Zimbabwe’s Financial Stand-Off: Who's Holding Whom to Ransom?

By Takura Zhangazha*

Following the recent abrupt changes to Zimbabwe’s financial system as announced by the government and the Reserve Bank, I was asked if I was going to write an opinion on the matter.  I initially responded by saying as an irregular blogger I tend to stick to my lane.  Mainly because I am not a finance, economics or banking expert and therefore I am least likely to put together around 700 words on the matter. Neither am I emotional about it.   

Then I changed my mind.  As a typically highly opinionated Zimbabwean. This was mainly because of the fact that the nature of the discourse around this matter appears to be linear.  Ideologically and in relation to assumptions of received ‘best practice’ business, financial and economic policy knowledge.  

Where it concerns ideology it should be self-evident the discourse around what the government and the central bank can do is couched in what ‘free market’ finance, business and economics require.  And how assumedly the state is ‘ridiculously’ going against the grain.  In this are included arguments such as ‘let the market decide' or the ‘state has no business in business’ or ‘just dollarize!’  Arguments that are the equivalent of a relatively blind ‘praise and worship’ session for capitalism.  Particularly a capitalism we do not own.  But instead want to demonstrate an 'other based ' knowledge of it for reasons I will come back to later.

The astounding issue is that it is those that are most disadvantaged by the 'free market' that are appearing to defend it. Especially on social media platforms, in mainstream media, some trade unions, civil society organisations and political parties, inclusive of the ruling one.  Yet they are not ones who have been at the foreign currency auction system.  Nor are they the ones who are complaining about in- country or offshore shareholder profit margins that must be maintained while ensuring there is no minimum wage for workers.  It is not only ironic but reflective of a tragic national economic consciousness that misses the point that supporters of the ‘free market’ misunderstand its direct inequality effects to the majority of our people.   

It is a reality that one can argue is an inverted ‘class’ issue.  With the traditional 'comprador bourgeoisie' (the property/money/production owners as inherited from colonialism) forming an alliance with the middle class, workers and peasantry against a state which believes in exactly the same thing. Except using a different methodology called ‘state capitalism’.  With the anticipated end result being the same.  That is the enrichment of the already rich and the continued impoverishment of the already poor in our society.   Even with the anticipation of trickle-down economics and misunderstanding the fact that inflation affects all currencies.  Particularly in their countries of origin, as is the case with the United States economy and dollar at the moment.  Or in the wake of the now economically globalised Russia-Ukraine outright war.

Let me return to the issue of ‘demonstrating’ free market, business and economic knowledge in everyday political conversations in Zimbabwe. Bearing in mind that even as Shimmer Chnodya wrote in his epic novel 'Harvest of Thorns' on how his book's main character's father should have been the minister of finance based on how he juggled his salary, every Zimbabwean in times of economic crisis becomes a finance and business expert. 

In a majority of cases this stems from formal education and/or experience.  Historically as it relates to the Economic Structural Adjustment (ESAP) years between 1989-1999.   In this somewhat dismissed historical period we were taught to assume that private capital and 'free market' trickle-down economics were the panacea to our social and economic challenges as a country.  By way of consumer culture and formally by way of what was then the equivalent of what we now refer to as Science, Technology, Engineering and Mathematics (STEM)  education models. In the 1990s through to the first decade of the new millennium we had a cultural and education discourse that reflected free market and ease of doing business as again the total solution to our problems. We were all encouraged to do business related degrees or diplomas. Even at postgraduate level. Also at the height of the most contradictory 'free market'  government policy that was the Fast Track Land Reform Programme (one that I know global private capital considers Zimbabwe's original modern day sin). 

This has directly impacted our national consciousness. More so during the economic crisis that was the 2008-2010 period until the dollarization period that was introduced before the inclusive government was formed.

Our reaction to the latter has not and will not easily be changed.  We welcomed the ‘free market’ knowledge system that it expanded.  Not only in relation to Chicago School type of economics but also how to manipulate it individually (with or without formal financial education).  Especially where it was about foreign currency exchange as enabled by the then and now current Reserve Bank leaders as well as private companies.

So the dominant and populist national consciousness narrative is highly materialistic and also pro-global (not local) private capital. As aided by the current government despite its claims of nationalism.  And amazingly finds common ground between the business and labour sectors of our society.  Especially based on neoliberal assumptions of what is best practice about currency and exchange rates.  Inclusive of listings on international stock exchanges and transferring financial capital to them without reinvesting in the country. 

In the final analysis we need to rethink the relationship between government and private capital (global and local).  Including requesting an answer to four questions as to, “Who holds whom to ransom? And Why? For Whom? For What?”

Takura Zhangazha writes here in his personal capacity (takura-zhangazha.blogspot.com)