Gono: If one man cannot “kill” an economy, neither can one man “save” it

Reserve Bank Of Zimbabwe Gideon Gono’s power and influence have waned in the wake of the inclusive government that has brought in MDC officials into important economic portfolios. Gono may still hold on to his title and position, but there is little doubt that his power has diminished considerably.

The once unchallengeable Gono has now found himself in the new and unfamiliar role of having all his decisions and opinions second-guessed and often derided. The man who the Zimbabwean media once portrayed as a miracle worker who could walk on water now struggles to defend the legacy of his bygone hey days.

Gono’s defence of his many controversial actions of recent years as central banker during the country’s worst period of hyper-inflation is essentially that no matter how bad things were, if it were not for his efforts they would have been far worse. He feels hurt and disappointed that Zimbabweans are not grateful to him for saving them from a much worse fate then they experienced during the tough times whose worst months were in 2008.

Here is an interesting example of his thinking about this, from a recent interview:

…Gono, who presided over the collapse of the local currency, insisted he was not to blame for “killing” the nation’s economy…He again rejected calls for his resignation after President Robert Mugabe’s unilateral decision to appoint him to a new five-year term last year — one of the major disputes facing the eight-month-old unity government.

“The immorality and irrationality of the whole argument is that ‘Gono must go because he printed money and he killed this economy. That’s a white lie because no single individual can harm or kill an economy,” he said.

Gono also stands accused of siphoning off state money into secret accounts in Asia and Europe, a charge he denies.

“Whatever I did had authorisation from the government of the day,” said Gono, a former commercial banker. He described his job as “a plumber mending burst pipes. I prevented this country from descending into chaos like Somalia.”

No doubt Gono has been misunderstood in many ways, although it is far from clear in which ones. But  it is also probably true that by haughtily and flauntingly wielding as much power over the economy as he was clearly allowed to do for a while, as well as through the media over-exposure he seemed to so love, he may well have brought on to himself the genesis of his present public relations troubles.

Poor embattled Gono is no doubt quite correct to argue that he could not have single-handedly “killed” the Zimbabwean economy. Whether he indeed prevented it from desceding into the chaos of Somalia is subject to debate and will likely never be resolved.

But I found an interesting insight into Gono’s mindset. It is that he denies an individual can kill an economy, but then seems to go on to claim that an individual can save it, and that this heroic one-man deed is his real legacy to Zimbabwe. There seems a contradiction in Gono’s words in what it is possible for one man to do to/for an economy then!

I wonder if this mix of immodesty and refusal to take responsibility for anything that went wrong under one’s watch while ascribing to oneself superhuman positive achievements are not part of the attitude that have contributed both to Gono’s meteoric rise as well as his dramatic fall. I think there are lots of lessons in there about the deadly cocktail of overarching ego mixed with almost unfettered power. They can quickly take you up, but they can just as quickly bring you down.

Investment rises, even in the midst of crisis

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.

Long predicted Zimbabwe collapse now postponed to 2008!

Zimbabwe has been said to be “on the brink of collapse” for so long now that the period must rate as yet another dubious record the country holds.

The predictions, usually from “authoritative” media, analysts and diplomats ( almost always Western, by some strange coincidence) have been made regularly for years now, ever since the country’s inflation rate was in the mere hundreds.

Former U.S. ambassador to Zimbabwe Christopher Dell predicted some big crash by the end of this year, so let us see what happens in the next ten weeks.

Now the crystal ball gazers are not quite as confident and willing to be identified, as the following recent (early October, 2007) report by South Africa’s IOL indicates:

Zimbabwe is unlikely to survive another year of the chronic poverty and hyperinflation it has suffered under President Robert Mugabe’s rule, a senior British diplomatic official has said.

Britain has been increasingly severe in its criticisms of Mugabe’s regime. Last week Prime Minister Gordon Brown threatened to boycott a summit of European and African leaders slated for December if Mugabe attends.

Official inflation in Zimbabwe stands at nearly 7 000 percent, the highest in the world. Independent estimates put real inflation closer to 25,000 percent and the International Monetary Fund has forecast it reaching 100 000 percent by the end of the year.

Large swathes of the working population were fleeing every day, and within a year Zimbabwe’s “difficulties will be extreme,” said the British official, who spoke on condition of anonymity because he was not authorised to speak publicly.

Zimbabwean opposition leader “Morgan Tsvangirai said to me there is no food in the country. That is a slight exaggeration but only a slight exaggeration,” he said.

Obviously it was a slow day, both at IOL and at the British embassy, because there is no story here! There is absolutely nothing new to justify an article, nor the alleged diplomat’s claimed wish for anonymity (I am assuming he actually exists, and that this is not one of those made-up stories.)

On second thoughts, there is a new angle here after all: The Zimbabwe collapse, predicted as being “just around the corner” for many years by the likes of the shy/phantom British diplomat, has now been officially postponed to 2008!

There are some amusing aspects of “the Zimbabwe crisis” after all!