ZIMBABWE’S rancid political deal may be doubted for the detentions of Jestina Mukoko, Roy Bennett and dozens of others, or for the 77 farms newly redistributed to Zanu PF elites, or for the bloated cabinet. But yet more pain threatens the country’s future.
President Robert Mugabe’s more than US$5 billion foreign debt has not been serviced since 1999, and paying arrears now will mean belt-tightening for ordinary Zimbabweans, who must by now be the world’s thinnest people. South African Finance minister Trevor Manuel and the African Development Bank (AfDB) are the main diet advocates, with a troubling precedent: the Democratic Republic of the Congo.
In June 2002, the South African cabinet lent R760 million to the (unelected) government of Joseph Kabila, saying it was “to help clear (the Congo’s) … obligations with the International Monetary Fund (IMF)” to pave the way for new IMF loans. Pretoria thus sanitised loans made to Mobutu Sese Seko.
The people of the Congo were previously victims of SA’s apartheid-era allegiance with Mobutu. Thanks to unwitting post-apartheid taxpayers, the Mobutu loans would be neither repudiated nor forgiven, but instead honoured and serviced.
IMF staff were allowed back into Kinshasa with new loans plus fierce neoliberal conditions.
In a just world, Mobutu’s and Mugabe’s debts should be repudiated by any democrat. Mugabe’s arrears stand at more than US$1,2 billion merely to the AfDB, World Bank and IMF.
Don’t repay Mugabe-era debt, says the director of the Zimbabwe Coalition on Debt and Development, Dakarayi Matanga: “There is danger that any new loans will add to the already huge debt stock. We therefore called on the political leadership to reveal the nature of these pledges, and for donor countries to cancel existing debts unconditionally instead of creating more debt in order for a new beginning to take place.” He advocates “repudiation of any odious and illegitimate debts”.
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Repayment is impossible based on current internal resources. Estimates of flight capital over the past few weeks run to US$45 million in the wake of Reserve Bank governor Gideon Gono’s liberalisation of the currency and capital controls, as the local unit utterly collapsed.
The flood of crony capital to Sandton banks is not new: a study last year on capital flight by economists Leonce Ndikumana and James Boyce found Zimbabwe to be Africa’s third-most victimised country in relative terms, after Nigeria and Angola.
Establishing a respectable currency under conditions of continuous government de-legitimacy will be a heroic task, especially if new loans are mainly meant to repay old loans, or if they facilitate more flight capital. Worse is the potential conditionality.
The biggest hit to the democratic credentials of Prime Minister Morgan Tsvangirai and Finance minister Tendai Biti will be creditor instructions to further impoverish the “povo”. Advice from IMF country staff hasn’t changed: pure Washington Consensus.
The United Nations Development Programme has joined the neoliberal chorus, with its Zimbabwe report, so reminiscent of the early 1990s Economic Structural Adjustment Programme (Esap).
Matanga says: “The problems of access to clean water, skills flight in local medical and health institutions, and poor infrastructure vividly illustrate the current poor state of social services.
The genesis of this social decline can be located in the implementation of neoliberal policies linked to Esap.”
Other South African vultures are examining the dying corpse. Consider a suggestion to Tsvangirai last September from Investec’s Roelof Horne: “Austerity from within”.
Yet as Zimbabwean activist Elinor Sisulu said last week: “I have seen the (SA-led) mediation process as undemocratic and manipulative. I have warned the MDC that they are lambs going into crocodile-infested waters.”
If repaying the US$1,2 billion is priority one for the AfDB and the Treasury, then greedy crocodiles are also resident in Tunis and Pretoria.
How diabolical would it be for SA to belt-tighten Zimbabweans, following years of belt-whipping sponsored by former president Thabo Mbeki financed by the multilaterals?
*Bond directs the University of KwaZulu-Natal Centre for Civil Society and co-authored the UKZN Press book Zimbabwe’s Plunge.
BY PATRICK BOND
