Almost forty years ago – 39 to exact – I worked for Price Waterhouse in Rhodesia as it was then known. The objective was to complete my articles while at the same time avoiding military service – the interminable “camps” – in South Africa. What this interlude provided me with was an insight into Rhodesia that has provided context for much of what has occurred since independence in February 1980. Is the end game in sight?
Main picture: The recently announced “Bond Notes” will ultimately become as worthless as the billion Zim dollar note
What the current generation falls to appreciate, is that South Africa of the pre-1990s was rent asunder not only by a stark racial divide – whites vs other races – but also a language partition – English vs Afrikaans. For English speakers progression within the civil service was thwarted at every turn with the senior echelon being overwhelmingly Afrikaans.
Rhodesia was different. Not only was it English speaking but the overt racial undercurrent was absent from the social discourse. Whilst most aspects of South Africa’s Apartheid might not have been legislated for, Apartheid existed in most spheres. As it was not a law forbidding races to intermingle, many aspects of South Africa’s concept of Apartheid were flouted or indeed non-existent. For instance, I recall that there were black Articled Clerks unlike down South. During a conference at the Kariba Dam, these clerks were allowed to fly on Rhodesia Air and stay in a normal hotel. They were even allowed to gamble and drink with the white clerks after the day’s work was done.
Upon closer inspection, the reality was apparent that these Blacks yearned for equal treatment not by the grace of the white man but legally in their own right.
In what can only be described as an epiphany, the situation in Rhodesia and its future became crystal clear to me. From an economic perspective Rhodesia had performed remarkably well. Apart from agricultural products in which they were totally self-sufficient, the local manufacturing industry had filled the void and the shelves of the shops with all manner of goods. Even a number of basic models of cars were locally assembled. With ingenuity and inventiveness they had been overcome the arms embargo placed on them by the United Nations. All manner of unique weaponry and tactics were developed. The Fire Force concept became legendary in its effectiveness as did the Selous Scouts
Notwithstanding these facts, the ability of the Rhodesians to subdue, let alone defeat ZANU, was extremely limited. Even with losses amounting to one tenth of those of the terrorists, the following refrain was heard over Rhodesia Radio on a daily basis, “Combined Operations regrets to announce the death in action of Trooper XXXXXX.”
This steady stream of death notices was akin to the archetypal Chinese drip torture. Within a tiny close-knit community where everybody knew everybody else, such announcements were insidious. Like a cancer, they corroded the will making emigration ever more inevitable.
From an auditing perspective, the effect of emigration of skilled whites or the constant call-ups – 6 weeks in and 6 weeks out – was painfully evident. It goes without saying that under qualified persons were often performing the work. At ICL this was evident when the Accountant battled to balance the Fixed Asset Register.
In the light of the deteriorating security situation, various restrictive measures and laws were enacted to buttress the struggle against the terrorists. Little did the Whites realise that these self-same laws left untouched by the Lancaster House Agreement would in later years to applied against them and all Mugabe’s opponents.
Those same restrictive laws were enthusiastically embraced and applied by Mugabe when he came to power.
My conclusion was that the emergence of black majority rule was imminent. This likelihood was strenuously opposed by my fellow articles clerks. Ironically during the election in February 1980, I was staying in a commune in Sandton with a bunch of Rhodesians. I can still vividly recall the supper on the eve of the election whilst sitting at the 15 seater dining room table being served by a black Rhodesian “house boy” as the male cook and house cleaner was called. All had already phoned home to gauge the mood of the “people.” The farmers all reported that their black labourers – an obvious tautology – had declared their undying love for Ian Smith.
Knowing full well the extent of their self-delusion, I went to bed with a heavy heart. Their disbelief at the election result was total. The result had been less a bloodbath than a massacre.
How had the whites been so deceived? Partly this had been their own delusions that white minority rule would endure for a 1000 years as they were winning militarily. They might well have won every battle but they were inexorably losing the war. Secondly they had under-estimated the effect of ZANU’s use of terror as an instrument of power. The unfortunate recipients of that strategy were mainly the peasants – the povo – most of whom had never even encountered a white man in their life as they were cloistered in their tribal trust lands.
At a superficial level for the next 22 years, everything went well. Most Whites emigrated as whites were replaced by blacks in all spheres of Zimbabwean life – political, military, economic and social. What the people lacked was a constitution that would safeguard the rights of all Zimbabweans.
Like many of society’s so-called heroes, Mugabe was deeply flawed. His rise within ZANU had been over the bodies of his erstwhile comrades. His movement had not earned the support of the blacks in the tribal trust lands through persuasion. Rather it was through the barrel of the gun and mass atrocities. The West ignored accounts of massacres of civilians. By nature Mugabe was not a democrat but the message of impunity due to inaction on the part of the West reinforced an anti-democratic mindset.
At the turn of the century, Mugabe’s ability to assuage the Zimbabwean population with platitudes and empty promises was drawing to a close.
Independent Trade Unions arose. Credible political opposition was born. Mugabe’s instinct never discarded, always dormant and latent, rose to the fore. All the organs of state were employed to derail their campaign. Not surprisingly the election result which took months to be released was rigged. Again the God of Impunity smiled on Mugabe as Mbeki applied his “quiet diplomacy” policy.
In order to placate his supporters, Mugabe dispatched his war veterans to expropriate white farms. Most white farmers were intimidated into vacating their farms. Ironically many were invited by neighbouring countries to farm there.
As agricultural production shrunk, the process of economic collapse commenced. From a situation where Zimbabwe was self-sufficient in food production, this figure has steadily been reduced where today it stands at 10%.
In this process, food imports skyrocketed and the economy stagnated. Instead of reversing his disastrous policy, it was accelerated.
As agricultural output shrank, so did the value of the Zimbabwe dollar evaporate. Finally when the value of the dollar had fallen to derisory level of billions to the Rand in 2009, it was scrapped.
Finally all the years of economic mismanagement under Mugabe, the economy had plumbed new depths. As all economists are keenly aware, in economics every dumb decision brings consequences, always negative. Economic laws can only be ignored for brief periods but more importantly, the more important the decision, the longer its impact and more significant the result. As Alec Hogg stated in his blog on this issue, “Another reality forgotten by instigators of incoherent economic policy is how the consequences eventually destroy basic functions citizens take for granted.”
The spectre of imminent economic collapse was temporarily averted by the replacement of the Zim $ with the US $. The replacement of a local currency with a foreign one would force any rational government to adopt sane economic policies. Without local food production, it would have to be imported. Exacerbating this situation has been the current drought. In this regard Zimbabwe again serves as a metaphor of irrational economic policies. As if the Zimbabwe government has a surplus of resources, it began repackaging the packaged donated food stuffs reading “Donated by the United Nations” into new packages stating “Donated by the Zimbabwe Government.” Apart from the blatant lie, Zimbabwe can ill-afford the wasteful expenditure of meaningless propaganda.
Mugabe’s adamant rejection of classical economic theory and reality has now placed Zimbabwe on the cusp of economic collapse. With imports exceeding exports by a wide margin and with further foreign investment being barred through the indigenisation laws, Zimbabwe is rapidly exhausting its supply of US Dollars.
It is at this point that the axiom that “incoherent economic policy eventually destroys basic functions that citizens take for granted” becomes pertinent.
In this case, a basic function like drawing cash from an ATM machine is subverted. Due to the paucity of US$s still available in Zimbabwe, severe restrictions have been placed on their withdrawal from ATMs. As a consequence, severe dislocations in the cash economy being hawkers, taxi drivers and even car guards are being experienced. As the wealthy or even the indigent are unable to withdraw cash, they are unable to pay for those goods and services normally paid for in cash. In the interim the banks are still allowing credit card transactions.
In order to alleviate these cash shortages, the Governor of the Reserve Bank of Zimbabwe – the RBZ – John Mangudya has issued a directive that, with immediate effect, the use of ZAR will be increased. Furthermore, in order to address cash shortages, he announced that the RBZ would be introducing what were euphemistically termed, “Bond Notes.” This issue would be backed by a $200 million loan from the African Export-Import Bank. The value of these Notes would be pegged at that of the US$ but would be legal tender only within Zimbabwe.
The introduction of these Notes has been viewed with anxiety by Zimbabweans as it is perceived as a covert attempt to re-introduce the defunct and worthless Zimbabwe dollar.
Surely this must be the endgame for Mugabe or as Churchill might have remarked; “it is the end of the end.”
Why am I so certain of impending catastrophe?
This stems in no small measure from the fact that no nation, however powerful, can defy economic reality in perpetuity. With an economy now half the size that it was in 2002 before the farm invasions commenced and imports vastly exceeding exports, foreign currencies in Zimbabwe must nearly be exhausted.
Mugabe’s saviour, in the interim, has been the African Export-Import Bank together with some loans from the Chinese. These sources too will be exhausted shortly. At that point, imports or foreign expenditures of any sort, except for foreign trips for Mugabe and his acolytes, will finally cease.
If this eventuality occurs within the next 20 months – when the next election will be held – Mugabe is unlikely to survive re-election without massive intimidation and vote rigging.
Whatever happens, Mugabe, the life President of Zimbabwe, will face the twilight of his life together with the sunset of a once vibrant economy which in the dim and distant past supplied the necessities of life for all Zimbabweans.
And it is this broken country that Malema wants to replicate and be the poster-boy for a new South Africa.
For Zimbabweans – the povo – it will still be a case of a luta continua.
Not militarily, but in an economic sense.