Zimbabwe: Elite scramble for power amid economic turmoil

June 24, 2017
The multitudes of street traders on every footpath bears out Zimbabwe's economic crisis.

Zimbabwe is facing elections next year, with the ruling Zimbabwe African National Union - Popular Front (ZANU-PF) government likely to be returned despite its huge unpopularity.

The 93-year-old Robert Mugabe, Zimbabwe’s first and only president, plans to seek re-election for another five years. But there is a bitter scramble within his party to find his successor. The scramble is purely for power — policy is irrelevant to the struggle.

But the overriding issue in ordinary people’s minds is the state of the economy. It is estimated that 90% of the population are unemployed or underemployed, and the multitudes of street traders on every footpath bear this out. “Street vending is a ZANU-PF creation”, headlined one newspaper article.

The extreme poverty rate is 72% according to the United Nations. Somewhere between three to five million Zimbabweans are living abroad, more than two million in neighbouring South Africa and 300,000 in Britain. I am asked many times how to go about migrating to Australia.

At the same time there is a monetary crisis. Banks have little money. If there is no queue curling around the block in front of an ATM, that ATM has no money. People sleep on the footpath all night to be near the start of a queue the next day when there is a chance of money being withdrawn.

Withdrawals are rationed at a maximum of US$50. Even changing foreign currency is difficult. I was told by every bank I went into in the capital Harare, “Sorry, we have no money”.

Zimbabwe adopted US dollars as its currency in 2009 after hyper-inflation made the Zimbabwean dollar worthless. Banknotes of one billion dollars were in circulation. People lost their savings.

The situation greatly improved after dispensing with the Zimbabwean dollar, but there was still a money shortage. To relieve the shortage, late last year the government began printing bond notes and bond coins with the same value as the US dollar.

However, this worsened the problem. Much of this money has flowed out of the country or is being hoarded as a substitute for US dollars, being more stable in value than the rand, metical and kwacha of neighbouring countries. Such is the shortage of bond notes that withdrawers are often loaded with bond coins instead.

By law, businesses must deposit their takings into a bank by the next day for the banks to re-circulate the money. However, there is resistance. Why would you put money in the bank when it is so hard to get it back?

This attitude, although logical, makes the problem worse because banks can only dispense what has been deposited.

There are several factors behind the likely re-election of highly corrupt ZANU-PF. One is the disarray of the opposition, which enjoys both business and trade union backing, with its contradictory policies and opportunistic leaders.

Movement for Democratic Change (MDC) leader Morgan Tsvangirai has proved himself to be ineffective and is suspected of corruption from his time as prime minister in a “national unity” government with Mugabe. Taking part in that government cost Tsvangirai his previous popularity, and he abandoned his progressive stances.

The MDC is trying to change ZANU-PF by seeking alliances with minor parties, with limited success.

Another factor is the undoubted support for Mugabe in the countryside. About 300,000 people have benefitted from government land redistribution. Subsidies for fertilisers and food aid are regarded as gifts from Mugabe and are distributed in the name of ZANU-PF. Mugabe also still has prestige as the leader of the liberation movement that took over white-ruled “Rhodesia” in 1980.

A third factor is intimidation. ZANU-PF thugs actively disrupt opposition meetings, use violence with impunity, and isolate and harass opposition supporters in the countryside.

Zimbabwe has a relatively free press, at least for now. The Herald is a mouthpiece for the government, but other papers are openly critical.

Zimbabwe has a good education system that has produced a skilled workforce, with the potential to restore the economy. Zimbabwe also has better infrastructure — schools, hospitals, roads, communications — than its neighbours, except for South Africa. With good government, people’s livelihoods could advance quickly.

However, there is not much optimism in Zimbabwe that life will improve in the near future. People are either resigned to the status quo or see emigration as their only option.

In the last election only 45% of adults voted, with many believing Mugabe’s re-election was pre-determined. The 2018 election is likely to bring the same result.

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