via Zim dollar return too ghastly to contemplate December 5, 2013 by Vince Musewe NewsDay
Never say never,especially with Zanu PF in charge.
There are rumours abound of the imminent return of the Zimbabwe dollar.
As far as I am concerned, that will surely sound the death knell for the Zimbabwean economy as we know it.
But, as I always say, never say never, especially when you have a desperate government that does not have wide choices.
I want to look at three scenarios: The political solution scenario, the Chinese scenario and the Zim dollar scenario.
It is clear that Zanu PF has not earned politically legitimacy from the West and the only way that this can be earned is through a political solution that acknowledges that the July 31 elections were not free and fair and did not reflect the will of the majority of Zimbabweans.
This would mean that all the reforms as stipulated in the Global Political Agreement must be implemented and fresh elections held as soon as possible.
Now that is as good as asking Zanu PF to admit that indeed they rigged the elections and we all know that is not about to happen.
Despite that, this is the only way the Zimbabwe can earn legitimacy and this would lead to normalisation of international relationships leading to economic recovery in the medium term. This is the hardest but the best solution for Zimbabwe.
We then have the Chinese scenario.
Here Zimbabwe mortgages its resources to the Chinese and receives cash from China.
The problem here is that, firstly, that nullifies indigenisation, but, more important, it will result in us selling our national resources for a song.
We must remember that Zimbabwe does not even know the value of the mineral resources it has and in desperation, we are most likely to undervalue what we have.
The Chinese would, of course, take full advantage of this situation, pay us as little as possible and effectively colonise Zimbabwe in the process.
The quantum of funds that can be raised through this solution is very minimal and cannot sustain our needs in the medium term.
The Zim dollar scenario would sees us introducing the Zim dollar.
The problem with this is obvious: There is no confidence that this government can manage its own currency as was the case up to 2008.
Added to this is the emotional baggage that comes with it due to the traumatic experience of Zimbabweans in 2008.
The introduction of the Zimbabwe dollar would wipe out imports, especially food from the shops, as we are importing an estimated 70% of our needs.
There is also no guarantee that it would keep its value and we would be effectively bringing back hyperinflation and would, therefore, wipe out any wealth accumulated since 2009.
It will not revive industry or create new jobs.
This option will reverse any gains that we might have made as a country since 2009 and will actually accelerate poverty.
This Zim dollar option is just too ghastly to contemplate and if any of our politicians are even considering it, they should be arrested.
We are in a good space I think, we all know that the only sustainable solution is a political one. Everything else will be short term and expedient.
The only question is: How long it will take for Zanu PF to realise that without a political solution, they are manufacturing their own demise?
Maybe that’s not a bad thing either?