Fighting an invisible economic foe
Posted by CM on July 5, 2007
One of the many reports about Mugabe’s reaction to the pricing chaos taking place in Zimbabwe, causing further shortages, business closures, misery and confusion :
Speaking at the poorly attended burial of the late commander of the 1 Infantry battalion, Brigadier General Paul Gunda at the Heroes acre, President Mugabe said his government is going to be tough with industries and businesses that effect unnecessary price increases.
“We are now getting tough. There is not going to be play, this nonsense of escalating prices must come to an end. Whether you are bakers, construction industry and suppliers take note.”
“It’s going to be a rough game. We will seize the mines and industries if they continue with their dirty tricks”, Mugabe said. He also criticized and warned his corrupt colleagues in the mining sector that his government will soon arrest those found externalizing minerals.
Well, certainly playing “a rough game” is something that Mr. Mugabe has proven himself to be a ruthless master at. Already the various extra-judicial militias have began the roughness in earnest, with shocking reports of abductions and physical abuse of shop owners who are trying to desperately cling on to business.
But the nature of the forces that Mugabe feels so threatened by now is a little different from those he can physically point to and identify as individuals who are “agents of imperialism.” Now he is fighting against more nebulous, more elusive, much tougher foes: human nature and market forces.
Let’s put all the ideological and economic jargon aside and get to the basics. The incomes of everybody buy less every day because of hyper-inflation, so everyone can identify with resentment against the constantly rising prices. Under these conditions the shop owner is not a popular person. But that shop owner must not just try to make a profit, he must try and guess what the new, higher price will be when he goes to re-order his goods and attempt to make provisions for that in his pricing. Add shortages and their separate effects on prices, greed, speculation and general lack of confidence in the sustainability of the country’s present path to the mix, and you have even worse inflation.
The whole mess is puzzling and stressful to everyone and the different social sectors turn on each other, as they do on the government, which is even harsher in lashing out against everyone indiscriminately.
There is simply no way that decrees and threats by Mugabe or anyone else can tame this situation, whose causes have been building up over years. Rather than a coordinated “conspiracy” against his regime, this latest manifestation of economic chaos is from disjointed forces that are finding common ground from the situation they find themselves in. So no amount of enraged thundering against such spontaneous, unplanned and informal coalitions will do any good. The more there are reports of brutality against businesspeople and orders to price goods below the cost of production or procurement, the more businesses will simply not find it worthwhile to keep their doors open.
This is not to deny that there are probably are many businesspeople in the present chaos who are indeed “profiteering” by affixing outrageously unjustifiable prices to their products. But even then, it is the situation of shortages that allows them to get away with this. Were there plenty of whatever it is they are selling, the customer would have the option to simply go and buy from a merchant with a better price.
I mentioned putting aside ideological jargon because it really doesn’t matter in this instance whether one agrees with the concept or rightness of market forces or not. The business person , or for that matter the suffering consumer who is delighted at the short-term prospect of being able to buy goods that have suddenly been decreed to be priced at 50% less, are operating at and motivated by survival imperatives, not complicated ideological theories.
Instead of being signs of strength and control, Mugabe’s enraged rantings this time are more indicative of confusion at a situation that has slipped out of control and that his usual tactics will not easily bring under control.