Despite the widening of sanctions by the US, European Union and Australia, and unprecedented criticism of his government last month by US President George W. Bush, Mr Mugabe has dismissed hopes of compromise with the opposition Movement for Democratic Change. President Robert Mugabe of Zimbabwe shows little sign of buckling to external and internal pressure to end his 24-year reign. Despite the widening of sanctions by the US, European Union and Australia, and unprecedented criticism of his government last month by US President George W. Bush, Mr Mugabe has dismissed hopes of compromise with the opposition Movement for Democratic Change.
A stalemate over disputed elections in March 2002, in which Mr Mugabe claimed victory over the MDC’s Morgan Tsvangirai, has paralysed the political process – a situation that Mr Mugabe, after celebrating his 80th birthday last month, appears content to live with.
Amid an increasingly tough sanctions climate, Zimbabwe appears even closer to the brink of collapse. The economic situation alone ought to have provoked a massive public backlash. With inflation touching 700 per cent, the black market exchange rate 100 times the official level of Z$55 to the dollar and widespread food shortages, the average Zimbabwean is much worse off today than three years ago, when the farm invasions instigated by Mr Mugabe’s government began.
Why has it not collapsed completely over three particularly grim years? Why have hungry, angry people not risen up against Mr Mugabe and his ruling Zanu-PF?
There are three main reasons. First, Zimbabweans today are passive political actors. The traumas of Zimbabwe’s war of liberation from white rule and Mr Mugabe’s subsequent purges of the minority Matabele tribe has kept the MDC committed to a non-violent, democratic transition. The brutality of the state’s security forces, also, makes a popular uprising unlikely.
A second explanation is that, despite sanctions, there has been relatively little external involvement to assist democratic forces within Zimbabwe.
Finally, Zimbabwe’s economy has transformed into a feudalistic, politicised system, reliant on a combination of fear and reward.
Nonetheless, it still operates – for a shrinking, elite circle. For this elite, the fact that 99 per cent of Zimbabwe’s 13m people might have suffered as a consequence is irrelevant. Despite – and sometimes because of – the economic collapse, such circles are making big money in at least five ways. The first is via direct patronage, including the redistribution of seized land and the lending of money at preferential interest rates as low as 15 percent, against a market rate of more than 50 times higher. Second, an artificial exchange rate peg has created a massive, informal currency market. Third, the collapse of state fuel procurement means entrepreneurs provide the country’s daily requirement of several million litres – and importers can easily double a $10,000 investment on one tanker load. Fourth, the existence of at least three exchange rates is a licence for state-sponsored fraud: the official rate, the exporters’ rate of Z$824 to $1 and the black-market rate. Of foreign exchange earnings through, say, exports, half is banked at the Z$824 rate and the remainder, at Z$55. Some of this money is exported overseas or used to buy luxury goods – Zimbabwe is still Africa’s largest market for Mercedes cars after South Africa; and the Reserve Bank makes enormous profits.
Finally, state pension funds, state enterprises and other monopolies offer additional opportunities to the politically connected.
The gradual deterioration of the economy has created a feeding frenzy, particularly in the absence of guarantees that elite offenders will be prosecuted. Mr Mugabe has been demonised as the architect of this collapse, but, while he must take a big share of responsibility, his removal would not change the situation. Nor will attempts to revitalise institutions of governance such as the Reserve Bank.
No doubt many Zimbabwean business people are hoping for the departure of some foreign investors, especially in retailing, mining and manufacturing. The sale of local a assets at discounted values creates further patronage opportunities. Investors who want a solution that features a functioning economy must withstand such pressure to sell their assets.
Thus Zimbabwe under Mr Mugabe – just like Rhodesia under Ian Smith – works rather well thank you, but only for a small number. The longer it remains on this course, the more difficult it will be to return to economic normality.
One way the international community could assist this process is through close scrutiny of the foreign assets of the political elite, to create the sort of leverage and external pressure that has been lacking until now.