Why US won’t come to the party

Why US won’t come to the party 

Zimbabwe Independent 28 September 2018 

The Brett Chulu Column 

PRESIDENT Emmerson Mnangagwa, together with the Finance minister Mthuli Ncube, as well as the Reserve Bank of Zimbabwe chief, John Mangudya, took their money-hunting ex­pedition to New York, United States, the nerve-centre of global capital. 

The charm offensive was intense, with the trio getting appearances on CNN and Bloomberg, some of the world’s powerful opinion-making media houses. The media strategy, from Zimbabwe’s perspective, was patently clear; it was about revamp­ing the badly damaged reputation of brand Zimbabwe, marketing the narrative that the so-called Second Republic marks a big break from the multitudinous iniquities of the erst­while regime presumably interred in November last year. 

On CNN, Mnangagwa deftly par­ried questions about the regime’s dark past and its attendant foibles by pleading to the world to judge him based on his current actions. Herein lies the problem; the movers and shakers of the global political econ­omy want him to atone for the sins of the past before a new day can be celebrated. 

Brian Nichols, the US ambassador to Zimbabwe, this week rehashed the summative assessment of the US on the current Zimbabwean regime; in essence the US contends that the so-called Second Republic is a re-pack­aged First Republic since talks and proposals on political and economic reforms are still that. 

Using the lens of classic grounded theory, the Zimbabwe Democracy and Economic Recovery Act (Zidera), first enacted in 2001 by the US Congress and amended this year in July, provides data that helps us un­cover Washington’s main concern. Main-concern analysis is a powerful analytic tool that helps explain the deeply embedded social psychologi­cal motives that drive collective overt behaviour of a social grouping. 

The main concern of the US as un­covered from Zidera is protecting the property rights system on which capitalism is founded. You take away property rights, you blow capitalism out of the water. This happens to be not just the main concern of the US; it is the key concern of every liber­al, capitalist democracy, especially the West. So when Nichols speaks on behalf of the US, he is voicing the shared concerns of the entire global capitalist edifice. 

Here is the point that Mnangagwa and many economic analysts seem to be missing; the numerous pre-condi­tions for external funding outlined in Zidera such as freedom of expression and association, indisputable elections, addressing and redressing human rights abuses, for instance, are all subordinate to the key concern of property rights protection. 

A few days before Mnangagwa made his maiden appearance at Da­vos earlier this year, he addressed captains of industry in Zimbabwe who identified themselves by the moniker Zimbabwe Business Club. His articulation of his government’s property rights position reflected a dearth in understanding the depth of the matter from a capitalist’s per­spective, the very people he is try­ing to charm his way into their deep pockets with his “Zimbabwe is open for business” refrain. 

He confidently made it clear that private ownership of land was guar­anteed in non-farming land, but not in farm land, thundering unequivo­cally that Zimbabwe’s land reform was irreversible. He rehashed with bravado that farm land will be un­der leasehold, with 99-year leases as the instrument to operationalise the leasehold rights regime. We all know how the much-touted 99-year leases have been shunned like a plague by local credit providers who are scepti­cal of their collateral worthiness. 

The new Zidera has included a new pre-condition related to property rights. Section 10 of the new Zidera states: “It is the sense of Congress that the Government of Zimbabwe and the Southern African Development Community (Sadc) should enforce the Sadc Tribunal rulings from 2007 to 2010, including 18 disputes involv­ing employment, commercial and human rights cases surrounding dis­possessed Zimbabwean commercial farmers and agricultural companies.” 

That is very telling. The Sadc Tribu­nal was suspended during the 2010 Sadc summit following spirited lob­bying by the Zimbabwean govern­ment. The US considers the rulings of this suspended tribunal binding be­cause the tribunal’s official position is that it was suspended de facto and not de jure. It might appear as though the US is shifting goal posts by adding more provisions.

From a classic grounded theory perspective, it is simply additional data that is buttressing the main con­cern of protecting capitalism by ring-fencing its bedrock of the property rights regime, especially with South Africa moving to acquire land with­out compensation. The contagion must be contained — that is the uni­versal driving force of which Zidera is a mere microcosm of the global capi­talism preservation motive. 

Mnangagwa must sift the noise and get to the heart of the matter if our economic woes are to be addressed; he must deal with the issue of prop­erty rights comprehensively, not su­perficially. Either way, his choices will trigger massive political earth­quakes. He knows it is politically suicidal to give back the land to the dispossessed commercial farmers— doing so will bury, himself and his Zanu PF into political irrelevance and extinction. 

Compensating for the loss of farms as per the current statutes, including the constitution, is not enough to the custodians of the capitalist order as the current laws exclude compensa­tion for the land itself and advocates for non-market valuation methods for acquired farm property. That is the bone of contention. 

The issue is not about the quan­tum of compensation; it is about a little country with a miniscule dent on the world economy that threatens to undermine the foundations of the capitalist political economy order. That will not be allowed. The reason is simple: to allow Zimbabwe to get away with undermining the capitalist order would be to set a bad precedent that can embolden other nations to follow suit and torpedo the founda­tions of capitalism. When you hear noises about the restoration of the rule law in Zimbabwe, it is just a code word for protecting property rights as defined by capitalism. 

The US is at the forefront of de­fending the capitalist order for a less-talked about reason; the US capita that oils capitalism since the creation of its Federal Reserve Bank in 1914 is credit born of fiat money. That money is useless if it is not allowed to freely move across international borders in search of real assets of which land is primary. 

The capitalists want the assurance that their oceans of fiat money, once they acquire real assets, no one can ironically, by fiat dispossess them of these real assets. This is the rub of the matter that Mnangagwa, Ncube and Mangudya seem to be missing The sooner they realise that the mat­ter of property rights is the real issue the better they can expend their en­ergy and advocate for policy changes that will leverage positive economic change. 

So what should Mnangagwa do? He must move immediately to amend the Land Acquisition Act to make it unequivocally clear that compensa­tion for dispossessed farms will be both for land and improvements at market value. The question of who pays is key. Then he should officially acknowledge the debt which, accord­ing to farm valuation experts I spoke to, comes to about USS10 billion. That bold move will surely open the flood­gates of external financial assistance as the threat of collapsing the capital­ist order would have been sorted out. Short of this, Mnangagwa and his for­eign capital-hunting lions will always come back empty-handed no matter how many investor roadshows they can do and how many appearances in powerful Western media. It will be all thunder and no storm, all flower and no fruit and all courtship and no marriage.

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Chulu is a management consultant and a classic grounded theory researcher who has published research in an academic peer-reviewed international journal. –[email protected]