ZANU-PF’ ‘empowerment, MDC’s ‘more investment’ need not be seen as contradictory

Dec 28, 2011

ZANU-PF and the MDC will start 2012 with a heightened awareness that a crucial election for them and for the country is not far away, whatever the final dates will be. As the parties sell themselves to the voters, it has become clear that their visions of how to bring about an economically prosperous Zimbabwe are starkly different. But are ‘empowerment’ and ‘attracting investment’ best thought of as opposing philosophies, or as two sides of the same coin?

Economically ZANU-PF has latched on to an aggressive drive for local ‘empowerment’ in various forms. Critics deride land reform which expropriated white farms without a plan to then ‘empower’ the new black landowners to be productive farmers as the worst example of this type of thinking. But ZANU-PF seems quite set on this path, and it is one that carries considerable emotional appeal given Zimbabwe’s history, and also because of how few African countries can be said to ‘own’ their economies, despite the increasing world obsolescence of that concept.

Foreign mining companies are being pressured to cede minority shareholding to ‘community trusts’ as part of ZANU-PF’s version of empowerment. It is certainly partly politicking, but it also reflects a way of thinking about the relationship between mining companies and the people of the areas in which they operate. It is a mindset that is far from unique to ZANU-PF, nor is the idea of such trusts unique to Zimbabwe.

But it is symbolic of a running thread in ZANU-PF thinking about economics. It is to concentrate more on re-distributing and re-arranging what is there, than to focus more on creating new wealth. This type of ‘empowerment’ can be a useful addition to economic expansion strategies, but it cannot sustainably be economic policy on its own.

Yet the ZANU-PF government, especially under Mugabe, is considered deeply tainted in the world’s major investment markets, particularly in the West. A clear, un-controversial  ZANU-PF election win (some will think of such an idea as an oxy-moron) might confer some lost international legitimacy and settle issues of stability for some prospective investors, but there is not likely to be a stampede of investors under a Mugabe presidency, for all sorts of reasons.

The MDC’s Tsvangirai says their main thrust would be to not just further parcel out a stagnant or decreasing-size economic ‘cake.’ The MDC would increase it by pursuing growth-friendly policies, such as by being much more welcoming to investors than  Mugabe’s ZANU-PF, which is clearly somewhat suspicious of investors, especially those from the Western countries with which they have such poor relations.             

Certainly many prospective investors in Zimbabwe would heave a huge sigh of relief to see an MDC government in power. At least half of this would be purely the effect of ZANU-PF and Mugabe having been deposed, rather than and even before any positive actions taken by the MDC government. That reflects the extent to which Mugabe the person has become internationally ‘large’ and controversial.

Mining companies would warily continue to come to seek opportunities in Zimbabwe under a new ZANU-PF/Mugabe government, but agriculture would continue to be largely a no-go area for investors.

Mining investment, such as of Zimbabwe’s new diamond find at Marange, might quickly, dramatically lead to the increase of macro-economic parameters like GDP. Yet it cannot have anywhere near the broad-based benefits of investment in agriculture, such as increased employment and broader economic diversification from a greater possibility of down-stream industries.  

But would the coming to power of an MDC government result in a sudden economic renaissance for Zimbabwe? Would foreign investors really flock to Zimbabwe then? If so, would it be in a way that necessarily caused widespread, broad-based economic growth?

Certainly Britain and the US in particular would want to help prop up and entrench an MDC government. Regardless of what private investors did or didn’t do, Western governments would almost definitely want to be seen to be supporting the political actors who had deposed the troublesome Mugabe in particular.

 Zimbabwe would again be back in the Western orbit of influence in a way it is not today. Tsvangirai and his government would likely reap huge dividends of Western gratitude and support. Reversing ‘Mugabeism’ in its many forms and consolidating the MDC’s hold on power would be a huge project that Western money would certainly be found for.

Credit would likely flow for the rehabilitation of long-neglected infrastructure, with  juicy contracts awarded to firms of the donor/lender countries. The Chinese who enjoy a strong advantage under Mugabe’s government would finally have some Western competition in doing serious business in Zimbabwe. Western donor agencies would flock to Zimbabwe even more than they did during the ‘crisis’ years, so NGOs will again be a growth industry.       

Debt relief would be more seriously on the agenda under an MDC government than at present, with Western government and institutions looking at it much more favorably. Tendai Biti, the current finance minister from the MDC, has expressed an inclination for Zimbabwe to apply for Highly Indebted Poor Country status to have debts written off and/or re-scheduled, also opening the doors to new debt, for better and for worse. HIPC status is ideologically and strategically unthinkable under a Mugabe government. The MDC’s Western-conventional economic inclinations and a West grateful to see the end of the Mugabe era would be two easily co-existing push factors to make many things possible that are not now.

So the economic normalization that has been taking place over three years under the ZANU-PF/MDC government would quicken and deepen in the short-term, aided greatly by inflows of various kinds of Western assistance, even if not necessarily accompanied at the start by significant new private investment.

Out with Mugabe and ZANU-PF would be their economic nationalism, replaced by the eager MDC embrace of Western economic orthodoxy. If ZANU-PF’s brand of ‘empowerment’ sometimes seems outrightly childish, the MDC’s slavish belief in ‘conventional ’economic prescriptions that are causing havoc and increasingly being questioned in the West where they were authored is just as embarrassing.

ZANU-PF is almost knee-jerk in pursuing ‘populist’ and nationalistic programmes that deeper consideration would easily show would be problematic in achieving the intended goals. As if in knee-jerk response, the MDC often seems doubly eager to present itself as the ‘anti-Mugabe, anti-ZANUPF’ by espousing conventional economic thinking that has also often failed Africa. Both insist that their contrasting positions will bring about the kind of economic miracle we have yet to see in any African country.

Zimbabwe may be one of the relatively few African countries that have the right elements to successfully pursue elements of both ZANU-PF’s economic nationalism and the MDC’s Western-economic orthodoxy. ‘Empowerment’ need not mean hostility to/suspicion of foreign investors, as seems the case now. Despite that official hostility, at least in rhetoric, no mining company is packing its bags to leave Zimbabwe and new ones are still sniffing around. Even a ‘difficult’ Zimbabwe cannot be ignored for the mining of some key minerals

Similarly, attempting to increase employment by being especially investor-friendly (MDC) need not mean being spineless in negotiating for local concessions. Zimbabwe, particularly with its corrosive politics no longer standing in the way, offers many more investment attractions than do many other African countries, which would put it in a relatively good position to seek the best compromise between sometimes competing economic imperatives.   

Yet ZANU-PF is now stuck on the track of being seen to be hard-headed and radical (‘populist’) on economic policy. This partly includes occasionally insulting and/or frightening prospective or even current investors. On the other hand, the MDC seems so desperate to present itself as the ‘responsible’ and conventional anti-Mugabeists that they sometimes give the impression they would roll over and play dead in order to be seen to be ‘investor friendly.’

The kind of ‘empowerment’ ZANU-PF advocates has great emotional and political appeal in a post-colonial state with the characteristics of Zimbabwe, but there is no pre-existing template for how it would work. The rules are being made as the empowerment thrust is carried out, and no one knows what the final result will really be or when it can be achieved.

Mugabe often encourages Zimbabwean mining executives to think beyond being employees of foreign companies. His empowerment message is ‘strive to be owners rather than just workers, even if you consider yourselves well paid.’ This is all very well, but not everyone, perhaps even very few, seek to be entrepreneurs. In agriculture, there may have similarly been many more people during and since land reform who were/are content to be farm workers than to be farmers in their own right.

Even for those who welcome the idea of being ‘empowered’ farmers and mine-owners, how do you start? Where do you get the kinds of capital to do this? Nice idea as national policy in theory, but not so easy to put into practice.

So if by ‘empowerment’ ZANU-PF means an economy significantly led and driven by local capitalists (much more so than now, where the ‘informal economy’ predominates; already most people are micro-entrepreneurs), it is far from clear and convincing that this is where Zimbabwe is presently headed, rather than to increasing poverty, destitution, and inequality.

When Tsvangirai and his MDC talk about policies to attract investment and increase jobs, that also sounds good but simplistic. How do you know these investors will come in large enough numbers to make a real dent in unemployment that is said to exceed 90%? What kind of jobs are you talking about? More farm laborers as before, new service industries, or manufacturing jobs? How will you attract them? The answers make a huge difference in the quality of the ‘more investment’ that the MDC talks about as if they have the switch to make it flood in.

Agriculture is an important and in Zimbabwe’s case, particularly emotive subset of the economy. The recovery and development of the country’s post-land reform agriculture would also take very divergent paths depending on whether it is ZANU-PF which continues in power, or if it is the MDC which takes control.

ZANU-PF would continue struggling to patch up the many mistakes made in implementing that land reform effort. Land would continue to be State-owned and foreigners would not only have limited opportunity to invest in any big, direct way, they probably would not want to under a ZANU-PF government, particularly with Mugabe still at the helm. Agricultural investment would continue to be considered ultra-risky given the precedent of un-compensated expropriations.

A big shake-up in agriculture is easy to predict if the MDC comes to power. ZANU-PF’s land reform may not undergo wholesale reversal but certainly the new governing party would be eager to use its electoral mandate to iron out some of the problems. The land audit that has been talked about but never implemented for years would be more politically feasible under an MDC government than now. 

And there would surely be pressure on the MDC for wholesale reversal of the effort as well, partly to serve as the strongest symbolic repudiation of the Mugabe era. It is primarily for his style of white-farmer expropriating land reform that Mugabe remains unforgivable in the Western world, particularly in Britain. The MDC would have to carefully weigh the pluses of scoring points in Western capitals by ‘reversing Mugabe’s land grab,’ versus the considerable domestic political costs and new upheavals of a controversial policy, but one for which Mugabe will long be lionized by Africans.
ZANU-PF has not shown any signs of having a strategy to build a new type of commercial agriculture to serve many of the economic functions of the old one that it dismantled. There will continue to be progress in various sub-sectors, but under the present conditions of security of tenure and access to finance, not enough to add up to the economic whole of the old commercial agriculture. Yet for a governing MDC, being seen to be merely trying to reconstruct the old agriculture would be a fraught, politically expensive exercise.        

Ironically, the present coalition government may make it harder, rather than easier, for ZANU-PF and the MDC to see how economic mind-sets they cast as being opposites can actually complement each other. In the constant tussle for the upper hand, nether party wants to be seen to be giving ground to the other.

It may actually then be easier than now for a government of one of the two main parties to then adopt policy elements of their electorally defeated opponents. Once the electioneering is over and calm has hopefully set in for five years, it may be more obvious for whichever party constitutes the new government that ‘empowerment’ and ‘growth/investment’ need not be thought of as if they are necessarily opposed to each other.



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