s government should seek to re-engage in international diplomatic and business forums, including seeking to rejoin the Commonwealth.

Although Zimbabwe’s “Look East” policy and South-South partnerships will continue apace, the government should also set out in detail how it plans to re-engage the West. The UK and Zimbabwe governments should establish a Zimbabwe–UK bilateral forum to discuss matters of mutual concern.

Opposition and civil society
The post-GNU political landscape has changed and Zimbabwe’s opposition and civil society will have to undergo a period of reform and renewal to remain effective influences.

The opposition and government should work towards consensual or bipartisan politics, particularly in responding to the various economic challenges the country faces. The government on its own cannot reinvigorate the economy. This will require a truly national effort that – even if only temporarily – brings together political, economic and social stakeholders in a collective effort to address the economic crisis. Otherwise, all parties will lose credibility.

Diaspora engagement
The diaspora has an important part to play in the country’s recovery as well as in its own success abroad.

The diaspora in the UK will need to manage its internal differences and craft a collective vision if it is to be seen in Harare as a serious partner in Zimbabwe’s development, and in London as a partner in UK policymaking on the country and region.

A dedicated ministry for the diaspora should be established to address issues such as investment, remittances, the diaspora vote, the diaspora return, the economy and wider diaspora–Zimbabwe partnerships. This would give more impetus to the current re-engagement drive between Zimbabwe and the diaspora.

Despite more than a decade of economic tribulations, Zimbabwe still has the human-resources expertise and skills of a highly educated and trained workforce and a still serviceable, if ageing, infrastructure, all of which are useful to investors.

Economic collapse is not inevitable but, if Zimbabwe is to avoid it, the government needs to adopt policies to build international business confidence, to support technocratic and entrepreneurial expertise at home, reach out to a large and skilled diaspora population, and to encourage good governance.

This is an edited extract from the report ‘Zimbabwe’s International Re-engagement: The Long Haul to Recovery’ by Knox Chitiyo and Steve Kibble. It was originally published by Chatham House. Get the full report here.

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