President Emmerson Mnangagwa recently held a consultative meeting with Zimbabwe’s business sector. This came against the backdrop of a national economic crisis largely caused by a new monetary policy that sent commodity prices and informal exchange rates on a wild spin.
guest column: Takura Zhangazha
Reports on the outcomes of the meeting have not had much detail. It, however, turns out that government and business came to some sort of mutual agreement about keeping commodity prices at what they would consider to be realistic levels, and also agreeing on business being more circumspect when requesting foreign currency from the Reserve Bank of Zimbabwe.
The latter policy pointing to a government that is potentially acting to bail out business by distributing foreign currency in the vain hope that private capital will eventually have a modicum of ethics to not profiteer from the assistance.
We would all be well advised to learn from the 2008 global financial crisis and the bailing out of big banks by governments/reserve banks in the global north and wince at how that has turned out in reality.
In the same week, the majority shareholder of Econet Wireless Zimbabwe, Strive Masiyiwa, gave his strongest approval yet of the economic policies of Mnangagwa’s government.
Insisting that he is of the view that the government should be given a chance, he also, to the surprise of some opposition activists, called for sanctions on Zimbabwe to be removed.
In both examples cited, government and business are clearly intent on becoming good bedfellows. And they agree on certain fundamentals that should be adhered to in relation to economic reform.
With the key agreement being that free market economics are supreme beyond dispute.
And that whatever government does, even if temporary, should be with the clear intention at allowing the “ease of doing business”, or alternatively, prioritising the needs of private capital (both domestic and global).
And for both government and private capital, this means only one thing: austerity. The latter basically being a term that refers to the cutting of government expenditure and allowing the free market and private capital to be the primary factors of economic policy.
Never mind the fact that most governments in the global north, who have implemented this type of economic policy, are increasing, sceptical of it (for example the United Kingdom’s Prime Minister Theresa May recently pledged to end austerity, while Labour opposition leader Jeremy Corbyn is popularly calling for the return of the welfare State and reigning in of private capital).
But this appears not to be a cautionary tale for Mnangagwa or private business. Instead, they appear to be firmly persuaded that the neo-liberal mantra of “no pain, no gain” is the only course of action they can take to gain the favour of the “market”.
Of course, they will not readily explain whose pain they are referring to.
For the avoidance of doubt, it is most certainly not their own pain, physically or emotionally.
From our own domestic experience of the early 1990s version of ‘austerity’ that we came to know as the Economic Structural Adjustment Programme, and for all the pain we suffered, we still remained jobless and lacked access to basic social services.
Even if we blamed the politics of former President Robert Mugabe’s long duree rule, the fundamentals were very clear around the fact that Zimbabwe was no longer anywhere near being the welfare State that it was in the first ten years of independence.
And those who benefitted the most were the ones with links to private local and global capital as well as the ruling party. (Remember all those celebrity businessmen who were part of indigenisation outfits, buying fancy cars, paying workers in shoes? Some of them are now very rich politicians and football administrators).
But even if government claims that this is a different path, the framework speaks a different language. It’s a Transitional Stabilisation Programme to be fortified when the 2019 National Budget is presented in Parliament later on this month, that will be framed as private sector-led economic growth.
That means private capital and its intentions are government’s number one priority, with the hope that the trickle down benefits (for example, cheaper labour) will suffice to retain a modicum of political stability.
The new marriage of business and government is, therefore, a State-private capital contract made for the elite. And Mnangagwa probably knows this only too well. His primary guarantee to capital is that he will provide the necessary political cover for capital’s profit motivated forays.
This cover will include suppressing unionism and direct popular opposition to his economic policies by social movements. (He is rather lucky that the opposition agrees with his economic template. In fact, it occasionally claims it as its own)
Mnangagwa intends to try and reinvent the Zimbabwean State, almost as a private corporation that houses other private corporations for a profit. In return, capital simply needs to do what it does.
That is to worship at the altar of the free market and neo-liberalism, no matter the economic rights concerns of a poor majority in the country.
The only catch is that capital, like global international politics, only knows permanent interests and has no permanent friends — a matter that Masiyiwa is also probably all too familiar with.
Takura Zhangazha writes here in his personal capacity