Zimbabwe is Again in Crisis – Eddie Cross

Zimbabwe is Again in Crisis by Eddie Cross 9 March 2014

You can never separate the economy from politics, the state of one affects the other and the current crisis in Zimbabwe reflects this truth. In 2007 the President of South Africa launched an initiative to try and get Zimbabwe out of the deepening economic and political crisis that prevailed at the time. Our economy was on the verge of total collapse, hyper inflation was spinning completely out of control and the political regime in Harare was isolated and regarded as a rogue regime by the great majority of the international community.

His intervention was remarkably effective, he quickly obtained the support of key political and economic constituencies – the SADC, AU and the G7 leadership gave him their support and over the next two years he guided Zimbabwe through a series of negotiations leading to the Global Political Agreement in September 2008 and the GNU Government in February 2009. However somewhere along the line, South Africa dropped the ball and Mugabe, ever the skillful opportunist, picked it up and with key support from the JOC (Joint Operations Command), scored the final try in this particular game in July 2013.

The only problem was that key constituencies have refused to recognise that final try, this has become quite focused in the past few months with a powerful quartet of the USA, UK and Germany adopting a hard line stance on the 2013 elections with the UK saying quite clearly that they were not a democratic reflection of the views of the Zimbabwe people. They all say that the elections were not free and fair and that the whole process was flawed by the failure to complete the GPA reforms before the elections were held.

Despite the support given by the SADC and the AU to the process, the refusal by these key States to recognise the new Zanu PF dominated government has created a real headache for South African leadership who wanted the issue of recognition to be one of the major outcomes of the GPA/GNU. From that perspective the exercise was a failure.

The second half of the situation emerging in Zimbabwe is economic – under the GNU, the bounce back of the economy was dramatic; revenues to the State grew from a paltry US$280 million in 2008 to US$4 billion in 2013. Foreign trade grew from US$600 million in 2008 to an astonishing US$11 billion in 2013. The new Minister of Finance negotiated the start of reengagement with the multilateral agencies of the IMF and a deal was signed by Mugabe in 2013. A possible debt relief deal was talking shape and Biti had secured the respect of the global financial community in recognition that at last there was some discipline and sanity in Harare.

What was not that clear was what was happening in that shadowy parallel government operated by the JOC. The JOC is a relic of the war of independence when Smith organised it to run the war effort. It was retained by the new government sworn in 1980 and in the past thirty years has grown to the point where it is virtually untouchable and has political ambitions. What was not anticipated in 2007; was that the JOC, cut off from traditional sources of funding, would stumble over the discovery of diamonds at Marange. Not just diamonds, the largest discovery of new diamond bearing ore in the world in over a 100 years.

In the following 6 years companies linked to the JOC in various ways extracted over 100 million carats of diamonds with a market value of about US$12 billion. These were the easy pickings at Marange in the form of alluvial diamonds in soft sand over a bed of rock. The revenue stream peaked in 2012 at nearly US$4 billion. Even allowing for “leakages” this gave the JOC a new lease of life and provided the essential funds for the July 2013 game plan which they executed with supreme confidence and skill and totally flattened the opposition in the form of the MDC and Tsvangirai.

The problem for the new government formed after July 2013, is that they found themselves in a government that was not going to be recognised by the key players internationally, did not have the confidence of the local business community and certainly did not have the confidence of global economic forces. The reaction of the market was immediate – US$1,5 billion fled the local bourse, another US$1 billion fled the banking sector and many local economic players who had been gradually emerging from the shadowy world of the informal sector, simply submerged back into the murky economic underworld that characterizes so much of the local economy.

The new Minister of Finance, a reasonable and competent man, simply could not cope with the outcome. A third of all the banks failed or teetered on the edge of failure. Revenues to the State from taxation started to contract and the decline is continuing. Pressure on him to deliver on the unrealistic promises in the Zanu PF manifesto compounded his problems. His inability to control the rapacious demands of the JOC and Mugabe, who sees the exchequer as a personal bank, was simply too much. On top of that in a shocking series of revelations, Ministries and Parastatals produced list of unpaid creditors amounting to well over US$1 billion at the end of 2013. All State controlled institutions and Ministries simply did not have the money to meet existing and current demands. Local authorities all followed suit and found themselves spending the majority of their revenues on salaries with nothing for anything else.

Compounding these conditions was the sudden collapse of the revenue stream from Marange – not because they have exhausted what remains but because the easy mining is over and the amateurs on site have been unable to work out how to mine the diamonds in hard rock. Right now, just when they need the revenues, Marange is closing down.

The economic crisis is immediate – the IMF is here on Monday with hard questions and the future of the debt relief and reengagement deals is in question, both critical to the immediate future of Zimbabwe. The Ministry of Finance is grappling with an impossible situation – they simply do not have the money to meet the basic needs of the country. They cannot feed the army or prisoners in jail. They cannot provide drugs and cleaning materials in clinics and hospitals, they cannot fund water treatment chemicals.

Then there is the political crisis, both the MDC and Zanu PF are engaged in messy and highly charged struggles for succession. No resolution are in sight for either Party and while this goes on the State is paralyzed and unable to come to grips with either the international problems related to legitimacy or the problems related to the contraction of economic activity across the board in the economy.

Neither Party seems to have the leadership that is capable of dealing with the myriad of problems that confront the country right now. This makes the present situation that much more complex and difficult than the one that confronted South Africa in 2007. Just when we need strong leadership with a clear vision of where they are going and what needs to be done, we have totally dysfunctional leadership in both major political Parties.

Sitting in the wings, waiting for the opportunity to intervene are the men and women who make up the JOC. Suddenly stripped of the bounty that was theirs from the Marange alluvial deposits and recognizing the impotence of the current political leadership, they feel that their time has come. The risk of intervention is very real and very dangerous. We all look again towards Pretoria wondering when the South African President will invite Mr. Mugabe to Loftus to watch rugby.

Eddie Cross Harare 9th March 2014

 

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18 comments on “Zimbabwe is Again in Crisis – Eddie Cross
  1. Bafunda says:

    When we have to look up to Zuma for salvation, that is what we call a crisis. Zuma has no capacity to manage his personal life nor his government for that matter. How do you expect him to even think about Zimbabwe. If we cant learn from how Zuma and his ex-wife dumped us at the time we needed them then we are the stupid ones. Remember July 31 2013!

    Now you know what happens when the politicians’ fat asses are placed against the window of public opinion. No one cares about the burning Zimbabwe out there because no one in Zimbabwe listens.

    we are a people consumed by our own arrogance and greed. we would rather spend millions on weddings, birthdays and arms than on education, hospitals and social services. we have to wait for UK to pay fees for our own children, South African companies to fix our roads while using our expertise, German to fix our water problems. I could go on.

    But to expect South Africa to fix us is desperation at its best. South Africa is experiencing power outages because coal for their thermal stations is wet. On a day when OR Tambo airport and Sandton city went without power the chairperson of the “Eishkom” board declared that this was hardly a crisis. Really? And we have to look up to such people for our solutions?

    We need to be serious!

    • Gomogranny says:

      Exactly…Bafunda is right. We are the ones who are to blame for this total shambles….Zimbabweans both abroad and at home.

  2. Mlimo says:

    Why mr cross does one have to look to South Africa when the problem is of Zimbabwean making? Why ask an outsider to fix internal problems which shows your party and the rest are flat out of solutions. It’s like the Mugabe birthday party. On one hand he spends money he doesn’t have or should be going to fix roads or dams or medical supplies. On the other hand he asks for 10 million for schooling from the British. You see mr cross Zimbabwe can’t spend money on overseas flights and birthday parties and borrow money when it doesn’t have any hope of paying it back. There is a systemic failure by Zimbabweans including you to face the reality and that is to remove from power the problems. Don’t ask South Africa ask your fellow country men . Ask where is a true leader? Every year Zimbabwe doesn’t have a functioning govt that it falls behind the rest of the human race. You can’t keep on blaming the joc, the mugabes, the mujurus , the west you sir must blame yourself and your fellow countrymen. If 3 or 4 million people who are actively engaged in Zimbabwe and want a change you sir must go and change it by force if needed. I ask you sir how can the 40,000 odd Mugabe stooges stand against the millions? That is of course if the millions want change they will stand up. Until then nothing will happen. Just the gradual destruction of one of the jewels of Africa.

    • Parangeta says:

      The 4000 goons have the guns and that is why the millions of poor, unarmed,disorganized masses will never overthrow Mugabe.

      Unless there is UN, or other International peacekeeping intervention.

      Yens or hundreds of thousands will have to be slaughtered first, before that happens.

      That is the dilemma!

  3. Jack says:

    The repeated inaccuracy of the value of the diamonds reveals this article is deliberately misleading. Diamonds trade at between $5 and $10 a carat resulting in sales of between $500m and $1bn. Surely Eddie knows this.

  4. Roving Ambassador says:

    I also see the junta coming in ,They worn the elections ,didnt they? But I think they will go for the Egyptian option, where by they put a stooge in power.otherwise wise they have to eliminate a few warlord s.eg Mtasa and Overt, to counteract insurrection.

  5. zim reeper says:

    @jack And this short but brilliant statement from you must now explain away the zim situation. You are probably the man everyone has been looking to lead zims out of this predicament.Stand up and be counted man!!!

  6. Mike Nyathi says:

    Thabo Mbeki’s intervention was “remarkably effective” says Eddie Cross. The man is in dreamland. “Effective” for who?? Robert Gabriel Mugabe is the answer. Now Cross looks to the fool from Inkandla to rescue us. Oh my word.

  7. Sekuru Mapenga says:

    Eddie writes: “However somewhere along the line, South Africa dropped the ball and Mugabe, ever the skillful opportunist, picked it up and with key support from the JOC, scored the final try in this particular game in July 2013.”

    But it wasn’t South Africa that dripped the ball. It was MDC and Tsvangirai who repeatedly dropped the political ball during the GNU. Every time there was a confrontation, MDC backed down, until they finally entered the 2013 election without even having a VOTERS ROLL. Really!

    If we end up with full blown military dictatorship, the blame will lie largely with Mugabe, but Tsvangirai and MDC have also squandered our hopes for democracy.

  8. Jono Austin says:

    Jack I will buy all the diamonds you can provide me at $5 a carat! You are out by a factor of about 1000. No wonder the fiscus is bankrupt if all they get is $5 and Mugabe pockets $4995.

  9. Daniel says:

    Some good comments here.Eddie the problem was and is the leadership of the MDC.You guys messed up big time.Remember Morgan saying I can work with Mugabe?Enough said.

  10. mutakura says:

    How can eddie cross view south africa as our saviour? The truth is south africa sees zimbabwe as a potential competitor so they would do evrything in their power to destroy the economy of this country using the idiots and imbeciles in zanu pf and mdc. South africa has turned this country into a huge warehouse for all south african products including derere and tissue paper. This idiot called zuma, just like the idiot before him called mbeki, would want to see the situation in zimbabwe remain as it is or better still, deteriorate. It is very naive for eddie cross to look to south africa for salvation. We are are our own saviours without the involvement of the unsophisticated and foolish tsvangirayi or that of the recent zanu pf recruit and a politically unstable immature fool called tendai biti

  11. NBS says:

    And you can never separate the politics and the economy from the spiritual. The church needs to search out its heart. Something is very, very wrong. No repentance! No restoration!

  12. Mseyamwa says:

    And when the rest of the workforce weas acceting austere remuneration in the hope that the national savings would help rescusitate the economy and that one day they would be restored to their former comforts, a few party fat cats were enjoying that future comfort on behalf of us all.
    And even though the rulers have committed so much evil upon us there is still no one rising to enforce sanity in the homeland. I remember mugabe (small letter intentional) threatening any and all who avered that policy was not right for the country, that if they want to involve themselves in politics then they must form political parties and openly challenge him in elections. Does not the current situation expose the truth that we all have to be politically conscious and politically active – voicing our displeasures at evil decisions and voting for real freedom and stability in elections – and not for the election period chibuku rations. We all contribute to the national coffers and all deserve to determine its usage.

  13. naome says:

    Eddie Cross, you are trying to come back to GNU through the back door. The crisis that you see is that whites will never rule Zimbabwe. You thought you can do it through Tswangirayi. The crisis which is there is actual in your puppet party. You fought hard to dislodge a true black government and you failed because Zimbabweans know who their true liberator is. Suffering is always there. Libya a liberated country by the west is in worse situation than Zimbabwe. So we do not want the west’s sympathy.
    Please get old properly. We are tired of your hypocracy.

    • Jono Austin says:

      You only want it’s sympathy in the form of aid, loans, donations, gifts, trade, mercedes benz’s, diamond revenue etc etc!

  14. Ndebvu Mukomichi says:

    Growth Pains- Necessary but Never Comfortable.

    So after the balanced article on white Africans, Eddie is back mourning about the weight of the electoral Cross. Well that is up to him. As for us Zimbos.

    1. Nothing New: there is nothing new in the nations he mentioned refusing to recognise and therefore punishing the people’s electoral choice. Examples of this abound all over the world.

    2. Dreaming of the ‘good old days’: The days of racist advantage are well and truly over for you Eddie. As someone else stated- grow old with grace and dignity without calling for foreign intervention in your own country- and you are an MP!

    3. Growth pains: We are happy to go through the pains of any growing nation- whether other nations like it or not. We will correct our own mistakes as long as the voracious and cannibalistic nations leave us alone. we remember their yesteryear actions of colonial ‘kindness’ and are still recovering from the effects!

    We see the mess they have left in the countries they have ‘helped’ recently!; and are keen to avoid it.

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