Hopes dashed in Zimbabwe as the economic crisis deepens

It is now a year since people came out onto the streets of Harare to celebrate the army-led ‘coup’s’ ushering in of a new post-Mugabe era. The year has not delivered the dreams and hopes of those on the streets, however, and now an economic crisis is enveloping the country once again.

Despite clear wins for ZANU-PF in the parliamentary elections, even in surprising places (see this interesting recent report focusing on Matabeleland), the July presidential elections between Emmerson Mnangagwa and Nelson Chamisa were disputed. In the aftermath, violence erupted on the streets and the ruthless backlash by the security forces resulted in civilian deaths that shocked the country, and the world.

The uncertainty surrounding the presidential elections, despite numerous international reports, has made international re-engagement difficult. The opposition has capitalized on this to try and push the Mnangagwa regime into concessions. Added to this, the failure to agree a long-term economic stabilization deal with the international finance institutions, so far, has resulted in an accelerating economic crisis. This has resulted in commodity shortages, a growth in a parallel currency market and rising inflation. As in 2006-08, the impacts on those in the cities, and particularly the middle classes, has become in the words of one commentator, ‘unbearable’.

The political roots of the crisis are becoming more and more openly debated. In an extraordinary outburst, presidential advisor Chris Mutsvanga named Kudakwashe Tagwirei, boss of the network of companies linked to Sakunda holdings, as getting preferential access to foreign exchange from the Reserve Bank and being central to manufacturing scarcities, particularly in the fuel market. Close ties to the political-military elite of influential business people who control the economy, and with this parts of the state have been exposed. Meanwhile, maverick politico, Acie Lumumba, the short-lived adviser to the new technocratic minister of finance, Mthuli Ncube, in a bizarre Facebook live broadcast made a dramatic set of allegations about RBZ corruption, the process of state capture and the role of ‘queen bee’ at the centre of the network. Social media speculation went wild, but these interventions only served to confirm what everyone knew already: some ZANU-PF factions and some in the security forces are intimately tied up with controlling oligarchic forces in the economy. This makes effective economic reform and stabilization extremely difficult, without getting rid of these networks of power and economic control.

In the midst of rising crisis, the MDC appears to be holding out for a renegotiation of power. But as Brian Raftopolous argues in a typically perceptive article, there are several problems with their approach.

“Firstly, as we have seen in other parts of the continent, crisis authoritarian states can maintain their rule for long periods of time through minimalist state forms of rule that combine a control of certain extractive forms of revenue with command over the central means of coercion. Moreover, as Paul Nugent points out, such states can combine coercive, productive and permissive forms of rule involving varying relations of coercion and consent and different episodes of negotiations and conflict between states and citizens. The reductionist view that economic crisis will deliver what the election could not is extremely precarious.

Secondly, the social base of the opposition, particularly in the now largely informalised urban sector, is likely to be further weakened by a deepening economic crisis. This is unlikely to result in more protests and a strengthening of the opposition presence in the public sphere. It could lead to a further retreat into individualised forms of survival and already well supported religious structures and their more optimistic ethereal futures.

Thirdly, the international pressure that the opposition is counting on will not take the forms of more open political conditionality in favour of the opposition. At present, key players in the international community are more concerned with keeping Zanu PF on the reform agenda than with any more open or surrogate support for the opposition as in the past. For many countries in the EU the stabilization agenda in countries like Zimbabwe remains a key factor in the face of all the changes in European politics, particularly around the massive migration issue that is currently dominating European politics.”

At the moment there remains a stand-off. While the government desperately seeks international political agreement for a stabilization programme, and the injection of liquidity into the economy, the opposition pushes for the maintenance of sanctions, holding out for political reforms and perhaps a sharing of power. It is a dangerous moment, with little sign of anyone shifting from entrenched positions.

Strangely, both main political parties seemingly agree on the broad contours of the way forward, and both are committed to a radical neoliberal reform package, with unknown, perhaps disastrous, consequences for the long-term. Currently debate on what types of reform are needed, and how Zimbabwe moves from this crisis mode is limited.

Raftopolous argues that, to move forward, “there is clearly a need for a new national dialogue, including but not just limited to, the major political parties”. The terms of any macro-economic stabilization programme alongside political reforms “should be the start of such a national discussion”, he argues, leading to “a serious critique of this currently shared economic policy”.

This is a hopeful, positive position that I share, but it currently has few backers, given limited evidence of progressive visions for economic policy from all sides. As argued before on this blog, unless a locally-developed response to the economic crisis emerges, rising inequality, lack of sustainability and capture – this time by new actors – will likely result. A future, resilient economy must therefore be rooted in the existing productive economy where most people work and gain a livelihood. Reform efforts therefore must focus on small-scale agriculture and the informal urban economy linked to area-based local economic development, and not expect large, external investments to do the job, even if they paper over the cracks temporarily.

Building long-term resilience for a broad-based economy that will reduce poverty and share wealth will take time. But small steps – most notably through providing reliable and cheap sources of funds to support farming and small businesses – can have a big impact.

This post was written by Ian Scoones and this version first appeared on Zimbabweland.

Photo credit: Flickr CC, Baynham Goredema