Harare: Futile chase of neoliberal economics


SOME form of elite cohesion is emerging in Harare, a cohesion around neoliberal economics, despite its failure the world over. For the second time in three decades, Harare (interchangeably the city and the country Zimbabwe) is becoming a guinea pig of privatisation of public services, leaving many of its poor citizens in abject poverty.

Paidamoyo Muzulu

Finance minister Mthuli Ncube set the mark in his first national budget statement (2018) when he stated that government would follow capital in economic activities.
Big business has had a carte-blanche to reshape and refashion the moribund economy.

The administration, for instance, introduced the forex auction system, a system that is controlled by the market (capital). It is a reality that these companies have manipulated the rate to $81:US$1.

However, a cursory investigation into the companies’ pricing models would show that they are rating the dollar at premium rates ranging from 95:1 to 105:1. So much for allowing capital to take the lead.

In a rare and candid interview with NewsDay this week, Harare mayor Jacob Mafume staked his colours to the mast that the capital city like the national administration will worship capital. He said the city had no qualms in privatising public utilities like water.

“However, going forward, we have to improve on debt collection systems. This entails improving on our billing and revenue collection systems. It also means we have to gravitate towards a pre-paid system. As said earlier on, the post-paid system of billing has proved to be a failure,” Mafume said.

The mayor was not done, he clarified that the city should rather have stocks of water in reservoirs than opening the taps for the poor.

“We also need to explore how we can convert our post-paid system to pre-paid. We have realised that the post-paid system doesn’t work, it costs more money to chase bad money. What we need to do is for citizens to pay upfront so that we are able to recycle the money in the provision of other essential services.

“We are better off with expensive water that is there than arguing about cheap water that is not available,” Mafume bluntly put it.

This was rich from a mayor of a city that does not have an asset register; a city that does not know what it owns; a city that has failed to have its books audited for the past two years because it was locked out of a billing system it could not pay; a city that struggles to bill residents in real time.

Mafume did not see the irony of his statement. Privatisation of services in a city where 90% of those working earn below the poverty datum line of $20 000 per month. What matters to him is squeezing the residents dry for the profit of capital.

This is the same city that is dabbling with the concept of a smart city — an euphemism for free reign of capital. Under the smart cities project, Harare will put up surveillance cameras in the streets, outsource services such as water supplies and refuse collection to Cassava Smarttech’s Clean City.

A stark reminder of smart cities is the recent surveillance video of Harare West MP Joanah Mamombe’s shopping trip. The big brother is watching — more or less like in George Orwell’s seminal book 1984. The citizens are trading their privacy for the tag that they live in a smart city.

There is something interesting about Ncube and Mafume’s shared vision of privatisation — elite cohesion. It may not be apparent to many at the moment, but the link is Eddie Cross. Yes, Cross the economist and former MDC secretary for economics during the late Morgan Tsvangirai’s tenure. Cross the same man who produced the neoliberal economic blueprints for MDC starting with Art to JUICE and most recently had a hand in SMART.

Cross is now ensconced at the centre of the country’s economy — Reserve Bank of Zimbabwe’s Monetary Policy Committee.

Reading the two economic policies of the administration and opposition is better captured by Orwell again in Animal Farm when he says the animals looking from men to pigs and pigs to men they could not see the difference.

International Monetary Fund (IMF) researchers Jonathan D Ostry, Prakash Loungani and Davide Furceri in their article Neoliberalism: Oversold? published in the IMF Finance & Development June 2016 argued that neoliberalism has failed to a greater extent.

“An assessment of these specific policies (rather than the broad neoliberal agenda) reaches three disquieting conclusions:

lThe benefits in terms of increased growth seem fairly difficult to establish when looking at a broad group of countries.

lThe costs in terms of increased inequality are prominent. Such costs epitomise the trade-off between the growth and equity effects of some aspects of the neoliberal agenda.

lIncreased inequality in turn hurts the level and sustainability of growth. Even if growth is the sole or main purpose of the neoliberal agenda, advocates of that agenda still need to pay attention to the distributional effects,” they argued.

The researchers added: “The evidence of the economic damage from inequality suggests that policymakers should be more open to redistribution than they are. Of course, apart from redistribution, policies could be designed to mitigate some of the impacts in advance — for instance, through increased spending on education and training, which expands equality of opportunity (so-called predistribution policies).”

Perhaps it is time Zimbabwe finds its bearings, customises neoliberalism to its own context or takes a paradigm shift and tries democratic socialism.
This is not a new fad, but it is rooted in equality and giving a fair chance to everyone. This demands a new movement.