Corporate Collaboration Lets Mugabe Continue Abuses
August 15, 2012
The Coming Corpse of Zimbabwe
by PATRICK BOND
Zimbabwe’s political-economic crisis continues because dislodging decades of
malgovernance has not been achieved by either a Government of National Unity
that began in early 2009, civil society activism, or international pressure,
including this week’s Maputo summit of the main body charged with sorting
out democratisation, the Southern African Development Community (SADC). With
a new draft Constitution nearly ready for a referendum vote, followed by a
presidential and parliamentary election by next April, the period
immediately ahead is critical.
Many examples of chaos appeared over the last week (much of which I spent in
a rural area northwest of the capital of Harare). On Monday, for example, 44
activists were arrested in the Gays and Lesbians of Zimbabwe office at a
project launching documentation of the repeated violations of their human
rights. Though released, it reminded the society of the power of
dictatorship mixed with homophobic social values.
Since the draft Constitution was released on July 18, leaders of Robert
Mugabe’s Zimbabwe African National Union (ZANU PF) have repeatedly rejected
crucial text within a document that its own negotiators had hammered out
this year and issued last month. Amidst the ‘3 percent’ that ZANU PF leaders
object to, one hang-up is that wording about presidential running mates
complicates the fragile balance of power given how ill the 88 year old
Mugabe has been with prostate cancer, according to his close associates.
If a referendum goes ahead with the current text, some in civil society –
especially the National Constitutional Assembly, probably to be joined by
students and the left-leaning faction of the Zimbabwe Congress of Trade
Unions – are likely to promote a ‘No’ vote, and ZANU PF might well make the
same choice. Nevertheless it is likely that the Movement for Democratic
Change led by former trade unionist Morgan Tsvangirai (known as MDC-T) would
win approval.
Although central powers have been weakened in the new Constitution,
according to critics in the NGO Sokwanele, “There remains no age limit for
Presidential office, immunity from prosecution remains, and the executive
remains in control of defence forces.”
Constitution confirms land redistribution
There are other important markers of the society’s balance of power in the
draft Constitution. For example, heeding ZANU PF’s wishes, it specifically
prohibits that monetary compensation for land will be given to the four
thousand whites whose farms were invaded from 2000-08, although improvements
(buildings, irrigation and the like, worth around $3 billion) can be
compensated, according to the text, while any land reimbursement should be
made by the colonial power, Britain.
There is certainly very important anti-imperialist symbolism at stake here,
and from this kind of compensation to the need for long-overdue colonial
reparations is not too far a conceptual leap. But recall that Mugabe’s
‘jambanja’ (chaotic, violent) land reform was driven partly by his
increasingly unpopular ruling party’s need to retain power after a prior
Constitutional draft was rejected 55-45 percent in February 2000. Another
reason was the immense rural pressures building up from below that were
craftily channeled into land invasions of the country’s best land, which
white settlers had originally stolen during the sixty years or so after
Cecil Rhodes’ ‘Pioneer Column’ invaded in 1890.
Attempts to redress the Land Question after Independence in 1980 failed due
to lack of political will and an incorrect technicist assumption that if
instead of land redistribution, rural credit was extended to impoverished
small farmers, they would be boosted into the mainstream economy (in
reality, four out of five had defaulted on their debts by 1988 because the
markets were unattractive).
The MDC-T position is that the post-2000 land redistribution is now
‘irreversible’ so white farmers have no basis for confidence they can
return, if Tsvangirai wins the presidency. Debate also continues over
whether the land redistribution ‘worked’ for the estimated 10 percent of
Zimbabweans who directly benefited: 146 000 households who were the main
small-farmer beneficiaries of jambanja, and the 16 000 farmers who got
access to much larger plots including the most productive commercial farms,
according to 2009 government data.
Tragically, as rains failed again this year, 1.6 million Zimbabweans – about
12 percent of the population – will be in need of food aid, the World Food
Programme estimates. The country’s best land, with irrigated agriculture
that would permit a return to food security, isn’t yet in the hands of the
masses, as cronyism on good farmland means a new era of land reform will be
needed.
Still, argues Sam Moyo of the African Institute for Agrarian Studies, “Only
about 15 percent of the land beneficiaries could be considered ‘elites’,
including high-level employees and businesspeople who are connected to
Government and the ruling ZANU PF. By far, the largest number of
beneficiaries are people who have a relatively low social status and limited
political or financial-commercial connections, although some of these may
have important local connections and influence.”
Aside from periodic drought, Moyo cites inadequate input supply –
fertilizer, pesticides, credit – as the main reason for the failed small
resettled farmers, but one in five also suffer “land conflicts, including
their lack of ‘title’ and fear of eviction as factors which limit their
social reproduction and/or production.” Nevertheless, according to Sussex
University researcher Ian Scoones and his colleagues, huge increases in
output have been registered by resettled farmers in one central district,
especially in small grains, edible dry beans, cotton and tobacco.
On the other hand, the overcrowded ‘Communal Areas’ where Rhodesians forced
blacks to live until 1980 appear not to have become decongested, and nor did
Mugabe’s ‘Operation Murambatsvina’ – the violent displacement of 700 000
urban residents in 2005 – make the Land Question any easier to answer. The
charge that cronyism allowed Mugabe’s allies to cherry-pick the very best
farms closest to big cities remains intact, characterized by multiple
farm-holdings by leading elites. Along with persistent food aid required
annually since 2000, this problem will continue to mar Mugabe’s reputation,
as he and his family remain prime cases of abuse.
Gripping to political power requires greedy corporates’ cash
In another indication of ongoing political manipulation last week, Mugabe’s
army initially threatened to derail the official Census count, scheduled
from August 17-28. It is desperately needed not just for socio-economic
planning but also future election districting. The army tried to place 10
000 of its troops amongst 30 000 teachers being trained for census taking,
and some beat those civil servants who objected.
Until they were finally reigned in this week, why were army troops intent on
intervention? Explains Claris Madhuku of the Platform for Youth Development,
“As they go through the process of counting, they want to provide some form
of intimidation so that the community in the next election, they must vote
for ZANU-PF or else.” A victim of such intimidation, Madhuku was arrested
last April and after seven court appearances acquitted simply for holding a
community meeting to air grievances against a biofuel corporation which was
grabbing small-farmer landholdings.
Such experiences drive the desire for a less repressive government. In a
free and fair election, Tsvangirai would probably win hands down; in March
2008, he trounced Mugabe in the first round by nearly 10 percent before
withdrawing in protest from a run-off vote several weeks later, because
meanwhile hundreds of his supporters were killed, tortured or injured by
desperate ZANU PF political thugs.
For Mugabe to retain power in what was a financially-broke government in
2008 also required an infusion of enormous financial resources, and as a
Mail&Guardian investigation last week revealed, when Mugabe was running out
of funds during the election campaign, his regime was bolstered by a $100
million loan from New York-based Och-Ziff Capital Management Group.
Ironically, the firm’s financier founder, billionaire Daniel Ochs, is also
vice-chair of New York City’s ‘Robin Hood’ Foundation, which according to
Fortune magazine, “was a pioneer in what is now called venture philanthropy,
or charity that embraces free-market forces.”
Och’s loan was made possible thanks to intermediation by London-based
Central African Mining and Exploration Company (Camec), run by famous
English cricket spin-bowler and businessman Phil Edmonds, and by Anglo
American Platinum, whose gifting of a quarter of its platinum assets to
Mugabe’s regime was the basis for securing the deal. The Mail&Guardian
reported, “Anglo was granted empowerment credits and foreign exchange
indulgences that would allow it to develop a valuable remaining concession.”
Zimbabwe slipped further into foreign debt.
When Edmonds was accused of funding Mugabe in 2008 in the context of a
business alliance with the notorious Zimbabwean businessman Billy
Rautenbach, The Telegraph remarked, “In the boardroom and on the African
sub-continent, the two places where Edmonds now conducts most of his
business, he is said to have a similar presence, capable of charming and
terrifying business rivals at the same time.”
According to The Telegraph, Zimbabwe mining has been profitable, for “It was
with Rautenbach’s help that the fortunes of Edmonds and Camec rose beyond
anyone’s expectations in 2006. The company’s share price increased by more
than 700 per cent in just a year, drawing in blue-chip investors eager to
cash in on the boom in mining stocks.”
It is in this context that the ‘sanctions’ critique offered by United
Nations Human Rights Commission Navi Pillay in May needs revising. “There
seems little doubt that the existence of the sanctions regimes has, at the
very least, acted as a serious disincentive to overseas banks and
investors,” she said while visiting Mugabe. Yet ‘sanctions’, which are
limited to the personal affairs of 112 elites close to Mugabe, were
obviously sufficiently porous to allow the Och-Ziff/Camec/Anglo deal.
So who will pay Mugabe’s campaign bill in 2013? The next greedy mining house
is Anjin, a diamond mining company co-owned by Beijing investors and the
Zimbabwean Ministry of Defense, whose leaders have said they will never
accept rule by Tsvangirai’s party. Anjin is the main beneficiary of what is
probably the world’s largest diamond field at Marange, near Mutare in
eastern Zimbabwe, where hundreds of informal miners were killed by the army
in November 2008.
Abuses continue at Marange. Two weeks ago, Anjin fired 1 500 workers who,
desperate for decent pay, launched their eighth strike since 2010. Diamond
watchdog Farai Maguwu, director of the Mutare-based Centre for Research and
Development, termed Anjin’s move “a gross violation of the right of workers
to engage in industrial action if their working conditions are appalling.”
Another Marange diamond firm, Mbada, is chaired by Mugabe’s former
helicopter pilot Robert Mhlanga, who recently purchased $23 million worth of
properties in the highest-priced suburbs of Johannesburg and Durban
(Sandton, Umhlanga and Zimbali).
This is the kind of company ZANU PF keeps, notwithstanding rhetoric
regularly hostile to foreign capital. For example, at this week’s Heroes Day
ceremony, Mugabe intoned, “We should join hands to resist the unjustified
pander of our resources by undeserving foreign forces that come to us like
friends in the name of democracy and globalization, yet they have sinister
ulterior motives.”
Mugabe perfected this talk left, walk right gimmickry; his support for the
Marange looting represents one of Africa’s most extreme Resource Curse
problems.
For the next election, probably in March, we can expect another tactic –
‘indigenisation’ (giving local people a share in white- or foreign-run
corporations) – familiar to those who witnessed Mugabe’s 2000 campaign,
explains Bulawayo writer Mary Ndlovu: “The indigenisation agenda ZANU PF is
pushing has now replaced the land issue as a programme to simultaneously win
support from a new constituency and frustrate the opposition. It seems
dishonestly designed to further enrich themselves, consolidate their
patronage lines and prevent the MDC getting credit for increased investment,
rather than honestly redistributing wealth to the people.”
The first two multinational corporations to play the game of diluting local
holdings so as to hold onto immensely valuable resources are platinum
exporters Rio Tinto of London and Johannesburg-based Implats. There is no
evidence yet that the ordinary Zimbabwean is benefiting, although a new
extreme-nationalist ZANU PF political tendency is emerging around 41-year
old Savior Kasukuwere – the minister in charge of indigenisation – that may
one day threaten the party’s two other core factions, run by potential
Mugabe successors Joice Mujuru (now vice president) and Emerson Mnangagwa
(defence minister).
Financial and fiscal failings
Another source of crony capitalism is the financial sector, through which
disgraced Reserve Bank Governor Gideon Gono and his allies arranged
lucrative illicit foreign exchange takeovers prior to the Zimbabwe dollar’s
collapse in 2009. Bankers close to ZANU PF made dubious loans which now
require the kinds of bailouts that Wall Street and the City of London
received from their own purchased politicians in 2008-09.
This is the main reason for Zimbabwe’s banking crisis, and recently
compelled Gono to issue a directive that $100 million be kept in capital
reserves to prevent a devastating run on the banks. Out of two dozen, only
six or so – nearly all foreign headquartered – will survive that degree of
regulatory restructuring (the rest must be merged or closed). The adverse
impact on credit availability, already hampered by the world’s highest real
interest rates, will be devastating.
On top of that is next month’s IMF and World Bank meeting in Washington
where Zimbabwe’s nearly $11 billion in unrepayable foreign debt is up for
negotiation, not to mention a looming public workers strike which will be
uncomfortable for the MDC-T, the party of labour but also under pressure to
impose austerity after the state budget was cut from a planned $4 billion to
$3.4 billion by Finance Minister Tendai Biti, known in his youth as the
country’s leading leftist lawyer.
The main reason for budget cuts is the failure of the mining ministry to
collect taxes on diamonds, which continue to be smuggled out of Zimbabwe on
flights from Marange to sites including Israel, India, Dubai, Khazakstan and
China.
Confirms Maguwu, “Revenue is not being accounted for and a faction of ZANU
PF is controlling the diamonds. This is was exactly the situation when the
Kimberley Process was formed in 2003 with the financing of rebel wars
through diamond revenues in West Africa.”
According to Maguwu, “The KP suffered huge credibility problems because of
allowing Marange diamonds to circulate at their last meeting in Kinshasa
last November. At the next summit in Washington this November, where
‘diamonds for development’ is a slogan against the Resource Curse, the KP
can only regain credibility by ensuring that there is revenue transparency,
otherwise Zimbabwe’s next round of election chaos can be blamed on diamond
revenues.”
Maguwu insists, “South African President Jacob Zuma is SADC’s lead mediator
and his team led by Lindiwe Zulu must put this on their agenda. Regional
civil society should also be putting pressure on SADC to ensure that Marange
diamonds do not sponsor political violence during the coming elections in
Zimbabwe and trigger regional instability.”
While economic growth may technically still top 5 percent this year, the
underlying crises are now being amplified, as the bulk of proceeds from
Zimbabwe’s 2012 outputs of diamonds ($3 billion), platinum ($600 million),
gold ($150 million) and nickel ($140 million) disappear into ZANU PF and
multinational corporate pockets, with only crumbs left over for the povo.
With a $3 billion trade deficit and only $500 million in donor aid
anticipated in 2012, the untenable economics of a modified Mugabe tyranny
still don’t add up.
Whether a free and fair election is possible in coming months, or instead
ZANU PF loyalists use military might, ill-begotten wealth and crony
capitalism to maintain illegitimate power, is too difficult to call. But by
the end of this week, SADC regional leaders could have their fingerprints on
Zimbabwe’s coming corpse if once again, they turn away from compelling at
least the minimal conditions for democracy: insistence on the Constitutional
referendum and preparations for the country’s first genuine vote in a dozen
years.
Patrick Bond directs the UKZN Centre for Civil Society in Durban, South
Africa.