Zimbabwe: the power of money.
22 . 10 . 18
By Ignatius Wilson
Zimbabwe is a great example of the power of money. The power to corrupt, to make or break whole nations and regions, to empower or disenfranchise. This has been on show increasingly since independence in 1980 to the present day.
The reasons for the poor state of Zimbabwe’s economy today include the birth of Zimbabwe as an ex-British colony following years of civil war; aggression fomented by the British between ethnic groups; corruption and dictatorship; and poor contemporary economic management.
Like in many regions of the world, colonisation by Britain and other western European nations completely destroyed whole cultures and uprooted, killed or disenfranchised the existing peoples. Zimbabwe was an old British colony and was christened by the British in 1980 as new African nation after decades of unrest and conflict.
The British actively fomented disunity and conflict to more easily control their subjects, so political divisions persist along ethnic lines. The current government of ex-President Robert Mugabe is an example of the ethnic majority continuing to act undemocratically towards minority groups.
Attacks by Mugabe’s government on ethnic minorities caused economic and political instability, poor international relations and created an ethnic underclass which cannot fully contribute to the economy.
Mugabe, suffering another stroke of genius, also instituted the Economic Structural Adjustment Program (ESAP) in the late 1990s which included forcibly removing white farmers from their lands and instituting black Africans, often without agriculture experience, training or interest in their stead to run farms.
Logically, this led to food production plummeting over the next decade. This had flow-on effects on the rest of the economy for two reasons. Firstly, Zimbabweans went hungry. Secondly, as primary production was the main component of Zimbabwe’s economic output, this weakened its economy as whole.
It is accepted that the ESAP was a disaster and one in a litany of economic mistakes made by Mugabe’s government.
Furthermore, Mugabe stole money from the nation’s citizens and government through corrupt infrastructure investment, ESAP, whereby Mugabe personally took ownership of forfeited farms rather than distribute them, and the proceeds of foreign civil wars.
The Congolese civil wars, waged throughout the 1990s, is a prime example of this. This is also the period in which the Zimbabwean government lied to the IMF about how much money was being spent on the war, to obscure the fact there was a huge push to their favoured side. Mugabe took some of the spoils of war as personal reward.
During this war Mugabe also increased the wages of his military personnel and allies without accounting for it on the national budget. This diluted the power of the Zimbabwean Dollar leading it over an inflation precipice.
This example alone, of the Congolese civil wars, shows how money can influence international diplomacy, life and death, how it can be used for good and evil and how key people can damage their economies for personal gain. Lying to international regulators, hoodwinking one’s own central bank and making cash bribes the norm sensically leads to political and economic issues.
At its peak, the dollar was experiencing inflation of 11,200,000%. This is an official figure. The reporting was delayed and incomplete so the real inflation figures would have unbelievably been even higher.
It bears remarking that during the Congolese civil wars (as in most international conflicts) there were other nations, including France, Angola and Cuba who likely also took part. Furthermore, Mugabe looms large in this story but was replaced in military coup in late 2017 with his Vice President.
We have covered a few central issues that seem to be synonymous with the dictatorship of Robert Mugabe, and which all irreparably damaged the currency, which has been replaced with the USD, and set back the Zimbabwean economy decades.
But we can also take this as an example of the ongoing damage colonialism has done. Seeing these two aspects side-by-side we can gain insights into the current state of Zimbabwean governance and economic policy,