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Friday, 18 May 2007

Zimbabwe in the dark....

The Economist Magazine on the rapid drift of our neighbour back to the dark ages.

23 comments:

  1. You can't trust 'The Economist' on Zimbabwe. Their "Economist Intelligence Unit" is run by a Rhodesian, John Robertson.

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  2. Suppose I agree with you that the Economist Magazine is biased (which is possible, I don't like the economist magazine because of its extreme "liberal" tendencies).

    Where do you go for a truly independent view of the economic situation situation in Zimbabwe?

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  3. " Where do you go for a truly independent view of the economic situation situation in Zimbabwe? "

    Now there's the billion dollar question.

    Yakima mentioned a report coming out from SADC on the situation in Zimbabwee.

    To what extent they gather their own evidence or depend on information coming out of the likes of "The Economist Intelligence Unit" will have to be seen.

    But it is beyond dispute that there are far too many people who have a stake in seeing Zimbabwe do badly.

    There is also a huge proliferation of well funded websites that pretend to be 'independent', but who throw out an unrelenting stream of negative news and especially, negative spin about Zimbabwe.

    So reader beware.

    I am looking at the Zimbabwean government's own data, but who exactly collected that is another question.

    Negative news about Zimbabwe is too politically expedient to the MDC, ex-Rhodesians, white South Africans, etc.

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  4. Interesting.

    I get my Zim "independent" view from two sources.

    1. Black Zimbabwean economists I know in Zim - however there not Shonas...lol!!

    2. Zimbabwean Blogs - however most of them are in diaspora.

    The problem is that the country is too polarised.

    The SADC analysis is likely to be too political and therefore may be more neutral but "neutral" is not the same as the truth.

    Isn't the best information what we are ACTUALLY seeing, which is REFUGEES in RSA?????? Lots of them crossing the border. These people carry stories from ZIM of persecution and other things.

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  5. "Yakima mentioned a report coming out from SADC on the situation in Zimbabwee."

    It will actually be a COMESA report to ". . . raise awareness of the sources of inflation in the COMESA region; and what long term policy actions can be pursued to reduce inflation . . ."

    "5. METHODOLOGY
    The study will review the experiences of inflation in each COMESA member countries based on historical data by using the theoretical and empirical determinants of inflation in the available literature. The data for the analysis can be obtained from the International Financial Statistics (IFS). To develop inflation models for each country, the study will use recently developed econometric technique. The explanatory variables that will be used include, among others, real income, nominal money supply, nominal interest rates, exchange rates and foreign prices. These variables are typical of those applied in other empirical analysis of inflation in Sub-Saharan African Countries. Where data from IMF and published sources are not available, they will be requested from member countries through a questionnaire."

    Full text available @: http://www.comesa.int/tenders/SOURCES%20OF%20INFLATION

    I suppose we can only hope that the final report (due in August '07) will reveal useful results and not political spin.

    A cursory review of the Herald business section today reveals mixed results, with some hopeful news:
    http://www.herald.co.zw/inside.aspx?sectid=19133&cat=8
    http://www.herald.co.zw/inside.aspx?sectid=19131&cat=8
    http://www.herald.co.zw/inside.aspx?sectid=19128&cat=8

    But also some news of concern:
    http://www.herald.co.zw/inside.aspx?sectid=19130&cat=8
    http://www.herald.co.zw/inside.aspx?sectid=19129&cat=8
    http://www.herald.co.zw/inside.aspx?sectid=19132&cat=8

    When it comes to finding "truth" or "independence" I share your frustrations and have no good answers. I figure that means I just have to keep looking.

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  6. Yakima,

    Thanks for the correction and the file. They state in their section under 'Methodology':

    5. METHODOLOGY
    The study will review the experiences of inflation in each COMESA member countries based on historical data by using the theoretical and empirical determinants of inflation in the available literature.



    I would encourage everyone to read Brendan Stone's article on the situation in Zimbabwe. He puts together a good collection of the events underlying the Zimbabwean economic situation.

    http://www.raceandhistory.com/Zimbabwe/2007/2205.html

    If we want to look at the sources of inflation in Zimbabwe, we really need not look further than the Jesse Helms sponsored 'Zimbabwe Democracy Act'.

    An alternate explanation suggests that the political programs in question were responsible for provoking retaliation from Western interests, rather than being a damaging force in their own right. In addition to their intransigence on land reform and defense of white settler interests, and funding of Zimbabwe's opposition, Great Britain and the United States have engaged in what can be described as 'economic warfare' against the state of Zimbabwe.

    First, in 2001, the IMF declared its resources off-limits to Zimbabwe. (86) U.S. President Bush and Senator Jesse Helms then passed an act to prevent U.S. financial institutions from loaning money to Zimbabwe, or from canceling any of Zimbabwe's debt. Western organizations acted to discourage trade, including British Foreign Secretary Jack Straw, who claimed to be "building coalitions" to "oppose any access by Zimbabwe to international financial resources." (87) By threatening the denial of funding to South African Development Community programs, Straw used Britain's clout to demand sanctions against Zimbabwe. African leaders continued to resist the intense Western pressure to apply sanctions, however. (88)

    Under the U.S. Zimbabwe Democracy Bill, the U.S. ordered its officials to prevent every major international bank from approving transactions with Zimbabwe. (89) In 2002, the E.U. and the United States withdrew funding and applied sanctions against the Mugabe-led government, and individuals who were perceived as being friendly to it. The U.S. and E.U. also applied a travel ban on Zimbabwean government officials, and the U.S. froze the assets of hundreds of Zimbabwean individuals and businesses. (90) Other "de facto" sanctions exist. For example, according to a former head of UNICEF, only $4 per person is distributed per-person for Zimbabwean AIDS sufferers, compared to an average of $74 in other countries. (91)


    The rest of the article can also be read here:

    http://maravi.blogspot.com/2007/05/zimbabwe-watch-zimbabwes-different-path.html

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  7. Just to add, that was the "Zimbabwe Democracy And Economic Recovery Act of 2001" - that is, democracy through the installment of a client regime, and economic recovery by crippling sanctions.

    A bit like 'No Child Left Behind' and the 'Clear Skies Initiative'. The lofty titles don't cover the content of the bill at all.

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  8. MrK,

    Thankyou for uploading the salient and well researched essay by Mr. Stone, it makes several important and often ignored points about the development of states in the immediate aftermath of National Liberation Movements.

    I have been living in Portland, Oregon in the western US for over a decade, and while it would be difficult to find a more left-leaning population in the country (the Republican National Commitee refers to us as "Little Beirut" due to the protesters who plague their every visit or campaign), they are also about as geographically divergent from Southern Africa as is possible on this globe of ours, and about as ignorant on the region.

    The local 'common sense' is far better informed on Western Hemisphere issues, and I am witness on a regular basis to unprompted (by me) condemnation of the Cuban Embargo, and support for the Movimiento Quinta Rep├║blica led by Hugo Chavez in Venezuela as well as the Movimiento al Socialismo led by Evo Morales in Bolivia. It does not surprise me therefore that when I mention the situations which prevail in Southern Africa, I am eagerly pressed for details, and corrections of what are assumed to be erroneous reports from the established american media.

    Amy Goodman is a household name here (not true in most of the US), and people wish that they could vote for Cinthia McKinney but can only support her from afar (her district is ~4500km away). I say all this by way of preamble, because I selectively shared Brendan Stone's essay around this population, and while I found universal condemnation of Rhodesia and its modern adherents, contempt for the Jesse Helms version of "Democracy and Economic Recovery", and disgust over the hipocrisy of the Bush administration condemning anybody for breaches of anything, they did raise some questions which because of their general ignorance of the issues concerning Zimbabwe I had to take account of.

    I will try to elucidate these expressed concerns in the order which they appear in the original essay for the sake of clarity. The first "flag" was raised over the 11th paragraph, where Stone states:

    "A key claim of this essay is that while Zimbabwe is technically a liberal democracy, widespread economic sabotage, an international campaign of demonization, and direct, artificial, foreign support for the domestic opposition has prevented Zimbabweans from enjoying the positive features of this system of government to the fullest extent. ... In other words, there is a reversal of cause-and-effect for Zimbabwe's problems. Zimbabwean government repression did not lead to Western economic sanctions and political sabotage, but rather the obverse. "

    The principal objection here is that the statement serves as both an admission and endorsement of government repression. The underlying justification being along the lines of "other people behave badly so I cannot be condemned for behaving badly", or "the Devil made me do it." However there was grudging appreciation for the honesty of actually calling it "repression" instead of "homeland security".

    [By way of editorial comment, the section was removed because it met with no objection from the external commentators. "The negative foreign pressure stems not from pre-existing anti-democratic 'sins' of the government, but rather the very serious 'sin' of pursuing an independent foreign, domestic, and economic policy, one that notably involves reclaiming land that fell into white hands during the period of colonization. This argument is particularly compelling in light of the fact that the U.S. supports a number of anti-democratic governments in Africa, particularly Rwanda, without complaint, while creating a media fanfare about events in Zimbabwe." These are observers who fundamentally agree with the facts surrounding the stated western interference in the internal affairs of Zimbabwe. Please assume that further excerpts likewise met with no objection.]

    Paragraph 12 which states, "Those who criticize Zimbabwe for being undemocratic because of repression against foreign interference, as well as patronage, and corruption, should be ready to explain which countries are more democratic in this respect. Not only most, if not all African countries, but most, if not all, developed countries use repression against political opponents in certain instances, particularly if these oppositions are perceived as 'foreign,' 'ideological,' or a 'security threat,' and every country in the world suffers from some combination of patronage, corruption, and election irregularities. " received general agreement accompanied by more offers of documentation than there is space to list here. The general consensus was, "and that makes it Good how?"

    Paragraph 15 states, "Overall, this essay argues that, plagued by continuous Western intervention, the ZANU-PF hegemonic party has constructed a shield around itself, magnifying its presence in the rudimentary civil society, using relations of patronage, and a defiant, 'anti-colonial' platform in order to remain in power." Here observers identified a distinct disparity with the arguments in the rest of the essay, i.e. either Zimbabwe is a functional multiparty democracy, or it is ruled by a "ZANU-PF hegemonic party". They argue that one cannot have it both ways.

    Paragraph 15 continues, "Zimbabwe's 'crisis' is not simply the result of voters electing Robert Mugabe, as many Western reports imply. The problem is that Zimbabwe has not been allowed to choose its own course free from interference." The response to this is, "Welcome to the world. Anyone who tells you you can choose your own geopolitical course without interference is lying to you." [editorial comment: Most of the respondents to this informal survey had never heard of Mugabe personally, while acknowledging right wing international pressure in general, this is generic leftist commentary.]

    Paragraph 16 beings the section entitled, "Evidence for Problems in Zimbabwe" whereapon the observers expressed extreme puzzlement as to how external pressure could possibly result in annual doubling and re-doubling of inflation at the rate experienced by Zimbabwe. [My disclosure of the more current early 2007 inflation rates doubling the article's stated 1600% to the current levels were a source of further shock.] They were troubled by the author's dismissal of the potential domestic causality of this by the statement, "Recent news articles, in publications such as the BBC, highlight the 2006 annual inflation rate of nearly 1,600%, the highest in the world. Economically, then, the country is indeed a "basket case." Evidence for political repression and a lack of democracy, on the other hand, serves as a locus for more intense debate." Modern economics, especially in regards to currency markets is based on the concept of "consumer confidence", and these external observers were hard pressed to place that causality entirely on the doorstep of external pressure in light of the glowing statements of local support for ZANU-PF and its economic policies. General consensus was, "The CIA is good at what they do, but they're not that good!"

    Paragraph 22, there were numerous and extensive objections to the characterization of Ukranian politics [ed. note: Oregon is on the pacific rim and eastern bloc emigrants constitute a significant portion of the population here], suffice it to say that they object to idea of hundreds of thousands of protesters being characterized as western puppets. The repeated assertion that a "Orange Revolution" could take place without massive domestic support is offensive to Ukranians I have contact with.

    [editors note: Although there was sporadic questioning of the author's choice of wording in isolated incidences for various reasons through subsequent sections, there was no fundamental objection to the reasoned logic of the description of the history of Zimbabwe in the essay. Overall consensus was: Rhodesia = Bad, Zimbabwe = Better, and these are people who want to support the Better. Perhaps crucially for myself, though not in the minds of the observers themselves, I saw no objection to the reclaimation of Rhodesian owned farms by any means, and considerable cynicism over the terms and implementation of the British Lancaster House Agreement. I have also given up on trying to count every paragraph in the essay, please forgive me.]

    Phrases is subsequent parts of the essays such as, "Because Mugabe was suffering a crisis of legitimacy at the time, he began to back the farmers, and their 'illegal' acquisition of land." also raised flags for these leftist observers. The primary question was, "So is this truly programmatical or mere political expediency on the part of an individual executive?"

    Likewise the statement that, "Critics of the ZANU-PF attempt to conflate the economic crisis with the land reform and, while they paint the latter as the cause of the former, the opposite, in fact, is likely the truth." there is question whether land reform was a response to economic crisis or a matter of fundamental NLM ideology in the first place.

    This is getting overlong, but I still want to highlight sections with significant questions raised. This bit was such a source, "The results of the sanctions were severe, as foreign trade plummeted towards near zero, and "foreign direct investment in Zimbabwe plunged by over 99 percent." Observers felt the need to question this section due to the fact that unlike sanctions levied against Cuba, North Korea, and Iran, the actual text of sanctions against Zimbabwe does not prevent any private entity from engaging in investment or charitable contribution to or within the state. The actual legislation is remarkably brief by US standards: [http://www.govtrack.us/congress/billtext.xpd?bill=s107-494], and could easily be overturned by the constitutionally mandated change of executive in 2008.

    This leads me, and I am probably glossing over some observers' objections to get here and I apologize, to what I see as the keystone of external leftist observers to Stone's practical case, which is embodied in statements such as: " Because of the lack of "circulation of elites" within these systems, some 'experts' on democratic transition have suggested that the transition has not been consolidated. and most cited " The real question may be whether, in the event of Mugabe's death or ZANU's defeat, the 'anti-colonial' program is able to continue. "

    The question here is why ZANU-PF cannot conceive of continuing in power without 83 year-old Robert Mugabe in power? Why is the the choice characterised as between his death or his party's defeat? That is the principal stumbling block, for the leftists near me, exposed to this essay; and with that they really caught my attention personally.

    Now I have to ask why there is no other person within ZANU-PF after almost thirty years of control ready and able to take up the leadership of this ostensibly democratic nation? Why is the debate always framed in terms of Mugabe and Reform vs. MDC and western control? Where is the rest of this Party? Does the ZANU label mean so little to the populace that without Mugabe it cannot sustain election? Most nations embrace their 'elder statesmen' with a reverance surpassing any acclaim they received while in office, so why is it assumed that Mugabe must die in office or be defeated at the ballot-box after decades of service?

    Here I sit surrounded by people who support Chavez and Morales and Mbeki, but question Castro and now Mugabe as to whether the movements they represent are truly "of the people", because the concept of passing the torch to the next generation seems to be beyond them.

    In my personal circumstance in the US I could rally far more support for a ZANU-PF successor as a genuine leader of a leftist party than I ever could for a man who has held power for nearly 30 years that started at the moment of independance from a colonial power. Because external observers tend to focus in heads of state I have found it easier to advocate to my fellow leftists on behalf of Zambia due to the turnover in the executive office, as shallow as that may seem on the surface. As my american neighbors are wont to remind me, George Washington refused the position of president-for-life offered to him following their revolution against Britain, preferring the role as "founding father" over that of "revolutionary despot". I am hard pressed to fault with that reasoning applied in Southern Africa.

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  9. Yakima,

    Paragraph 16 beings the section entitled, "Evidence for Problems in Zimbabwe" whereapon the observers expressed extreme puzzlement as to how external pressure could possibly result in annual doubling and re-doubling of inflation at the rate experienced by Zimbabwe. [My disclosure of the more current early 2007 inflation rates doubling the article's stated 1600% to the current levels were a source of further shock.]

    Then the question should be - what could lead to hyper-inflation at all?

    With inflation being an imbalance between the goods/services produced and money that is available, the only logical answer I have found, is the sudden cutoff of access to foreign currency, especially dollars.

    For evidence of this, see the article on the Zimbabwe Democracy and Economic Recovery Act of 2001 - there are many banks listed which they ban from lending to Zimbabwe.

    http://maravi.blogspot.com/2007/05/zimbabwe-democracy-and-economic_24.html

    In this act are listed:

    - International Development Association
    - International Finance Corporation
    - Inter-American Development Bank
    - Asian Development Bank
    - Inter-American Investment Corporation
    - African Development Bank
    - African Development Fund
    - European Bank for Reconstruction and Development
    - Multilateral Investment Guaranty Agency.

    I think this goes a long way to explaining the runaway inflation that Zimbabwe has experienced.

    At the same time...

    This 'slamming' (as it is called) by the IMF is not unique to Zimbabwe, and is done regularly to countries that 'step out of line'. The very same thing had happened to Zambia itself, when KK refused to meet their policy demands.

    Check out Kenneth Kaunda's article, "Zambia's IMF Break: Lessons for Latin America", in which he goes into some detail about this turn of events.

    http://maravi.blogspot.com/2007/05/zambias-imf-break-lessons-for-latin.html

    The IMF has been behaving like a mob debt collector, and that is the problem.


    Phrases is subsequent parts of the essays such as, "Because Mugabe was suffering a crisis of legitimacy at the time, he began to back the farmers, and their 'illegal' acquisition of land." also raised flags for these leftist observers. The primary question was, "So is this truly programmatical or mere political expediency on the part of an individual executive?"

    The break with the willing buyer/willing seller program and it's transition to the 'fast track' land reform program came with the election of New Labour in Britain, in 1997. They made it clear that they were not going to finance land reform in Zimbabwe, which they identified with the Tories. See Claire Short's letter to the then Zimbabwean minister of agriculture and land, Kumbirai Kangai.

    http://www.swans.com/library/art9/ankomah5.html

    I should make it clear that we do not accept that Britain has a special responsibility to meet the costs of land purchase in Zimbabwe. We are a new Government from diverse backgrounds without links to former colonial interests. My own origins are Irish and as you know we were colonised not colonisers.

    Zimbabwe's lack of land reform also was stalled to allow the ANC to make a deal with the then apartheid government and come to power in 1994.

    (see: Zim land reform 'waited for SA' )
    http://www.news24.com/News24/South_Africa/Politics/0,,2-7-12_1745450,00.html

    This is how it took 18 years for land reform in Zimbabwe to come to a head, even though land had always been central to the liberation struggles in Zimbabwe. I don't think it reflects any 'crisis of legitimacy' on behalf of the ZANU-PF, as if they didn't have anything better to do except redistribute land. Their only crisis of legitimacy comes from their not enacting land reform back in 1979, at the request of the British, whose aristocracy and corporations own huge tracks of land all over Africa.


    This is getting overlong, but I still want to highlight sections with significant questions raised. This bit was such a source, "The results of the sanctions were severe, as foreign trade plummeted towards near zero, and "foreign direct investment in Zimbabwe plunged by over 99 percent." Observers felt the need to question this section due to the fact that unlike sanctions levied against Cuba, North Korea, and Iran, the actual text of sanctions against Zimbabwe does not prevent any private entity from engaging in investment or charitable contribution to or within the state.

    How many banks the resources to make major loans to governments? Which is what we are talking about when we are talking about the institutions that were mentioned in the Act (see them listed above).


    Here I sit surrounded by people who support Chavez and Morales and Mbeki, but question Castro and now Mugabe as to whether the movements they represent are truly "of the people", because the concept of passing the torch to the next generation seems to be beyond them.

    I would like to echo Stephen Gowans in this issue, and state that there is no point in waiting for the perfect revolution, or perfect revolutionaries.

    There are many things that ZANU-PF could have done differently. However, it is also important to remember the huge historical and economic constraints newly independent countries have struggled against.

    One of the reason for the lack of turnover among political elites, is that their middle classes are tiny. And yet, it takes educated people to take a country forward. This is, I think, why you see the same politicians coming back over and over.

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  10. MrK,

    Thank you for sharing your reasoning and the supporting articles, they have been useful to me and will hopefully prove likewise useful in informing my pacific rim associates on the background situation in Zimbabwe. While I view most of their questions to be prompted by a generic mistrust of charismatic leaders in control of strong executive authority, I do see questions over the causality and extent of hyperinflation as a more productive line of inquiry toward practical solutions.

    "Then the question should be - what could lead to hyper-inflation at all?

    With inflation being an imbalance between the goods/services produced and money that is available, the only logical answer I have found, is the sudden cutoff of access to foreign currency, especially dollars. "
    -MrK

    I agree wholeheartedly that concerted efforts undertaken by the IMF, US and UK serve as both initial spark and continuing cause of severe economic hardship on the Zimbabwean state. However, the research I have been undertaking into past incidences of hyperinflation elsewhere in the world indicates that the nature of domestic response to such circumstances can have significant effects on exacerbation or mitigation of inflationary pressures.

    If extricating Zimbabwe from its accelerating economic meltdown is wholly dependant on IMF/US/UK reversal of policy, then we might as well advocate capitulation and return to the SAPs. I prefer to think that there are other options for inflation mitigation available, some of which the GRZ is apparently to their credit already implementing, others which may require a modification or even reversal of some policies.

    Some freely available online resources include:

    The Concise Encyclopedia of Economics entry on hyperinflation
    http://www.econlib.org/library/Enc/Hyperinflation.html

    A Serbian Government sponsored technical study by Belgrade University in Yugoslavia (1991-1993)
    http://www.zlatko.info/files/An_Econometric_Study_of_Hyperinflation.pdf

    A CEPII report contrasting Brazilian and Argentinian monetary policy remedies for hyperinflation (1990-2002)
    http://www.cepii.org/anglaisgraph/workpap/pdf/2003/wp03-01.pdf

    A brief 1981 essay by George J.W. Goodman describing the circumstances of the post-WWI German hyperinflation
    http://www.pbs.org/wgbh/commandingheights/shared/minitext/ess_germanhyperinflation.html

    And to close I recommend perusal of the August 2006 meeting of the Confederation of Zimbabwe Industries Congress with these historical examples in mind.
    http://www.czi.co.zw/CZI%20Congress%202006%20Deliberations.doc

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  11. https://www.blogger.com/comment.g?blogID=2705183461541363969&postID=8604897018463624667


    Yakima,

    If extricating Zimbabwe from its accelerating economic meltdown is wholly dependant on IMF/US/UK reversal of policy, then we might as well advocate capitulation and return to the SAPs.

    Which is exactly what the MDC wants to do. Which is why they are the West's darlings. They explicitly state in their manifesto that they want to turn back land reform, and implement IMF's Structural Adjustment Programmes. (

    " Macro Economic Policies.

    The basic policies for sound management of a developing economy such as that found in Zimbabwe are well known and developed. Such a policy framework is applied in all progressive and developing economies including many of Zimbabwe’s neighbors.

    The MDC remains committed to adopting and implementing such policies when it takes power in Zimbabwe. This would include market based managed exchange rate, lifting exchange control as soon as markets stabilized, interest rates that protected and encouraged savings and stringent controls on the fiscal regime. Price controls would never be used by an MDC government to try to reduce inflation as this treats the symptoms rather than the cause.

    Instead, an MDC government would foster open competition between firms and ensure that all basic necessities were maintained in free supply. Local monopolies would be required to face import competition if they are unwilling to allow greater competition in local markets. "
    )

    (source: http://www.mdczw.org/index.php?option=com_content&task=view&id=34&Itemid=32)

    Actually, there is a third option. We, bloggers, activists, get out there are hold these events up to the light of day.

    It is very difficult to maintain that Zimbabwe is collapsing under President Mugabe's mismanagement, when people understand the massive economic sabotage coming from the IMF and World Bank and the USA (see the Zimbabwe Democracy and Economic Recovery Act of 2001).

    We should put up IMF policies in Zimbabwe and Africa to the one thing they can't handle - daylight. Scrutiny. Objective analysis. Common sense.

    The IMF and World Bank are extremely unaccountable and undemocratic organisations, and they need to be taken to task for that at every opportunity.

    President Mugabe's problem is that he made a move for economic independence not when he wanted to (back in 1979), but when he had to (in 1997).

    Lastly, much of this power comes from African countries dependence on foreign money and oil. This must be a call for economic indepencence. And I don't mean isolationism, but market protections. Demands that Africans have a major share of all the business that is conducted on the continent. Transition to sustainable technologies - biofuel, solar energy. Economic and political indepencence by letting our own agriculture and other sectors flourish. Political indepence, by shifting away from a rule by the few, to a rule by the many - away from concentration of power in the hands of an easily manipulated central government (the presidency, ministries), toward empowerment of local government and local democracy. Checks and balances on the power of the president, by greater legal empowerment of parliament, the civil service and civil society organisations.

    Those are the way forward.

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  12. Thanks for the links. I think this shows that all these cases of hyperinflation have their own historical cause, and the economy, psychology, etc. also play a role.

    However, the basic theme is the imbalance between goods and services that are produced on the one hand, and the amount of money in circulation on the other hand.

    However, some themes seem to come back - a major monetary shift, at a time of great expenditure.

    - Germany: letting the gold standard go in 1914.
    - Yugoslavia: international sanctions (like in Zimbabwe)
    - Zimbabwe - a cutoff of international credit by the IMF.

    The big argument I would make to your friends is this - if Zimbabwe was really imploding on itself, why is there a need for sanctions?

    Also, I don't know whether the printing of more money (as was mentioned in the general article on hyperinflation you provided a link to) is actually the cause of hyperinflation, or a reaction to it.

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  13. "[W]hether the printing of more money (as was mentioned in the general article on hyperinflation you provided a link to) is actually the cause of hyperinflation, or a reaction to it." -MrK

    The econometric models I have come across in my research which seem to do the best job at simulated recreation of historical hyperinflation events indicate that the printing of money is both. Usually the initial issuance of additional banknotes is a policy response to some form of account deficit, which subsequently feeds back as depreciation causing inflation, which effectively increases the deficit and prompts additional printing. The viciousness of this feedback loop is what turns inflation into hyperinflation.

    "The big argument I would make to your friends is this - if Zimbabwe was really imploding on itself, why is there a need for sanctions?" -MrK

    The people I am dealing with certainly do not support the sanctions, I hope I have not left you with that impression. Their inquiry does not question the negative impact of the sanctions and other disruptive measures employed by external actors on the economy of Zimbabwe, rather the degree of that impact.

    In seeking to identify examples of the impact of additional factors such as media reports of human rights abuses and breakdowns of law and order, I went back to this paragraph from Brendan Stone's paper:

    "Both Ankomah, and Taylor, his interviewer, criticize the Western media for treating Operation Murambatsvina as if it is unique to Zimbabwe, when, as they both testify from personal experience, the demolition of illegal housing is common in other African countries.

    John Vidal of the Guardian supports Ankomah's position. He refers to the discrepancy between the BBC's claims that "bulldozers have crashed into the homes" of a half million people in the capital, and the fact that only 1.2 million people live in Harare - clearly, half the population had not fled in terror. Some alarmist reports had suggested that at least 200,000 people had been displaced in the Operation, but the UN did not list such high figures." http://www.raceandhistory.com/Zimbabwe/2007/2205.html


    All of which made me want to know what figures the UN did in fact list as displaced, so I tracked down this 2005 "Report of the Fact-Finding Mission to Zimbabwe, to assess the Scope and Impact of Operation Murambatsvina by the UN Special Envoy on Human Settlements Issues in Zimbabwe"
    http://www.unhabitat.org/downloads/docs/297_96735_ZimbabweReport.pdf

    It is rather long (100 pages), but among the most informative documents I have read in a while. I can't at the moment find the words to summarize, but I strongly recommend reading all of it.

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  14. Apologies for taking a while to weigh in on the discussion. I went away to meditate on the Brendan Stone paper, came back with some thoughts, only to find much deeper assessment from the folks in Oregon :) Ignoring my “centre right” tendencies I decided to go back and reflect again, this time I have found discussion on “hyper inflation”. Well I better get that out of the way.

    I believe the IMF economists' explanation for the causes of hyper inflation in Zimbabwe. These were recently set in the following 1st April papers - contrary to popular perceptions IMF and World Bank working papers are done by academics whose rigour more or less gets thorough tested by readers like - for example I am currently chasing that chap who appears to struggle finding the data on the proportion of students. This happens world over. Their working papers do go through some academic purification:

    http://www.imf.org/external/pubs/cat/longres.cfm?sk=20630.0

    http://www.imf.org/external/pubs/cat/longres.cfm?sk=20658.0


    Now back to Brendan Stone’s paper. My own take on this paper in the end was simple – some of portions of the paper are good, other portions of are questionable but the topic certainly warrants further study.

    The good bits – clearly as Yakima notes, the paper does provide deeper insight on how the struggle for independence can shape the development of the state post-independence through the distribution of power within the nation. It’s quiet clear from Brendan’s assessment that although Zimbabwe gained “political independence”, it still remained economically dependent on the white farmers who retained enormous level of control over the land. The author is therefore quite right that in seeking to assess Zimbabwe’s current problems we cannot ignore the “genesis” of the national state. The author is also quite right in raising questions of the Western coverage of what has transpired in Zimbabwe, and indeed to some extent the role the IMF has played. His general conclusion that Zimbabwe's problems are multifaceted therefore seems sound.

    The questionable bits – I think the paper could have been more sounder and more robust if it was not pandering to the extreme. Some of the assessment is not of the level of rigour and standards expected. It has too many political overtones and not strict enough in its search for balanced evidence and where it has found some, it reaches judgement too quickly. A more professorial approach and detached view would have made for a ground breaking piece of literature. A few examples:

    “But he also witnessed positive developments, such as the incorporation of women into the skilled labour force, in this case, bricklayers. Reconstruction involved the erection of new homes, and clean marketplaces, unlike anything Ankomah had seen over eight years of living in Britain”.

    The author clearly gets carried away with the last sentence.

    The near-unanimity in the selective interpretation of the 2005 election and house demolitions suggests the existence of a concerted effort in Western media and scholarship to obscure events in Zimbabwe.

    Unanimity does not equate to concerted effort, neither does it imply a strategy of any sort by the media. The evidence to justify this statement is simply not presented within the paper. The author is relying on the reader to have prior “negative view” of western media coverage, to follow his argument.


    ”The specific, anti-'Mugabe' interpretation of events relates to the contested nature of the country's politics, as the hostility of the 'former' colonial powers towards Zimbabwe is very real, and a major cause of the current political and economic problems.”

    The use of the word “hostility” is inappropriate, and neither is it fully substantiated. Through out the paper the author seems to identify the Government with the state. This could be for a number of reasons. Even if the UK and USA Governments could be argued to have hostility towards Mugabe, that does not translate towards Zimbabwe. The interchangeable use of Zimbabwe and Mugabe’s Government is unfortunate and rather clouds much of his analysis, as is the use of the word “hostility” in this instance.


    There are many other examples, including his views on democracy that would read many readers perhaps uncomfortable. He seems to have a narrower view of what democracy encompasses - I note that institutional literature atleast carries a minimum of 3 definition of democracy. I don't think democracy is a word that can be tossed around without deeper discussion of what it means - incidentally neither is totalitarianism.

    His statement that “ZANU-PF leads the Shona majority and rural population, attempting to monopolize elections as legally as possible through its institutions that occupy parts of civil society” was not substantiated and flies in the face of other evidence we have seen. Not to mention is own slight hint that the beating of Tsvangarai was somewhat justified given the supposed militant nature of opposition. He also does not discuss fully the disparity in resources between the state and the opposition, neither does he point out that other external sources of funding supposed propping up Mugabe. He also skips over quickly the war in DRC - a huge waste of resources by any standard.

    I can go om….in short I find more holes in the paper than the good bits.

    But as always there’s something to build on….

    I think Brendan’s assessment could be better framed by asking the obvious question – what is unique about Zimbabwe? Why is Zimbabwe special compared to other African nations that have gone through a lot of problems but have never reached the position of a near, dare I say “failed state”? This is essentially what he seeks to demonstrate, but ultimately fails -perhaps because the paper covers too much ground. There atleast 5 papers within that paper!!

    Although Brendan’s assessment has not convinced me that Zimbabwe is entirely unique, I think the nature of the “Lancaster Settlement” probably provides a window for african economic historians to study how similar settlements around the world have affected the evolution of societies – have they prospered, have they got worse? It’s only then we can build a true counterfactual. I am not persuaded by the IMF route. It remains the case the for me that countries are poor in the long term because of the choices they make and not the choices imposed on them.

    I have recently fallen in love with culture as a viable explanation for differences in development. In Brendan's assessment i see some hints of this approach but not fully crystallized.

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  15. Yakima,

    You will want to note that the second IMF paper referenced here indicates that the UN estimates that some 700,000 people lost their home or source of livelihood. and a further 2.4 million people were indirectly affected in varying degrees. I need to check the UN Habitat report to see if it was the source.

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  16. Cho,
    The report of the Fact Finding mission did indeed use the 700,000 directly affected, and 2.4 million indirectly affected numbers as initial estimates. However as the report details these numbers are based on data provided to them on the last day of their mission from the GRZ itself (demolitions were still in progress, albeit below the peak rates in June '05). Estimates from NGO's tended to be higher, but in the absense of an independant effort to perform an actual count of displaced persons, the GRZ numbers were seen as acceptable for the purpose of planning an attempted short term response.

    I am currently seeking data on the eventual fate of those displaced two years ago, as well as the success rate of programs designed to help them. Amnesty International prepared a national survey report released in Sept. 2006 :
    http://web.amnesty.org/library/pdf/AFR460052006ENGLISH/$file/AFR4600506.pdf

    Solidarity Peace Trust released a report focused on the western section of the country in Aug. 2006:
    http://www.solidaritypeacetrust.org/reports/meltdown.pdf

    Neither organization has the resources or government sanction of the UN HABITAT mission, however the findings do serve as a general illustration of the situation last summer from the viewpoint of NGO's involved.

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  17. Yakima,

    Very useful reports. Thanks.

    Can we then assume that the GRZ numbers are some sort of "minimum"?

    You note that "Estimates from NGO's tended to be higher" - I am not sure why that should be the case...

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  18. Cho,
    The UN Mission report describes their methods at greater length, but this excerpt from section 3.2.2 provides a guide to their process:

    "Official Government figures released on 7 July 2005 revealed a total of 92,460 housing structures that had been demolished directly affecting 133,534 households (Note 46: For the purpose of this report, households include conventional family structures, multi-generational and/or extended family structures and individuals. The average family size has been taken to be 4.2 persons.). At the same time, the structures of 32,538 small, micro and medium-size enterprises were demolished. Based on average household size derived from the 2002 census, and authoritative studies on the informal economy, the population having lost their homes can be estimated at 569,685, and those having lost their primary source of livelihood at 97,614 (Note 47: Official sources have intimated that most demolished structures were occupied by 1 or 2 people. This appears to be highly improbable given the significant number of households affected which is likely to be a representative sub-sample of national and provincial averages. Furthermore, independent studies including Government surveys and policy statements systematically refer to overcrowding in informal settlements as a major issue. Some surveys have indicated 4-6 people per room as the norm, with some shacks harbouring up to 8 people.).

    "While there is a degree of overlap between those who lost their homes and those who lost their businesses, the total figure of 650,000 to 700,000 people directly affected by the Operation is considered plausible. This takes into account other reports of the number of people arrested for alleged illegal or criminal activities (40,000), the substantial number of street vendors and hawkers who were omnipresent in all cities and towns prior to the Operation, and discrepancies noted between the figures provided by the Central Government, and those provided directly to the mission by Resident Ministers (Governors) and Mayors in the course of on-site visits."


    Since no single NGO could cover the entire effects of the Operation in all of the localities that demolitions were performed (GRZ reports indicated some 40 sites in all 8 provinces), the UN could not indentify which persons might have been counted by two or more NGO's, or by none. A key factor in all estimates is the figure used for average household size, with the GRZ asserting a below census average for affected households and NGO's asserting above average size, the UN chose to use the census number in preparing estimates.

    In Zimbabwe the proportion of low income households occupying areas qualifying as slums under UN definitions was relatively small (3.4% of urban population), while the bulk occupied unlicensed additions to existing structures. The Report asserts, "By 2004, backyard tenancy had become a dominant source of housing for low-income households living in urban areas. In Mutare, for example, the mission was informed that there were 34,000 backyard extensions compared to 27,000 legally recognised and approved dwellings. In Victoria Falls, they comprised 64% of the housing stock." The worldwide tendency is for lower income households to contain higher than average numbers of children (often from two or more resident mothers as well as related orphans) as well as childless extended family adults, though with below average elderly populations. It therefore seems unlikely that the household size of displaced persons would be lower than the national average of 4.2, and not implausible that it would be higher.

    The figure for those indirectly affected is based on models accounting for persons including "those whose livelihoods are indirectly affected by, for example, loss of rental income and the disruption of highly integrated and complex networks involved in the supply chain of the informal economy. The upstream and downstream linkages include, for example, transport and distribution services, suppliers of foodstuffs from rural areas and, conversely, suppliers of inputs to rural areas, formal and informal micro-credit institutions, and a wide range of part-time and casual labour."

    The report also adds with regard to the 2.4 million estimate (18% of national population) that, "This figure, which is still increasing owing to ongoing evictions and destruction of structures, will have considerable short-term and longer-term impact in social and economic terms."

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  19. Yakima,

    Thanks for this.

    Yes it does seem that household size is indeed the key for direct effects.

    I am not fully convinced that the household average for poor people CANNOT be less than the national average. Its plausible that it can. The 'many babies' story for the poor makes sense, but so does the high mortality.

    But my basic observation is that, in our culture [and that of Zim] richer households tend to attract a larger amount of people from the villages. Its not rare to see a typical house with a working husband having 10 or so people there. I have no econometric evidence on this [I would to do some analysis though if I can get the data :) ], but I see some sort of "laffer curve" relationship with the income being strongly correlated with household size at the lower and middle section and perhaps tends to decline at the higher end (as the richer you get the more 'self -centred' you become? - although I would need a better apriori lol).

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  20. "But my basic observation is that, in our culture [and that of Zim] richer households tend to attract a larger amount of people from the villages. Its not rare to see a typical house with a working husband having 10 or so people there." -Cho

    I agree with you, but what is becoming apparent from the reports is that the majority of demolitions were not of dwellings which met the definitions of slums. Instead the vast majority of structures were semi-permanent additions to existing houses, but which did not meet the standards of the old restrictive Rhodesian building codes designed to discourage urbanization of rural populations, which are still in effect.

    The Anglican/Catholic church-based Solidarity Peace Trust report of effects on displaced persons after the first year includes a detailed "Survey of two high density suburbs in Bulawayo" [ http://solidaritypeacetrust.org/reports/meltdown.pdf (pp. 38-49) ].

    A random sampling yielded data from 89 affected stands (out of 10,867 demolitions citywide, and 886 in the two sampled suburbs, as reported by the city council), on which 119 buildings were demolished comprising of 178 individual rooms. 96% of rooms had been housing people, 3.3% used for storage, and one was under construction. The average age of buildings was 10 years, but ranged as high as 33 years. 87% of rooms were built out of brick and mortar, with access to clean water and to an outside toilet connected to the municipal sewerage. 86% of rooms destroyed had access to electricity, with 60% of unelectrified rooms being used for storage.

    The report indicates that the demolitions displaced a total of 432 persons on the 89 stands, or an average of 4.85 per stand. The report also found that about 40% of, "[family] units or individuals still live on the same residential stand, having simply moved into the main house." Crowding has increased in the main houses, with space per person declining from 5.63 sqm to 3.39 sqm (prior to demolitions, backyard structures averaged 3.67 sqm per occupant).

    The data therefore indicates that a large proportion of the displaced were extended family members of richer main house owners. Just the sort of family group that would "tend to attract a larger amount of people from the villages."

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  21. Very useful assessment indeed.
    Thanks.

    This is both comforting and worrying. Comforting to know that The report also found that about 40% of, "[family] units or individuals still live on the same residential stand, having simply moved into the main house."

    Worrying that the basis for the demolitions seems even weaker now "that the majority of demolitions were not of dwellings which met the definitions of slums".

    There's a genuine issue here of course that transcends Zimbabwe. And that is the "housing crisis" in our urban areas and the whole slums issue. Another topic we have yet to address on the blog :)

    I read some of the Habitat for Humanity literature on slums and low cost housing. But I have yet to see any sustainable solution implemented on this across the continent. I see the South Africans are taking the idea of low cost housing seriously, but not necessary with view of addressing the "slums" issue per se. The problems with the slums is that it is a "demand" issue - not necessary a "supply" side.

    So I just don't see how demolishing the slums is a sustainable solution in the long term. You simply delay the inevitable.

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  22. Cho,

    You are very correct that, "There's a genuine issue here of course that transcends Zimbabwe. And that is the "housing crisis" in our urban areas and the whole slums issue. I read some of the Habitat for Humanity literature on slums and low cost housing. But I have yet to see any sustainable solution implemented on this across the continent."

    I have found some intriguing literature on successful projects via UN-Habitat "Best Practices Database":
    http://www.vcn.bc.ca/citizens-handbook/unesco/most/bphouse.html

    For example the Habitech solution from Thailand utilizes public/private partnership to create, " prefabricated modular interlocking concrete based elements that can easily be put in place without the need for heavy equipment. Because the components are self-aligning they can be put in place by unskilled workers." This system is oriented towards materials sourcing from specialized local light industry, and self-construction of units by four persons with little instruction or supervision. Costs are reduced significantly over conventional construction (estimated 30%-50%).
    http://www.habitech-international.com/home.html

    In the case of housing displacements similar to those we have been discussing, there was a successful "pilot project (1987-1990), following the social and economic hardships created by the large-scale slum clearences in 1985, the Senegalese government decided, with the assistance of the German Technical Cooperation, to experiment a new approach to uncontrolled settlements based on keeping people where they already were and having them take part in the improvement of their living environment.

    "In parallel to the physical upgrading of the area (streets, water, electricity, sanitation and facilities), this approach insists on ensuring land security to people who had been duely made census of. This condition being a key motivation for the populations, since it made it possible for householders to make their situation legal."
    The program was eventually expanded to cover the whole country, and became an officially autonomous agency from the central government in 1996.
    http://www.vcn.bc.ca/citizens-handbook/unesco/most/africa15.html

    For rural housing needs, the Habitat for Humanity (Malawi) approach seems well suited to the task, working with government, traditional authorities and revolving-fund financing to gradually improve housing stock on a per dwelling basis.

    "Home owners are required to provide volunteer labour, thereby increasing their commitment to their house and the scheme, and also decreasing house cost. Home owners are required to repay the cost of all inputs provided by Habitat for Humanity (Malawi); while no profit or interest is charged, repayments are indexed to the cost of cement (the biggest input in the house) to protect against inflation. Repayments are used to build more houses and latrines in the community, promoting social responsibility."
    http://www.vcn.bc.ca/citizens-handbook/unesco/most/africa10.html

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  23. Yakima,

    Thanks for the links, I enjoyed reading them greatly and actually led me to do more reading around this whole “housing crisis” issue.

    The models in the links you provided appear to offer fairly simple and workable solutions. Incidentally, Habitat for Humanity are also doing work in Zambia.
    http://www.habitat.org/eca/build/ame/232.aspx

    I believe there’s a blog on the low cost housing initiative in Zambia somewhere. I’ll try and dig it up.

    As I was saying, “cost” clearly is not the issue. The issue must therefore be policy.
    I have just checked the UN Habitat website on the numbers on Zambia “slums statistics”.
    http://www.unhabitat.org/list.asp?typeid=44&catid=243
    They indicate a slum population of around 3m in 2001. It seems the situation has actually worsened since 1991.

    This year’s budget allocated about 6.5% to housing and amenities or K787.4bn in total. Of that only K23.1 bn is actually on housing development itself.
    http://www.sarpn.org.za/documents/d0002315/Budget_Address_Magande_Feb2007.pdf

    I have serious concerns on the policy direction in this area in view of the Fifth National Development Plan. Please see this to see what Government plans are in this area.

    http://www.cspr.org.zm/Reports&Updates/FNDP.pdf
    (pages 151-154)

    I will start a new blog topic specifically on this issue of housing. There are some interesting issues we need to discuss in view of the FNDP proposals and the slums issues.

    ReplyDelete

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