The Crisis Deepens

The Gono circus has come and gone - or as one commentator said to me - Gono has preached his latest sermon from the mount. It lasted 2 and a half hours and to be frank I was less than impressed. A lot of right sounding rhetoric without substance or form.

He devalued the Zimbabwe dollar by a third - to 9 000 to 1 against the US dollar, raised commercial interest rates and promised more concessionary lending - some at 5 per cent per annum interest rates, to key sectors. He also threatened everyone who dared to trade outside the system and took a swipe at private foreign currency accounts - people who have such accounts must now apply to the Reserve Bank for permission to use them!

On the same day the rates in the real foreign exchange market collapsed to new lows - the Rand traded at over 4000 to 1, the USD at 28 000 to 1 or more, signaling frantic activity and a total loss of confidence. In an effort to offset the negative effects of the exchange rate on key industries he handed out the promise of soft loans and gave the tobacco producers a Z$350 billion dollar "subsidy". He also jacked up the so called "support price" for gold to give producers a return approaching the value of gold at current prices computed back at a parallel market exchange rate.

Outside the gilded hall where he made his statement the situation is bleak - today workers are walking home - there are few buses running. Fuel stocks are virtually zero in all centers - food stocks are also completely exhausted. Water shortages plague most towns and cities and electricity cuts are widespread. Just as worrying are the growing list of basic consumer items that simply cannot be found on our shelves - soap, salt, sugar, matches, cigarettes, cooking oil; the list grows longer every day as factory after factory closes its doors.

In the face of this calamitous situation Mugabe has conceded that we need help but he is defiantly saying that any food aid should not come with conditions. He must be crazy to think that anyone would allow food aid into the country under these conditions without demanding that the regime put its house in order. This is not a natural disaster - this is a made in Mugabe disaster, and it must be treated as such.

I understand that the Secretary General of the United Nations has personally spoken to Mugabe - sent an emissary in the form of the former President of Mozambique to see him and that together they have "persuaded" the old man that he needs help. He has now said he will meet with the head of the World Food Programme - Morris, when he is in the region next week. To be frank I had hoped that the UN intervention might embrace the real causes of this crisis, but it seems as if they are going to deal with the consequences and not the cause.

This is very dangerous. We have a humanitarian disaster on our hands - we need nearly a billion US dollars worth of food imports to meet our needs over the next 12 months. We have half our population on the verge of starvation. Mugabe, sensing the extent of the problem, has now rejected the NGO Act, which would have closed down hundreds of organisations vital to any relief effort. Just this week I saw a letter from the World Food Programme closing its Beitbridge operations - a vital link in any food relief exercise.

But is anyone thinking about the longer-term consequences of a massive humanitarian relief effort? Let us imagine that when Morris gets here, a new appeal is launched for food aid. Donors come forward and they buy US$500 million dollars worth of food in the next year; bring it into Zimbabwe and give it away to needy people.

Such an operation will totally undermine any possibility of a recovery in our own indigenous food system - peasants who receive food free will make little or no effort to grow food. Government will just love such a development as they will make sure such free food hand outs are attributed to State intervention and this will ensure the continued "support" of rural peasants for the "ruling Party". No matter how much the donor community may try, they will never get the hands of Zanu PF off the food aid business.

Foreign aid coming into Zimbabwe will also create a new flow of foreign exchange which will go through "official channels" giving the patronage system a whole new range of opportunities as the Reserve Bank obtains inflows of hard currencies at a third of its value. This will further entrench the political patronage system which has allowed crazy policies to prevail in this lunatic asylum they call Zimbabwe.

Of course the UN loves food aid - it's a safe, no hassles activity that allows officials on high hard currency salaries to justify their existence. NGO's love food aid - it means new 4 x 4 vehicles and hard currency allowances and many other perks. Someone said to me once that you could tell how much trouble a country is in by the numbers of vehicles carrying the UN flag. It's worse than that - such countries become incurable basket cases and permanent holes for so called "food aid".

So what should the international response be? First it should be tough and demand that the country address all the governance issues that are on the table - democracy, the rule of law, human and political rights. Secondly they should demand that priority should be given to funding commercial imports of food in the form of raw materials to local industry so that we can protect jobs and supply food to all without political interference. The objective being to bring these basic needs into free supply. Thirdly, these supplies should be priced into the market at real exchange rates and the counterpart funds thus created used imaginatively by the donor community (not the UN) to help needy people and communities.

Forcing people to buy food at real prices will require people living outside the country to send money home to fund these purchases. It will also protect local producers and create incentives for local farmers. Then maybe, just maybe, we will grow something ourselves this coming season.

But if the UN simply responds to this deepening crisis in the normal way - they will simply make our position worse and entrench a delinquent, criminal regime in power.

Eddie Cross
Bulawayo 20th May 2005