The Crisis Deepens
The Gono circus has come and gone - or as one commentator said to me -
has preached his latest sermon from the mount. It lasted 2 and a half
and to be frank I was less than impressed. A lot of right sounding
without substance or form.
He devalued the Zimbabwe dollar by a third - to 9 000 to 1 against the
dollar, raised commercial interest rates and promised more
lending - some at 5 per cent per annum interest rates, to key sectors.
also threatened everyone who dared to trade outside the system and took
swipe at private foreign currency accounts - people who have such
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
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
he handed out the promise of soft loans and gave the tobacco producers
Z$350 billion dollar "subsidy". He also jacked up the so called
price" for gold to give producers a return approaching the value of
current prices computed back at a parallel market exchange rate.
Outside the gilded hall where he made his statement the situation is
today workers are walking home - there are few buses running. Fuel
are virtually zero in all centers - food stocks are also completely
exhausted. Water shortages plague most towns and cities and electricity
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
after factory closes its doors.
In the face of this calamitous situation Mugabe has conceded that we
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
the country under these conditions without demanding that the regime
house in order. This is not a natural disaster - this is a made in
disaster, and it must be treated as such.
I understand that the Secretary General of the United Nations has
spoken to Mugabe - sent an emissary in the form of the former President
Mozambique to see him and that together they have "persuaded" the old
that he needs help. He has now said he will meet with the head of the
Food Programme - Morris, when he is in the region next week. To be
had hoped that the UN intervention might embrace the real causes of
crisis, but it seems as if they are going to deal with the consequences
not the cause.
This is very dangerous. We have a humanitarian disaster on our hands -
need nearly a billion US dollars worth of food imports to meet our
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
NGO Act, which would have closed down hundreds of organisations vital
relief effort. Just this week I saw a letter from the World Food
closing its Beitbridge operations - a vital link in any food relief
But is anyone thinking about the longer-term consequences of a massive
humanitarian relief effort? Let us imagine that when Morris gets here,
appeal is launched for food aid. Donors come forward and they buy
million dollars worth of food in the next year; bring it into Zimbabwe
give it away to needy people.
Such an operation will totally undermine any possibility of a recovery
our own indigenous food system - peasants who receive food free will
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
to State intervention and this will ensure the continued "support" of
peasants for the "ruling Party". No matter how much the donor community
try, they will never get the hands of Zanu PF off the food aid
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
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
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
how much trouble a country is in by the numbers of vehicles carrying
flag. It's worse than that - such countries become incurable basket
and permanent holes for so called "food aid".
So what should the international response be? First it should be tough
demand that the country address all the governance issues that are on
table - democracy, the rule of law, human and political rights.
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
can protect jobs and supply food to all without political interference.
objective being to bring these basic needs into free supply. Thirdly,
supplies should be priced into the market at real exchange rates and
counterpart funds thus created used imaginatively by the donor
(not the UN) to help needy people and communities.
Forcing people to buy food at real prices will require people living
the country to send money home to fund these purchases. It will also
local producers and create incentives for local farmers. Then maybe,
maybe, we will grow something ourselves this coming season.
But if the UN simply responds to this deepening crisis in the normal
they will simply make our position worse and entrench a delinquent,
regime in power.
Bulawayo 20th May 2005