Zimbabwe’s economy goes from bad to worse

Zimbabwe’s economy continues to decline, with inflation spiralling and the new local currency losing value by the day. The IMF’s recent report makes grim reading, with negative growth recorded for last year, and an expectation of effectively no growth, growing inflation and a devaluing currency into 2020. The underlying macro-economic instability has been made worse by major climate impacts during 2019 – both the drought and cyclone Idai. The situation is bad, and getting worse.

With the failure of government to address the required reforms, the prospects of renewed external support with the necessary debt write-offs look minimal. The stand-off with the international community continues, with international sanctions and a lack of investment continuing. With external public debt rising to over 50% of GDP, much of it in arrears, there is little chance of the Zimbabwean state repaying. Bail-outs at some point will be required, and the scale of investment needed for basic infrastructure and services is estimated at US$16 billion. But instead of Zimbabwe, Somalia seems to be the focus of favourable terms, with Zimbabwe being left to decline further.

The embedded corruption at the heart of state failure becomes intensified as the economic chaos deepens. Those able to profit from parallel currency deals and leverage resource from state-led programmes are the elite few, connected to the political-military elite. And who suffers? Ordinary people, and especially the poor. The consequences of economic collapse are most felt in the urban areas, where safety nets are non-existent. While those in the rural areas have their own production to fall back on; even though this year the effects of drought have hit rural livelihoods hard too.

As the state tries to ameliorate the situation, things only get worse. For example, the Finance Minister announced the creation of ‘garrison shops’ so a restive army could buy goods on favourable terms. It was supposed to be financed by a levy on civil servants. But another parallel economy only creates opportunities for hoarding and profit, and punitive taxation on already struggling people causes resentment. Policy is being made on the hoof. Almost as soon as it was announced, it seems the tax was rescinded, or deemed voluntary, and so a big unbudgeted expenditure was added to the inflation pressures.

The uncovering of the massive rent-seeking in the milling industry, directly fuelled by state-sponsored grain buying for food relief, has exposed the problems. An apparently well-meaning policy is naively implemented, and those in the system exploit its benefits ruthlessly. In this case, with many alleged connections right to the top. The sense that those in charge are wholly out their depth or exploiting the system for their own benefit (or possibly both) is palpable. The IMF review team, in appropriately guarded language, clearly felt this.

Mentioned only obliquely was the cause celebre of this chaos – command agriculture. The corruption at the heart of this programme has been widely exposed, not least by the Public Accounts committee, chaired by opposition MP, Tendai Biti. Around US$3 billion is alleged to have been misused, through a complex web of government funding, private companies and military involvement. A recent ZDI report has highlighted the nexus of corruption at the heart of the party-state and military.

Under normal circumstances a public-private partnership for contract financing of commercial agriculture would have some credibility – just as would subsidised produce for the armed forces or state purchasing of grain through milling companies. But circumstances aren’t normal in Zimbabwe. Despite attempts at restructuring, the grip of corruption is so intense, and often led by networks close to those in power and running these initiatives, that these apparently sensible schemes become the basis for significant extraction, no matter what their worth.

No-one has quite got to the bottom of the command agriculture story as yet. The political economy is clear, but there have certainly been benefits. In our study areas for example, command agriculture resources have unquestionably resulted in boosts in production, especially on A2 farms. Repayments have been inconsistent, but many have been pursued rigorously. Not everyone can get away with just exploiting the system. But this is the point – it is just a few that continue to profit, getting massively rich while the rest suffer.

Is there a way out of this downward spiral? Attempts by the technocrats in the state to do what is required are foiled with each move it seems. Policies seem to be concocted at random, desperately responding to situation that is out of hand. One day it was illegal to sell fuel in US dollars to protect the local currency, the next day it is permitted across the country. Secret printing of money to offset US dollar losses in the mining industry solve one problem, but create many others.

The loss of trust in the government by key players – the IMF, western donor governments, even the Chinese – is clear. Sanctions (or other ‘restrictive measures’) are still in place, with influential players within and outside Zimbabwe arguing that they should remain until the regime changes. Investors are shying away, despite the occasional positive effort to rebuild key parts of the economy. Moves to create political coalitions across the divides are viewed with great scepticism given the experience of the Government of National Unity from 2009-13. It’s stale-mate. Some are holding out for an ‘uprising’ (usually those sitting in comfort firing off tweets), while others think it will have to get much worse before there is a change.

It is not a happy story, and given the dire food security situation this year, the consequences for livelihoods are severe. In agriculture, the glimmers of progress seen up to 2016 on the back of greater economy stability are fast being stamped out. Things are currently very fragile, and most farmers are holding back on investing further.

Today, like Somalia, Zimbabwe has a collapsed economy with vanishingly little state capacity, but, unlike Somalia, seems to be unable to convince the IMF, AfDB or other donors and investors to provide support. Another shock – whether further drought, the spread of coronavirus or something else – may create cascading, disastrous effects, with the elite being able to escape, while the poor (and this now includes a large portion of the population) will have to bear the brunt.

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

Zimbabwe’s latest crisis: it’s the economy – and politics, stupid!

The images of economic crisis in Zimbabwe are all too familiar. Queues for petrol and cash, commodity hoarding, parallel markets in currency, rising inflation and so on. It all seems reminiscent of the dark days of the mid 2000s, in the build-up to the full-blown crisis of the hyperinflationary collapse of 2008. This was not meant to be how the much-hailed second republic started out.

Bill Clinton’s 1992 election slogan, ‘it’s the economy, stupid’ does ring true. Years of economic mismanagement, deep corruption and failure to invest, combined with sanctions, credit embargoes and investment freezes, have taken their toll. But the current crisis is also to do with politics, both domestic and international.

The dimensions of the economic crisis

Tony Hawkins, an economics professor at the University of Zimbabwe, recently gave a widely-circulated talk to the British Council on the economic travails of Zimbabwe. There was much to agree with in his summary of the situation.

The economy is uncompetitive, he argued, not helped by the appreciation of the US dollar by 17 percent since dollarization, the huge loss of value of the South African Rand and rising oil prices. Estimated 14% revenue increases from tobacco, gold and other minerals are offset by a massive hike in state expenditure, up 57%, exacerbated by election commitments to public servant wage hikes. The budget deficit has ballooned to $3.3 billion, with a projected trade gap of around $2.5 billion.

What’s more, he said, the total national debt now stands at a staggering $22 billion, now more than the GDP. Government borrowing continues to grow, crowding out the private sector, and putting pressure on available finance for investments, as people seek cash on the (expensive) parallel market. Inflationary pressures are also increasing dramatically therefore, with money supply far exceeding (formal) GDP growth.

But, despite the value of this description (repeated of course in numerous assessments by the IMF, the World Bank and other economists), his diagnosis of causes was only partially on target, and his solutions missed crucial dimensions.

Causes were laid largely at the door of domestic economic policy (or lack of it) and corruption by the ruling party. This, as is well documented, is a key part of the story. From Gideon Gono’s use of the reserve bank as a political tool in the ‘casino economy’ years to the massive expropriation of diamond resources, both show how the Zimbabwean economy has been destroyed from within.

This has not been the only story. The sanctions imposed following the land reform of 2000 took their toll too. While only targeting select individuals, and withdrawing aid from government led programmes, this signalled diplomatic disapproval from the West, and it had a major impact on patterns of economic support.

Aid programmes still continued but under a humanitarian label channelled through NGOs. But much more significant was the withdrawal of international finance and credit lines. This had a devastating impact and, even if not directed by official sanction policies, were their direct consequence. Despite the easing of diplomatic tensions in the post-Mugabe era, and the charm offensive that Mnangagwa has been engaging in from Davos to New York, the situation has not fundamentally changed.

Hawkins does point to the problem of ZDERA (the Zimbabwe Democracy and Economic Recovery Act of 2001, amended this year) in particular. This is the US law that prevents the US government supporting Zimbabwe at the IFIs, without implementing a set of political reforms. In the coming months, this will likely prevent the US rep at the IMF backing a recovery plan, making the position of others on the IMF board crucial if any changes to support Zimbabwe’s recovery are to be realised.

Reforming the economy

The new finance minister, Mthuli Ncube, knows all this, but does he have the leeway to change course? He is severely hampered by the political legacy of sanctions and other ‘restrictive measures’, and deep distrust across international actors. However, there have been some good signs. His interviews with Bloomberg and speeches around the world have mostly been impressive, and suggest that he is committed to a major economic restructuring.

Some of this will be tough, and will be highly political. A test of the new government’s commitment will be how far he is allowed to go. Already attempts at introducing taxation measures have resulted in protests. What happens when he is forced to cull the public sector, massively reducing the salary bill, or overhaul the currency system, which benefits those dealing on the black market, including powerful individuals well connected to the political system?

Clearly the stop-gap measure of a “multi-currency” environment that followed the abandonment of the Zimbabwe dollar and the adoption of the US dollar is no longer working. Local ‘bond notes’ were supposed to be backed by external hard currency finance, but are clearly no longer, and are fast losing value. Stalling the massive flow of hard currency out of Zimbabwe is vital, and this means ending the pretence of equivalence between greenbacks and bond notes. Sticking to the US dollar in a period when US protectionism is boosting its value is risky too, as it makes everything absurdly expensive. But setting up a new currency in such straitened times is not wise either, given the low levels of confidence in the economy.

What to do? Given the dire experiences of structural adjustment from 1991 – which in many ways set the scene for much of Zimbabwe’s current malaise – making the case for IMF stabilisation intervention, combined with a HIPC-style debt relief package, with all the raft of expected conditionalities does seem rash. But there really doesn’t seem to be any other option currently. The Chinese are fed up with Zimbabwe given its failure to pay back loans in the past, and the ‘socialist solidarity’ line has worn thin. Reluctantly, this may be the only route.

The centrality of the rural economy

Assuming a political route to reform can be created, it therefore matters a lot what such reforms look like, and how they are implemented (lessons from Greece and others of course). Where I fundamentally part company with Hawkins’ analysis is his disparaging rejection of the importance of the rural economy. Like so many conventional economists, he focuses on the urban, industrial sector, forgetting that this is dependent on a wider economic system that remains substantially small-scale, informal and rural. The distinctions between ‘formal’ and ‘informal’ economies in Zimbabwe are irrelevant today: most of the economy is ‘informal’, and that’s where livelihoods are made.

In the rural areas this is especially so. And, as we have shown in our research over many years, this is vibrant, growing and generating employment in significant ways, particularly when linked to land reform areas that are producing surpluses and creating spin-off linkages in local economies. It is far from dead, as Hawkins suggests, but it is different to what went before. This is not backward-looking rural traditionalism, bound by archaic cultural norms, as Hawkins seems to suggest, but the new economy; one that everyone must get used to and support. For sure, it is the ZANU-PF support base, and the reason they won the parliamentary elections, but that makes it even more important that the government gets its reforms right for rural people, as well as the urban middle classes.

The small steps towards a positive dynamic of rural growth spurred on by land reform however stalls dramatically when the wider economy is in crisis. With no liquidity, investments dry up, and with a lack of credit, the financing of new operations cannot occur. If inflation kicks in, as it is now (some estimate that annual inflation is touching 50 percent already), then the value of goods is uncertain, and economic transactions are risky. The result is that the economic dynamism ceases, and livelihoods are affected up and down value chains, from agricultural producers to traders to processers to wholesalers to retailers and consumers.

This is what happened in the mid-2000s, and again is what is happening now. But rather than dismiss rural people and areas as economically backward, somehow culturally unable to engage with a modern economy, policymakers and economic advisers need to appreciate the potential of the agrarian economy, and encourage investment. Simply wishing an industrial revival without a core agrarian productive base supporting the mass of the population is foolish, especially in Zimbabwe’s context, as a small economy operating in a highly competitive global environment.

Wider stabilisation, debt write-offs and addressing inflation and currency instability is vital at the macroeconomic level and must be central to Mthuli Ncube’s agenda. But his next step must be to set up the type of investment strategy that allows a dispersed, largely informal economy to thrive, and contribute to growth and employment in multiple ways for long-term, sustained and equitable recovery.

Only then will links be made that allow the industrial and service sectors to thrive, and taxation and so government revenue raising to be applied. The post land reform economy does not look like that of the 1990s in the earlier adjustment era, or the post UDI sanctions period in 1980. Big ticket ‘modern’ investments in agriculture, tourism, maybe even some industries, will be important, but they must not undermine or take attention away from the key challenge, which is supporting the real, predominantly rural, economy where most people make their living.

It’s politics, stupid!

The on-going negotiations with the IMF and the wider diplomatic and donor community are of course not just about economic restructuring, investment and financial prudence. They are also (of course) about politics. With Nelson Chamisa and the opposition MDC still not recognising the results of the elections, their lobbying of western governments continues.

Their strategy is unclear, but it seems to be to encourage the US in particular to maintain sanctions and the ZDERA law, with the aim of extracting political concessions for the long-term. You can see the rationale, but the consequence is that the economy is nose-diving and people are suffering; if not from cholera due to lack of investment in urban infrastructure, certainly from growing economic hardships, even if this is only queuing for petrol at night. This may backfire, with the opposition seen as holding the country hostage, undermining recovery for political gains.

Calls for demilitarising the state apparatus as part of conditions are appropriately central to many demands. The latest bogey-man for the international community is of course the Vice President General Chiwenga. But, with ZANU-PF, despite the new, PR-branded version that President Mnangagwa is projecting, a securitised state is likely to persist, even after the army has returned to the barracks or swapped uniforms for suits. A technocratic-military state is a feature of the current dispensation, and by some seen as a positive route to implementing a state-led (aka ‘command’) developmentalist policy, in the mode of Kagame in Rwanda or previously Meles in Ethiopia.

Where next?

There are divisions amongst the western diplomatic community on how to move forward. Some take a pragmatic stance and argue that a stabilisation bailout will create stability, and allow the economy to function, arguing that conditions for future elections and a deeper embedding of (western-style, liberal) democracy will emerge only when the country is not in crisis mode. Others make the case that a crisis of legitimacy following the elections means that this is the moment to exert pressure on Mnangagwa and exact the maximum concessions in favour of the opposition’s stance. Economic crisis is a price worth paying if political reform emerges, goes the argument. Within ZANU-PF and the MDC, as well as commentators not linked to any party, all shades of opinion exist.

What all agree is that a return to 2007-08 is not desirable, and that action to avert this needs to happen soon. And I would add: a focus on supporting the informal sector and the agrarian economy – and the linkages beyond – is vital to any way forward.

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

Britain and Africa: confronting the Zimbabwe question

Last week my boss, Lawrence Haddad, asked me to write a guest blog for Development Horizons. He had read Richard Dowden’s piece in Prospect magazine, and wanted to know my views. The blog I wrote, subsequently picked up by African Arguments, All Africa, the Zimbabwe Mirror and various other websites, is below.

Britain and Africa: confronting the Zimbabwe question

Britain’s relationship with Africa has always been a tricky one; and this is particularly so for a former settler colony like Zimbabwe. Robert Mugabe’s recent win in the contested election in Zimbabwe has been seen by some as a victory for independent, sovereign Africa over the former colonial power and its imperial ambitions. As Richard Dowden commented in a recent issue of Prospect Magazine, this was “the biggest defeat for the United Kingdom’s policy in Africa in 60 years”.

In his recent speeches, Mugabe has not been able to constrain his glee. The deep animosity that developed between Zimbabwe and Tony Blair in particular is still a recurrent refrain. Britain has misjudged its diplomatic relationships with Zimbabwe many times, but the most extreme incident was Clare Short’s ill-judged letter in 1997 arguing that Britain had no special responsibility for the land issue, and Short’s Irish ancestry showed that she was not on the side of the coloniser. This of course infuriated Mugabe and many others. As nationalist leaders who fought a liberation war against Ian Smith’s Rhodesia regime, the denial of responsibility for colonialism was outrageous.

Yet today Britain is a declining power, with decreasing economic and political clout. Zimbabwe, as other African states, has turned to others for support, where the baggage of colonialism and the strings of aid and investment conditionality do not apply. Zimbabwe’s ‘Look East’ policy focuses on China, but also Malaysia, India and others. Chinese investments in Zimbabwe have accelerated, particularly in the period from 2000 when Western nations boycotted the country, and investment and credit lines were curtailed, due to Western reaction to Zimbabwe’s radical land reform.

The land reform saw a major restructuring of the agricultural sector and the wider economy. A transfer of nearly 10 million hectares benefitted over 170,000 households, around a million people. But at the same time it removed 4000 mostly white farmers from their land, and considerable numbers of farm workers lost their jobs. The consequences have been far-reaching, as we outlined in our book, and debates continue about the pros and cons, means and ends.

The sanctions imposed by the West were aimed at punishing the Mugabe regime, and were particularly focused on the President himself and his immediate coterie. The withdrawal of Western capital and credit had an even bigger impact, and helped precipitate a collapse in the economy. From 2009, and the establishment of a unity government with the opposition, the economy recovered to some extent, especially following the abandonment of the local currency. This put an end to hyperinflation that had increased in some estimates to 230 million percent, and encouraged investment again.

In the agricultural sector, tobacco and cotton production boomed. Chinese and Indian companies in particular have been important players. For example, the Chinese company Tian Ze has contracting arrangements with over 250 farms, mostly in the new resettlement areas. Smallholder farmers who gained land through the reform are now the major producers of such cash crops, and contribute significantly to the national economy. Chinese led outgrower arrangements provide support in terms of finance, inputs and advice. British companies that had been important as buyers of tobacco from the previous white commercial farmers have looked on, and are now trying to get back into the game.

Mugabe’s party, ZANU-PF, has certainly exploited the land reform to gain political advantage. The land reform, they argue, is evidence of the struggle for liberation having reached a final phase. Shedding commercial links with Western companies shows in turn that sovereign countries like Zimbabwe now have a choice, both in economic and political affairs. No longer will they be pushed around, condescended or demeaned. Of course this rhetoric must be taken with a very large pinch of salt, as the political-security-business elite associated with ZANU-PF have benefitted from these reconfigurations of land and economy, alongside considerable numbers of ordinary people.

Indeed, the electoral calculus of 2013 suggests that land reform beneficiaries, along with other rural people, backed ZANU-PF, reversing the major wobble in 2008, when ZANU-PF lost both parliamentary and presidential polls. It is impossible to know for certain what the real results were, as there was most definitely fiddling going on. This included bussing in voters to swing constituencies, changing constituency lists and obstructing registration for young and urban voters, as well as various forms of intimidation.

However many commentators believe that the results were probably pitched in favour of ZANU-PF and the opposition MDC lost, if not by the margin announced. Certainly the opposition offered very little in the way of a campaign, and failed to articulate a convincing vision for land, agriculture and rural development. Independent assessments prior to the elections indicated a major disillusionment with the MDC, due in large part to their mixed performance in the unity government, with a major swing to ZANU-PF predicted.

Will Britain and other Western nations reengage with Zimbabwe? This is not the result that they wanted, nor the one that most expected. They had been convinced that the violence, corruption and neglect of human rights and the rule of law that has characterised the ZANU-PF regime (in fact for most the period since Independence in 1980) would put an end to Mugabe’s rule. The diplomatic social milieu in Harare is of course very different to the rural areas or the townships and squatter settlements on the urban fringe where most voters live. It is not difficult to see why the result was so incorrectly called.

The question arises, should the West support presidents and parties with an electoral mandate but who are involved in clearly highly reprehensible, possibly criminal, practices? Where does an ‘ethical’ foreign policy fit in? And what about the role of the West in upholding international standards and human rights? Opinion is highly divided on this topic, in Africa and elsewhere.

This has been brought to a head by the on-going prosecution of the Kenyan president, Uhuru Kenyatta and his vice-president, William Ruto by the International Criminal Court. The African Union, irked by the seeming emphasis of the ICC on African abuses and not others (Blair and Bush are of course mentioned as those who have got away), has proposed that sitting presidents should not be prosecuted. Others have called for withdrawal from the ICC, arguing, like the US, that international meddling in sovereign power is problematic and biased. Mugabe – of course – has joined in the chorus.

The double standards of the West are of course plain to see. Mugabe, Morsi, Museveni, or Meles? Who is/was acceptable, and who deserves to be cast out? And on what basis? There are no clear rules, and the interests and biases of Western foreign policy and associated commercial and political interests quickly become exposed. Is it perhaps easier to go the Chinese route, and proclaim a position of ‘non-interference’, based on ‘solidarity’ and ‘mutual interest’, while at the same time promoting a highly interested commercial relationship through development cooperation?

The UK’s Secretary for State for International Development, Justine Greening, hinted at such a shift in UK policy recently in a speech at the London Stock Exchange. Some observed that she sounded more like a Chinese official, acknowledging the importance of aid relationships for UK business; a contrast to her predecessors who only emphasised human rights, good governance and Western liberal democratic values.

As African states become more assertive in international affairs, buoyed by economic growth and a sense that in the post-colonial world order they do not have to be behoven only to the West and their former colonial masters, there is a greater level of what some have termed ‘state agency’ – the ability to negotiate,  manoeuvre and make choices. Yet, with the West unable to dictate through aid conditionalities, there are even greater obligations on citizens, as part of civil society organisations, social movements, political parties and electorates, to hold states to account.

In places like Zimbabwe this is not easy, given the obstructive and sometimes violent and oppressive politics of the ruling party. As the opposition rebuilds itself it has some serious thinking to do. Avoiding getting perceived as a puppet of the West, and broadening its focus to encompass economic and social rights and freedoms at the centre of a redistributive agenda will be essential. Meanwhile, Britain needs to reengage, supporting investment in the productive sectors, including agriculture and belatedly backing the successes of the land reform, and join Zimbabwe as a partner in economic development, alongside China and others, avoiding at all costs the misplaced, patronising stance of the past.

Ian Scoones is a Professorial Fellow at IDS, he blogs at www.zimbabweland.wordpress.com, and is co-author of Zimbabwe’s Land Reform: Myths and Realities

Making friends in London: is a new rapprochement on Zimbabwe occurring?

Recently, the ‘Friends of Zimbabwe’ group of western donors met in London, together with representatives of all of Zimbabwe’s main political parties. The ‘Friends’ group – formerly known as the ‘Fishmongers’ after an expensive restaurant in Harare – is a grouping aimed at the discussion of international donor policy on Zimbabwe, including sanctions. While all the western donors are represented, its positions are firmly influenced by the EU and the US, and perhaps especially by the UK. London was therefore a fitting destination for the latest meeting.

The final communiqué was the usual non-committal diplomatic statement, indicating continuing commitment to Zimbabwe, and recording the actually substantial aid flows that are being offered. But the departure for this meeting was the presence of senior ZANU-PF officials whose travel bans had been removed following the successful Constitutional referendum.

Justice minister, Patrick Chinamasa, was among the delegation, and he got a roasting on BBC’s Hard Talk, as he tried to defend the government position on a variety of policies. However, there were also other more civil exchanges, including one at Chatham House when senior officials from all parties, commented on the current situation with a clear tone of compromise and conciliation.

The political context in Zimbabwe remains highly uncertain, but there are unexpected shifts – partly as a result of the relative success of the ‘unity’ government, and partly as a result of failures in the opposition, both to offer a convincing alternative and to develop a clear set of alliances.

Simukai Tinhu offered a useful overview in a recent African Arguments piece. Phillan Zamchiya in a very detailed Crisis in Zimbabwe report reckons ZANU-PF is gearing up to win the election by stealth, stealing votes and fixing the results through a number of tactics. These are well worn tricks of course, but there may be wider political shifts underway too. However, simply blaming a poor result for the MDC on foul play may not be enough. For this reason many see another coalition as an inevitable result, with the big questions being who will occupy the presidency and what the balance of power will be in parliament.

Finance Minister Tendai Biti was also in London recently on his way back from negotiations with the IMF in Washington, and again spoke at Chatham House. Analysis by the Zimbabwe Human Rights NGO Forum was revealing:

“Judging by the Minister´s tone and the way he addressed some of the key issues, it is our opinion that the gap between ZANU PF and the MDC(T) on key issues appears to be narrowing. Similarly, the Minister was quite diplomatic in trying to demystify the myth that the MDC and pro-democracy civil society organisations are synonymous and are working together towards the so-called regime change agenda. He obviously did not want to alienate pro-democracy civil society organisations which traditionally helped the MDC in its formative years.

However by expanding the definition of civil society organisations beyond the usual narrow definition and stating that there is an operational civil society in Zimbabwe, the Minister sought to, in our view; keep a healthy distance between the MDC as a political party and other pro-democracy groups. This, it appears, was his counterpoint, against the ZANU PF argument that all pro-democracy forces are bent on a western-sponsored regime change agenda.

The view that points to a political convergence is supported by the plea the Minister had made to the USA and the IMF that Zimbabwe ought to be treated equally according to the same measure that has been used on countries with troubled pasts such as Burma. By saying this, he echoed his strong views for the lifting of sanctions by the European Union in July 2013.

On the issue of indigenisation, the Minister again struck a note which doesn´t quite resonate with some of the sentiments from the Western countries.

It would appear that behind closed doors, both the MDC and moderate ZANU PF Ministers agree on key issues than they disagree in public.

That´s how politics work. The current widely held view that President Mugabe hasn´t softened on his legacy ignores anecdotal evidence that indicate that lately he has been softening his clenched fist, so to speak. An example is his calls for peace, which has widely been dismissed by most people as rhetoric which doesn´t match what is happening on the ground. However anecdotal evidence from various sources including Zimbabwean equivalent of Wikileaks appear to suggest that the President´s attempts to soften are negated by some within his party who fear what might happen if ZANU PF softens on its legacy inspired by its liberation war credentials.

Although the Minister spoke about the current issues of concern, he was very measured in his approach. He exhibited every sign of a principled man, who, despite having undergone the vagaries of his difficult job and the incarceration he underwent in 2008, has matured, forgiven his persecutors and might even have undergone a paradigm shift. This shift, which is also reflected in the entire MDC, has seen it move from its widely perceived Eurocentric roots to the moderate pan-African approach. It also appears that there are some within ZANU PF who have softened on their legacy by moving to the centre ground although there are still some still on the far right. Those on the far right are in our view, the ones the Minister referred to when he said there are Ministers within the government who make irrational political statements that affect the economy”.

In light of other pieces of evidence we have gathered, particularly the likelihood that the US is to announce policy shift on Zimbabwe, there is every indication of a national and political consensus on key issues, which might see an unexpected political landscape after the elections.”

The consensus may be surprising to some who have been viewing Zimbabwe’s tortured process of transition from afar. There may be much more consensus on thorny issues of land reform, national ownership of key businesses and the role of civil society than is commonly understood.

Clearly the consensus is not universal and the more progressive elements across all the parties may be out-manoeuvred by those with other agendas, whether the military elite, fearing post-election reprisals, or white capital, seeking a reassertion of power. As Biti, a clear presidential contender in the (maybe not so far off) future, tentatively repositions the MDC, it may not just be the traditional western ‘friends’ of Zimbabwe, but others including China, Brazil and South Africa, who become the important brokers into the future.

This post was written by Ian Scoones and originally appeared on Zimbabweland

 

Zimbabwe has a new Constitution, but disputes over the land provisions continue

On March 16^th, Zimbabweans voted on a new Constitution in a national referendum. The voting was largely peaceful, and the turnout higher than expected, with over 3 million people voting. With all major parties supporting it, the result was a resounding 93% ‘yes’. This endorsement paves the way for elections in the coming months. It is also an important signal that a new commitment to moving forward has been reached, one that international donors have agreed to respect with the removal of further ‘sanctions’.

The Constitution is naturally a compromise document, one hammered out in parliament by all the parties. It involved wide consultation, with inputs from the public. Given Zimbabwe’s immediate political past, it is in many respects a remarkable achievement. It is of course rough at the edges, and not everyone agrees with every section, but it now does exist, and should, in my view, by celebrated.

Of course one of the controversial areas has been the issue of land (see earlier blog). Some are very unhappy about the provisions, blaming the MDC in particular for conceding too much. Ben Freeth, the former farmer activist, is particularly outspoken. In a slightly more considered contribution, Dale Dore asks, can the new Constitution bring about a just, legal and transparent land policy? He answers, “The prospects, unfortunately, look decidedly bleak. Chapter 16 entrenches the outcome of land invasions and the seizures of farms and property. The draft Constitution also retains provisions under section 72 that are inimical to international law, human rights and the rule of law”.

What then are Dore’s complaints? He argues that the separation of provisions on property rights from rights over agricultural land is a big mistake, as the section on agricultural lands restricts rights, running against natural justice. He is particularly concerned about the long-talked about Land Commission, as he thinks it will not have teeth, and will be easily captured. He notes:

“The most important retreat, however, has been to make the Land Commission an advisory body to Government rather than an independent parastatal organisation with executive authority. The Commission may make recommendations on a host of issues – including land tenure and compensation – but it lacks any real powers of implementation or teeth for enforcement. Decisions governing land remain firmly in the hands of the President and his appointed minister”

While Section 297(6)” tries to give the impression of independence and impartiality”, he argues that this is not sufficient. This he worries will mean that a Land Audit, also a requirement in the Constitution, will not be fair, as it will be overseen by the Commission.

Overall he argues, that the section on land – Chapter 16 – “maintains all the discriminatory provisions governing farmland found in the current Constitution”. He argues that there will be inadequate notice of compulsory acquisition and that compensation will be paid for improvements only, and not the full value of the land. He objects to the proposed dispute settlement mechanism, arguing runs against basic principles of ‘rule of law’, being an administrative not judiciary process. He argues that, as a result, the Constitution is not in line with earlier rulings by the now disbanded SADC Tribunal ruling. Yet, as I and others have commented before, this obsession with this particular ruling forgets that the proposed constitutional provisions are actually in line with much international practice, and perfectly compatible with ‘the rule of law’, as long as the rules and regulations are abided by. This of course is the critical point. The test will be in the practice, and the demonstrated impartiality and effectiveness of systems of land acquisition, compensation and dispute settlement. Given recent experience, Dore and others are right to be concerned, but have no real argument for rejecting the provisions as a whole.

Before jumping to excessively negative conclusions, we have to understand the political context for the new Constitution, in order to judge it properly. In a heated debate at the end of February on the new Constitution, chaired by Violet Gonda in the Hot Seat slot on SW Africa Radio, Professor Brian Raftopoulos commented:

“Well I think the first thing to point out is that this constitution was a central part of the mediation process. It was always therefore going to be a compromise document and part of a broader process of trying to establish the conditions for a free and fair election – which was the original objective of the SADC mediation. There’s clearly things in the constitution which are problematic; there’s also things which I think establish a very good basis for moving forward and I think that as part of a long term process of discussion between the parties which was established through the mediation, it’s a step forward and one should look at it as that”.

On land, he notes:

“This land process has produced many contradictory results. As recent research shows, it hasn’t been the complete failure people thought it was but at the same time it hasn’t ended the land question. It’s raised a whole series of new issues, which are going to confront Zimbabweans throughout – for the coming decades. So this issue hasn’t been resolved and there are harder questions ahead”.

Of course the land question is not going to be fully resolved by the Constitution. But hopefully the Constitution sets the basic parameters: the land reform is not reversible; rights to land are circumscribed by the state to avoid abuse; compensation for improvements are offered if land is acquired by the state; land administration and distribution is overseen by a competent authority in the Land Commission; and abuses are corrected through a transparent Land Audit. All of these provisions are actually good ones, and compatible with international practices, but will only work if the appropriate political and administrative conditions apply. Given recent experience, this is of course a concern, and why a wider political resolution of the on-going political impasse in Zimbabwe is so urgently needed.

However, given that it has now been approved by the referendum, and given that the Constitution represents an important moment in the mediation process to create such political conditions, surely its basic principles need now to be respected. Sure, there will be need for working out the details of the Commission, the Audit and the associated regulations to govern any land administration processes, but the overarching basis for these, surely, is now set.

Or is it? Dale Dore refers to a discussion with a ‘senior MDC politician’ who noted that: “The MDC had to make compromises. If it conceded to ZANU(PF) on the land issue, he said, “so what?” Anyway, he added, land is not a major issue for the great majority. The issue of land and land policy was something the MDC could fix once in power”. This seems more like a threat to unravel things that have been agreed, even as reluctant compromises. In an email exchange on Dore’s piece as part of probably the most bizarre email list I am copied in to, Eddie Cross MP, the MDC’s Policy Coordinator General (who supported a yes vote with 10 reasons), commented on 10 March, “Excellent as usual – but so long as everyone understands that this was the main focus of concession to the views of Zanu PF in the negotiation and was a compromise – it is not the final word on the issue of agricultural land”.

Yes the Constitution is a compromise. Yes it emerged through negotiation between parties that did not agree. And, yes, it is not the final word. As Brian Raftopolous pointed out in the SW Africa Radio discussion, “there are still a lot of issues around the land [issue] which wouldn’t necessarily be dealt with simply through the constitution – issues which will have to be dealt with through legislation coming afterwards and through political and technical processes that need to take place in the aftermath of what has happened”.

But does this mean that the basic tenets of the Constitution should be dismissed? Technical and administrative details will be required of course, but should a party go into an election essentially saying that key sections are up for grabs? What if ZANU-PF said the same? There would, quite appropriately, be uproar. Equally, for the resumption of international development assistance to be conditional on changes to the now approved Constitution, as Dale Dore seems to suggest, would be madness.

The new Constitution, with its inevitable flaws, now at last provides the basis for moving forward: hopefully towards the removal of sanctions and free and fair elections in a few months time. This is by no means assured, and the unlawful arrests of MDC officials and their lawyer, Beatrice Mtetwa, does not bode well, with a return to ‘brute power’ suggested by some. But equally we cannot succumb to fatalism, a trait so common among the commentariat. Let us also hope that after the elections, the parties respect the Constitution and the painful, slow, but ultimately successful, process of creating it, with all its difficult compromises, was not in vain. A process of healing, compromise and looking to the future is what all Zimbabweans need above all. If any party comes into power and rips up sections of the Constitution they don’t like, is this a good result? For this reason, I, for one, would favour another coalition government; one that, this time, is genuinely committed to national unity and development, so the spirit of compromise with all its awkwardness and faults, embedded in the Constitution provides the basis for a brighter future.

This post was written by Ian Scoones and originally appeared on Zimbabweland

Aid to Zimbabwe: time for a rethink?

In a recent article in the Guardian, Alex Duval Smith argues that aid to Zimbabwe must support resettled farmers on so-called ‘contested areas’. These are the 8m or more hectares taken over as part of the ‘fast-track’ land reform programme from 2000. Around 180,000 households, about a million people live in these areas, yet aid – development and humanitarian – is not offering support despite the clear needs and challenges.

Many argue that the UK government and others should boycott such areas, as they are under dispute – sometimes with legal cases in Europe and elsewhere. The Zimbabwe Vigil group, based in the UK, is vehement that sanctions should be retained. The EU argues that the ‘targetted measures’ (notionally focused on individuals, but actually much broader in effect) should be sustained until free and fair elections have been held. But it has been 12 years since the land invasions and the challenges are very real – whether in the area of agricultural production, social services, health and education.

I offered a brief contribution in response to the (yet again) rather ill-informed comments being made on the Guardian’s website:

Alex Duval Smith is absolutely correct to argue that Zimbabwe is missing out on the benefits of land reform by failing to invest in the ‘fast track’ resettlement areas. For sure some areas are not being fully utilised, but our decade-long research study in Masvingo province showed how, particularly in the A1 schemes, most new farmers are producing, selling, investing and accumulating. Most new farmers in these areas are not ‘cronies’, linked to the ZANU-PF elite, but ordinary farmers formerly from nearby communal areas or towns. But equally, as Alex Duval Smith correctly points out, such farmers cannot do everything by themselves. They need support – from government, as well as donors. Their predecessors, the white farmers who occupied the land from the colonial period, received massive support over many decades, and new farmers need this too if the restructured agrarian economy is to thrive. Investment in schools, roads, irrigation, extension services, markets and so on are all essential. Of course the situation across the country varies enormously, as the array of studies now available shows, and thus it will be necessary to tailor support accordingly. But 12 years since the land reform, it must be time to reconsider the aid boycotts and ‘sanctions’. These provide political succour to elements of ZANU-PF, and all sides concur they do more harm than good.  Everyone agrees that land reform in Zimbabwe was necessary and, although the manner in which it happened resulted in unnecessary violence, disruption and loss, today Zimbabwe, and its development partners,  must look to the future, accepting the need for some compensation for those who lost out, but also supporting the new farmers. A more informed debate about Zimbabwe’s land reform is urgently needed, and this article is an important and timely contribution.

A rethink of ‘sanctions’ is clearly needed. Unfortunately the UK continues to sit on the fence. According to recent reports, the UK High Commissioner, Deborah Bronnert indicated that the UK government had no intention of changing their tune on land reform. “At some point I think we are likely to…support a future settlement but I think we are a long way from it and it will require quite a big political shift and a political settlement here for that to be taken forward,” she said. Farm families on the new resettlements may have a long wait for education and other services.

http://www.guardian.co.uk/global-development/poverty-matters/2012/may/04/aid-zimbabwe-resettled-farmers-contested-land

Sanctions stand-off

The issue of “sanctions” (or restrictive measures if you prefer) has become a political football in Zimbabwe’s painful political transition. The US and Europe insist they are essential, but regard them as only limited and targeted. Meanwhile, ZANU-PF argues that they are undermining recovery and preventing unity. And various opposition groups, although not the MDC formations, argue that they are an important lever in negotiations around the constitution, addressing human rights abuses and so on.

The problem is that when discussing ‘sanctions’, different people talk about different things. For sure there are highly restrictive measures applied to particular people, including many close associates of the President. These prevent travel, financial transactions and more. But actually the effect of the diplomatic stand-off, now over a decade old, is much wider, with diverse knock-on effects. It affects the way aid funds are spent, with the channelling of funds away from government and through NGOs. It influences the ability of Zimbabwe to gain credit lines internationally, pushing the government and the private sector towards Chinese sources, for example. It undermines the relationships with the international financial institutions (the IMF and the World Bank), and so the ability to secure loans and seek debt relief. And of course with diplomatic relations strained, normal interactions on the international stage are affected. While perhaps not formal sanctions, the effects are the same – and these are shaping Zimbabwe’s economy and politics not just now, but perhaps for the long-term.

This may be the desired effect. Isolation, and the creation of a pariah state, reinforced by a narrative about the evil of Robert Mugabe, may be the diplomatic aim of US and European foreign policy. But does this really make sense in 2012? Many think not. Certainly SADC has long argued for the removal of sanctions. The MDC also regularly make this plea. In their CMI brief of 2010, Alois Mlambo and Brian Raftopoulos argued: “The future of the democratic forces in Zimbabwe depends, in important ways, on its capacity to lead an economic recovery programme that will strengthen the country’s social base. The assumption that a deepening crisis and continued sanctions will be advantageous to the opposition is a dangerous fallacy”.

In other words, sanctions can act to undermine democracy, strengthening the hand of the nationalist hawks, while undermining any alliance of democratic forces in the MDC and beyond (including in ZANU-PF). Economic recovery – and with this must be the restructuring and revitalisation of agriculture following land reform – goes hand in hand with the growth of democracy.

This is a view reinforced by an insightful new briefing by the International Crisis Group, ‘Zimbabwe’s Sanctions Standoff’.  Reviewing the fragile political situation in the lead up to the elections (which must be held by June 2013), the briefing argues that: “ZANU-PF manipulates the issue politically and propagandises it as part of its efforts to frustrate reform and mobilise against perceived internal and external threats to national sovereignty”.  Evidence, the briefing says, indicates that: “the existence of sanctions has strengthened ZANU-PF hardliners against more reformist elements and the MDC-T and provided an ostensible justification to block reforms”.

The problem is that removing sanctions, even flexibly and incrementally, is be seen as a sign of capitulation and victory of the hardliners. Not only has the issue become a contest between different political groupings within Zimbabwe, it has also been a contest between Harare based diplomats and their superiors in Washington, London or Brussels. Sanctions, as the ICG briefing suggests, has become a diversion, and the underlying political challenges that need to be addressed in advance of the elections – most notably accountability of the security services – are not on the table. It is therefore good news that the EU has ‘eased’ its restrictive measures from February 2012.

The international community has failed in the past to seize the opportunity to exert influence, for example around the formation of the GNU, preferring to maintain a simple, politically pure hardline stance, but this positioning has not helped. Indeed, according to many analysts, it has made things worse. Perhaps, as the economy continues to rebound, and the ‘social base’ grows, now is another moment, and the EU’s move is a sign that relations are thawing and a more pragmatic approach will prevail.