Don’t read too much into succession issue-Bloch


The business sector should not read too much into last weekend’s ZANU-PF resolution to harmonise “presidential and parliamentary” elections, a move viewed by many as a ploy to extend President Robert Mugabe’s term of office to 2010, commentators said this week.

Bulawayo-based business consultant, Eric Bloch, said very few resolutions passed by the ruling party were ever implemented. “The President can still decide to retire, so I think the business sector should not over-react to the resolution,” he said.

President Mugabe’s current term of office ends by March 2008. Though most people have already resigned themselves to the prospect of another three years under President Mugabe, arguing that the extension is inevitable because the party leadership can bulldoze its way and Parliament can easily ratify it because ZANU-PF has the required two-thirds majority, observers say President Mugabe has a long way to go.

They reckon that while party supporters agreed on the need to harmonise the elections, they were divided on whether President Mugabe should stay on. The party leadership was so scared of exposing the divisions that it postponed passing the resolution saying instead that people should be given more time to look at the issue.

The British Daily Telegraph said President Mugabe’s failure to get an outright endorsement was his second political defeat in 26 years following the rejection of the new party constitution in 2000.

“There was real consternation among the party leadership, known as the presidium, as it wasn’t only the 3000 delegates to the annual ZANU-PF conference who were divided about his desire to hang on until he is 86,” the paper said. “Earlier in the week the ZANU-PF politburo couldn’t come to a decision either. The next day the central committee, which is the party’s highest authority in between its five-year congresses, also turned him down.”

“The annual conference had no problem in agreeing to hold presidential and parliamentary elections simultaneously, it makes sense as they are expensive,” the paper went on. “What they couldn’t stomach was the dear leader staying on until 2010 as part of the package.”

Observers believe that the decision to endorse the harmonisation of elections was orchestrated by the party leadership, which deployed members of the powerful politburo to the provinces to whip them into endorsing that resolution. But even some in the ruling party now believe that the country cannot improve its economic fortunes as long as President Mugabe is in power because he has scared away all potential investors and continues to denounce the West, which can provide the much-needed economic aid.

Bloch, one of the advisers to the central bank, said 2006 had been disastrous because the government had ignored all advice on how to improve the country’s economy, solely for political expediency.

“We were not prepared to change any of the economic fundamentals. We continued to spend money that we did not have. We killed the export market by refusing to devalue our currency and enhance export viability. We pursued a Look East policy when we should have adopted a Look Everywhere policy. We kept on telling investors that they were not welcome,” Bloch said.

He said all this was done ostensibly to help the consumer but it had backfired and had instead fuelled inflation. According to the Consumer Council of Zimbabwe, the basic bread basket for an average family of six — a father, mother and four children— had shot up from $21 805 in January to $208 715 last month.

Bloch said things could be worse in 2007 if there was no change in government’s attitude. He said inflation, the country’s worst enemy, could soar from the current 1 100 percent to between 1 800 and 2000 percent before stabilising and finally declining. While the government said inflation would decline to below 400 percent by the end of 2007, Bloch estimated it would still be between 600 and 800 percent.

He said the situation was only likely to start improving in the second half of next year provided the government changed its fiscal policies. Finance Minister Herbert Murerwa had already made the right start by taking over quasi-fiscal operations from the central bank. Bloch said this was a significant shift, a move that was also commended by the International Monetary Fund team that was in the country from December 4 to 16.

“The inclusion in the 2007 budget of substantial quasi-fiscal activity reported by the RBZ (Reserve Bank of Zimbabwe), such as the provision of subsidised foreign exchange to the public sector and price supports to commodity exporters, marks a positive step towards increasing transparency,” the IMF team said.

“Going forward, the key will be first to ensure that sharp cuts are made in real terms in fiscal spending, including quasi-fiscal activity previously undertaken by the RBZ. This will mean that the government should aim to stay within the current 2007 budget envelope. Second, fiscal expenditure needs to be prioritised, in particular to ensure adequate food imports, an urgent improvement in health infrastructure, and well-targeted social safety nets to protect the poor and address the needs of those affected by HIV/AIDS and Operation Murambatsvina.”

The IMF team said strong fiscal adjustments would need to be supported by complementary policies such as unifying all official exchange rates and moving the unified rate towards market-determined levels; removing restrictions on current account payments and transfers. Liberalising price controls and imposing hard budget constraints on public enterprises, whose losses have been largely responsible for quasi-fiscal activities; and establishing a strong monetary anchor, with the RBZ focusing on its core function of ensuring overall price stability were the other measures that could be undertaken.

While some people now believe that the economy cannot be turned around while ZANU-PF is still in power, Bloch said what was more important was that Zimbabwe should move away from being a command economy to a deregulated one.

He said either a change of government or a change in government would do the trick. “It is not necessarily just a change of people, it can also be a change in people. Either one can bring about the change we need,” he said.


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Charles Rukuni
The Insider is a political and business bulletin about Zimbabwe, edited by Charles Rukuni. Founded in 1990, it was a printed 12-page subscription only newsletter until 2003 when Zimbabwe's hyper-inflation made it impossible to continue printing.


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