An Insight into Zimbabwe's Economy



An intensive economic study on Zimbabwe covering the period from Independence to the year 2000 was completed by top EU economists over a two and a half year period.
It included World Bank records in Washington and Zimbabwe, all the activities of local aid organisations and NGO’s, all mining and industrial sectors and the Zimbabwe government. It touched on every event that had an economic bearing on the economy in exceptional detail with back up reference documents and taped interviews in exemplary university fashion.

In conclusion, the paper asserted that no other Third World government could have done any better in the circumstances.
In Europe it was decided to water down the draft removing reference to highly sensitive documents as it was feared the authors would be blacklisted by the financial aid institutions and therefore be ineffective in promoting change.

Although unseen by Zimbabwe, Britain or the US, economic blame promoted by propaganda is unlikely to succeed within the UN framework as one of the authors is an accredited economic researcher to same. Whilst the writer does not suggest a witch hunt there is a serious need to view the original draft prior to international decision making as it may have an economic impact.

The writer may not compete with the paper which, was a report of excellence examining the foundation of such policy as ESAP and the questionable need for devaluation when Zimbabwe was exporting all it had available having a healthy growth rate during the mid eighties.
Again, it is difficult to justify a planned devaluation with IMF over five years as, only god has access to the economic state of a country five years into the future, unless …..?

What the writer may do is briefly add to, extract from in part, the economic report, illustrating briefly, factors that had an effect on the economy.

Zimbabwe contrary to international propaganda, which holds that it was an Agro – based economy, was a wide based mainly manufacturing/ mining economy. At independence it inherited an economic infrastructure that most Third World countries only dream of, necessitated by sanctions during the UDI years, being almost totally self sufficient.

Indeed, as far back as during the Second World War, Charles Prince Airport at Mount Hamden was an aircraft assembly plant set up by the RAF, equipment being donated to National Railways after the war. Due to convoys being attacked and the shortage of parts, within months, manufacture was set up locally including such items as piston rings. It is thus that the former Rhodesia, as it was, illustrated it capabilities.

During sanctions and UDI many weapons were manufactured and designed locally depicted in the book “Weapons of Rhodesia”. Even oil multinationals such as Shell manufactured automatic weapons for the first time through their totally owned subsidiary company, Crusader Engineering depicted in the same book. Possibly the first time any Oil Multinantoinal had become a weapons manufacturer - in certain First World countries political donations from arms dealers are frowned upon. 

There were several factors that were to have a deteriorating effect on the economy from Independence including the following: - 

At Independence the Zimbabwe Government announced a socialist policy in appreciation of the assistance given by socialist countries during the UDI period. This was unexpected by the West and, with the cold war,was a matter of concern. It was thus that the operations of the South African Psychological Warfare on Zimbabwe’s economy were overlooked by the West.

The former Minister of Home Affairs with the Rhodesian Government filled the post of consultant to Psychological Warfare on Zimbabwe in Pretoria, South Africa, utilising the same local indigenous operatives used to destabilise the armed struggle in Rhodesia. In addition to the training camps set up in Northern Mozambique and elsewhere effectively training terrorists, many successful economic sabotage operations were launched.

By way of example, one such operation was in Southern Zimbabwe. The Mugabe Government had inherited an integrated army at Independence with the exception of the fifth brigade made up of political ex-combatants loyal to the government, largely ill-disciplined being accustomed to guerrilla warfare. This was a natural target for Psychological Warfare. By funding, organising and training a potential Matabele uprising the Mugabe Government would have no option but to respond utilising the loyal fifth brigade.
Hence the massacre in Matabeleland considered a successful operation by Psychological Warfare in Pretoria. It was this engineered act coupled with resultant international pressures that was to fuel the change from socialism to capitalism.    

Today, Munangagwa, a lawyer, former Minister of Justice and former senior member of CIO is awarded the blame by the International News Media whilst, the former white director of CIO and British MI 6 attached to CIO are considered blameless and respected. It is unlikely that either CIO or the Zimbabwe Government are aware of South African Phycological Warfare involvement at the time.

It was perhaps an example or poor research that Jack Straw stated the following in his opening address to Parliament (01/07/2004)   

Jack Straw: “…But the idea that this was some kind of golden age for Mugabe's Zimbabwe is false. His brutality and desire to stifle opposition by any available means was also increasingly clear. During the 1980s some 20,000 people were massacred by North Korean-trained soldiers in Matabeleland - atrocities which went largely unremarked by the British Government of the day…..”

It were better he researched the reason it was “unremarked” before making the statement, as, others reading same may well research the reason for him. 

Although the local economy grew during the early eighties it is beyond belief that the financial might of South Africa’s destabilising efforts had no lasting effect on Zimbabwe’s economy.
 
Various international policy decisions affected the entire infrastructure of Zimbabwe and, the Third World in general.

Presumably, in the interests of prospective First World trade, university places were offered to Third World students with grants by most first world countries. In some countries such as Greece there were language barriers. Lectures were conducted in Greek and it took the Third World student at least two to three years to learn Greek hence little academic knowledge was gained. All students were issued with degrees as they would never use them in Greece and it was considered undiplomatic to fail all foreign students. (Critical areas were affected in such disciplines as veterinary science.)

In Russia, degrees were stamped “not for use in Russia”.

In Britain, although there was no language problem, a visiting Dean of the Faculty of Engineering of a prominent UK university stated that, ‘a foreign student only has to attend a few lectures to attain an engineering degree.’ Explaining, that to fail overseas students is considered undiplomatic because it looks if foreign students fail and that they are unlikely to use their degree in the UK.
 
Local Professors were faced with conflict situations when asked to validate degrees for the various local professional institutions.

By example, it happened that a local Professor of Engineering and former dean of the faculty at UZ was asked to validate a UK degree and that, the dean of engineering of that particular university was visiting Zimbabwe in his capacity as an examining professor to the University of Zimbabwe. The degree was authentic but the encumbrant had little engineering knowledge and the local professor wore two hats in that he was also Chairman of Zesa, the local power utility, at that time. The individual had applied for a position at Zesa as an engineer supporting a degree from UK that would normally be considered pristine.

Again the Zimbabwe Government, as is the case in many Third World countries, was following a policy of indigenisation.

Whilst the conversation centred on devaluing British University Degree’s, the issue is substantially more serious. Whilst the writer does not suggest it is economic sabotage by First World countries and rather views same as erroneous diplomatic policy it nevertheless has had a marked effect on the Third World in general. Government employees in critical areas may have such degrees; the utilities that provide basic infrastructure to the economy such as Zesa are now collapsing.

It is not as simple as replacing engineers and professional employees as many of their assistants have resigned being unable to work under an ‘unqualified’ supervisor. This situation will be duplicated throughout the Third World with the resultant economic damage being directly proportional to the numbers that have taken advantage of First World qualifications.

As it is laterally particularly difficult to locate those ‘professionals’ with dubious degrees it is likely to take a generation to normalise institutions and utilities and one should expect the resultant appropriate rise in corruption and economic chaos.

Ironically, many with such degrees will now be resident and working in the United Kingdom, Europe and America resultant of local economic decay. Even those with local qualifications or ‘genuine degrees’ have left for greener pastures, actively supported by the First World, resultant of economic decay and the drain of that expertise will be take at least a generation to rebuild.

It would be insufficient to replace same with expatriate expertise as it would take a considerable time to induct same to local conditions and, particularly in the agricultural and industrial sectors, a university degree does not imply commercial or the appropriate technology expertise necessary in the third world. There is a greater need to retain those with the appropriate aptitude or encourage the repatriation of same. 

By way of example in the medical profession, nurses, pharmacists and others trained at Zimbabwe, Third World, expense, have been taken in bulk to prop up the national health system in the United Kingdom with intense local advertising. Without this expertise coupled with economic decay, to the dismay of the WHO, infectious/ contagious diseases such as tuberculosis, in a country that was once considered safe, are now hopelessly out of control and the medical profession no longer have the infrastructure to deal with same.

Standards of public health have reduced where basic drinking water is no longer fit for public consumption and rodent conveyed diseases are normal. Dr Agata, former head of the Southern Africa Infectious disease section of WHO will confirm same. Raw sewerage is regularily pumped into the Manyame river, source of Harare's water supply. It is the writers information that dead cattle were left to rot adjacent to the same river suspected of Anthrax.

Even the Cobra snake is now considered vermin in the greater Harare area by the School of tropical medicine in the UK resultant of the increased food source of rodents. (It is the writers information that only one hospital carries a very cheap multi anti-venum serum in Harare which may cause fatality in most cases of snake bite if administered. Even local embassies do not carry cobra anti-venum serum and, with a bite life expectancy of 15 minutes plus, Johannesburg in South Africa is hardly an alternate. (The writer, a cobra snake bite survivor, relates from experience having survived two bites at his home in as many years with the kind relayed assistance of the School of Tropical Medicine combined with appropriate technology.)

Urgent bulk repatriation of local expertise needs to be considered by the First World.  

The healthy mining, industrial and manufacturing sectors of the economy grew until the implementation of ESAP. Agriculture was a minor sector of the economy and grew by default as the effects of ESAP destroyed the manufacturing and industrial sector.

Ironically, the local Confederation of Zimbabwe Industries recommended ESAP to Government accepting that most of middle industry would close. This came about due to the support of the multinational companies, the controlling influence in CZI notwithstanding that the bulk of membership came from middle industry. It happened that the hands on management of middle industry had little time to hold public office in CZI as opposed to the larger public companies who’s network of companies voted each other on committees.

To the employees of the public companies and multinationals ESAP was seen as a fast way of removing competition and creating monopolies. Although ESAP closed many companies there was no media reporting, international sympathy or any hope of compensation. Financially, far greater economic wealth was lost in total than with the land issue.
Today CZI is but a shell of what it was prior to ESAP. All that was left was effectively service industries to the farming and the now substantially reduced mining sector.

The Lome Convention Agreement signed by the nations of the EEC and ACP countries to encourage the export of goods to Europe from ACP countries was breached by Europe in the sense that it laterally imposed quotas on goods. It also imposed unofficial trade barriers to finished goods.

By way of example, whilst one could obtain EU standards at EU testing stations spread throughout the world (S.A.B.S. is one in South Africa), even being Tested to British Standards as well as the EU standards was unacceptable to the Department of Trade and Industry in UK. Eg. One product was condemned and publicly advertised as dangerous by DTI and then, on official enquiry, DTI stated that it was sent to them by someone ‘unknown’ hacksawed in two and in that state was unsafe in much the same way as any other appliance would be adding, as supplied, of course, it would be safe.

However, with the massive adverse publicity in all British technical and consumer magazines it was decided uneconomical to launch in Britain. (Written report by the investigating standards authority that had a meeting with DTI officers at their expense – copies adverse advertising available) In addition the product referred to, in spite of attaining BS and EU standards, had been voluntarily submitted to BS in the UK for further testing prior to launching. Being patented in the EU and by extension in the UK it had additionally been the subject of inspection by an eight man team of engineers attached to the EU patenting office who even visited our local factory – an unsafe invention may not be patented.

The writer, the former chairman of the committee on Intellectual Property with representatives from the Institute of Engineering, Government and Legal Profession on board was asked on one occasion to assess the proposed ARIPO patent. Delegates from ARIPO were present at all meetings. With the exception of the legal profession, it was decided by majority that the concept of the ARIPO patent undesirable for the following reasons: -

a)      It was proposed to relax the criteria for novelty of the invention and in the committees view there was no such thing as a second class idea or invention. It was stressed by Aripo delegates that simple copies of international patents would be permitted by locals.

b)      The main intent of ARIPO was to make it less expensive for the first world countries to register a patent in African Countries bulking them together as was done in the EU and this did not justify the dangers of copying  international and local patents.

c)      The only reason that the local legal profession gave for their support for ARIPO was they felt they had the only sophisticated legal system next to South Africa and would get the financial foreign exchange benefits of bulk registration from International Companies.

d)      Cause for concern was that African Intellectual Property could easily be copied/ stolen by others simply using traditional patenting system of the first world in that they were unconnected and the traditional system would still be operative locally.

e)      Other concern was that permission would be effectively granted to copy international intellectual property by reducing registration novelty standards. In the long term this could lead to massive Intellectual Property theft and fraud and a veritable nightmare of policing and legal control as it seemed additionally possible by utilising a corrupt official for a local to submit a similar ARIPO patent while an international one was in the process of being registered – it promoted international crime.

Notwithstanding the committee’s findings were supported by the Confederation of Zimbabwe Industries and Technical Government Ministries, the ARIPO delegates and legal fraternity went through the back door, so to speak, by approaching the local Ministry of Justice and pushing legislation through without the committees and stakeholders knowledge.

Note :- At all times the ARIPO delegates were given opportunity to resubmit the proposal with the provision of better safeguards for the general public and International Community.

As opposed to other countries where only legal practitioners with the necessary qualifications in patenting law are allowed to practise as patenting agents, in Zimbabwe, in terms of the Legal Practitioners Act and the local Law Society any lawyer can act. There are no suitably qualified legal practitioners in Zimbabwe and suitable qualifications are not provided for at the Law Faculty of the University of Zimbabwe.

This becomes a real threat when it comes to policing intellectual property infringements and is likely to backfire on the EU and International Community particularly, in the computer industry and software field. In any local litigation, foreign lawyers would have to be approved and registered sometimes required to take a local law examination and, the alternate of local expertise is unavailable.

The imposition of the ARIPO patent on Africa is a prime example of mispent aid.

On the basis of the above the writer felt it appropriate to dissolve the committee which has never been reinstated.  

To consider that the Third World has nothing to offer in the field of intellectual property is a grave mistake. There are many areas in the field of medicine and technology which are of major importance to the first world.

By way of example, in the construction industry in the manufacture of concrete a method of compacting materials in the process of manufacturing concrete was discovered by the design of adjustable  equipment which compacts aggregates utilising an adjustable frequency and intensity of vibration suited to any aggregate. Currently vibration pokers with one intensity and frequency are utilised in the international construction industry resulting in pockets of air and resultant weaknesses. It should be understood that aggregates have differing properties from area to area.

Described by Professors of Civil Engineering as a major break through in the international construction industry it is unavailable in the first world resulting in sky rise structures collapsing internationally particularly in areas prone to earth quake and natural disasters.

In destruction tests implemented by the appropriate testing authorities in South Africa, C.S.I.R. attached to S.A.B.S., a road surface was passed, classified indestructible when compared with bitumen with a life span of +- two years and conventional concrete achieving ten times the norm and still remaining intact. In fact it is the writer’s view that the surface compares with that of the Roman roads, some still utilised today, simply maintained.

There are indeed many others including remedy for the horror of ‘runaway lifts’ causing fatalities internationally where the absolute law of synchronous speed taught to all international engineers in physics was challenged and found wanting.

In the field of wind energy a substantially more efficient and cost effective design has been researched whilst First World governments continue promote an expensive now inefficient design based on the design theme of the Dutch windmill.

There are many more such cases of great significance. Without adequate protection inventors are reluctant to place ideas in the public domain. It is sad that although the Third World countries are termed developing countries, no aid from the First World has ever been put into real development which is Intellectual Property.

Funding and assistance is needed to police inventions, for research into projects of international significance, for international patenting in much the same way as First World nations do for their citizens to the benefit of the world in general.

Local funding via the Ministry of Industry for Intellectual Property amounted to Z$250 in the 1980’s (equivalent to US$40) which was the budget for the entire nation. Although increased it is now utilised for appropriate technology and fairs as opposed to intellectual property.

Corruption within the Zimbabwe Government whilst the popular First World reason for financial decay is realistically a common disease in politics throughout the world, including the First World where it is in generally in larger figures and undertaken with more expertise. Largely caused by unfair/ illegal trade barriers, Foreign Multinationals and others set up totally owned subsidiary multinational companies within the EU taking advantage of incentives. The only hope for Third World countries to realistically export finished products was to go to bed with them in barter deals, sometimes three way, involving Russia.

Simply put, the writer read a letter from a senior official in a multinational in a very prominent EU state stating the following “An election is forthcoming in ……..and, for reasons I cannot put in writing the next head of state will be …. He has the power of veto over local EU standards and will assist with your product which will then be acceptable throughout the entire EEC. “

The same letter was viewed by the now accredited research economist to the UN. There was possibly a great deal more wrong with that election than, elections held in Zimbabwe and, whilst the multinational concerned appears ethical in other respects may have long term effects on both the EU public and the US particularly in the field of health.
Again, until fairly recent years tax relief was given for ‘incentives to foreign government officials’ within the UK whilst the same would be considered corruption in UK if practised locally.
 
The writer voluntarily promoted anti corruption legislation assisting with the drafting of same on a voluntary basis for many years being actively involved with the late assistant to the then Minister of Justice and invited to attend police anti corruption meetings with other stakeholders. It was with dismay that the writer read adverse reports from Amnesty International of the Act who failed to comprehend the difficulties of criminals under investigation leaving Zimbabwe under the cloud of political asylum, gaining residence in Europe and America coupled with slow local investigation procedures.

It was clearly to the greater benefit of Zimbabwe and the International Community to have such legislation rather than none at all.

Other organisations failed because with the emergence of an opposition party, the bulk of Human Rights organisations fell under the control of an opposition MP rendering them ineffective and open to abuse. 

With the growth rate in sharp reverse Government now had difficulty for the first time with its balance of payments and the economy showed signs of economic collapse. Government resisted efforts by the World Bank to keep Zimbabwe on track to economic disaster in vein with all financial assistance from the First World countries on which it was now reliant held back conditional on compliance with ESAP. Massive export revenue was lost and the once world renowned textile industry with ability to compete in the EU, closed down.

It is hard for many local industrialists to believe, given the content of the G8 World Trade Agreement effective in 2005 that in part the ESAP disaster was not by design. In fairness, no Third World Government could be expected to counter the massive array of financial expertise and economic power of the combined G8 countries as they lacked the expertise.

By way of example all EU aid to Zimbabwe went through the appropriate committee’s and EU aid officials were required to show the financial benefit to the EU being subjected to strict financial control. Hence, aid was supplied for massive housing projects on the premise that all domestic appliances would be imported, without reference to local job creation. As described simply by a very senior EU aid official “Everyone has a TV in Europe and only replaces it when it is defective therefore, there is a need to create a replacement market in order to alleviate a slump in Europe. Happily, the Zimbabwe Government supports a massive low cost housing scheme which suits our purpose but, of course, we will not support industry as that provides competition. All expenditure has to show a profit”

It is thus security nightmares of effective slums referred to as the high density area’s were created without the necessary employment opportunities.

Small scale project aid offered by such countries as Germany was given without financial support for proper accounting and local aid directors admitted projects were expected to collapse in the first year.

The trade unions under the leadership of the now political opposition leader held violent demonstrations complete with cans of petrol, looting, burning vehicles and violence against the general public in the face of rising unemployment figures and inflation. Clearly depicted on the BBC world news at the time.

In an extract from the uncorrected version of Peter Hain’s examination before the select committee on Zimbabwe on the 18^th April 2000 it is clear British Parliament are aware of the extent of damage to Zimbabwe’s economy resultant of ESAP and the World Bank.

Dr. Godman to Mr Hain: -

103.I do not think we can hold you responsible for the WorldBank.

and again:-

44. One last question on this section. Free market solutions and structural adjustment programmes advocated by the World Bank and the International Monetary Fund they are inappropriate, are they not, in cases such as this which we face in Zimbabwe? Elsewhere, your African experience would suggest that such free market solutions, as advocated by these two institutions, are inappropriate.

101. With regard to World Bank's structural adjustment programme,
it did not work too well in Zambia and it is important we do not have that
kind of clumsy international intervention in Zimbabwe, would you agree?

(Mr Hain) I very much agree. I think lessons have been learned from
the Zambian experience.

102. The World Bank in future will not be as clumsy as it was in
Zambia.

(Mr Hain) I hope that the World Bank is never clumsy.
Dr Godman: Very clumsy

From an academic point of view the Zimbabwe Government was faced with a security situation of note. An election was forthcoming, the economy was in sharp decline and unemployment was at an all time high resulting in criticism of the pace of resettlement on the land, an earlier election campaign promise. Without funding from Britain, little land resettlement progress could be made.

As there was absolutely nothing the Zimbabwe Government could do to reverse the economic decay given the substantially reduced export earnings, attention was turned to land resettlement.  Although the agricultural sector of the economy had grown considerably by default it had also been the source of further inflation.

By way of example when South America had a good crop of tobacco international tobacco prices naturally reduced. In the knowledge that government desperately needed the foreign currency local farmers, supported by local economists, refused to sell the tobacco unless an appropriate devaluation occurred. This of course affected all sectors of the economy resulting in further unnecessary deterioration of the manufacturing sector with increased importation costs for inputs, costs of production and eventually, labour costs.

Having no funds to effect a subsidy or being unable to convince the farmers that all commercial enterprises had good and bad years, government acceded to their demands for a number of years. It is thus that the production of tobacco became an additional cause of decay to the economy and its infrastructure illustrating the inherent danger of allowing one sector to effectively gain control of the economy by default. It were perhaps better, were it economically possible, to simply call the farmers bluff.

In retrospect, here was a genuine repetitive case for IMF/ World Bank financial support which was not forthcoming.

Drastic measures are taken in Europe to stabilise the economy or protect farmers such as government purchasing vegetables and then destroying same to stabilise prices.

Although it may have been in part political retaliation against the Farmers and Fist World countries who funded the opposition, the opportunity was given to Britain to honour the pre Independence pledge of funding the purchase of the land by providing fair compensation for land which should have been finalised in 1990.

Had Britain, in view of political difference, opted to pay the farmers/ landowners directly in terms of the Zimbabwe Constitution then there would have emerged a situation whereby those farmers who wished to stay could have negotiated the repurchase of their farms in return for payment in currency sorely needed by Zimbabwe.

In fact, given that the reason for cessation of compensation payments to the Zimbabwe Government was, that Britain disapproved of the way it was spent, it was always the obvious honourable solution and remains so.
More detail is contained in the section on the Land Issue suffice to say that the issue is supported by both political parties being a popular vote attracting policy save that the opposition state they would have done differently presumably with financial support from Britain. The precise position the existing government adopted. 

Economic remedy