| UNIVERSITY OF PENNSYLVANIA - AFRICAN STUDIES CENTER |
Zimbabwe: Statements/Analysis, 1 Date distributed (ymd): 000514 Document reposted by APIC
+++++++++++++++++++++Document Profile+++++++++++++++++++++
Region: Southern Africa Issue Areas: +political/rights+ +economy/development+
+security/peace+ +US policy focus+ Summary Contents:
This posting contains two statements on the current crisis in Zimbabwe, one from the Advocacy Network for Africa (ADNA) and the other from the African Studies faculty of Michigan State University Another posting today contains on-line starting points for background and analysis on the current crisis in Zimbabwe, an article by Patrick Bond on the history and political economy of the crisis, a statement from the Congress of South Africa Trade Unions (COSATU) and a brief update on the economic situation from the UN's Integrated Regional Information Network.
+++++++++++++++++end profile++++++++++++++++++++++++++++++
Statement on the Present Crisis in Zimbabwe and Needed Actions Advocacy Network for Africa (ADNA) May 10, 2000
Zimbabwe's current political and economic crisis demands immediate attention and action from the international community. As one of Africa's long-term success stories, Zimbabwe's current environment is now one of extreme fragility. National peace and security are severely threatened, and there are regional implications that stem from Zimbabwe's collapsing economy as well as the potential for massive refugee flows if human rights violations persist or violence escalates.
Of urgent concern is the fact that regular attacks are taking place, on both members of opposition parties such as the Movement for Democratic Change (MDC) and white commercial farmers, allegedly by well-organized supporters of the ruling ZANU-PF party. At least eighteen people have been killed, including white and black farmers, MDC members and a police officer. President Mugabe claims that the land-occupiers are dissatisfied war veterans and that the violence is due to white farmers resisting their occupation. The fact that the attacks have been mounted against MDC members however, in the run-up to the parliamentary elections after President Mugabe received his first major defeat-a rejection of his proposed new Constitution-illustrates the very political nature of the problem. MDC Executive members claim they have been threatened with death, and there is wider concern amongst the public that those who support the MDC may be under threat as well.
While these political sources of conflict must be immediately addressed, any long-term transformation of Zimbabwe's crisis will require addressing the structural sources of conflict, upon which the success of violent conflict depends. In addition to the very real land hunger, there is a present economic crisis, characterized by record high unemployment (over 50%), poverty (76%), inflation at (70%), and severely declining standards in education and health (with Africa's highest AIDs-related death tolls)-all of which have considerably worsened since the introduction of the Economic Structural Adjustment Program (ESAP) in 1991. Compounding these problems is the financial fact that Zimbabwe is reportedly spending US$1 million per day in the Congolese war.
Immediate End to Violence and Impunity
Police should act impartially and promptly to situations of potential and actual violence and should safeguard the human and civil rights of all in Zimbabwe. Specifically police should protect the security of the farm workers, farmers, opposition leaders and members, and in particular women, now vulnerable to acts of rape, as well as peaceful demonstrators exercising their rights of freedom of speech, assembly and association. The government of Zimbabwe, and President Mugabe specifically, should direct police to act in this manner.
Investigations should also be promptly and impartially made into all violations, or risk the characterization of violence with impunity. Immediate investigations that should be undertaken include: violence surrounding the Saturday 1 April peace demonstration in Harare, all murders and cases of arson and rape.
Free and Fair Elections
Elections should be conducted in a free, fair and transparent manner devoid of intimidation and violence, respecting peoples' rights to freedom of expression and association. The government of Zimbabwe should act to protect the integrity, fairness and openness of the electoral process. State-sanctioned acts of violence create a climate of fear where individuals are unable to exercise their rights.
By calling opposition leaders "puppets of the white farmers" and white farmers "enemies of the state" for their support of the MDC and their "no" vote in the constitutional referendum, President Mugabe illustrates his resistance to the most fundamental aspects of democratic process that entitle the free formation of opposition political parties. Historically, President Mugabe's record in this regard is not good. In previous elections, the courts successfully prosecuted ZANU-PF members for political violence, to which the President responded promptly with political pardons.
Land Invasions Stopped
Land invasions should be stopped and the Zimbabwe government should not support them. They threaten the immediate human and civil rights of farm workers and farm owners, and raise the prospect of wider social violence. They also contribute to an atmosphere of intimidation in the run-up to elections. Zimbabwe's highest courts have twice ruled that against the occupations, and that the police should evacuate them. These court rulings must prevail.
In addition to the threatening atmosphere and actual violence they produce, land invasions present the appearance or reality of partisanship, and discriminate a priori in favor of some social groups, particularly actual or claimed ex-combatants aligned with ZANU-PF, to the likely disadvantage of other groups, including farm workers, older and younger peasants, ex-combatants not aligned with ZANU-PF, and women, as well as current land owners.
Action
The legitimate and much needed issues surrounding land reform should be dealt with through the extensive measures that have already been arrived at and put in place. These include the Inception Phase of the Land Reform Program, and the UNDP- coordinated Technical Support Unit, responsible for assisting implementation. As also suggested in the Donor Conference Report of September 1998, further discussions between all potential stakeholders should continue to take place, in conditions free of violence and intimidation. This should include farm workers, whose indigenous knowledge of the farms ensure that they are well placed to continue working that land. Efforts such as the National Stakeholder Workshop held in May 1999, must continue to inform and guide the process.
As both non-governmental organizations and the 1994 Land Tenure Commission Report has emphasized, land redistribution is essential for sustainable development and national reconciliation. Various non- governmental actors within the country have noted that a fair land redistribution process must be guided by principles of:
a. equity, in terms of race, gender, and number of landholders (more landholders, smaller farms), and in terms of access to rural infrastructure, agricultural and capital markets;
b. transparency: open and accountable process of land acquisition and its redistribution;
c. participation: the policy and program would involve potential 'winners' and 'losers', with opportunities and fora for policy dialogue and steps taken to compensate 'losers';
d. fairness: beneficiaries of resettlement are to be selected by clear process, and not determined through racist, ethnic, regional party affiliation, or anti-'foreigner' sentiments, and at the same time;
e. a need-based strategy: those in greatest need should be targeted. While the system to date in theory is "fair," in practice the government is under fire as government ministers, who are generally not farmers, have reaped benefits.
The U.S. government should pursue approaches to the situation that put priority on concerns for human rights, social justice, peace and development in Zimbabwe rather than on international economic ideologies. They should consult widely with all interested Zimbabweans and support a process of social negotiations that is widely participatory, transparent and free of coercion, in which Zimbabweans set the pace and content.
International commitments, some dating back to the 1979 Lancaster House Agreement, to financially aid the land reform process should be reaffirmed and extended, following elections and supporting the above principles. The international community should call for and support free and fair elections, providing funds and election monitors.
Active efforts should be taken by the international community towards fulfilling moral and practical, historical and contemporary responsibilities related to land redistribution. The Zimbabwean government's efforts have long been crippled by a lack of resources to carry out needed land reforms-even when it was pursuing policies approved of by Britain and the wider international economic community. Land redistribution, needed for sustainable peace and development in Zimbabwe will require thoughtful consideration and action towards linkage to Zimbabwe's wider development policy.
Signatories
(Twenty-one ADNA member organizations signed on to this letter. List of signatories is on file.)
Erin McCandless Editor, Cantilevers School of International Service, American University 4400 Massachusettes Ave. NW Washington DC 20016-8071 Tel: (202) 885-1626/Fax: (202) 885-2494/levers@american.edu --------- Home: 526 4th St. NE Washington DC 20002 tel: (202) 543-7513 emccand@attglobal.net
***
This message is distributed from Cantilevers and the ad hoc working group on Zimbabwe for the Advocacy Network for Africa (ADNA).
Vicki Lynn Ferguson Advocacy Network for Africa Communications Facilitator c/o Africa Policy Information Center 110 Maryland Ave, NE #509 Washington, DC 20002 Ph: 202-546-7961 Fax: 202-546-1545 E-mail: vlf@africapolicy.org Web: http://www.africapolicy.org
************************************************************
Date sent: Fri, 12 May 2000 01:26:15 -0500 From: David Wiley <wiley@msu.edu> Subject: Resolutions on Zimbabwe by MSU ASC Faculty
Colleagues concerned with Africa,
Here are two resolutions adopted by the vote of the faculty of the African Studies Center at Michigan State University after extensive discussion and amendment beginning at the Faculty Spring Meeting on May 4. They reflect our special concern resulting from the engagement of many of our faculty and students in Zimbabwe since its Independence.
These are being disseminated to the Government of Zimbabwe as well as to the U.S. Administration, Department of State, and relevant Members of the Senate and Congress.
We hope that these may have some impact on the painful and unjust situation that has developed in Zimbabwe and to the benefit of the Zimbabwean people.
Regards, David Wiley Director, African Studies Center
===
Statement on Zimbabwe by the Faculty of the African Studies Center at Michigan State University
May 10, 2000
Statement to President William J. Clinton 1600 Pennsylvania Ave., Washington, D.C. 20500 (Via Fax: 202-456-2461)
and to:
Secretary Madeline Albright and Assistant Secretary of State for Africa Susan Rice U.S. Department of State, Washington, D.C. 20520 (Via Fax: 202-261-8577)
We, the faculty of the African Studies Center at Michigan State University, are proud of our tradition of defending justice and basic human rights, condemning both injustice and oppression in Africa, as found in colonial and apartheid regimes, as well as U.S. policies which supported oppressive regimes. From this tradition we express our deep concern for the people of Zimbabwe, and we condemn the many egregious acts of violence and intimidation occurring there against both Zimbabwean farm workers and individuals who support opposition parties.
With humility, we recognize our failure to voice our collective opposition to instances of state-sanctioned injustice and violence against civil populations in several countries in Africa in recent years and the Western support of war, violence, and dictators during the Cold War. With this resolution, we pledge our more vigorous and unequivocal opposition to such practices and our commitment to a more vigorous opposition to violations of human life and liberty wherever they occur in Africa.
Specifically we call upon the government of the United States to condemn the widespread and violent attacks in Zimbabwe, including murder, rape, beatings, and burnings of homes. We note with grave concern that Zimbabwe's most vulnerable population of 3 million commercial farm workers and their families are highly vulnerable to further acts of violence in the absence of protection by Zimbabwe's police and military.
In response we call upon the U.S. government to take the lead in funding rape crisis programs for female farm worker victims and their families, new housing construction for affected farm worker families, and nutritional programs for their children.
Recognizing the legacy of the discriminatory colonial land policy and the continuing injustices in disenfranchising Zimbabweans of land, we call on the U.S. government to honor its commitment to provide generous financial support for an equitable land redistribution programs in a manner that contributes to the welfare of the truly needy--and to encourage its allies in the wealthy nations to do likewise. It also should encourage the Zimbabwe Government to vigorously address the legitimate and long-unattended needs of the landless and farm workers in a fair and just manner.
Finally we support the State Department's call of April 19, 2000 for a return to the rule of law and to respect for basic human rights in Zimbabwe, and we call upon the U.S. government to use its influence with the Zimbabwean government to insure timely, free and fair elections.
=================================
Statement to the Government of the Republic of Zimbabwe c/o The Ambassador, Embassy of the Republic of Zimbabwe, 1608 New Hampshire Ave. NW. 20009 (Via Fax: 202-483-9326)
The faculty of the African Studies Center at Michigan State University has a proud tradition of condemning injustice and oppression in colonial Rhodesia and for supporting the liberation of Zimbabwe and its people. Moreover we strongly condemned the role played by our own government in supporting the illegal Smith and Smith/Muzorewa regimes. Further, in the two decades since independence, this faculty, through its linkages with the University of Zimbabwe, the government, and non-governmental agencies, has collaborated with Zimbabwean colleagues to develop institutional capacity and to address solutions to economic and social problems confronting Zimbabwe. More than any other U.S. university, we have provided countless University, personal, and grant funds and fellowships for Zimbabweans, and we have given much labor to assist in building a new Zimbabwe.
>From this tradition of deep loyalty to Zimbabwe and Zimbabweans, we express our deep concern for the people of Zimbabwe and condemn the egregious acts of violence and intimidation targeted at the Zimbabwean farm workers and individuals supporting opposition parties.
We call upon our friends and colleagues in the Government of Zimbabwe to take immediate action to end all attacks and intimidation against these rural and urban peoples. Moreover, we call upon the GRZ to insure the basic human rights of all Zimbabweans, to immediately return to the rule of law, and to organize timely elections which are free of intimidation.
Recognizing the legacy of the discriminatory colonial land policy and the continuing injustices in disenfranchising Zimbabweans of fertile land, we also are calling on the U.S. government to honor its commitment to provide generous financial support for land redistribution programs in Zimbabwe if it is carried out in a manner that contributes to the welfare of the truly needy and to encourage its allies in the wealthy nations to do likewise.
Finally, we urge the Government of the Republic of Zimbabwe -
* to vigorously address the legitimate and long-unattended needs of the landless and the farm workers in a fair and just manner,
* to provide funding for rape crisis programs for female farm worker victims and their families, new housing construction for affected farm worker families, and nutritional programs for their children, and,
* to be proactive in providing safety and security from murder, rape, beatings, and burning of homes for all the people of the country regardless of their political affiliation.
************************************************************
Zimbabwe: Statements/Analysis, 2 Date distributed (ymd): 000514 Document reposted by APIC
+++++++++++++++++++++Document Profile+++++++++++++++++++++
Region: Southern Africa Issue Areas: +political/rights+ +economy/development+
+security/peace+ Summary Contents: This posting contains (1) on-line starting points for background and analysis on the current crisis in Zimbabwe, (2) an article by Patrick Bond on the history and political economy of the crisis, (3) a statement by the Congress of South African Trade Unions (COSATU), and (4) a brief update on the economic situation from the UN's Integrated Regional Information Network. Another posting sent out today contains statements on the crisis from the Advocacy Network for Africa (ADNA) and the African Studies faculty of Michigan State University.
+++++++++++++++++end profile++++++++++++++++++++++++++++++
Selected Web Links
E-Zim Current news and links http://www.e-zim.com
Zimbabwe government http://www.gta.gov.za
Movement for Democratic Change http://www.in2zw.com/mdc
Zimbabwe Mirror (SAPES) http://www.africaonline.co.zw/mirror
BBC Background and News http://news.bbc.co.uk/hi/english/in_depth/africa/2000/zimbabwe
Guardian Special Report http://www.guardianunlimited.co.uk/zimbabwe
APIC/ECA Roundtable Panel Zimbabwe's Farm Workers and the New Constitution http://www.africapolicy.org/rtable/ded0002.htm
Additional Newspaper and Background Links http://www.niza.nl/uk/press/zimcrisis.htm
Africa News http://www.africanews.org/south/zimbabwe
Additional Sources http://www.africapolicy.org/featdocs/southern.htm
************************************************************
Zimbabwe's Crisis Showcases Reasons for Bank/IMF Protest
by Patrick Bond
>From ZNET Daily Commentaries, April 28, 2000 http://www.zmag.org
In Zimbabwe, President Robert Mugabe appears to have taken leave of his senses, potentially plunging his country of 12 million into civil war. What does this have to do with the mid-April protests against the World Bank and International Monetary Fund?
Confusingly, Mugabe excels in IMF-bashing, famously telling Fund staff to "Shut up!" late last year. Yet from independence in 1980 until quite recently, he followed their advice unfailingly. Indeed, just five years ago, Zimbabwe was Washington's newest African "success story," as Harare adopted economic policies promoted by Bank and IMF lenders, and even conducted joint military exercises with the Pentagon.
Things fell apart quickly. Southern African diplomats are shaking their heads in frustration at Mugabe's quick-shattering Good Friday promises--made to Thabo Mbeki and other local leaders--to tone down racial rhetoric, reverse land invasions of 1,000 white farms, and sort out financial matters with the Brits, IMF and donor governments.
Is Mugabe deranged, or instead playing out a tragic logic partially of his own making, but partially imposed from above? Under the very real threat of losing parliament to the labor-led Movement for Democratic Change in coming elections, he resorts to authoritarian populism: egging on a few thousand land invaders so as to restore memories of the 1965-80 struggle against Rhodesian colonialism, a period when his Zimbabwe African National Union (ZANU) truly represented a mass-popular movement dedicated to reversing settler-colonial land ownership.
Yet early on, perceptive ZANU watchers identified two major problems: the party's class character and its likely realignment towards foreign capital.
Political scientist Rudi Murapa (currently president of Africa University, Zimbabwe's second-largest) wrote in 1977 of an alliance between "a politically ambitious petit-bourgeois leadership, a dependent and desperate proletariat and a brutally exploited and basically uninitiated peasantry."
Forecast Murapa, "After national liberation, the petit-bourgeois leadership can abandon its alliance with the workers and peasants and emerge as the new ruling class by gaining certain concessions from both foreign and local capital and, in fact, forming a new alliance with these forces which they will need to stay in power. Of course, lip service commitment, a la Kenya, to the masses, will be made."
Accusations that ZANU "sold out" are justifiable, technically--given not only the steady rise in corruption, but the fact that most of the land and other wealth redistributed since 1980 has gone to cronies not the masses--yet are deeply unsatisfying. The same will be said of the African National Congress, as it was in Zambia of Kenneth Kaunda and likewise his successor Frederick Chiluba.
However, assailing petit-bourgeois acquisitiveness--which also motivated white Zimbabweans to loot their compatriots' land and labor beginning in 1890--risks downplaying the second factor: the role of global financial pressure.
Once anti-Rhodesia financial sanctions were lifted, Zimbabwe made bad policy choices and succumbed to armtwisting by Washington. Finance minister Bernard Chidzero (who later chaired the IMF/Bank Development Committee) borrowed massively at the outset, figuring that repayments--which required 16% of export earnings in 1983--would, he insisted, "decline sharply until we estimate it will be about 4% within the next few years."
The main lender, the World Bank, concurred: "The debt service ratios should begin to decline after 1984 even with large amounts of additional external borrowing." This was the economic equivalent of a sucker-punch, for in reality, Zimbabwe's debt servicing spiralled up to an untenable 37% of export earnings by 1987. Loan conditions quickly emerged. By 1985, the IMF pressured Mugabe to cut education spending, and in 1986 food subsidies fell to two-thirds of 1981 levels.
Similarly, genuine land reform was stymied not only by the "willing-seller, willing-buyer" compromise with Ian Smith's Rhodesians at Lancaster House, but by the World Bank's alternative: showering peasants with unaffordable micro-loans. >From a tiny base in 1980, the Bank's main partner agency granted 94 000 loans by 1987. But without structural change in agricultural markets, the Bank strategy floundered, as 80% of borrowers defaulted in 1988 notwithstanding good rains.
Analyst Ibbo Mandaza lamented in 1986, "International finance capital has, since the Lancaster House Agreement, been the major factor in the internal and external policies of the state in Zimbabwe."
Agreed Thandike Mkandawire, head of the Geneva-based United Nations Research Institute for Social Development, "It seems the government was too anxious to establish its credentials with the financial world."
The macroeconomic situation worsened when Chidzero persuaded Mugabe to ditch Rhodesian-era regulatory controls on prices and foreign trade/financial flows, liberalizing the economy through an Economic Structural Adjustment Programme (ESAP) in 1991. ESAP was supposedly "homegrown," but World Bank staff drafted much of the document, which was substantively identical to those imposed across Africa during the 1980s-90s.
ESAP brought immediate, unprecedented increases in interest rates and inflation, which were exacerbated (but not caused) by droughts in 1992 and 1995. As money drained from the country, the stock market plummeted by 65% in late 1991 and manufacturing output declined by 40% over the subsequent four years. Amazingly, the Bank's 1995 evaluation of ESAP declared it "highly satisfactory" (the highest mark possible).
More vulnerable than ever before, Zimbabwe's currency then came under fierce attack during the 1997 East Asian crisis, falling 74% during one four-hour raid after Mugabe joined the DRC conflict and paid generous pensions to protesting liberation war vets.
Reacting to growing unpopularity and two Harare food riots, Mugabe finally invoked three pro-poor policies in 1997-98: reimposition of price controls on staple foods, conversion of corporate foreign exchange accounts to local currency, and steep luxury import taxes. (He also foolishly cemented the Zimbabwe dollar's value too high.)
The IMF and donors are explicitly withholding hard currency until these three policies are reversed. So Zimbabwe spends its hard currency repaying foreign lenders, and can't afford to import petrol. The harder the economic pressure bites, the more Mugabe staggers politically.
What lessons from Harare? Evade hard-selling foreign bankers. More aggressively--and honestly--redistribute wealth and land. And avoid structural adjustment policies that worsen inequality, stagnation and vulnerability. Will leaders in the Movement for Democratic Change, and for that matter also in Pretoria, take heed?
Regardless, more protesters--including Harare's church-based, anti-debt activists--are joining the global campaign to shut the IMF and World Bank, precisely because of mounting evidence of this kind, from Zimbabwe and across the Third World.
- Johannesburg-based academic Patrick Bond is active in the Jubilee 2000 movement, and authored *Uneven Zimbabwe: A Study of Finance, Development and Underdevelopment* (Africa World Press, 1998) and *Elite Transition: From Apartheid to Neoliberalism in South Africa* (Pluto Press, 2000).
Patrick Bond email: pbond@wn.apc.org * phone: 2711-614-8088 home: 51 Somerset Road, Kensington 2094 South Africa work: University of the Witwatersrand Graduate School of Public and Development Management PO Box 601, Wits 2050, South Africa email: bondp@zeus.mgmt.wits.ac.za phone: 2711-488-5917 * fax: 2711-484-2729
************************************************************
COSATU (Congress of South African Trade Unions) http://www.cosatu.org.za
COSATU statement on crisis in Zimbabwe. April 25, 2000
COSATU has been monitoring the events in Zimbabwe over the past few weeks with growing concern. It is crucial, both for that country and the entire Southern African region, that stability and the rule of law is installed in Zimbabwe.
We are once again distressed at the kind of coverage these events have got in the South African media. It seems that our journalists and editors are bent on covering this issue as purely a race issue. White farmers who have been attacked and killed have had a lot of coverage in our media, while we hear very little about black farm workers and black members of the MDC who have also been attacked and killed. We are not convinced this is purely a race issue. Do whites own all farms? Have any black farmers been attacked? What does the unity of white farm owners and black farm workers say about racism in that country?
Moreover, there has been little attempt to analyse why these events have started now, just before the Zimbabwe elections. Only a few journalists have looked at class issues surrounding these events. For example, what happens to the workers if farms are confiscated or occupied. Has there been any attempt to redress the land question and create tenure security for those who have lived and worked on these farms for a long time. Why has the land redistribution programme not been implemented after all these years?
We believe these are some of the crucial issues which should be raised in the media. We hope that journalists investigate these crucial topics, and refrain from creating a red herring leading us to believe the issue is narrowly one of black people attacking white people in Zimbabwe.
In the meantime COSATU condemns any acts of violence and unlawfullness. We call on the government of Zimbabwe to install peace and the rule of law to that country. We hope the issue will be speedily resolved.
************************************************************
ZIMBABWE: IRIN Focus on a grim economic outlook
IRIN-SA - Tel: +2711 880 4633; Fax: +2711 447 5472; e-mail: irin-sa@irin.org.za
[This item is delivered in the English service of the UN's Integrated Regional Information Network humanitarian information unit, but may not necessarily reflect the views of the United Nations. For further information, free subscriptions, or to change your keywords, contact e-mail: irin@ocha.unon.org or Web: http://www.reliefweb.int/IRIN . If you re-print, copy, archive or re-post this item, please retain this credit and disclaimer.]
JOHANNESBURG, 3 May (IRIN) - As Zimbabwe's foreign payment arrears climb to an estimated US $400 million, economists told IRIN on Wednesday the economic outlook for the country remained poor in coming months.
Meanwhile, the Bankers Association of Zimbabwe met on Wednesday to find a way to enable an "unofficial" devaluation of the Zimbabwe dollar so that growers of tobacco, the country's key foreign exchange earner, will be able to make some profits.
Although they declined immediate comment on the outcome of the meeting, commercial bankers have said they realised that tobacco profitability had been seriously affected by the pegged rate of 38 Zimbabwe dollars to the American dollar. Zimbabwe is the world's third largest producer of tobacco
An easing of the exchange rate for tobacco
When the annual tobacco auctions opened last week, farm occupations, political violence and the exchange rate saw volumes of tobacco delivered for sale drop by over 60 percent, according to the Zimbabwe Tobacco Association (ZTA).
"This is also an issue which was discussed at yesterday's cabinet meeting on the current political situation," said Eric Bloch, a leading economist in Zimbabwe. "My view is that they want to get the tobacco floors to pay the farmers at the parallel rate of roughly 46 to 48 Zimbabwe dollars to the American dollar, so that the profit will go to the growers."
The official pegged rate, in force for 15 months, has been a source of complaint in all sectors of the economy, while bankers have said that they have been powerless to go against the wishes of the government.
Debt default
Bankers and economists have warned that the foreign payment arrears raises the prospect of Zimbabwe defaulting on its external debt of approximately US $4 billion.
"Although our import bill has been held back quite a bit in the last four or five months," said another Zimbabwe-based economist, John Robertson, "we might have to default. A devaluation is very necessary and it will cause inflation, now close to 60 percent, to rise." He said the official exchange rate had also had a negative impact on other key foreign exchange earners such as gold and ferro-chrome.
The danger of rising unemployment
"Zimbabwe is facing a very, very serious economic situation," he said. Robertson said the impact of the economic crisis on the industrial sector was bound to push up unemployment, currently at 55 percent, quite soon. "At this level it is dangerous and unemployment levels will become more dangerous if we allow this to continue. This is a very anxious time indeed."
The economists also cited concern that Zimbabwe could find itself unable to finance fuel imports agreed last month. In March, the state-owned national oil company of Zimbabwe owed foreign suppliers US $60 million, South Africa said its national electricity utility, Eskom was owed US $16 million.
Economic crisis likely to worsen in coming months
Bloch said the economic situation was likely to grow worse over the next three months until after the parliamentary elections when a new government, whether or not Mugabe's ruling ZANU-PF maintains its 20-year grip on power, will follow a more pragmatic programme.
"Instead of talking about recovery, a new government will have to concentrate on implementing an economic rescue package. That is what I hear lately from politicians of all shades, both in ZANU-PF and the opposition Movement for Democratic Change (MDC)," he said.
A road to recovery
They believed, he said, the road to economic recovery lay firstly in an end to Zimbabwe's expensive military intervention in the Democratic Republic of Congo (DRC); a cut in government spending by at least 25 percent; the privatisation of parastatal companies; incentives for expatriate business; investment incentives and a relaxation of expatriate employment rights, and an end to tight exchange rate controls.
"We would then see IMF payment support, a lifting of the World Bank's suspensions, as well as an end to the Danish and Dutch freeze on aid programmes," Bloch said. "Gradually lines of foreign credit could be renewed so that eventually we can get out of the foreign exchange trap we are in. Only then, after at least 18 months, will the international community begin to consider debt relief."
************************************************************
Message-Id: <200005150044.UAA22344@server.africapolicy.org> From: "APIC" <apic@igc.org> Date: Sun, 14 May 2000 21:31:32 -0500 Subject: Zimbabwe: Statements/Analysis,
Editor: Ali B. Ali-Dinar
| Previous Menu | Home Page | What's New | Search | Country Specific |