Published on July 19, 2007
The State-owned Herald newspaper of 10th August 2007 had the stories to the effect that the government has reviewed upwards to the prices of goods. This comes 2 weeks after it had issued a statement that the price controls will remain in place until December 2007, while the Zimbabwe Independent had well researched and written stories on the consequences of the price controls.
One must go backwards to find out how we came to be where we are today. Besides notable and demonstratable economic policy mega-paralysis in Zimbabwe, one wonders who generates ideas in the ruling party and government and subject them to scrutiny. Compare with an array of them in Britain (http://politics.guardian.co.uk/thinktanks/0,,509380,00.html) and USA (http://usinfo.state.gov/usa/infousa/politics/thnktank.htm and http://www.sourcewatch.org/index.php?title=Category:Think_tanks).
To address this matter adequately, lets provide the sequence of events:
March 15, 2007
The Tripartite Negotiating Forum (TNF) - was unanimously agreed to adopt and sign the "Kadoma Declaration' and the founding principles of the TNF that lay the foundation for commitment and shared vision in tackling economic challenges facing the country. It was meant to be a solution aimed at providing a quick fix to the country's economic crisis. At the time the Declaration was mooted in August 2001, inflation was only at 76.1% per annum, today it stands at more than 4,500%.
When the document was tabled for discussion and signing in January 2003, the government balked and refused to sign it. The Kadoma Declaration emerged out of the TNF meeting of August 20, 2001, when the social partners - government, business and labour, noted that it was desirable to address the macro-economic challenges the country was experiencing in their totality, including the country risk factor.
Country risk factor is the premium that is attached by nationals, residents, foreigners and international bodies residing in, visiting or doing business with a particular country.Some causes of Zimbabwe’s country risk factors the social partners identified include mismatch between policy and action, delay in policy implementation, continued racial imbalance in ownership of the means of production, irresponsible utterances by leaders, lack of political tolerance, corruption, external interference in the country’s affairs and lack of respect for human rights.
The Kadoma Declaration social partners identified the following as causes of Zimbabwe's country risk factors:
- The failure by some of the institutions of governance to function effectively;
- Mismatches between policy and action;
- Delays in policy implementation;
- That the overall (imbalance in the) spread of wealth in the country and continued racial imbalance in the ownership of the means of production;
- Irresponsible utterances by politicians;
- The activities of civil groups and pressure groups as forces affecting governance;
- Lack of political tolerance between the ruling party and members of the opposition;
- Corruption;
- Contradictory statements by and among social partners;
- Lack of meaningful response to positive government, labour and business policy initiatives;
- External interference in the country's affairs; and
- Lack of respect for human rights in the world of work and society in general.
The TNF was established in 1998 with a view to deal with socio-economic issues. It is a voluntary and unlegislated chamber in which social partners namely government, business and labour discuss, explain or negotiate socio-economic issues.
May 18th, 2007
National Incomes and Pricing Act - the Minister of Industry and International Trade, Obert Mpofu, apppointed the National Incomes and Pricing Commission Board under the newly enacted National Incomes and Pricing Commission Act. The mandate National Incomes and Pricing Commission (NIPC) will be to develop pricing models for goods and services produced in Zimbabwe with a view to balancing the viability of producers and the incomes and welfare needs of people. It will regulate fees and prices in all services in the economy and will have authority to imprison suspected profiteers.
June 1st, 2007
Social Contract - this was under the auspices of the Tripartite Negotiating Forum (TNF) signed between the state, labor and business was sponsored and handmaided by the Reserve Bank Governor, Gideon Gono. The government would review its public spending to bring down its budget deficit and take steps to improve economic management; to fight corruption and profiteering and observe restraint over price increases and wage demands.
June 22nd, 2007
Panic Reaction to Dell's Remarks and Price Controls - on this date, the Guardian newspaper of Britain published an article following an interview with the US Ambassador to Zimbabwe, Christopher Dell (www.guardian.co.uk/frontpage/story/0,,2108972,00.html).
In the interview, which was carried out by the newspaper's Andrew Meldrum (himself who was deported from Zimbabwe for what the government called journalistic malpractice), he foresaw a regime change in Zimbabwe as hyperinflation destroys the economy. He predicted Zimbabwe's inflation will rocket to 1.5m% before the end of the year. The official rate of inflation Zimbabwe stands at 4,500%. The black market rate for the Zimbabwean dollar slumped, from ZW$160,000 to the pound the previous week to more than ZW$400,000.
Three days later, the government of Zimbabwe, panicly reacted to the regime change agenda by decreeing that the business sector reverts to 18th June 2007 price levels first for basic commodities and then for all goods and services. Initially, the British government had said it was working with the opposition and NGOs (especially those financed by funds of Western origin) to effect regime change.
This vindicates Professor Jonathan Moyo, when he said the government is being run by 'securocrats'. The author first got to know of the word 'securocrats' from Professor Jonathan Moyo when he was trying to explain the Tsholotsho debacle, that President Mugabe is being held hostage by 'securocrats'.
The government read the US Ambassador's remarks in line with the regime agenda. The former British Prime Minister, Tony Blair, officially made remarks in the British parliament that his government is working with the opposition and NGOs to bring 'change' in Zimbabwe. When Dell then said in 6 months, the government will come down because of the economic meltdown, the Zimbabwe government wasted no time in ill-conceivingly deal with the price escalations.
By the nature of their apppointments and work, both the ministers and service chiefs of the army (Sydney Sekeramayi, Costantine Chiwenga, Philip Valerio Sibanda and Perence Shiri), intelligence (Didymus Mutasa and Happison Bonyongwe), prisons (Paradzai Zimondi) and police (Kembo Mohadi and Augustine Chihuri) are Mugabe ultra-loyalists. One would not know if they are like that naturally. It is treasonable to be seen to be not an ultra-loyalist of the President when one holds a security-related position.
Ordinarily, if this is an excercise, if well meaning, should be run by the economic ministries - Finance, Industry and International Trade, Economic Development and Agriculture. It is a national interest that the economy survives and business thrives.
"Government has established a taskforce on price monitoring and stabilisation comprising a number of cabinet ministers to monitor and clamp down on businesses defying the price freeze. This taskforce is however, running parallel with the National Incomes and Pricing Commission, creating unnecessary confusion and conflicts. There is also an open disconnect between the National Incomes and Pricing Commission and the TNF as the former is not part of the latter which should have been the case. This would ensure harmony and synergy in terms prices and incomes policy" - Financial Gazette, July 11th, 2007.
Under the JOC, is the Cabinet Taskforce on Price Monitoring and Stabilisation chaired by the Minister of Industry and International Trade, Obert Mpofu. The decisions of the JOC and Taskforce are implemented by the price control 'inspectors'. Nobody knows whether they are employed by which ministry or the ruling party, and how and where they meet to coordinate their nefarious activities.
The anti-business campaign under the guise of price stabilization is a brainchild of the Joint Operations Command (JOC), which comprises the ministries responsible for the army, intelligence, prisons and police, and the service chiefs following remarks by the US Ambassador to Zimbabwe.
Friday, 12th July 2007
In Comes Gono - the Mail and Guardian newspaper's print edition had an exclusive story on “How Gono Warned Mugabe: The Governor’s 59 pages of policy advice that Bob ignored”, filling 2 pages (http://mg.newspaperdirect.com/epaper/viewer.aspx).
The online edition, “Inside the Gono Dossier” (www.mg.co.za/articlePage.aspx?articleid=313803&area=/insight/insight__africa/), in which all the 59 pages were uploaded in PDF format.
This made interesting reading as a collection but the dossier contains information already known to the public because it is the same detailed information attached to the periodical monetary policy statements (MPS).
While he wants to distance himself from the self-destructive tendency of the government, the governor has on his own accord caused more damage since his appointment. One would need to go through the details of his overt and covert behaviour over this time. It will be shocking.
"Who controlled the exchange rate at artificial rates and then introduced Productive Sector Facilities? Who removed the three zeros from the currency and called them heroes? Who said that devaluation was out of the question? What is the difference between no devaluation and price control? Who introduced unconstitutional and illegal quasi-fiscal activities whose full extent remains shrouded in mystery? Why would Gono want to run away from his shadow? What ever happened to (former Finance Minister) Herbert Murerwa who correctly predicted that the zeros would come back with a vengeance? It is evident that (Robert) Mugabe learned from Gono that the police can do a better job in managing political and economic behaviour than good policies." Mutumwa Mawere, in an article for his weekly online column.
Gono thought by leaking the documents, he becomes the preferred 'reformist' within ZANU (PF) in the eyes of those desiring and seeking to see a reformed ruling party.
He sees himself as a better candidate than Simba Makoni. His newspaper, the Financial Gazette, has seen Simba Makoni as political nonentity or it has celebrated when he is under attack. The newspaper has deliberately ignored the fact he was relieved of his ministerial duties for what its owner is doing - devaluating the local currency.
Simba Makoni has not helped himself either as a possible candidate or not, when he says nothing when he is seen as the prefered candidate of Western powers, especially against a background of our history and current relations. Tony Hawkins, a professor of economist at the University of Zimbabwe and a regular contributor to the Financial Mail magazine of South Africa, in an interview with SW Radio Africa said "The British foreign office as you know (so it has become common knowledge?) is a supporter of a re-branded ZANU PF under somebody like Simba Makoni. The South Africans would like to see a re-branded ZANU PF and I suspect there may well be others."
Just like most mature economies, one cannot expect to become the State President without the support of the 'Establishment'. In Zimbabwe, the 'Establishment' is the retired and incumbent military whose rallying point is the liberation/anti-colonial struggle. To make meaningful contribution to the ruling party, one should have a significant liberation-oriented military credentials (LOMC).
Leading in this 'Establishment' are three protagonists/camps - Robert Mugabe, Retired General Solomon Mujuru (the 'General') and Emmerson Mnangagwa (nicknamed 'Ngwena' - for his stealthiness approach).
One cannot really tell the source of the ideological or personal differences between the General and Ngwena, and Mugabe is not sure which of the 2 camps can his legacy and personal life be protected.
The camps for Retired General Solomon Mujuru and Emmerson Mnangagwa would be happy to see Robert Mugabe retiring. The 'General' would want Mugabe to be replaced not by his wife as what most people believe, but by Simba Makoni and the latest outcry in the Mugabe loyalists should be seen in that framework. There is therefore an overkill danger that the Mujuru faction might end up having the President (Simba Makoni) and Vice President (Joyce Mujuru).
The Mnangagwa camp is centred around the Tsholotsho Declaration and it is not dead. It is the expectation of people like Professor Jonathan Moyo that ZANU PF must split along the lines of KANU to produce a new and reformed party but steeped in ZANU PF - nationalist and anti-colonial. Out of this approach of a split, Mwai Kibaki was elected Kenyan President. People of this school of thought are waiting for an opportunity where either fate decides or the succession is not handled with care leaving the camps to destroy each other rendering the party useless like the MDC.
What this means is that because Mnangagwa wants to become the next president, it becomes difficult for him to make a power settlement deal with the General. The current impasse between the two camps could have been overcome through a 'balance of power' (BOP) deal.
The day the Mail and Guardian newspaper hits the streets of Harare, the State-owned Herald newspaper had a lead story on Gono. The 12th July edition of the Mail and Guardian newspaper did not reach the streets. Those who are not subscribers of the Mail and Guardian had no opportunity to read the attempts by Gono to exonerate himself from the economic messy gulfing Zimbabwe through price controls.
How does one explain the linkage between his denial in the Herald on the day the details his dossier would have been read by the reading public in Zimbabwe? The coincidence is too much to ignore!
It is hypocritical to see Gono distancing him from his Principals' campaign against business through the price controls. On his own accord, he has caused similar damage by:
1. Embarking on a Gestapo inspired crusade against locally-owned banks soon after his appointment. No meaningful results were earned out of the exercise, and Zimbabwe has probably the best banking brains exiled by Gono.
2. Flouting tender procedures - 304 vehicles and 20 million litres of diesel which were later 'donated' to government, fertiliser acquired from South Africa that later caused the dismissal of Simon Pazvakavambwa for exposing Gono;
3. Printing money under the guise of various programmes and initiatives with high sounding titles like parastatal and local authorities reorientation programme (PLARP), National Housing Facility (NHF), Operation Maguta/Command Agriculture, Agriculture Sector Productivity Enhancement Facility (ASPEF), establishment of a white elephant called the Infrastructure Development Bank of Zimbabwe (IDBZ), Operation Sunrise (looping of 3 zeroes from the local currency), creation of endless companies owned by the RBZ, SME Development Fund, and many others;
4. Getting involved in fiscal matters to the point of rendering the finance ministry useless. This caused him to considerably differ with Herbert Murerwa and Sydney Gata that led to their dismissal as the Finance Minister and ZESA Executive Chairman respectively;
5. Wasting money on so called Russian investors without due diligence under the guise of seeking investment;
6. Spending money on useless ventures like printing newspaper inserts at the spur of an event. The latest was when he printed a colourful insert for all newspapers of his pictures and speech at the handover of the agricultural equipment;
Therefore for Gono to write a letter to Elliot Manyika on July 2, 2007 distancing himself from the economically destructive government conduct, is mischevious and ridiculous.
Whatever he does, people must see it as opportunity to position himself politically.
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