International Herald Tribune
By Michael Wines
Published: August 2, 2007
BULAWAYO, Zimbabwe: Earlier this month, shortly after President Robert Mugabe proposed legislation mandating a gradual transfer of ownership of all businesses to “indigenous” citizens, a Zimbabwean businessman received an unexpected telephone call.
The caller, a stranger, said that he represented a group of indigenous investors. The investors, he said, would like to discuss the merchant’s plans for complying with the coming ownership law.
There is a flip side to Zimbabwe’s incrementally unfolding human tragedy, and this is it: as 11 million or more people descend into destitution, a tiny slice of the population is becoming ever more powerful and wealthy at their expense.No one outside of Mugabe’s inner circle, of course, can say with certainty why he has pursued a series of policies since 2000 that have produced economic and social bedlam. For his part, Mugabe says Zimbabwe’s chaos is the product of a Western plot to reassert colonial rule.
Among many outside that circle, however, the growing conviction is that Zimbabwe’s descent is neither the result of paranoia nor Mugabe’s longstanding belief in Marxist economic theory. Instead, they say, Zimbabwe is fast becoming a kleptocracy, and the government’s seemingly inexplicable policies are in fact preserving and expanding it.
“Their sole interest is in maintaining power by any means,” David Coltart, a Bulawayo lawyer and politician, said this week. “I think their calculation is that the rest of Africa is not going to do anything to stop them, and the West is distracted by Iraq and Afghanistan. The platinum mines can keep the core of the elite living in the manner they’re accustomed to – just in a sea of poverty.”
Coltart, a member of the Zimbabwean Parliament, is both white and a leader of Zimbabwe’s minuscule political opposition, which may make his opinion appear both cynical and suspect. And there surely are other views. One influential member of the ruling ZANU-PF party – the Zimbabwe African National Union-Patriotic Front – says that Mugabe, now 84, is rushing to empower black Zimbabweans before he dies.
This, he said, explains why the government seized thousands of white-owned commercial farms early this decade, and why Mugabe ordered manufacturers and merchants this month to slash their prices by 50 percent and more. It explains why he now proposes to require that every Zimbabwean business be controlled by native Zimbabweans.
“The old man wants to leave a legacy,” said that politician, who insisted on anonymity. “He’s in the twilight of his life, and he wants it to be remembered that he left something to Zimbabweans.”
Yet in interviews in Zimbabwe this week, Coltart’s harsh view was widely shared by blacks and whites alike, many with no political ax to grind. Even the ruling party politician acknowledged that whatever the aims of Mugabe’s policies, their execution as gone terribly awry.
Zimbabwe’s farm seizures destroyed the country’s rich agriculture industry, and vast tracts of land were handed over to party elites in the form of patronage. The looming takeover of businesses is expected to produce the same result.
“Some of these people, his cronies, are being greedy,” the ZANU-PF official said. “That’s the tragedy of this country. Those who benefited from land reform are also going to benefit from this takeover.”
And in fact, the circumstantial evidence that Zimbabwe’s decline has become a zero-sum game, in which one side’s loss inevitably is the other’s gain, is not easy to ignore.Zimbabwe’s plummeting currency – 200,000 Zimbabwe dollars now buy a single American dollar on the black market – has rendered the salaries of working Zimbabweans worthless. Yet the official exchange rate is not 200,000, but 250. Those with connections to the government’s reserve bank are widely said to ply that influence to buy American dollars cheap, sell them dear and reap an 800-fold profit on currency transactions.
Mugabe’s own government declares currency trading illegal, but regularly dumps vast stacks of freshly printed bills on the black market, still wrapped in plastic, to raise foreign exchange for its own needs.
The country’s extraordinary hyperinflation, last pegged at 10,000 percent a year, would seem to benefit no one. Yet after the government ordered merchants in July to slash their prices in half, cadres of police and soldiers moved into shops to enforce the new controls, scoop up bargains, and give friends and political heavyweights preferential access to cheap goods.
Should the price controls continue, they are widely expected to force many businesses into insolvency. Coincidentally or otherwise, Zimbabwean business officials say, viable but bankrupt businesses will be prime targets for well-placed persons seeking to benefit from Mugabe’s new law placing enterprises under so-called indigenous control.
“After all,” said the business executive who was approached to sell his firm, “if you can’t make a company viable, you might as well sell 50 percent of it and make what you can.”