Zimbabwe Review

Reflections on Zimbabwe

Archive for September, 2008

An example of the racial narrative in Western media’s coverage of Zimbabwe

Posted by CM on September 30, 2008

A recurring theme on this blog is how the British media in particular long ago descended into a deep racial miasma over Zimbabwe. Other Western media are only a little bit less so.

The reason that media goes off the handle over Zimbabwe, and over Robert Mugabe in particular, is not because the country’s problems, as bad as they are, are the worst world crisis, but because Mugabe has made no secret that the country’s troubled racial and colonial history very much inform his world view and actions. More so than any other leader in modern times, he has pilloried the creeping revision of British colonialism as a sort of gentle, benign enterprise by good white people ‘helping’ the backward natives. And he has not been shy or diplomatic in doing so.

This is unheard of, a breaking of all the unspoken rules. Of course the British understand that the Africans cannot have the view of their subjugation as being one they should remember fondly. But the ‘deal’ that almost all African countries have made with their former colonial powers is that if they behave themselves and talk and act like good boys and girls, they will be rewarded with handouts and ‘development aid.’ And the really good natives might qualify for a ‘state visit’ by some British minister. The best natives might even be invited to Buckingham Palace in order to enjoy the privilege of bowing before the English queen.

Most African leaders, including Mugabe in the days when he was still a good native, find these kinds of inducements simply irresistable. One of the continuing scars of colonialism on the African psyche is to have ambivalent feelings about the former colonial master but still pine for his approval. Mugabe only rejected this when he himself was rejected by the British for whom he once had a sick, slavish affection. He was considered as being increasingly ‘wayward’ in his speech and actions, especially against Zimbabwe’s once all-powerful white farmers.

This breaking of the rules of engagement that are accepted by most of Africa’s weak, donor-dependent states is why the British political and media establishment so revile Mugabe, not that he is a cruel, ruthless despot to his own people.

So outraged have that UK establishment become over the outspoken Mugabe they cannot think straight on anything to do with Zimbabwe. The racial feelings Mugabe stokes in them are so strong that they are largely incapable of any longer being able to analyse Zimbabwe calmly and outside the straitjacket of their deep Mugabe antipathy.

Here is an interesting story from the Scotsman newspaper. It is tragic, but also a funny illustration of what I mean about racial feelings being on full display in how much of the British and other Western media writes on a lot of aspects of The Zimbabwe Crisis.


Farmer’s daughter mauled by Zimbabwe ‘guard lions’

An eight-year old Zimbabwean girl was mauled by a lion and a lioness her white farmer father kept to deter attacks by supporters of the president, Robert Mugabe. Courtney Sparrow, who suffered a hole in her throat and serious injuries to her arms, face and head, has undergone ten hours of surgery in Milpark Hospital, Johannesburg.

Her father, Ron Sparrow, one of a handful of whites still farming in Zimbabwe, said he used the lions after the farmhouse in Zimbabwe’s south-eastern Masvingo district was subject to four attacks by so-called war veterans loyal to Mr Mugabe over the past three months.

The “war vets” began invading and appropriating white commercial farms in 2000, when there were 5,000 white farmers in Zimbabwe: now there are barely 200 on much reduced acreages.

Mr Sparrow told the Afrikaans-language newspaper Rapport that while he was away on business in neighbouring Mozambique, his wife, Margaret, had secured the farmhouse.

But two lions broke through a weak window and the lioness attacked Courtney. A domestic worker, whom Mr Sparrow did not name, was injured when she tried to rip Courtney from the lioness’s grip. When Courtney tried to run away, she was attacked by the male lion. A black farm labourer, also unnamed, beat off the lion with a stick.

Courtney was first taken to a Zimbabwean hospital but it had no painkillers.

I could have understood the ‘whiteness’ of the girl being mentioned in passing, since the angle the paper chose was to illustrate this as yet another manifestation of how ‘Mugabe’ has caused Zimbabwe’s once all-dominant, poor rich white farmers great misery. But her whiteness is not centrally material to what happened to her or to relating the import of the story. The emphasis of the fact that she is white therefore comes across as being quite heavy-handed.

The Scotsman’s chosen spin on this story is political, rather than human interest, so it is understandable that they do not delve into the irresponsible recklessness of a man endangering his family’s life by ‘protecting’ them with a pair of wild lions. But for me what leaped out of the story was the utter foolishness of what is carefully, deliberately described as the girl’s “white farmer father” and in the next paragraph, as “Ron Sparrow, one of a handful of whites still farming in Zimbabwe.”

The ‘persecuted white farmer’ angle is far more important to the story as written than the issue of what the hell Sparrow was thinking to have “kept” these dangerous predators as guard animals. But the story makes it clear that so nightmarish is the life of a white farmer in the Zimbabwe of Robert Mugabe that one such white farmer felt driven to the desperate act of ‘hiring’ a pair of untamed lions to ‘protect’ his family from Mugabe’s marauding war veterans.

The blame for the poor girl’s near fatal encounter with the lions is therefore the fault of…you guessed it…old Robert Mugabe, not her father’s dangerously reckless decision to ‘keep’ the animals. There you have it: You see what a nasty chap Mugabe is?! Geez, the fellow must be really satanic, driving innocent white farmers to depend on wild lions for a sense of security for their families.

One could ask if the lions were not much more dangerous to Sparrow’s family than any threat from ‘Mugabe’s war veterans,’ but the story did not seek to pursue what would seem an obvious and very relevant question. And while we are often told of how the irresponsible, starving natives are ill-treating and killing the country’s wildlife for meat, no question is asked about the propriety or legality of Sparrow “keeping” a pair of prized wild animals as sentries, although those reluctant sentries turned on his own child.

The race of the farm labourer who eventually beat off the lions that broke into the house to attack the child would seem to be totally irrelevant to the story as well. In any case, we all know that in the plantation model of commercial farming that existed in Zimbabwe, any labourer working for a white farmer would necessarily be black. But for some reason the writer of the story wants to be sure we are in no doubt about this, and is very careful to refer to him as “a black farm labourer.”

The white farmer, his wife and child are all humanised in the story by being named. A ‘domestic worker’ who tried to protect the child and the ‘black farm labourer’ remain nameless, identity-less. Yet these two anonymous characters are the true heroes of the piece, the literal saviours of the child from its ‘white farmer parents’ extremely poor judgment, which almost caused the death of the child.

The story calls for sympathy not so much for the girl who almost died from her parent’s irresponsibility, nor does it focus on the heroics of the two workers, both of whom we can safely assume to be black, although only explicitly (and irrelevantly) told so about the labourer, not the ‘domestic worker.’ No, the one we are strangely called to sympathise with is the white farmer, for having to go to such foolish extremes because of his suffering at the hands of Mugabe’s war veterans!

Don’t tell me the shrill telling of the story of Zimbabwe in “the international media” is mainly about concern for ‘economic collapse’ and ‘human rights’ for the natives. Subliminally or otherwise, it is centrally and primarily a deep racial narrative.

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Mugabe vs. BBC, CNN

Posted by CM on September 29, 2008

A report by AFP:

Zimbabwe’s information minister has castigated western media for their coverage of President Robert Mugabe’s speech at the UN General Assembly, state media reported Friday.

Minister Sikhanyiso Ndlovu said CNN and the BBC gave US President George W. Bush full coverage when he criticised Mugabe in his address to the Assembly this week, but denied Mugabe similar coverage for his speech.

“The so-called champions of press freedom, CNN and BBC cut the live broadcast when the President was hitting hard, full throttle, with a volley of intellectual punches left, right and centre,” Ndlovu said.

“Bush was given full coverage to demonise our President and our nation but our President was not given equal time to defend himself and his country.

“They always claim that they give balanced information through their media but they have proved themselves to be suffering from inexactitudes and stretches of imagination. I know why my predecessor threw them out of Zimbabwe.”

In his speech at the UN, Bush said the people of Zimbabwe needed help to free themselves from suffering under a “tyrannical regime.”

Mugabe hit back saying Bush “has much to atone for and very little to lecture us on the Universal Declaration of Human Rights” adding that the US leader’s hands “drip with the innocent blood of many nationalities.”

The propaganda war continues at full throttle.

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Investment rises, even in the midst of crisis

Posted by CM on September 27, 2008

No one could possibly want to invest in a country with as much bad press as Zimbabwe, could they? The ‘international media’ have been warning anyone who cares to listen that the country’s collapse will happen ‘tomorrow, next week, next month, in the next six months,  any day now,’ for close to a decade now.

And the ‘international media’ lovingly, in great detail and as regularly as possible, tells us about the social and economic hardships of life in Zimbabwe in a way they strangely forget to do in war zones like Iraq, where people have not just been experiencing hardships too, but also being killed in their thousands.

So surely no one in his right mind would invest in a country like Zimbabwe, would they? Well, according to a report about worldwide investment trends by the United Nations Development Programme, there are actually are some investors who think the country is a good bet, if only in the medium to long term. The Financial Gazette reports:

Despite the worsening economic conditions in Zimbabwe, a report by the United Nations Conference on Trade and Development (UNCTAD) has highlighted a marked improvement in foreign direct investment (FDI) in the country from US$40 million in 2006 to US$69 million last year.

These investments have, however, not translated in the overall growth of the country’s tottering economy, which means the funds could have been invested on the buoyant financial markets.

UNCTAD’s statistics came as the Zimbabwe Investment Authority (ZIA) indicated an upsurge in enquiries on the back of a political settlement reached between the country’s main political parties — ZANU-PF and the Movement for Democratic Change.  “We have seen a serious interest on Zimbabwe in the past few weeks,” said ZIA chief executive Richard Mubaiwa. “Next week in South Africa there will be a conference on investment in Zimbabwe to be held at the Development Bank of Southern Africa headquarters. It shows there is interest on Zimbabwe after the political settlement,” he added.

Confederation of Zimbabwe Industries president Callisto Jokonya revealed yesterday that the industrial representative body was due to meet a foreign investor keen to inject about US$250 million in investments in the country.

For a country of Zimbabwe’s former economic glory and its potential, a rise in investments in two years from $40 million to $69 million may seem impressive in percentage terms, but it is paltry in absolute terms, a mere shadow of the country’s boom times. And as the story guesses, much of this new investment may have been in the speculative financial markets rather than in production. The Zimbabwe Stock Exchange has weathered the country’s many storms to continue to reward investors with good, above-hyper inflation returns.

But it is the trend that is interesting. Instead of investment declining to near zero in response to the unprecedented propaganda, economic and diplomatic onslaught against not just Mugabe’s regime, but against the country itself, there are still some hard-nosed businesspeople who think Zimbabwe is an interesting place to put their money.

This partly illustrates how despite the very real hardships and decline of recent years, Zimbabwe remains more functional in some surprising ways than many ‘non-crisis’ countries that do not have such controversial rulers as it does.

If a convincing political settlement should emerge from the murky recent positions & perks deal between the political parties, the next few years should be very interesting business time in Zimbabwe.

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How Zimbabwe will influence events in a post-Mbeki South Africa

Posted by CM on September 20, 2008

One doesn’t hear South Africa referred to as ‘the rainbow nation’ very much anymore. That post-apartheid fantasy could not and did not hold for long. The realities of the leftovers of one of the world’s most brutally efficient systems of state-sponsored oppression meant that it was not realistic to hope that South Africa  could turn into a ‘non-racial’ state overnight. Still, the country’s transition from apartheid to majority rule has been remarkably smooth and peaceful considering its history.

A growing but still small clique of blacks now drive the fanciest BMWs, live in formerly white-designated areas and generally enjoy the consumerist ‘good life.’ An even smaller clique have been able to position themselves to become instant millionaires from the country’s ‘black economic empowerment (BEE) program,’ a kind of lottery where you can peddle your influence to get shares in white enterprises.

No white person will now publicly  own up to having supported apartheid, and whites are generally happy and relieved that there were no reprisals. There is of course the grumbling about the fall of ‘standards’ as the national cake that previously mainly was shared amongst a small white population now must serve the whole country, but overall, South Africa continues to be ‘successful’ in the IMF/World Bank terms by which countries are typically judged.

Both Nelson Mandela and Thabo Mbeki have received high praise for not rocking the economic boat. Investors heap praise on Mbeki for being so business-friendly, unlike  that nasty fellow to the north, Zimbabwe’s Robert Mugabe.

But there are apparently a lot of people in South Africa, including in Mbeki’s own ANC, who are not particularly impressed with the economic course the country has chartered since 1994. They would like to see a more radical, more interventionist role for the government in bringing about post-apartheid socio-economic transformation, including on issues such as land.

It is these influential power centers within the ANC who have forced Thabo Mbeki to agree to resign from the presidency a year before his second term was due to expire. They are the same power centers who are likely to make Jacob Zuma a shoo-in for president next year.

These latest political moves signal the end of the softly-softly period of post-apartheid transition. We are now going to see a dispensation in which business and investor-friendliness are not going to be necessarily regarded as positives. Of course Zuma has made the expected noises of assurance to the nervous. But as has been shown by the unprecedented, un-Africa like humiliation Mbeki has suffered in the last year at the hands of his party, Zuma is not likely to be all-powerful in the mould of Mugabe, or of African leaders in general. The ‘radicalization’ of policy under Zuma as president will be largely independent of what he says. Even if he were inclined to (and it is not clear that this would be his inclination) resist it, there is clearly strong pressure within the ANC for what are considered more ‘people-friendly’ policies.

Perhaps South Africa will find its own unique blend of satisfying the heightened pressure for faster post-apartheid change while remaining ‘business and investor’ friendly, but the two are generally considered to be opposite each other. This is likely to have profound effects on the economy as foreign investors and the still overwhelmingly white business sector hedge their bets until it is clear that South Africa is not ‘going the way of Zimbabwe.’

This phase of transition had to come, it was almost inevitable. For now, it looks like a good thing that it is coming after 16 years of the kind of classical economic ‘stability’ and ‘growth’ that outfits like the World Bank and the IMF find praiseworthy. Perhaps this drift to a more radical agenda now will be much less frightening to those who control the economy than would have been the case if it had instead been a  sudden, radical shift right from Mandela’s time at the helm in 1994.

But then again, there are those who look at Zimbabwe and say meaningful land reform and general ‘economic empowerment’ would have been more successful and less disruptive if they had been embarked on right from independence in 1980, rather than being postponed for almost 20 years. The argument is that the racists who couldn’t handle this would have left early on, and those who chose to stay would have had the long-term security of knowing that a thorny political issue had been dealt with once and for all. Whatever shock to the economy that would have been felt would have been expected at a time of overall change in both political and economic spheres, and after a spell the country would begin to work itself up and forward.

Of course we will never know if this is indeed how things would have played out. In any case, in both Zimbabwe and South Africa, it was clearly felt by the incoming majority-rule leaders that assuring local business, foreign investors and money lenders like the World Bank and the IMF that change would be slow and gradual was the best course of action to take. And indeed, the leaders were praised profusely for being ‘responsible,’ model Africans. Praise was heaped on them in Western capitals for not paying heed to any  amongst their ranks who wanted a radical new order in regards to land and the economy in general from the start.

Despite the classical economic parameters for which today’s South Africa is praised (low inflation, good FDI levels and reputation amongst investors, rising GDP, low budget deficits, etc, etc) many of its black citizens feel cheated out of ‘the good times.’ As anywhere else, many of the poorest hoped for overnight change in their fortunes. Told to be patient, they became less so as they witnessed the emergence of a small, well-connected, not-necessarily-productive black BMW/BEE brigade, flaunting their new-found wealth provocatively while they continued to be jobless, living in shacks with no running water.

It is still too early to know what kind of model of economic recovery Zimbabwe will undergo in the coming months and years after its recent political settlement. It is not hard to guess that there will be pressure on the coalition government to reverse some of the ’empowerment laws’ of recent years in order for aid and investment to flow. But it will be difficult or impossible to reverse Mugabe’s land reform programme, for many reasons. Former white farmers and many in the British power structures would be unhappy with this, but they would learn to live with this reality of Southern Africa’s continuing winds of post-colonial change. They don’t have much choice.

It would be an interesting Zimbabwe that began a slow recovery with foreign assistance, but with much of the economy in black hands as a result of Mugabe’s aggressive changes over the years. Some of them might be softened, but it would be a fundamentally changed Zimbabwe in which foreign investors were returning if much of the empowerment changes of recent years were largely left in place, such as the requirement for foreigners to give a certain minimum stake to locals.

Almost inevitably, agricultural recovery will largely consist of capacitating the black farmers who are allowed to keep their land, rather than handing it back to the previous white owners. It may take many years, but this could be the start of a new black-dominated commercial farming model.

What all this could mean is that Zimbabwe would be rising from its ashes at a time when South Africa is under-going its first experiments with really widespread and deep economic transformation. Such fundamental changes are hard to manage smoothly, so it may very well be that the country would begin to experience Zimbabwe-like difficulties, even if they never get anywhere near as bad as at its northern neighbour’s lowest point.

Zimbabwe might well be beginning to rise up from its long, inefficient, costly and painful process of post-colonial economic transformation at a time when South Africa is just beginning its own in earnest. That would create many interesting contrasts and ironies. One hopes that South Africa’s will not be as costly and painful as Zimbabwe’s, but the nature of this kind of change almost rules out a flawlessly smooth process.

Many aspects of it will be experimental with a lot of ‘honest’ mistakes made. But it could also be driven by  hotheads to whom a smooth process is far less important than scoring ideological points, settling political scores and just appearing romantically ‘radical.’ All these  have been among the elements of Zimbabwe’s experience, and their historical/political/racial/ideological drivers exist as much in South Africa as they did in Zimbabwe; perhaps even more so.

The tired, weak and dilapidated Zimbabwe of today looks like a ‘failed state,’ especially compared to its robust neighbour South Africa. But could it perhaps now be in a position to rise up from a difficult, not entirely well-managed period of wrenching economic transformation at the same time that South Africa under Zuma will just be entering its own era of an attempt at more meaningful change than has been experienced up to now?

If so, the Zimbabwe that is such a mess today could in a few years of well-managed recovery (obviously a very big ‘if’) look like an attractive model of radical transformation to be adopted and modified by impatient South African radicals un-impressed by the dry indices by which their country is today praised as being ‘successful.’ Those indices ignore the anger and cynicism in the townships, rural areas and the sectors of the country that have not yet benefited from the ‘rainbow nation’ benefits of the privileged few.

There are uncertain but interesting, hot times ahead in southern Africa.

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After deal-signing, forwards or backwards for Zimbabwe?

Posted by CM on September 20, 2008

Normality and stability in their broad sense are obvious outcomes all Zimbabweans hope for after the recently signed political deal between the country’s political parties brokered by South African president Thabo Mbeki.

But there seems to be no unanimity about the details of the nation Zimbabwe seeks to now become, beyond obvious things like goods in the shops at reasonable prices, low inflation, more employment opportunities and so forth. None of these are minor goals to aim for, and a government that is able to deliver any of these in  the next few years would have done very well.

Prime minister-designate Morgan Tsvangrai began his term of office by pleading for international aid. No doubt a lot of assistance from the world will be needed for years to come. But by making this his first serious indication of what his orientation is to problem-solving, he suggests that he has no vision of Zimbabwe as anything other than a donor-dependent banana republic, on a continent already full of such weak, under-achieving states.

There are many examples in Africa of countries that are darlings of ‘the donors’ for one reason or another, but that are not substanitally ‘developing.’ That requires hard and smart work by the public and private sectors working together, as we have seen from the many examples of real ‘development’ in Asia.

Africa has become so donor-dependent structurally and psychologically that aid has become one of the most insidious ways of preventing African progress, rather than of promoting it. The continent’s best and brightest and its most powerful, people like Tsvangirai, spend more time and energy trying to figure out how to get ‘aid’ from Europe and the U.S. than they do on how to make their economies more productive.

Robert Mugabe’s many sins and errors are well known and do not need repeating here. But one of his legacies will be daring to try to effect the idea that Africans must be masters of their economic destiny, and that they need to contemplate possibly enduring hardship to overcome the interests who would rather keep them dependent and weak. That ideal was soon over-run by cronyism, cynicism and the sheer failure to achieve the noble goals that stirred the hearts of many Africans (and enraged many Westerners for all sorts of reasons.)

But if Mugabe the man is now fading into political oblivion, rejected as a despot, a failure and an anachronism, his original focus on genuine African economic empowerment still rings as true as ever. Due in large part to his own excesses, it will take a long time for the positive parts of his legacy to be separated from the negatives and the failures, but it will happen eventually.

Tsvangirai’s conventional, dull vision of aid-dependent recovery may bring relatively quick relief from the deep economic pain being suffered by Zimbabweans. If so, he will receive the accolades of grateful Zimbabweans who have been reeling from a rapidly imploding economy for a decade. And he will be a hero to Westerners uncomfortable with Mugabe’s sharp, continuous recantations of the need to address the many lingering aspects of the unfinished business of colonial exploitation and oppression, which is ‘ancient history’ to Westerners but very much a part of their present-day reality for Africans.

A West relieved at the exit or (hoped for) sidelining of Mugabe will certainly back up its gratitude to Tsvangirai with all sorts of aid. It will be partly humanitarian, partly ‘thank you Tsvangirai for getting rid of or weakening Mugabe,’ and also a way of making sure the new government is malleable.

But this route to ‘normality’ will not and cannot address the underlying structural economic and developmental issues of countries like Zimbabwe. Who really owns the wealth of the land? From what date in the past do we effect ‘the rule of law’ (such as who owns what land?). What is an ‘equitable’ sharing of riskand profit between citizens and foreign investors? And so on and so forth.

Mugabe made his answers to these sorts of questions very clear. His answers and the way he tried to effect them delighted many Zimbabweans and Africans, as much as they frightened and enraged many Britons and other Westerners. For a whole host of reasons, Mugabe’s populist answers to the deep questions of the post-colonial era have not in the short term translated to the hoped-for results.

This makes it easy for Tsvangirai to come in with ‘I hold the keys to Western aid’ as his main trump card. Even among those who recognise the dangers of this approach, disgust with Mugabe and despair at the hardships of recent years has meant many Zimbabweans look to Tsvangirai’s implied promise of aid-funded relief and ‘recovery’ with anticipation.

This is quite understandable, but it does not in any way solve or remove the underlying difficult issues that contributed to Zimbabwe finding itself where it is now. After the euphoria of achieving a kind of ‘normality’ has abated, these questions will arise again, along with the ghost of Mugabe.

We have the strange situation where in the short recent term Zimbabwe has been very rapidly sliding backwards. Yet in forcing the society to ask difficult questions that go far back into the past with a view to finding answers for the future, the society was setting a stronger foundation for that future. A strong economic foundation partly rests on more risk-taking and wealth-creation by Zimbabweans; more ‘ownership’ of the process of ‘development’ by the locals than we have generally seen in a weak, donor-dependent Africa.

Mugabe largely failed to back up his empowerment rhetoric with practical, successful examples of it. But it is to take the wrong lesson to abandon the dream, rather than to pick it apart for where it went wrong and try to fix it. Tsvangirai would be relieving the immediate problems by attracting a lot of ‘donor aid,’ but not addressing the long-term issues of how to overcome the complex legacies of colonialism (land ownership patterns being just the most obvious one), and how to spur true ‘development’ and empowerment based on production-led economic growth.

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Nothing learned about price controls in many years

Posted by CM on September 2, 2008

The Financial Gazette in a recent issue had an article with the heading Cement firms on brink of closure.

There have been so many of these ‘collapse’ speculations about various sectors  of the Zimbabwean economy over the last ten years that I tend to take them with a grain of salt. Which is not to deny that things are extremely difficult for companies as well as for individuals trying to stay afloat. But the cement industry, and countless others, have been ‘on brink of collapse’ for years now but somehow keep going, holding on for better times.

The immediate cause of this ‘collapse’ story is a familiar one: price controls. For political reasons, government insists on dictating the costs that companies should charge for various goods and services, even if those mandated prices are below the cost of production. It is essentially an order for companies to operate at a loss.

The argument argues that the price caps would have been reasonably imposed to prevent exploitation by businesses able to charge as they like in a hyper-inflationary environment compounded by shortages of many goods.

Of course the arguments on both sides are much more involved than this, but the details of those contrasting arguments are not the subject of this post.

Excerpts:

The selling price of cement is set by the government-run National Incomes and Pricing Commission (NIPC), which accuses companies of hiking prices to foment public anger against President Robert Mugabe’s administration, charges denied by industrialists.

Despite the hyperinflation and a rapidly deteriorating exchange rate, there have been inordinate delays by the Commission in reviewing the price of cement, resulting in the cement price falling well below cost.

The industry, dominated by Pretoria Portland Cement (PPC), Circle Cement and Sino, has been pushed into a situation where it is no longer viable to manufacture cement. Currently, the selling price of cement is less than 10 percent of the cost of production.
The industry, which is the lifeblood of the construction industry, has in the past, and is again, being forced into considerable borrowings from the banks, at punitive interest rates to settle creditors accounts, while the NIPC debates the setting of a revised cement price. These increased borrowing costs will have to be recovered from the new price — thus pushing up the price of cement in the long run, according to industry sources.

“This is not to the benefit of the producers or the consumers,” said PPC finance director Gavin Stephens when contacted for comment this week. “Furthermore, when the NIPC does finally grant an increase, the hike in the selling price is considerable, causing major hardship to consumers. Small regular increments would be of benefit to both the consumer and the producer,” he added.

Investigations by The Financial Gazette revealed that the Commission has in the past approved increases in the prices of power (15, 419 percent), coal (12,700 percent), slag (8,630 percent), rail transport (18,000 percent), gypsum (5,064 percent), which are critical inputs in the production of cement. During the period of these input price hikes, cement price was only let up from $500 a bag to $1 000 a bag.

Industry sources said at the current price, manufacturers couldn’t produce because they cannot afford the input costs.

A property magnate alleged that cement manufacturers were ex-porting clinker, a critical raw material in the production of cement, he-nce the current shortages. Cement producers, it is further alleged, were exporting cliner to earn foreign currency required to import spares and replace antiquated machinery. It is also alleged that cement manufacturers had resorted to charging in foreign currency in order to circumvent the price controls and remain viable.

A bag of cement, which is only found on the illegal parallel market, ranges between US$10 and US$15.

Except for the figures, almost every detail  of this story could have been recycled from 10 years ago. Cement has been available on the regular market only in fits and starts for at least that long, with some combination of all the reasons given in this story blamed for the shortages and the regular, huge price increases.

What is depressing about the situation is its dull same-ness. Seemingly very little has been learned about the most effective ways to do so if government feels compelled to interfere with supply and demand.

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Future-looking investors look beyond the headlines

Posted by CM on September 2, 2008

The brief excitement about a Zimbabwean political settlement of some sort being near is beginning to fade. Even with a slight opposition majority in parliament, it does not look like anything practical is going to change except perhaps for the worse.

The Mugabe government continues in power with an astonishing detachment at the economy’s deep problems and the tremendous suffering faced by the majority of people. The reports of the extent of the shortage of the staple maize meal, almost nine months before the next harvest (whose size and quality cannot be guaranteed to relieve the present food crisis) are alarming.

But for investors, Zimbabwe’s interest is in its promise; the potential spoils it offers for those who are able to take a long term view.

I am continually amazed at the number of investors who overlook the sustained negative international news blitz about the country to look for and try to advantageously position themselves for a better day.

The latest example of this type of investor is carried in a Reuters article entitled Bidvest profit up 10 pct, eyes Zimbabwe, U.S.

Excerpts:

South Africa’s biggest company by revenues, services group Bidvest, posted a 10.1 percent rise in annual profit on Monday and said troubled Zimbabwe is among the places where it is looking for growth.

Chief Executive Brian Joffe said Bidvest was looking to invest and would raise about 600 million rand ($78.04 million) from selling its stake in waste management group Enviroserv, which has received a private equity buyout offer.

“Internationally speaking, we are looking to expand our food service business and we had one or two opportunities we are currently pursuing,” he said.

Bidvest already operates in Zimbabwe and is optimistic about growth in the southern African country, which is mired in a political crisis and grappling with hyperinflation.

“It’s premature to talk about it,” Joffe said. “We are still looking for opportunities in the U.S. We are definitely looking for opportunities in Zimbabwe.”

Hard-headed investors do not talk like this out of sentimentality or political expediency. They would have carefully looked beyond the heated headlines of the day to see the bright prospects of tomorrow.

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Who holidays in Zimbabwe?

Posted by CM on September 2, 2008

The British government has just lifted its warning to its citizens to refrain from all but ‘essential’ travel to Zimbabwe. Election-associated violence has waned considerably in the last few weeks, even if the long-running political impasse and economic crisis drag on.

During the height of the election violence foreigners would have been well advised to avoid potentially troublesome areas and situations; to make sure they did not put themselves in situations in which they might be regarded as being political ‘combatants’ for one side or the other. But apart from taking reasonable precautions similar to those that would be advisable in any country holding heated elections, the truth is that British tourists minding their own business would not have been in any significant degree of danger.

Yet the travel warning was understandable  given the political tensions between the governments of the two countries, and the UK media’s portrayal of the country as a war zone (incorrect, perhaps deliberately) in addition to being an economic mess (true.)

On August 27 the BBC had a feature article entitled ‘Who goes on holiday to Zimbabwe?

It’s introduction was vintage UK media stuff: ….economy shattered, poverty endemic, political strife and repression widespread, once described as an “outpost of tyranny” by the US.

So why would anybody go there?

The story gave ‘…the magnificent Victoria Falls, the ruins of Great Zimbabwe and herds of roaming wildlife’ as part of the answer. It cites Zimbabwe Tourism Authority figures of more than 218,000 tourists from outside Africa entering the country last year, some 109,119 from Europe. These figures are said to show a gradual recovery in tourist arrivals, with a  claimed 42% rise in visitors from the Middle East.

As well as those attracted to Zimbabwe by history-in-the-making, the country’s wildlife still acts as a draw for hunters, those on safari and volunteers on working holidays.

The 2007 ZTA visitor numbers are compared to those of 1999, ‘before the government began its forced seizures of white-owned commercial farms in 2000.’ Then the ZTA recorded 597,000 overseas arrivals. But by 2005 the number of visitors from outside Africa was down to a low of 201,000.

Harare economist John Robertson is quoted as throwing doubt on the ZTA’s figures. “I don’t believe them,” he says, making the point that the government is “desperate to express what is happening in more upbeat terms. We have very, very under-occupied hotels, a very low degree of trade of tourist type items – those shops are barely functioning.”

I am in no position to say anything about the veracity or otherwise of the ZTA’s figures. Robertson bases his doubts on anecdotal evidence, but gives us nothing solid to indicate if his doubts are any more credible than the ZTA’s figures.

But then I stumbled on a completely different set of tourist arrivals figures to muddy things even more. The Southern Africa Trade Hub, a US-funded trade promotion body based in Botswana, has an article about tourism in the region, and about how operators are trying to position themselves to benefit from the expected influx of visitor for the 2010 soccer World Cup to be held in South Africa.

Highlights of Tourism’s Performance in 2007, South African Tourism, May 2008.

Tourist Arrivals by Country, 2007

Country, Arrivals, % change ‘06-’07
Angola                                       31,227                                                     10.2%
Botswana                                  818,403                                                       7.3%
Lesotho                                 2,170,074                                                     13.4%
Malawi                                      147,246                                                     18.2%
Mauritius                                    14,663                                                     14.7%
Mozambique                          1,084,157                                                     18.2%
Namibia                                    220,535                                                     -1.6%
Swaziland                               1,039,233                                                       4.8%
Zambia                                      183,056                                                      14.6%
Zimbabwe                                 964,027                                                      -1.7%

So here is an alternative source of information, although there is no detail provided about the source of the data. But here we have figures actually showing a significantly higher number of tourist arrivals to Zimbabwe for 2007 than the 208,000 of the ZTA. It must be kept in mind that we have been told the ZTA’s figures are for arrivals ‘from outside Africa’ while the South African figures are un-qualified.

Presumably the S. African figures are for all tourist arrivals without regard to origin. South Africans would be a significant proportion of those numbers, but I wonder if this could account for the huge difference (208,000 according to the ZTA, 964,000 according to the S. African figures.)

I cannot recall the details, but I seem to remember that a few years ago there was some acrimonius disagreement between the ZTA and a compiler of regional tourist figures (who could be the same one involved here) over how those figures were arrived at. I think at that time the ZTA was protesting that the regional body’s tourist figures for Zimbabwe were much lower than its own data showed.

But if anywhere near accurate, the latter figure for 2007 suggests a tourism sector that is not doing too shabbily compared to neighbouring countries that are not considered to be ‘in crisis,’ and that do not have the bad international ‘brand’ Zimbabwe does.

The picture that emerges from the two sets of figures and the counter-claims is too confusing to lead to any clear conclusion about just what Zimbabwe’s true tourism situation is.

Just another example of how the true overall situation in Zimbabwe depends on who you ask, and to some extent on your own biases and on which version of events who you are more inclined to believe.

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