BURY the bad news is an old cliché in the journalism sector. President Emmerson Mnangagwa came out clearly that Zanu PF has embraced free market economics and no attempts at socialism — its founding principle — will be done going forward.
This was revealed in a lead story of The Herald Business’ Thursday edition. For some reason, it was not in the main paper.
The news hit the face like a gale wind if one still had illusions about what Mnangagwa’s leadership signature is. He came out clearly in his own words and through the State-controlled daily newspaper.
The ruling party, Zanu PF, since its formation in 1963 had been clear that it was a socialist party. Tomes of writings on the party’s ideology were written and distributed. Musicians like Thomas Mapfumo sang the then popular Chitima Cherusunungoko extolling the principles and virtues of socialism under Robert Mugabe leadership.
This all has changed. For the first time, Mnangagwa on record said they had gone the free market way. This is not new. In 2018, Finance minister Mthuli spoke about it in his budget statement. I then wrote in this column a piece titled: The Chicago Boys are in town. It is important to restate that the Chicago Boys is an euphemism for all economists who studied under Milton Friedman at the Chicago School of Economics and most of them went on to hold influential roles at both the International Monetary Fund and the World Bank.
The Chicago Boys went on to develop and implement economic structural adjustment programmes (SAPs) whose thrust is free market economics mainly made up of three things: deregulation, privatisation and free capital flows across borders.
All available literature to date shows that SAPs have not been successful anywhere where they were implemented, particularly in Africa and Latin America.
What did Mnangagwa exactly say? He said: “Unless you want us to introduce socialism, then we determine that if you grow an orange, we give it a price.
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“I think we are beyond that now. If you grow oranges, you can sell them at the price you want. If another person is selling oranges, the one who is cheaper will sell more oranges.
“The market determines the price of the oranges. This is where we are going and this is what we are doing. You cannot ask us to give prices of what you produce.”
It sounds all good and dandy when the example cited is an agricultural product. The big point is, Mnangagwa has said going forward producers, manufacturers and providers of goods and services have carte blanche in determining the price of their products.
Mnangagwa said, “I think in a democratic setup, in a free market set up, you can’t put the burden of prices on the government. Prices must find their levels in a free market.”
There, you have it from the horse’s mouth. Looking with the benefit of hindsight, one can see that this was long in coming. Let us look at the creation of the Mutapa Investment Fund that was done late last year. Mutapa replaced the Sovereign Wealth Fund and its mandate was expanded as more than 40 parastatals were brought under its ambit. It is, on paper, a huge conglomerate with potential to dwarf the biggest listed companies such as Econet, Delta and CBZ Bank.
The catch in the new development is Mutapa under the chief executive John Mangudya can sell the company shares or the whole companies and invest the money in foreign markets without questions and are only answerable to the President.
The Chicago Boys panacea to problems is privatisation and privatisation. So public assets will be privatised. There will be a lot of hands-off approach, deregulation and hope that the companies will thrive and they have the leeway to repatriate foreign currency to foreign lands.
Mnangagwa missed something in following the failed free market economics, except if the end game is asset stripping under the guise of privatisation.
It is interesting how the nascent industries in Zimbabwe will compete against foreign investors without protection. Zimbabwe will most likely become a supermarket economy and the leadership is not worried. That says a lot about them.
In the capitalist world, Western Europe and North America, salaries and wages for shop-floor workers are regulated, there is social housing, efficient public education, health and transport systems. The cost of fuel and gas is regulated or otherwise people would freeze during their harsh winters.
And here in Zimbabwe, where workers are underpaid and public services are dead — the leader is busy fantasising about free market economics and a government that is a bystander. This is not on.
The developments take me back to Naomi Klein’s seminal work, The Shock Doctrine and the Rise of Disaster Capitalism. It is a book worth reading at this juncture in Zimbabwe.
In the book, Klein argues that governments use moments of shock to implement unpopular policies. Mnangagwa has chosen an opportunity when everyone is busy with the RBZ monetary policy statement and the new currency to say Zimbabwe is now a free market economy. He is aware or his advisors have told him this will pass unnoticed because Zimbabweans are too busy reconciling their new bank balances and have a hard time to transact things that need small amounts like commuter omnibus fares and drinks.
By the time the shock is over, the new economic policy will be entrenched and everyone would simply accept it. Mnangagwa and Finance minister Mthuli Ncube have done their mission, to sell out the struggle and look buddies to capital at the expense of the citizens, particularly the poor, peasants and working class.
The message is clear in free market economics, each man for himself. This is not what Zimbabweans are, this is alien. We need a discussion on this — unions and civil society raise your voices to this injustice.
