The move by Delta Corporation Zimbabwe Limited (Delta) to announce that it would begin to sell its products in multiple currencies with a particular emphasis on the US$ was one of the most bold actions from a private corporation in recent years. Mainly because in its statement announcing its decision, Delta made reference to the current government's monetary policy as being inadequate and went on to audaciously listed new prices in US$ for its commodities.
Government sort of panicked with the Minister of Industry, Nqobizitha Ndlovu issuing a press statement warning business against ‘dollarising the economy’ through unilateral decisions on commodity pricing by private business.
It went further and convened a meeting with Delta executives with the governor of the Reserve Bank which resulted in a joint press conference that announced a reversal of the US$ pricing of beverages for the domestic market. The Reserve Bank also promised to provide the requisite foreign currency (state subsidies) to Delta in order to maintain the status quo of pricing in bond notes.
The minister of finance weighed in on the matter by stating that he did not expect private players to ‘rush to choose the currency they think the country should adopt. They should just be patient, let us work together.’
This incident between government and Delta is interesting in a number of respects.
The most evident being that Delta is a powerful player in Zimbabwe’s political economy. When it sneezes, it would appear government coughs. This is probably due to the fact that it is almost a monopoly supplier of beverages and contributes significantly to the national purse via taxes and excise duty. So government cannot afford to have an unhappy behemoth of a company that can decide unilaterally that its operations are no longer feasible (i.e profitable).
Secondly the government is increasingly a victim of its overall macro economic policy framework of the ‘ease of doing business’ or an unfettered ‘free market’ and its attendant neoliberal principles and rules. Delta and a number of other large companies (Econet, Innscor, Makwiro Platinum etc) are probably all too aware of this. Hence the ease with which Delta announced its decision as a private corporation. Because government is pushing pro-private capital policies, the latter can easily decide that the former’s policy measures are inadequate. As did Delta. And they can with relative ‘ease’ threaten the government with arbitrary and profit motivated decisions to scale down their operations if their demands are not met.
This is a vulnerability that government has brought on itself and local private capital knows that it has the protection of the gaze of global capital. It then becomes a question of what does government actually control? Or what will it eventually be able to control when it comes to the interests of private business and companies as large as Delta? So far it would appear that these large companies (private capital), given the example of Delta are potentially the proverbial tail wagging the dog.
And this latter point brings into focus the intrinsic/ longer term character of the emerging relationship between the state and private capital. It’s a relationship that intends to become cemented by the shared principles of the free market/neoliberalism. This to the extent of creating that hazardous ‘revolving door’ between state actors and private capital actors. That is to say, at some point it will become difficult to tell the difference between a cabinet minister and a corporate executive. Hence for now there is amicability, even after Delta’s unilateralism, between the state and private actors. With the latter being keen to see government do its specific bidding in the name of the free market or as Mnangagwa puts it, ‘the ease of doing business’.
It is however evident that this relationship between state and private capital actors is not democratic. Or does not seek to deliberately work to serve the democratic public interest. This is because the public interest tends to work at cross purposes to the profit motive of big business. Hence for example the quicker solution to a potential crisis of beverages over and above that of the health services sector.
In order to counter this increasingly hegemonic relationship between private capital and state actors, we need to put up alternative understanding of what would a progressive national political economy. We need to protect state capital (land, health, transport, water, education infrastructure) from the avaricious hands of private capital.
And we need to put private capital in its place by telling a corporate citizen such as Delta that it is not a priority citizen because of this proximity to the state or claims at being too important to be allowed to fail (hence it and other private players are now guaranteed of state bailouts).
And finally we need to come to unpopular terms with the fact that our continued use of the United State dollar (US$) as an official or publicly preferred currency in unsustainable. However we try to rationalize it. Instead we should work on introducing a credible local currency that will be available as a medium of exchange for all of us and not the politically and private capital connected few.
*Takura Zhangazha writes here in his personal capacity (takura-zhangazha.blogspot.com)
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