Fwd: No. 27486: Christmas 2014 -- Zimbabwe

AfricaFiles

Title: Christmas 2014
Author: Eddie Cross
Category: Zimbabwe
Date: 12/20/2014
Source: Eddie Cross's Website
Source Website: http://www.eddiecross.africanherd.com/

African Charter Article# 13: Every citizen shall have the right to participate freely in the government of their country and to equal access of public services

Summary & Comment: As if Zimbabwe is in a landing mode to escape political and economic turbulence, the country has began its descent, as Eddie Cross, says the new rains as the ushering in of the new vice president and the lifting on sanctions signals a new beginning for Zimbabwe. MM

http://www.eddiecross.africanherd.com

Can you believe it is Christmas again? It seemed that just yesterday we were celebrating the New Year; I know I am at an age when time seems to rush by, but this is ridiculous. For those of us who live in southern Africa, this is a special time. Right now the ITCZ (Inter Tropical Convergence Zone) is sitting right over us and it is pouring with rain. After 8 months of dry weather and hot sun, the rain comes in vast swathes, drenching the ground and giving rise to beetles and flying ants in their trillions and the veld transforms in days.

It's a time of renewal and hope and somehow the rains seem to make everything better. If they go on too long we get irritable and touchy - we like our sun and get lots of it (you can play golf here 350 days a year) but we know that the rains mean water next winter and grass today.

But what a year it has been - the rise of militant Islam, the attempt by Putin to reestablish Russian hegemony over the countries of Eastern Europe, the resurgence of the dollar and the decline in oil. A new world order is emerging and it seems to be working, the Tiger economies in the Far East seems to be maturing and slowing, Africa is moving into the front rank of the race for growth.

In the middle of all this rush into the future Zimbabwe seems locked into a time warp. Our economy is again in deep crisis, not hyper inflation this time but the opposite - deflation. The economic contraction is just as serious without the liquidity created by the printing press at the Reserve Bank and therefore that much more serious. But the restaurants are full and you have to queue to get a decent cup of coffee and somehow people survive. The informal sector and a vast "hidden" economy keep's part of the country busy and prosperous while the majority suffer.

We have just passed the national budget for 2015, its set at $3,5 billion (2014 $4,1 billion) and is a bare bones deal - absolutely no extras and even the basics will be hard to fund. It is going to be a very difficult year for the Civil Service. The Government has many critical decisions to make, they have on the table offers from the international community to help - the Chinese have offered budget support and substantial new investment in urgently needed infrastructure but on condition that we put our affairs in order. This means we have to establish the succession to an aging State President, we have to put our economic house in order and get the economy moving and we have to reengage with the West.

The European Union has dangled reengagement in front of us with the lifting of most sanctions and opening discussions on the resumption of Zimbabwe's participation in the European Development Fund (the EDF). This means another $350 million a year in development assistance on top of the $800 million in general bilateral assistance that will come through the various donor agencies. The Americans have made it clear - no easing of restrictions until we start to implement the many reforms that would restore our democracy and our respect for all human and political rights.

The decision of the USA to start talks to lift the 50 year old embargoes on Cuba came as a pleasant surprise this week - I think that it is a measure that is long overdue. Mr. Castro made it clear that in secret talks they had agreed to adopt essential reforms to permit more democracy and freedom and to open up to the USA. In a way, this signals the kind of deal we are going to have to agree to if we want reengagement.

Nothing illustrates the depth of our economic needs than our debt situation. We owe international creditors $8,8 billion as a country. The private sector has another $1,9 billion in international debt. The State debt has not been serviced since 2000 and under international law and banking practice; this freezes us out of global financial markets. In turn this exacerbates our critical shortage of local liquidity and means that our business sector has to borrow funds at the highest interest rates in the world (perhaps Russia suddenly is paying similar interest rates). To exacerbate this situation we are again accumulating debt - a billion dollars this year and another billion in 2015 to meet our minimum needs. In addition, in an effort to stabilize out banking system, we are going to have to take over $1,6 billion in Reserve Bank debts from the hyper inflation era and another $800 million in non performing debt from the Commercial Banks.

We have no prospects of paying interest on these loans or repaying them any time soon. We have to have a deal that will allow us to reschedule debt and secure debt forgiveness from the international community through institutions such as the Paris Club. This is only possible if we reengage with the West and get countries like Germany and the USA to support a deal with our international creditors.

I think that the Government is painfully aware of what they have to do and have already started on that long road back to legitimacy. The agreement in 2012 between Tendai Biti as Minister of Finance and the IMF to put in place a Staff Monitored Process (SMP) in 2013/14 and its subsequent adoption by the new Government in 2014 and extension to the end of 2015 is the first real attempt to get the process of change and reform underway. This time negotiated and agreed without external South African pressure.

What remains and is essential to the progress being made under the SMP in an economic sense, is the resumption of the reform process started during the Government of National Unity (GNU). This involves the implementation of the new Constitution, media and human rights reform and fundamental changes to the electoral system.

We have just been through a political coup, a bloodless coup made possible by an alliance between the hard men and women in Zanu PF and constitutional power in the form of the State President. Suddenly the squabbling confusion of multiple power centers in the State has been replaced by a single power center and the succession issue seems to have been resolved. Mr. Mugabe has gone off on his annual leave in the Far East and will only be back in harness in mid to late January. He left behind a stunned Party and a very shaken Government and I do not think anyone should underestimate what has happened. The baton has passed and although we remain under Robert Gabriel Mugabe rule we are in a post Mugabe era.

The new team at the helm knows exactly what they have to do, the only question is will they be allowed to get on with the process? That is the key question and one that can only be answered by time. The process of house cleaning and change is far from over and will be continued in 2015. The outcome will determine what sort of Christmas we will have next year. In the meantime we struggle on believing the adage "next year will be better". Have a blessed Christmas.

Disclaimer: Opinions expressed in this article are those of the writer(s) and do not 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.

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