Bond Notes and Zimbabwe’s Bifurcated Economy.

The re-introduction of the Zimbabwe Dollar under the guise of Bond Notes has caused much consternation in Zimbabwe’s Economy. The better part of 2016 has seen Zimbabweans from all walks of life protesting or making submissions to the monetary and fiscal authorities in Zimbabwe to shelve the plans to introduce Bond Notes. As you are reading this piece Bond Notes are already a reality within our economy and in one way or the other we must deal with them. A lawyer friend of mine sent me a text message this morning: Big Men I saw them with my own eyes. I saw the bond notes. It is not hearsay. They were counting big men, and those are not bricks but concrete blocks. They are already being sold and for US$1000 you get ZWBN1500 (1500 Zimbabwe Bond Notes). Already some enterprising people- though connected to the party-state- are using their proximity to tap into the chaos.

Two major problems that Zimbabweans should embrace to tackle is their scavenging public and private executives and the bifurcated nature of the economy- a legacy of colonialism- that creates a two societies in one but with contradictory yet at often times complementary economics. Precisely two economies are operating in Zimbabwe: One based on the fundamentals of modernity and market economics vs. non-market modes of economy. These economies feed into each other creating a complex economy (mixture of formal and informal) that calls for solutions that go beyond orthodoxy western based teleological modernism. However, the crude reality is that the consumption tastes and patterns of most Zimbabweans operate within Western Modernism but at the same time the logic that informs their economics is a fusion of non-capitalist and capitalist modes. The interesting aspect is that the fundamental principles that informs these two worlds are irreconcilable, but to some sections of Zimbabweans they do not see the linkages. This poses the greatest challenges to economic reformers in Zimbabwe. 

The opposition in Zimbabwe is popular for the saying ‘you can’t rig the economy’. The statement presupposes waiting for an Economic Armageddon that will see the confinement of the bad ones of society (ZANU PF) to a Political Gehenna, in the same manner to the biblical Armageddon when sinners will be burnt in hell. This kind of economic logic will likely succeed in a highly urbanised and capitalist societies. The Greek crisis validates the Economic Armageddon End Game, yet events in Zimbabwe since the late 1990s has proved otherwise. ZANU PF’s grip on power failed to collapse even under the worst known inflation levels in human history outside a war zone. The height of the crisis in 2008, even saw ZANU PF and President Mugabe garnering significant support base closer to 50% in the March 2008 elections, despite their defeat in those elections. The significant support base that ZANU PF has been getting indicates a disjuncture between voting behaviour pattern and economic governance. It therefore raises fundamental questions why there has been failing to be an economic implosion outside the state sponsored violence thesis.

This lack of correlation between economic governance and political behaviour of citizens is not surprising when one reads Mhone, Ekeh and Mamdani’s characterisation of the post-colonial state and its attendant problems. Mhone observes that the African post-colonial economy is a structured capitalist enclave with low labour absorptive capacities and thus to lead to islands of prosperity circled by seas of poverty. The impact of the dual economic governance system is also mirrored in Mamdani's conceptualisation of civil society that the post-colonial African state has both, civil (modern) and customary (tradition/native) societies operating alongside each other. Peter Ekeh’s thesis on Colonialism and the Two Publics in Africa, further illuminates on the nature of the post-colonial society- primordial vs. civic- that emerged in post-colonial Africa and accounts for the dual governance system.

A reading of Rosa Luxembourg’s articulation of different modes of production and how capitalism manages to sustain itself by tapping into non-capitalist forms of production is also insightful to understand why the Zimbabwe’s economy has failed to collapse. The statistics indicate a 67% rural based population vs. 33% urban, close to 80% of the Zimbabwean adult population not having bank accounts and more than 90% of Zimbabweans depending on informal or subsistence economies. The argument in these statistics is not necessarily the geographical location but that they present the highest possible chances of citizens' interaction with and assimilating modern economic principles and modes of governance. This re-configuring of the economy has created a complex economy that is neither modern nor traditional, yet at the same time provide opportunities for some and misfortunes for others. It is that group that sees immediate benefits that will sustain the bond notes and they constitute a commanding majority against those minority- mostly urban based, rural petit-bourgeoisie, middle and working class- who will lose out because of their deep immersion in the formal economy. For those in the rural areas and informal economy Bond Notes present an alternative or it will help them to transact in and accumulate the short term. The question of sustainability of the Bond Note is a debate for another day as they must hustle (kuKiya-kiya) to the next day.

In my conversations with some Zimbabweans who are taken advantage of by unscrupulous dealers and business operators, they argue that they would rather dance to the tune on the dance floor. For this section of citizens whether Bond Notes or whatever currency is proposed they will use it because they think it is a passing phase and the question of how we got there is a non-issue for them. The extra-commissions charged by money transfer agencies or the demands by business operators to match amount of goods bought and cash given, practices outside money transfer platforms have rendered citizens hapless. The introduction of Bond Notes will give power to this group to negotiate the value of goods, services and foreign currency without being taken advantage of by predatory business people. A read of Mawowa and Matongo as well as Chagonda gives insights on how business and the state benefitted from parallel market and speculative activities at the expense of ordinary citizens. History is most likely to repeat itself as those who see benefits will only have immediate short-term benefits but the major beneficiaries will be the ruling party, the political connected and big business. These three entities, like in the hyper-inflation  era will be able to hedge their losses but maximise the returns and survive. For the ruling party and President Mugabe, the rule of self preservation- survival -matters most as he seeks a de-facto life presidency project.

The most intriguing question for most people is why ZANU PF continues to get support amidst such a debilitating economic crisis? From MDC-T’s Charlton Hwende to PDP’s Vince Musewe grumblings on their Facebook walls on the lack of correlation between economic governance and voting behaviour outcome- ZANU PF candidate amassed more than 11000 votes vs. 3000 for the second highest candidate- in Chimanimani, and it seems the same trend will likely continue into 2018, all things being equal. This puzzle is not only a phenomenon of geography (rural-urban divide) but a structural question where you have some significant sections of citizens partially or totally not socialised within the modern economy. A debate with one of my scientist cousins is anecdotal to the nature of our bifurcated economy. He argued that Bond Notes are good and they will help to easy liquidity and would not lead to any quasi-financial activities as in the hyper-inflation period. He premised his arguments on that John Mangudya is engaging and not abrasive like Gideon Gono and therefore we will not witness the raiding of bank accounts. Yet, on the flip side of his argument Alex Magaisa’s article articulates how we got to the present crisis and exposes the fallacy of his arguments built on social factors rather than economic facts.

The excessive abuse of Treasury Bills as an instrument for raising cash on the domestic market by the government to meet consumption rather than production goals and the Reserve Bank's directive for the repatriation of Nostro Bank Balances all sounded like the biblical Tower of Babel to him in our conversation.  This immediately make me ponder that if greenwood can burn like this what of dry wood. Despite the high literacy rate in Zimbabwe, we still lack financial and economic literacy. This financial and economic illiteracy presents challenges to all anti-bond notes activists, given that they have become the elephant in the room. Our prescriptions or engagement with the public have largely remained trapped in modernity yet our people are mired in the bifurcated economy where different conceptions of citizenship, morality and material expectations prevail.

The Dilemmas for Democrats in the Third World: Reflections on Fidel Castro’s Legacy

The death of Fidel Castro at 90 has sparked a huge debate in the developing world whether to call him a dictator or revolutionary. A departmental colleague Jess du Plessis tagged me on her Facebook post of the 26^th of November 2016: “Cuban Diaspora. A tribute to an unwavering human…Give me your thoughts…Charlotte Visagie, Tamuka Charles Chirimambowa and Larry Onyango please? I pondered on what to say to her, as I got caught up between remembering Fidel Castro as a revolutionary or dictator. It looks like I will be engaged in an endless and inconclusive soliloquy, as it is a neither-nor question but Janus faced. This raises challenges for democrats particularly in the Third World, where people of colour had to wage wars or struggles of decolonisation from Western powers. Fidel Castro was instrumental to the waging of wars of liberation within the Third World yet at the same time, a significant population of Cubans have complained of his authoritarian rule. The Cuban Diaspora is a stain on Fidel Castro’s history and its size maybe debatable but the fact is that there are many Cubans who strongly view him as a dictator. Yes, Fidel Castro had many positive contributions but his greatest weakness has been how to manage or deal with opposing views. My colleague Jess posed a very good but challenging question for democrats in the Third World and my simple answer is: It is not what it ought to be, but what it is. In this case, Fidel Castro was neither a revolutionary/liberator of the people but one of the many Cubans that fought imperialism and colonisation, yet at the same time had his limitations. His main challenge was overstaying in the office and seeing the revolution as him. Che Guevara’s advice that the people have no liberators but are their own liberators could have been useful to Fidel Castro and those who may want to understand the struggles for Liberation by the Underclass in the former colonised worlds.

History across all humanity and geography is replete with teachings, stories, personalities or values that have always sought to defend society’s underprivileged or poor (underclass). From Robin Hood, Oliver Twist, Cinderella, Aristotle’s conceptualisation of arête in contrast to that of the Epicureans to the tortoise’s victories over the hare in African folklore; the message has always been about giving dignity and protection to the poor or less privileged in society. Humanity acknowledges and is aware of the trepidation of the exercise of power and how this may create a dangerous society to the poor. The positive eulogies for Castro in the Third World when viewed from the perspective of fighting in the corner of the underclass are understandable and Takura Zhangazha’s blog article articulates this well and needs further emphasis. The Cuban Leader, Fidel Castro’s contribution to the improvement of the underclass is unquestionable yet at the same time had its many faults. Castro managed to successfully establish an education and health system that sought to cater for everyone regardless of one’s class. The contribution of Cubans to the fight against imperialism and colonialism in the Third World remains unquestionable. Castro and Cubans have been known to have vigorously and religiously pursued the fight against imperialism and at the same time faced an onslaught from the West, especially the United States of America.

However, the question to Castro’s legacy is not his contribution towards the underclass but how do progressives manage dissent in a non-authoritarian manner. It would be irresponsible for democrats in the Third World to argue that there were no challenges of repression to dissenting voices in Cuba. The challenge for democrats in the modern world go beyond creating a society for one class only but for all classes (the poor and the rich). The underclass needs protection from the powerful or the haves but at the same time, the privileged need protection from tyranny of the underclass. It this dilemma that we are caught in today; how do we remember the contributions and contradictions of our gallant fighters in a sea of cacophony as argued by Emmanuel Sairosi. Can we envision a democracy or progressive politics that can arbitrate our differences and at the same time remain on the path to a political Nirvana?

The discourse of democratisation within the Third World has always been pitched between the poor vs. the rich. Democracy is reduced to a struggle between socio-economic rights vs. civil and political rights. Yet, a close analysis shows that these rights are inseparable and mutually inclusive. You can’t enjoy socio-economic rights at the expense of civil and political liberties.  Shivji conceptualisation of the struggle against colonisation as part of the democratic equation in Africa may assist us to begin to envision a new society and return to democracy. Attempts at splitting rights traps us within the binaries of benevolent dictators and cruel dictators. At a Trust Africa, UNECA and OSISA organised conference on developmental states in Africa, I had an exchange with Baffour Ankomah after justifying Mugabe’s excesses during Fast Track Land Reform. His argument was to make omelette, you need to break eggs. I immediately quipped if he would like to be the first one to sacrifice his life so that he may enjoy social economic rights from the coffin. The whole conference room giggled, but the thorny question was how do we realise progressive politics without resorting to authoritarianism. Do we need to torture, rape and maim those with dissenting voice to give land to black people or address historical inequality? Similarly, for Castro’s Cuba, was it necessary to torment the many Cubans into exile to implement Socialism? Does socialism or the Left need authoritarianism to deliver a good life. The Cuban Diaspora remains an eyesore to Castro’s legacy. Despite the arguments of sell outs and revolutionaries, some of the Cuban Diaspora may have collaborated with imperialist forces, but it is not all of them. Some have genuine questions to be addressed and it seems the Cuban Project failed on that aspect. This poses challenges to the left and democrats within the Third World: How do we manage dissent without resorting to authoritarian tendencies? Does it mean we need benevolent dictators as opposed to cruel dictators to address the question of the poor?

I wouldn’t want to trash Fidel Castro’s contribution to humanity, but at the same time I deem it irresponsible to ignore the Cuban Diaspora who have been victims to his rule. His legacy has many positives but at the same time is tainted with dark stains. The challenge for those within the Third World is how to envision a progressive politics or democracy that harvests international solidarity but at the same time manages dissent in a non-authoritarian manner.