SAR, Vol 11, No 2, January 1996
ZIMBABWE: ESAP'S FABLES
BY RICHARD SAUNDERS
Richard Saunders is SAR's man in Harare, only now he lives in Oxford. He is a correspondent for Africa Information Afrique (AIA).
Just when it seemed things couldn't get much worse for the beleaguered Zimbabwean economy, government was dealt another blow in September by the death of recently-installed Finance Minister Ariston Chambati. Following new evidence that the country's experiment with structural adjustment has produced a costly dud and not a World Bank miracle, Chambati's passing threw the ruling ZANU (PF) - already put off-balance by rising challenges from civil society - into further disarray.
Under attack from a range of allies at home and overseas, Robert Mugabe's government is being forced to fight fires all over the hot terrain of social policy. But increasingly, government is facing a shortage of both political capital needed to fight the flames and - perhaps more importantly - a coherent strategy indicating how to go about the job.
Does this mean that the Mugabe government, desperate for breathing space, will soon be forced to seek the cooperation and consensus of its majority population rather than deepening its dependence on its ever more demanding Bretton Woods partners? And if this is the case, are Zimbabweans now witnessing the rewriting and revitalization of a popular nationalist agenda for the '90s?
While the answer is far from clear, it is nonetheless apparent that the old commandist nationalism of the liberation war and 1980s is crumbling quickly, exposing a variety of options for political reform both within and outside of the ruling party.
ESAP fosters disaffection
What is indisputable, too, is the role of Zimbabwe's failed structural adjustment programme (known by the acronym ESAP) in fostering the widespread, popular disaffection that now confronts the ruling party.
When at the outset of ESAP in 1991, ZANU (PF) abandoned its mild social welfarism of the 1980s to go into partnership with the World Bank as Africa's newest reform-oriented star performer, the party promised reduced unemployment, less bureaucratic red tape, higher productivity and rapid wealth creation. The price for rapid development, it cautioned, was short-term deepening hardship in the form of social services cutbacks, skyrocketing consumer prices, the swamping of local markets with imports and sharp temporary increases in unemployment.
But while suffering over the last five years proved even more intense, widespread and chronic than the state initially predicted, the pay-offs did not materialize. Five years on, most of government's promises remain unfulfilled, while the hardship of ordinary Zimbabweans seems without end.
Despite its comparatively high-performing economy over much of the 1980s, Zimbabwe now appears firmly lodged in a quagmire of mounting debt, generally inadequate growth and plummeting living standards. Most macroeconomic indicators show continued overall decline and little relief on the horizon.
In what would be his first and last budget in July, Chambati - a leading industrialist until his entry into Cabinet in April of this year - delivered more sobering news. The government deficit, he revealed, mushroomed to Z$7 billion (or 13 per cent of GDP) in 1994-95, nearly triple the five per cent target set by ESAP planners.
Even though Zimbabwe's donor partners have clamoured to blame public sector overspending and demand cuts in recurrent expenditure to reduce the deficit, most of the increased debt is accounted for by heavy ESAP-related borrowing encouraged by these donors (including US $3.5m from the World Bank in 1991-95). Indeed, in five years of reforms the accumulated foreign-held debt has doubled to more than 100 per cent of GDP. Meanwhile, the even higher (and still rising) domestic debt has come to consume more in interest and principal payments than any other budget item - including education and defence.
Rather than recommending the rescheduling or cancellation of some or all of this debt, however, international donor agencies have applied greater pressure for bigger sacrifices at home. In May, the IMF temporarily suspended its ESAP-related lending programme in reaction to Zimbabwe's failure to "gain control" of its deficit. Tellingly, this was one crucial fact which was NOT mentioned in this year's budget statement.
What the IMF and others donors do not factor in, of course, are the growing social and political stresses to which ZANU(PF) and its state have been subjected because of liberalization - and the potentially disruptive nature of these tensions for the programme, the state and the national political economy.
Lost jobs not replaced
While government struggles to cut spending, it is also under intense pressure to create jobs replacing those lost through ESAP, and maintain at least parts of its lauded social services. ESAP has forced government to consider the attack on unemployment and moves to improve services delivery as mere rearguard actions, in comparison with the war on budget deficits.
High unemployment continues apace - reaching 50 per cent in some parts of the formal sector - as spiralling production costs continue to undermine much of the import-beleaguered manufacturing sector. Government itself has set retrenchment targets in the public service at 23,000. In the private sector, it is likely that more than double this number have lost their jobs (including 23,000 last year alone). On the other hand, only 16,000 new jobs were created annually for the 220,000 school leavers who came onto the labour market in 1991-93. Lately job creation levels have dwindled.
In the lower-income informal sector, which provides a diminishing livelihood for as many as two million Zimbabweans, economic marginalization is even more pronounced due to the higher relative impact of cost of living increases.
The situation is also bleak for many employers. In the last four years, business failures have accelerated, turnover and profit rates have dropped and export earnings have been erratic. In the face of this onslaught very few sub-sectors, mainly those involved in primary production for export like mining, agriculture and horticulture, have made substantial gains. And even in such cases, the results have been mixed, and not wholly attributable to government reforms.
Official figures show more than 130 company liquidations since the early 1990s, as well as an accumulation of heavily-indebted, interest payment-plagued enterprises. Several independent observers now refer to the prevailing "de-industrialization" of Zimbabwe's once relatively self-contained, highly-integrated economy.
This dramatic decline and impoverishment has not gone unnoticed by different factions within the ruling party itself. In an oblique partial rebuke of the fundamental "free market" principles of ESAP, this year's budget quietly moved to help bolster some of the national stalwarts of the economy, invoking lapsed protectionist measures for certain sectors like clothing and textiles, beverages and motor vehicle assembly, which have been under intense stress from cheap (often dumped) finished imports.
Yet these changes were nonetheless limited, and government's overall take-no-prisoners reform policy remains on track, for the moment. In this strategy, the dominant sections of the private sector - those largely controlled by white and foreign capital - are still regarded as Zimbabwe's main "engine of growth," while ordinary consumers and the country's fledgling so-called "indigenous" business community of black entrepreneurs are increasingly marginalised.
This year, for example, government increased sales taxes by 2.5 per cent to 15 per cent, added new taxes on electricity and other items, and refused to offer substantial further assistance to emergent black businesspeople. New spending on land resettlement was effectively curtailed by a paltry budget allocation of Z$10 million, and a similar 48 per cent cut in outlay on new capital wipes out hopes of significant public sector infrastructure development. In this regard, then, the shortcomings of policy refinements have only worsened the political problems of the government.
ZANU(PF)'s apparent abandonment of many of its old constituencies has been met with a rising chorus of complaint, in which a broad range of popular groups have harmonised on broadly popular-nationalist leitmotif. The "new" nationalism contains different themes, including criticisms on the one hand of the continued dominance and privileges of white private society; and on the other, of the controlling presence of foreign capital and international financial institutions. It's a compelling mix that resonates deeply in black society, and threatens to undo ZANU (PF)'s links to its mass constituency in civil society.
In response, the party has taken steps to quieten the noise-makers, through patronage, co-option or harsher means. But the chorus of complaints continues - and gets louder as hardships persist - from all quarters. The question now is, who will take control of the score and direct the growing choir?
Black businesspeople increase pressure
In the last two years an increasingly vocal lobby of small-scale black businesspeople has applied pressure to obtain funding, political support and other policy concessions from government in favour of black business development. Grouped primarily within two umbrella advocacy organizations, the Indigenous Business Development Centre (IBDC) and the more aggressive Affirmative Action Group (AAG), this fraction of black enterprise has met with some success, in the form of preferential awarding of smaller government contracts and access to government and donor-guaranteed concessional loans. ZANU (PF)'s strategy has helped pre-empt the formation of a credible, adequately financed and organised political opposition in multi-party Zimbabwe.
But now that the chips are down - in the form of further budget cuts demanded by large (mainly white) national capital, World Bank strategists and donors alike - the party has been forced to distance itself from the high-profile local black business lobby.
In response there have been angry threats. Government "has gone out of its way to protect multinationals and ex-settler businesses against competition from outside, so that they can consolidate their hold on this economy," raged the IBDC-affiliated Indigenous Business Women's Organization in July, "but has not cushioned aspiring black businesses from evil competition applied by the monopolies and oligopolies in this country. Blacks in their eyes should remain consumers of basic commodities rather than owners and creators of wealth."
"We're now wondering whether our government is scared of whites . . . because what there is now, is a recipe for confrontation with the black people," says AAG President Philip Chiyangwa.
On the other side of the black political spectrum, trade unionists have re-entered the national political stage after several years of being shut-out by a hostile, union-bashing, reforming government. In a scenario unthinkable until recently, the Zimbabwe Congress of Trade Unions (ZCTU) emerged in September from its fourth-ever National Congress with an offer to join hands with government, in a bid to counter the deepening negative impact of ESAP.
Some question the logic of this apparent concession by workers. But perhaps the new rising tide of corporatism does not signal a defeat of the union movement, so much as the increasing weakness and flexibility of the ESAP-battered state.
For the ZCTU, the current softening of government and civil society by the failed liberalization programme has opened the space for new policy initiatives from outside the state. One of the primary thrusts of this year's congress was recognition of the need to seize the occasion, and seek meaningful participation in a range of structures related to reconfiguring ESAP.
"The work we have done recently at tri-partite level in developing one labour law, in discussing wages and salaries, in developing the NSSS (National Social Security Scheme), in drafting a code on AIDS and Employment and in the tripartite Zimbabwe Occupational Health and Safety Council signals the ability and potential for government, labour and employers to work in a tri-partite manner," ZCTU President Sibanda told congress delegates.
But at the same time, ZCTU leaders aim to deepen workers' representation in such bodies while questioning the ruling party's strength within civil society by appealing to a new, reworked, more popular sense of nationalism. Recent remarks by some ZCTU leaders indicate that not only ZANU (PF) is capable of adopting "dual strategies" of engagement with adversaries, in an attempt to win consensus and weaken at one and the same moment. Evidently, co-operation from the popular sector will increasingly come at a price.
"There is a need for the role of the State to be properly defined," says ZCTU Secretary General Morgan Tsvangirai. "We believe the State has a role to play in the economy - we don't believe in the complete withdrawal of the state from the marketplace and society. But we think the State needs to intervene to empower, not to control; to redress imbalances, and do so under a consensual process."
In exchange, Tsvangirai and other labour leaders now concede that ESAP can no longer be scrapped without dire consequences. Yet they have phrased their critique in a way that opens a debate on the wider question of democratic participation in government and policy making; and by extension, on the shape, nature and leadership of popular nationalism in the 1990s.
"In implementing ESAP there are important choices to be made involving the issues of indigenization, land reform and so forth," Tsvangirai argues. "But none of these are addressed specifically by ESAP - though they need to be dealt with if the policy is to succeed. In this regard the trade unions have not played a role to date - neither has the peasant sector, nor representatives of small-scale indigenous businesses. What kind of 'national programme' is that?"
ZANU critics challenge status quo
It is unclear if the ZCTU will be able to muster enough popular support inside and outside its ranks to press the ruling party more closely on the matter of access to policy-making, but there are signs that other players in civil society are emerging to challenge the political hierarchy with similar aims.
Inside ZANU (PF), a new and growing group of disparate critics is publicly questioning the status quo, and beginning to have an impact. Earlier this year, a number of ruling party MPs were defeated in party primary selection polls, in advance of this year's general elections in April, thereby forcing them out of Parliament. More recently, local government elections in October saw an unprecedented number of independent candidates - including the new mayor of Mutare, the country's third city - winning over ZANU (PF) standard bearers. Ten of these fifteen independents were cast-offs or deserters from the ruling party.
In late November ZANU (PF)'s most famous current dissident, former Harare MP Margaret Dongo, will stand as an independent in a re-run of her April contest with ZANU (PF)'s Vivian Mwashita. Mwashita's victory in the general election was nullified in August by the High Court, following Dongo's uncontested submission that her result had been rigged. Whatever the final result, Dongo's successful court challenge has inspired many democratic activists.
Other organizations that target democratic mobilization outside the ruling party, including human and civil rights groups like Zimrights, the Catholic Commission for Justice and Peace and the Zimbabwe Council of Churches, are aiming to pick up some of this momentum and sink the foundations of new democratic practices deeper, against increasing resistance from the party.
"We are aiming to move the democratic process out of ZANU (PF), and into the national community where it should be," says Rev. Murombedzi Kuchera, the Secretary-General of the Zimbabwe Council of Churches. "We want to see a real participatory democracy, on all sorts of issues. Currently most policy and implementation is done beyond the consultation of the people, the NGOs and the community-based groups; it should be done with their full participation."
In what is perhaps an indication of the new battles to be fought for democracy in the course of the elaboration of a new national consensus from below, Kuchera points to the weak underbelly of a misdirected ruling party. "Government should be answerable to the people, to the community," he argues, "and not just to donors like the World Bank, the IMF and the others."
- 30 -
Disclaimer: Opinions expressed in this article are those of the writer(s) and not do necessarily reflect the views of the AfricaFiles' editors and network members. They are included in our material as a reflection of a diversity of views and a variety of issues. Material written specifically for AfricaFiles may be edited for length, clarity or inaccuracies.