Pajamas Media interview

It seems last week was the week of interviews for yours truly. I appreciate the feedback left by those who stopped by even those who remain critics of our efforts to chronicle the Zimbabwean story. Undaunted by circumstance or criticism, we’ll continue to tell you the Zimbabwean story from an unheard perspective. This is an excerpt from my interview Richard Fernandez of Pajamas Media.

PJM: What happens next in Zimbabwe?

Zimpundit: This crisis continues while the world watches. With no oil, or “national security” interest for western powerhouses like the US, Zimbabweans are on their own as they continue to bear the brunt of the leadership’s poor choices.

South Africa, our biggest trade partner won’t intervene either because Mbeki considers Mugabe one of his own or because he’s enviously hatching plans to carry out his own atrocities, or both.

Zimbabweans must find it in themselves to negotiate a way out of the present situation. It will take more lives, it will take more suffering, it will take more pain, but we have no other choice.

The MDC leadership will be released with no charges because the state has no case against them. I suspect, having been brutalized once, both Mutambara and Tsvangirai will be out again urging people stand up against the cruel regime. And they’ll both have stronger credibility.

Because of their visible wounds and the fact that they have sacrificed their own bodies and led by example, more people will listen to them. Their wounds and tales of brutality have the potential to spell an end to ZANU-PF’s tyranny. If the government thinks they are going to get the MDC to back down, they have a surprise coming.

PJM: Are there any red lines left?

Zimpundit: The only thing remaining to happen is a public ground swell of people refusing to stand the oppression any longer. Zimbabweans have been pushed long enough, they’ve suffered long enough, all that remains is that their anguish be channeled toward one central place.

Sooner rather than later, there will be an out pouring of rage against the oppression. The economy has yet to grind to a complete stop. Keep in mind that it was the Tsvangirai led crowds that stoppped the nation in its tracks back in 1998 protesting against the cost of living. History has a funny way of repeating itself.

Richard also found some very interesting videos to go along with the article he wrote. Be sure to check both videos for some historical perspective.

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“Rounds”: celebrating a creative conception of Zimbabwean’s survival impetus.

If there is one constant in the everchanging sea of Zimbabwe’s turbulent circumstances it is this: the economic wellbeing of ordinary people has been under seige over the last eight years. With a national economy reeling from record inflation, untamed unemployment, an aneamic currency, and shrinking productivity, people’s ability to excercise economic self determination has all but disappeared. Prices of basic neccesities have rocketed out of range leaving most of Zimbabwe’s working people living under the poverty datum line (PDL).

All that is old news.

It never ceases to amaze me to note that every time I look, people all around are constantly innovating new ways to eke out the increasingly elusive survival. Many Zimbabweans refuse to give up even though they confront the most dire of circumstances with each sunrise. As long as there is school fees, rent, utilities, transport, and many other bills to be paid, people persistantly rise to the challenge, failing only after exerting the most valiant of efforts. Tofira mutrial, a popular colloquialism which when literally translated means “we’ll die trying” has become the defacto modus operandi on the highways and by ways of our once teeming nation. And, as we Zimbabweans are apt to do when vexed by circumstances that defy the best of our attempts, we’ve coined a slang term to satirizes this new hustle; kukorokoza (the loose equivalent of gold panning).

But perhaps even more impressive that our uncanny ability to poke fun at our existential dilema, is the depth to which people are digging in as they refuse to allow these pressing circumstances to compromise their existence. Of all the resourceful ways people have invented to remain viable, none captures the communal resilience of my people better than the month-end phenomenon of circulating pots of money better known to Zimbos as “rounds.”

Each month end, at a predetermined date, small groups of friends (typically between five to 12 people) pool their monetary resources and give the collective pot of money to one member of the group. So for that one month, that member’s family has up to 12 times their usual disposable income. Consider this as an example; a group of eight nurses who work together decide to throw $150 into the pot each month. Every eighth month, each of these nurses takes home an extra $1,050. This scheme, is in essence, a revolving fund of sorts or, an interest-free loan to members of the club.

Assuming that this amount is proportional to the price of things, each time a member takes the pot, their family is afforded a financial opportunity they typically would not have been able to experience. In real terms, this means that the family that collects the “round” can make a significant household purchase, save for school fees, or invest the money in an interest bearing tool.

Most of the TV’s in many of Zimbabwe’s households were bought with money from the rounds. As a kid, I have fond memories of that eighth month when my mom collected and was able to splurge. My favorite “round” purchase was a fine china tea set that my mom bought only to reserve its’ use for occasions when she had special company. Of course, of all the visitors we received at our house, and they were many, I can recall only a handful that were important enough to use the tea set.

Nowadays, rounds are being collected monthly to pay essential bills instead of financing out of the norm purchases. The rounds are now a means of survival. Rounds are just one of the many tricks that Zimbos are compelled to rely on in the face of unrelenting difficulty.

I pay homage to rounds not only because of their ability to enable Zimbabweans to prosper materially at a low cost, but because for me, they embody a unique type of capitalism that will one day catapult us to the front of the world’s economic stage. In a rare marriage of self interest and benovelance, rounds, in their own unique way, represent the ultruistic benefit that can be derived from sheer capitalistic enterprise. In my opinion, this is strictly because of how central the notion of community is to rounds.

A reliable and trustworthy relationship is a prerequisite between any potential members of these clubs. The people have to both trust that they will all pay their monthly dues, and have confidence that each member will earn enough income to pay the dues. Who better to trust for long term reliability than one’s own neighbors and workmates?

That is the economy, stupid!

While reading the Saturday’s edition of the Herald I was reminded of how badly the Zimbabwean government has misunderstood the capitalist system and how it is playing itself out our country. Generally put, the Zimbabwean government, is guilty of distrusting the market system. In their bid to correct all that is wrong with the economy, they’ve overregulated the formal market, so much that it has become inaccessible for most Zimbabweans and Zimbabwean businesses.

But there’s a minority in Zimbabwe who, in the face of the failure of the formal economy, have become part of a vibrant alternative market. In the informal market people operate laissez faire; free from the entrapments of government precipitated laws and unweilding influence. Here they have been able to unleash the power of their creative thinking and be rewarded fairly well for it. Just like it is supposed to work.

The Herald’s erstwhile business editor, Victoria Ruzvidzo, is astonished to find just how well the informal economy is doing when she immerses herself into one of it’s most prosperous markets; the Dubai cross border trade.

At least 170 shoppers travel to Dubai every week, spending an average of US$3 000 each.

Some spend tens of thousands of the greenback and have to bring their wares in containers by sea.

On each visit, one person folks out US$115 for a single entry visa and $258 million for a return ticket.

This effectively means that on average, the shoppers, or cross-border traders as they have come to be known, spend a combined US$510 000 per week or about US$2,4 million per month on their trips, enough to buy a day’s petrol supply for the whole country.

Add this to the figures spent by those who ply the China, Singapore, and other traditional routes such as South Africa, Botswana and Zambia and you have a huge figure of foreign currency that could otherwise be allocated to more deserving national needs.

Sadly, like the officials over at the Reserve Bank and in the Ministry of Finance, Ruzvidzo is resentful of the informal market because the government cannot regulate and influence it. More importanly, they cannot levy and collect taxes on most informal market activity. So they yell and scream, deride and chase, but fail to realize that they cannot eradicate the informal market.

No one can do that.

Like the Zimbabwean government, many people don’t understand that the miracle of the capitalist free market resides not in the places where the business transactions occur (eg. Wall Street, Nikkei), or in the currencies of trade (US$, Yen). No, the magic of the free market is in the mind where an unparelled creative capacity ensures the most efficient matching of needs and resources.

Look around you, is there a “black” market? It’s doing just that; making sure that people with needs are brought into contact with resources that address their needs.

In many cases, say the U.S. (where, for the most part, the formal market is doing a phenomenal job of allocating resources to the needs of people) for example the informal market becomes “black” because it isthe place where trade in illicit goods is happening.

This is not the case everywhere; certainly not in developing countries like Zimbabwe.

Those readers who’ve read me for a while know that I have long been intrigued in discovering the reason why the market economy has succeeded so well in some parts of the world, while it let the rest of the of us down. My quest has led me among other things, to Hernando De Soto and this erudite assertion of his; the free market hasn’t failed in the developing world, it just hasn’t been discovered yet. De Soto claims contrary to popular opinion, the free market is alive in the developing world; it is just not recognized as the “formal market.”

In Zimbabwe, the government and their propaganda like the Herald demonize the informal market and label it the “black market.” They terrorize it with their police conducting impromptu raids all the time. The reality is that it isn’t a “black” market at all. It sources and allocates resources like oil and foreign currency at sustainable prices, not the superficial values imposed by the government out of political expediency.

The reality is, as De Soto puts it in The Other Path

People are capable of violating a system which does not accept them, not so that they can live in anarchy but so that they build a different system which respects the minimun of [their] essential rights. p.55

In other words, the informal market which Ruzvidzo and the finance people in government loathe is doing a better job of doing what the formal market should be doing doing.

In fact they should realize that: That is the economy, stupid!

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Eddie Cross: “Stormy Weather”

Walking on Water.

I hit a pothole in Harare last Wednesday and it smashed my front wheel assembly. In an effort to find the spares needed I went out to a dealer and when I walked into the Managers office I was astonished to find a close friend behind the desk. It had been five years since I had seen him last and he told me what had happened to him.

He had been working in the Karoi area the last time I had seen him and when the farmers in the district had been dispossessed he had found himself also out of a job and also dispossessed. After 30 years of work he and his wife found themselves without a home, just a few old pieces of furniture and some clothes and a small car.

To compound his problems, his wife of over 30 years, was battling with cancer – a struggle she lost after two and half years and he had found himself without his wife and companion as well as his assets and means of making a living.

He rented a small house in a medium density area in Harare and with the help of a younger businessperson, set up a car dealership in one room with a laptop computer. When I walked into his office three years later, he was the General Manger of a substantial business, was expanding rapidly and looked set for real success. Where others were struggling, he was making good money and doing well.

Hot Seat: Analysts say engagement not mass action

Transcript of ‘Hot Seat’ programme in which SW Radio Africa’s Violet Gonda talks with Professors Brian Raftopoulos, Jonathan Moyo and Economist John Robertson.

Broadcast on 13th June 2006

Violet: Zimbabwe is a country in crisis and many have asked what needs to be done internationally by all democratic forces and what role the regional and international community can play – now, and in the post Mugabe period. To help discuss various ideas I’ve invited three people who have at one time or another advised some of the key players in Zimbabwean politics. They are political analyst Professor Brian Raftopoulos who once acted as an advisor for Morgan Tsvangirai’s MDC, independent MP Jonathan Moyo, who was widely described as an advisor and strategist for Robert Mugabe and well known economist John Robertson. Welcome to the programme gentlemen. Now we will start with a common question, ah, well, there is no question, but there is a serious political crisis in Zimbabwe and that the economy has collapsed with inflation officially at 1 193.5 % but generally it’s understood to be much higher than that. Now obviously something must be done about Zimbabwe but what are the suggestions? Let’s start with Professor Moyo.

Jonathan Moyo: Well, the suggestions – I don’t think that the way our country is and how things are going invites suggestions, clearly what is needed is action. The first action, of course people would reasonably expect, that it must come from government – what government should do. And, the problem we have at the moment is that the government seems to be in a policy paralysis and it does not have a response. Although, I must say, the recent developments suggest that there is some international engagement which might lead to some resolution of this crisis because of the consequences of this economic meltdown. All this discussion around a possible initiative led by Kofi Annan suggests that the government now wants a way out and the question is, what it would be? There are a number of scenarios we can talk about in the course of the discussion.

Violet: Ok, we’ll talk about that later, but I would like to know the views of John Robertson and Professor Raftopoulos about what they think needs to be done. John Robertson?

John Robertson: I believe that the government today is completely out of its depth and doesn’t have the resources any longer to deal with these crises. Unfortunately it has constantly sought economic answers to what are basically political problems. I feel that strenuous efforts must now be made to devise political policies that are there to fix the political problems. We’ve seen a massive decline in the level of production, a total absence of new investment into the country, a massive flight of skills from Zimbabwe and the country now has no credit rating internationally. And, although we might have raised a bit of money to pay for fuel by pledging exports of certain minerals, we have come nowhere near solving any of these problems because the political hang-ups still keep the people who could help the country at arms length. So, I think that the answer has to lie in the political arena, not in the economic one.

Where to start

Some days, today is one of them, there’s seems to be too much going on I just don’t know where to start or focus my energy.

I could spend hours bloviating on the not so pleasant plight of Lovemore Madhuku the leader of Zimbabwe’s National Constitutional Assembly–an umbrella body of civic groups pushing for a new constitution in Zimbabwe. He has taken a battering in the news over the last few days because he somehow managed to secure himself a third term at the helm of NCA in violation of the groups constitution. He took care of that though, he ammended the constitution. Needless to say, Dr. Madhuku is swimming in controversy. The activist is accused of manifesting the same despotic tendencies his opposes in Mugabe. He fired back at his critics in an interview with SW Radio’s Violet Gonda.

The Interception of Communications Bill, which empowers the government to monitor cyber and telephony activities of individuals “suspected of threatening national security” continues to sail through the legislative hoops on its way to becoming law. After being gazetted late last week, it went for reading in parliament’s legal committee. If they pass it, the bill could be tabled on the floor for a vote in a matter of days. By the end of the week it could be signed into law.

That’s a bogus concept for you, national security in Zimbabwe? Security from what, certainly not from hunger, disease, dilapidated infrastructure, economic implosion and so on. The governent can’t even provide workspace for some of their own functions and they want to talk about “national security?”