Monday 13 March 2017

Ungracious ‘Architects of Poverty & Parastic Elites’: Thinking Beyond Zimbabwe’s Economic Stagnation


Institute for Public Affairs in Zimbabwe (IPAZ)
GRAVITASLite Dialogue Series Brief No.4/2017
13 March 2017
Editorial Contact gravitas@ipazim.com


Ungracious ‘Architects of Poverty & Parastic Elites’: Thinking Beyond Zimbabwe’s Economic Stagnation

Tamuka C. Chirimambowa & Tinashe L. Chimedza*

Ungrateful Tugas: Zimbabwe’s apparatchik patronage networks

Zimbabwe’s ruling elite quickly reminds someone of Pepetela’s ‘Ungrateful Tuga’ in the book Mayombe. The book chronicles how the Portuguese colonisers remained ungrateful despite having violently stripped people of their land and livelihoods. But that was in colonial Angola yet here in Zimbabwe we have a post-colonial ruling elite which takes pride in distributing all kinds of trinkets boasting that ‘mai vauya’ (the mother has come) to traumatised faces; cooking oil, sugar, bars of soap, second hand clothes (mazitye) and even shoes are thrown as vote buying baits to impoverished citizens. For the ‘dear leader’ and his network of hangers on keeping the citizen in abject desperation gives them power of appearing on the horizon like a messiah. No shame at all.
The  ruling elite is locked in an obstinate extractive mode, stripping national assets, dispossessing people and loading their slobbering appetites. The lifestyles of Zimbabwe’s political elites clearly out-perform Ali Mazrui’s characterisation of African leadership as ‘having monarchical tendencies and palacious lifestyles’. The best summation of this creature ‘chine vene vacho’ was done by Alex Magaisa, in 2007, when he characterised the ruling elites as a Mafioso brought together by the ‘unbridled pursuit of wealth by any means’ and ‘everything else, including political differences, pale into insignificance when the issue of money is at stake’.

The Godfather of the Mafioso has to keep feeding the patronage network to keep the whole enterprise flamboyant so that it does not turn to roaming the streets and become bent on devouring itself. There is palpable panic in the ‘palace’ because if this orchestra of marauding scoundrels is not fed adequately it can turn to the palace like Herod’s wife and demand John’s head on the platter at one of these February banquets. Imagine the pandemonium. Watch the anxiety on the stage at those rallies and you will see sheer gripping trepidation written on the face of the ‘palace’.  So every little gangster in town is given a corner of the economy to racketeer and grow obese; diamond fields are plundered;  police extort citizens; the revenue authority is siphoned, workers pensions pay for decadent lifestyles, half a billion cheque for command agriculture and state owned enterprises are  ruined by ruffians with no basic comprehension of how capital works.

When night falls tribute flows to the palace either in pure cold cash and most decisively in blind loyalty. Witness the brother Governor paying a fat cow for every year the ‘revolutionary leader’ has lived while flood victims are fed by ‘imperialist’ food packets and his workers went unpaid. The hypocrisy knows no bounds of morality. On this one and this one only we agree with the vociferous brother Chris Mtsvangwa that the current elites do not understand capital. Yet we do not want to be taken down the road of militarism the ‘comrade’ advances because it will be a daylight coup and our hard-won constitutional democracy will be pulverised by resorting to guns and gunpowder to make economic policy. Who will censure the garrison if they decide to parcel the booty amongst their ranks?

The latest discovery we are told, in the Sundaymail (12.03.2017) is ‘command agriculture’ and the Vice-President is already on the move to expand this into ‘Command Mining’, ‘Command Health’ and even ‘Command Education’. We know, from experience, that the ‘Command Economy’ represents another party-state extension of the patronage networks to feed fat the security apparatchiks that keep the Mafioso Godfather in power. In Stalin’s Gulag the penchant for militarization, collectivisation and a surveillance state ended with the state feasting on human flesh, literally. The policy inconsistencies are shocking; from ‘ZIMASSET’, to the ‘TEN POINT’ plan,  now the ‘Command Economy’ and add that to the Indegenization and Economic Empowerment Legislation. The consequence is a discordant cacophony of public policies costing Zimbabwe dearly.

If we take the newly industrialised countries such as South Korea, Singapore and Malaysia which moved from the bottom of the ladder in one generation the key anchor was stability in public policy and a developmental framework which prioritised productive investment rather than the consumptive profligacy superintended by this so called ‘revolutionary nationalist government’.
Architects of Poverty : Pursuing Lima While Plundering Billions.
Zimbabwe’s elites have no comprehension of how capital really works, policy contradictions are innumerable and they are always on the ready with a begging bowl. In 2016 the government was extending a US$6m humanitarian begging bowl but at the same time the President was throwing a million-dollar lavish birthday party in Masvingo.

The raid on the national treasury is shocking: a connected brother wipes through $5million and potentially $200million meant for a solar project; another brother handed over $30million of pension funds to the collapsed Renaissance Merchant Bank and at collapsed Interfin another $19million was stuffed down the throats of these gluttonous elites.  A further $16m was gobbled by the other ‘black owned banks’ like Genesis Bank which collapsed after these garrulous elites parcelled the loot and they now live lavishly in the Brooke, Chishawasha and the hills of North Harare. Just go to the parking bays of the Pentecostal churches around town and witness how these cars and palatial homes are labelled ‘miracles’ and ‘blessings’. Pickpocketing pensioners and speaking in ‘tounges’ on Sunday, doesn’t the scripture talk about the ‘eye of the needle’? The Stewrard Bank C.E.O, Dr Lance Mambondiani, did a whole dissertation of this pillaging extravaganza of depositors funds.

In the latest floods where more than 200 people have died and thousands displaced the ‘dear leader’ has  not even bothered to visit the devastated areas.Upon reflection one discovers that the ‘palace’  and its coterie of parasites has been costing the citizen: in 2017 the Office of the President (OPC) was allocated a whopping $187million; in 2016 the same OPC was allocated $205million and in 2015 the OPC was allocated a $225m under the ‘presidential input scheme’. Extrapolated over a decade this translated to close to US$2bn in for the surveillance state and a picture emerges emerges of a palace that has the citizen by throat. At the so called Dema Emergency Power Station which is diesel powered  (yes you are right, diesel powered like ‘chigayo’) the national power company is forced to buy electricity at inflated prices. According to The Standard (30.09.2016) the cost of that project suddenly jumped from $249m to an unexplained $498million, the project did not go to tender and was supervised by the OPC. However we gather that the platoon running that money looting racket at Dema is linked through marriage networks to the ‘palace’. If the late ‘comrade’ Maurice Nyagumbo had any ideas of how these elites will feast through the national treasury he would have cursed himself for the shame and not contemplated suicide over a mere Toyota Cressida.

As always the tax payer pays and the brother Tendai Biti warned that the national treasury is being emptied dry by these mobsters with no bounds.  Apart from gallivanting the world and funding spooks we are not aware of any industry, production or return on investment being directed by the OPC yet it gets a confounding percentage of the national budget. The Ministry of Industry & Commerce which is supposed to be a centrepiece of industrial transformation has insignificant allocations. It means over the past decade the Office of President and Cabinet has chomped and chomped through over US$2billion which is enough to solve Zimbabwe’s current and future energy demands. These so called nationalists are simply preposterous.

Let us pardon these scoundrels and focus on how much the policy instability has actually cost the Zimbabwean economy. At one point Vice President,  Emmerson Mnagangwa, in an unguarded moment, admitted that Zimbabwe’s industrial stock is at least 30 years old  and did he get a reprimand by the ‘dear leader’ for speaking such obscenities in foreign places. So let us look at some deals that have cost Zimbabwe ‘billions’:

Investor
Deal
Status
Diamond Illicit Flows
+US$15b
Untraced.
ESSAR
+$750million
Collapsed.
Russia Platinum Deal
+$3billion
No progress
Chinese Deals
+$6billion
No progress
Dangote Group Deals
+$1.2billion
No progress
Zambezi Water Project (2012)
+$1.2billion
No Progress
South Africa Deals (2016)
+600million
No Progress
Total
$27billion
On the Freeze

The figure above can easily go to $30billion, which would be 50% of what Brother Thabo Mbeki needed to finance NEPAD for the whole African continent. On the other hand Finance Minister Patrick Chinamasa has been scumpering up and down the corridors of serious creditors pursuing the Lima debt restructuring process arguing that this will open up credit lines. The priorities of these elites are so deformed; take the ZISCO-ESSAR deal for example which would have revived ZISCO, employed close to 5 000 workers, increased exports, generated revenue and over time the debt would have been repaid. The government was not prepared to assume  the debt yet the government quickly brought an act before parliament to assume the RBZ debt which was incurred by networked elites during Gideon Gono’s ‘Russian roulette’ with the national coffers.
Whenever the ruling elites are under pressure they literally print money by issuing Treasury Bills (adding to public debt) leading the The Source (06.03.2017) to conclude that ‘for the government of Zimbabwe, money grows on trees’.  If the International Monetary Fund (IMF) & the World Bank  (WB) open new credit lines as Patrick Chinamasa argues this will open the floodgates for the Zimbabwe elite to re-start an unprecedented borrowing drive Zimbabwe’s debt levels into the stratosphere.

State Institutions  and Public Policy as Instruments for Economic Transformation

In an article in the Financial Gazette (09.03.2017) Dr Tinashe Nyamunda compared the Rhodesian and Zimbabwean ‘statecrafting’ and pointed out how the white minority settler regime wielded state institutions and public policy to drive economic survival. Interestingly the white racist industrial and agrarian class was given incentives to produce and it did produce and the state owned enterprises became a linchpin of economic production when Ian Smith was deftly trying to survive under sanctions. Rhodesia’s state owned enterprise now lie in ruins hollowed out by ‘comrades’ in power.
It dawned to us whilst following some of Strive Masiyiwa’s Facebook posts that the denial of a licence to KweseTV is failing to grasp how technology is a game changer. This act could potentially lead to lost revenue for the government and opportunities for employment creation.The growth in online television, Facebook Live streaming, Youtube Channels  and the lowering of data costs point to ‘creative disruption’ going on in the the media landscape. Sedentary dinosaur enterprises like the ZBC TV will fall by the way side that is why Zimbabweans spent over US$200m on DSTV.

Figure 1.5 New Media Entrepreneurs: Innovation and Disruption in the Media-landscape
‘Media entrepreneurs’ like Ruvheneko Parirenyatwa, Fadzai Mahere’s online platform and Cde Fatso’s Magamba TV point to how technology is slowly changing the broadcasting environment. Mobile devices, like phones and hand held devices, will dominate internet and ‘app’ based broadcasting. As we write this article we noted that over 30 Harare Municipal Police Officers and staff had turned up at MotoRepublik to dismantle a technology hub which has created jobs and space for young people. This is just an example of how government policy is anti-innovation. Hypothetically there maybe 10 employed youths who would have bought 10 laptops, buy data, pay rentals and rates, use a kombi or drive daily to and from work, pay school fees and for many other goods and services within the Zimbabwean economy. This is what economists call ‘national aggregate demand’ and shutting down Moto Republik has an economic cost.

Moving Out of the Stasis: The East Asian Experience

In a recent article (GravitasLite 27.02.2017)we pointed that Zimbabweans need to debate the question ‘how much state is enough state’. We first dealt with this question at a conference organized by the United Nations Economic Commission for Africa (UNECA)  & the Open Society for Southern Africa (OSISA).We focused on Zimbabwe  and sought to reveal whether Zimbabwe can have a ‘developmental democratic state’ and the answer is still evolving. (http://www.developmentalstatesconference.com).
We observe  here some important experiences from what has been called the East Asian Miracle in which countries like Singapore, South Korea, Singapore and Malaysia, following on Japan transformed their economies in one generation. Zimbabwe has been independent for three decades now but has actually regressed. Our observations point to some five critical factors; (i) political and social commitment by the ruling elites to a developmental project (ii) social policy stability to generate internal state stability, (iii) consistent economic policy framework driven by (iv) production incentives and innovation subsidies  and (v) a developmental alliance between the state and private sector.

Ultimately Zimbabwe is caught between two roads: the first road, which leads to ruination, is dominated by a parasitic fake revolutionary class who love western bourgeoisie paraphernalia as evidenced in divorce cases of people like Ignatious Chombo and the Army General Constantine Chiwenga who had 23 gold watches and an array of differently diamond collections. The second road is to put a developmental agenda back on the centre of state institutions, policy making and practice and back it up with stability and consistency.

When public policy and state institutions are nationally functional we do not need ungracious palace peacocks to be pacifying us with trinkets and a Member of Parliament (MP) has no role either distributing rice or fixing road potholes with mud (mahumbwe chaiwo – child’s play).


Tamuka C. Chirimambowa & Tinashe L. Chimedza* are the Co-Founders of IPAZIM & Co-Editors of Gravitas.

The next Gravitas Issue will expand the economic debates raised in this edition of GravitasLite. It will shine light on which forms of economic models to pursue, how State Institutions and Public Policy can be put to work in particular areas of the economy to create and expand opportunities for citizens. Contact: gravitas@ipazim.com .

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