Government and civil society in Zimbabwe's economic recovery

The two formations of the Movement for Democratic Change (MDC) and the Zimbabwe African National Union – Patriotic Front (Zanu PF) have finally endorsed the Southern African Development Community (SADC) summit’s decision to form the government of national unity (GNU). All disputed issues, such as the appointment of a 'Joint-Monitoring Implementation Committee' comprising members of all the parties, the distribution of provincial governors, the appointments of the Reserve Bank of Zimbabwe (RBZ) governor and the attorney general, and the National Security Bill – which ensures the joint monitoring of the country’s security apparatus – have been resolved before the passage of the constitutional amendment number 19 in parliament, thereby paving the way for the formation of an inclusive government. But critics are still sceptical about Zanu PF's sincerity with regard to implementing an inclusive government given its past open violation of the spirit of both the memorandum of understanding (MOU) and the global political agreement (GPA) with impunity.

Already, South Africa’s President Kgalema Montlanthe, as chair of the SADC, appraised the African Union (AU) summit in Addis Ababa, Ethiopia, as an 'African solution to the African problem', ending the political stalemate since the signing of the GPA on 15 September 2008. Indeed, this stalemate had not only dented regional leaders’ moral and democratic conscience in defence of voiceless Zimbabweans, but also the facilitator’s résumé as an honest peace broker.

So far, the SADC, led by South Africa, has called for an immediate lifting of 'smart sanctions' targeted at Zanu PF officials and their associates. The AU has also adopted a resolution calling for the withdrawal of sanctions against anti-democratic forces and violators of human-rights to help ease the humanitarian crisis. In response, Western countries, particularly the USA, Europe and Australia, uphold the punitive measures until 'there is clear and practical evidence of sharing of power in Zimbabwe as well as serious commitment to resolve the country’s numerous social, economic and policy challenges.'

ECONOMIC SECTOR CRISIS

Zimbabwe is in a state of economic freefall and has since 1999 registered eight consecutive years of negative growth, falling by about 46.9 per cent in the process, as illustrated in figure 1. Over the last decade, the economy has witnessed capital flight and a significant reduction in private sector investment. As a result, capacity utilisation in all the key sectors, especially agriculture, mining, industry, tourism and construction, is now extremely low, while the value of economic output is estimated at US$3 billion, down from US$13 billion in 1989. The economy’s unemployment is over 94 per cent of the total labour force. Symptoms of the economic crisis are evident in fuel, money and unstable supplies of basic goods and services including the staple diet of maize-meal. Since 2007, the economy has had hyperinflation,[1] which has impoverished over 80 per cent of its inhabitants, particularly those with no access to foreign currency, as well as forcing millions of Zimbabweans to emigrate.

Figure 1: Percentage real GDP (gross domestic product) per capita growth, 1998–2007 (Source: Steve H. Hanke)

principles for re-engagement [pdf: 76kb] as a measure of commitment to pluralist, democratic processes in line with relevant statutes of the AU and the SADC. There is 'no cherry picking', meaning that ‘all the principles’ should be treated with equal importance. In addition, there is a strong call for national ownership of the economic reform agenda, a development that entails consulting key constituencies such as civil society, business and consumers. Proponents of pluralist democratic processes link outcomes to accessing donors’ resources to support-sector projects, technical assistance and budgetary expenditures.

THE ROLE OF CIVIL SOCIETY

Given the country’s decade-long inability to regenerate its economy and tax revenues through its own resources, it is certain that Zimbabwe’s economic transition will be bankrolled by 'a comprehensive financial package' from the international and regional communities, hence the call for civic groups to prepare, develop and engage strategically with the nature, content and scope of such an eventuality. As noted above, such a bail-out financial package resonant in the nature, content and scope of the proposed political transition benchmarks as a measure of full compliance with pluralist democratic processes. Indeed, any success in economic reconstruction process will depend to a large extent on the depth of internal political adjustments. It is therefore quite clear that 'some quarters within GNU' will resist such benchmarks even though the options available to the country are very limited. It is also clear that civil society groups favour such a benchmarking process, which is poised to deliver the true political transition that the decade-long struggle espouses. However, the fear though is summarised by the following questions: What will be the nature, content and scope of re-engaging with the international community and collaborating with different stakeholders in support of the economic transition? What are the chances of unlocking both foreign investment flows and multi-donor resources? What is the likelihood of mobilising unconditional foreign capital investment and multi-donor resources? Given that donors and foreign countries have already tabled their conditions of engagement, is the new administration ready to play ball or galvanise the collective wisdom of all stakeholders? Where does the ordinary citizen fit in this process?

These questions reinforce the role of civil society in monitoring both compliance to the GNU and the dictates of the international community in policy-making frameworks. It is imperative also to note that the economic collapse has its roots in the decade-long management of fiscal and monetary policies, which unfortunately succeeded in reducing the productive capacities of all the sectors in the economy while increasing monetary disbursement to finance public expenditures.

This reflects not only civic groups’ weak monitoring strategies on the management of public resources, but most importantly, the repressive nature of the regime which succeeded in adopting unorthodox macroeconomic policies which defied all people-centred wisdom. Thus, the advent of the GNU and the proposed benchmarking process provide acres of space for civil society’s monitoring of both fiscal and monetary policies. Indeed, any success in the economic transition will be measured by the manner in which various constituencies will be consulted by the new Harare administration, particularly the ability of Zimbabwean civic groups to respond to such a call. Therefore, it is imperative for civic groups to form extensive strategic networking with partners and other like-minded institutions working on issues of both political and economic transition. This is necessary to sustain both the 'new political dawn' and the 'economic recovery path'. In this way, civic groups and networks in Zimbabwe and beyond will show commitment to monitor pluralist democratic processes as well as the moral fibre of donors funding. Central to this is the desire to ensure that donors’ conditionalities should not crowd out social development, that is, increase borrowing amid tight repayment schedules and worsening poverty and inequalities. This must not worsen both the colonial era and the decade-long repressive regime’s related social and economic injustices. It is essential also to ensure that the policy space is not constrained by the huge presence of donors. All this requires an alert civil society that is capable of raising pertinent intervention questions, develop advocacy strategies and that is courageous enough to lobby the corridors of power in support of the new Zimbabwe.

* Richard Kamidza is the Economy in Transition programme associate of the Institute for a Democratic Alternative for Zimbabwe (IDAZIM).
* Please send comments to [email protected] or comment online at http://www.pambazuka.org/.

NOTES
[1] Hyperinflation is defined as a rate of inflation per month that exceeds 50 per cent.
[2] This was calculated using official exchange rate of US$ : Z$32, based on revised currency. The parallel exchange rate was US$ : Z$2,500.
[3] April is the harvesting period, assuming that the weather conditions have been kind and farmers produce.