ZIMBABWE’s presidential run-off will go ahead tomorrow without MDC’s Morgan Tsvangirai who pulled out of the race last Sunday.
The government has said the election will go ahead with or without Tsvangirai. The Zimbabwe Electoral Commission (ZEC) said on Wednesday that Tsvangirai’s pull-out was null and void.
It has become clear that the election will proceed and President Robert Mugabe will declare himself the “Winner” but the key question is what will happen to the economy after that.
What happens the day after?
“The person who inherits this mess has to make dramatic changes,” Harare-based economist John Robertson said. “But it is very clear that in the first week after the election, if the right candidate does not win, then things will really get bad.”
There is a growing consensus locally, regionally and globally that this election will not solve the political and economic crises facing the country.
The political impasse is at its peak and the isolation widening. The economy has mirrored all these changes and has continued to bleed. Year-on-year inflation on June 20 was 9 000 000%, up from 1 700 000% recorded last month.
The new figure expected at the end of the month, though yet to be finalised, is well above 10 500 000%. The Zimbabwean dollar has been crashing at a spectacular rate of about 25% every week and the free fall is likely to accelerate after today’s election.
The new figure for the period from June 20 to today has not yet been finalised but unconfirmed figures says it is around 9 030 000% million. The Zimbabwean dollar has been crashing at about 25% every week. This free-fall is likely to continue after today’s election.
Industry is operating at 10% capacity. Most companies have shut down. Agricultural production is at its lowest level ever.
Thousands of qualified workers have left the country. Basic infrastructure has collapsed. Mineral production is also it its lowest.
University of Zimbabwe business school lecturer Professor Tony Hawkins said the crisis was going to continue to spiral out of control and no amount of cajoling from a Zanu PF-led government would halt its decline.
“One thing is very clear, Mugabe may win this election and have his little party but the economy will take him down,” said Hawkins.
“It is the millstone around his neck. But how long it will take, no one knows. I believe that he does not have many months longer in office.”
That the economy is in a shambles is crystal clear, even to die-hard Zanu PF loyalists.
The country has zero wheat stocks and urgently requires 1,5 million tonnes of maize to feed the people.
“Where will they get the money to do so?” Hawkins asked. “It’s not only the money, it also concerns the logistics. Zimbabwe has no foreign currency, how will it achieve all this?”
The United States and the European Union are now talking of tightening the sanctions and has pressured several companies which had announced their interest in investing in Zimbabwe to leave Zimbabwe’s economy has shrunk by over 60% since the crisis started.
This margin of shrinkage has been greater than that of African countries in the most brutal of civil wars like Ivory Coast which has had a four-year civil war and its economy has declined by 7%. The DRC’s five year conflict saw its economy decline by 19%.
Sierra Leone’s three year conflict saw its Gross Domestic Product decline by 25%.
In a paper presented by Todd Moss and Stewart Patrick of the Centre for Global Development, the purchasing power of the average Zimbabwean gone down to 1953 levels.
Hawkins said if Mugabe won the elections, he was in a serious fix that threatens his rule.
“He has to stop the printing of money, which he can’t do at the same time,” said Hawkins.
“He has to get foreign currency from the international community, which again he can’t do. No government in the world will support a government headed by Mugabe.”
Hawkins said if Mugabe won the elections, Reserve Bank of Zimbabwe governor Gideon Gono would be forced to continue printing money to meet recurrent expenditure.
“He has to pay the soldiers and the police, the security elements propping up the administration,” Hawkins said.
“It is only a matter of time before the army realises that the Zimbabwean dollar is worthless and they start demanding their salaries in foreign currency.”
Robertson said the printing of money to make up for lack of foreign investment was a false belief which Mugabe’s government could not continue with.
“The very act of printing money causes inflation to rise,” he said. “It causes the value of everyone’s money to go down. Civil servants will possibly want minimum salaries of $500 billion this month. Next month, they will want $5 trillion. With a month on month inflation of nearly a thousand, prices are at present 10 times what they were at the beginning of the month.”
Fifty percent of Zimbabweans currently rely on emergency assistance while a third of Zimbabweans live abroad.
Moss and Patrick said any economic recovery would first require that the new president bring the macro-economy under control, restore basic public services and generate jobs.
“Reviving the agricultural sector…will also be priority areas,” they said.
“Private investment in banking, mining, industry, and telecommunications is likely to return on its own once the business environment can be improved (especially if private property rights are restored and foreign exchange constraints are lifted), but public-private cooperation could catalyse much-needed infrastructure investment.”
Robertson said he believed that Mugabe’s people would try and coax him into retiring if he wins the election so as to give Zimbabwe a realistic chance of recovering.
“Maybe it could occur in the first week of his victory,” Robertson said. “I have no doubt that they will try and convince him to retire so that they will appoint someone favourable from Zanu PF who is at least acceptable to the international community.
“Everyone knows the name Mugabe has disaster attached to it.”
Moss and Patrick however said several post-Mugabe scenarios existed which included a transition to a hand picked successor, a broad government of national unity, a military coup and even a descent into chaos.
“It is of course impossible to predict the outcome,” they said. “What is likely is that the change will come without much warning and that a speedy and substantial international response will be necessary.
Political analysts say Zimbabwe will not turn around until the political parties start talking to find a solution to the crisis.
Zimbabwe is unlikely to get foreign funding under Mugabe.
By Jeslyn Dendere/Kuda Chikwanda