Mugabe's re-election could spell disaster for private enterprise

Mugabe's re-election could spell disaster for private enterprise

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By Mutumwa D. Mawere
(www.mmawere.com)

ON SATURDAY, Zimbabwe will decide on the fate of Zanu PF and President Robert Mugabe. President Mugabe, in power for the past 28 years, believes sincerely that he is best positioned to lead the country for the next five years and that at 84 years old, age is irrelevant.

There are four presidential candidates and only President Mugabe can boast of experience and yet Zimbabweans find themselves more vulnerable and less secure about the future than at independence in 1980.

It is common knowledge that no nation can prosper if its values, principles and morality are founded on an ideology that undermines its own tax base. Without income, no state can hope to benefit from income tax and the principal purpose of any government necessarily becomes to provide an enabling environment to allow citizens both natural and artificial to pursue their economic interests while at the same time contributing to the national pool through taxes.

The colonial state was underpinned by a capitalist ideology and President Mugabe, like many of his contemporaries, genuinely believed at independence that a post-colonial state required a different ideology to inform its programs and policies.

Although ideology has played second fiddle to personality issues, what is clear is that this election is also a referendum on whether Zimbabweans are ready for five more years of President Mugabe’s version of socialism. The role of business in a socialist order is well established as is the fact that under such order, resources will not be allocated efficiently.

If one accepts that a functioning state requires resources, principally from citizens, it is acknowledged that under a socialist order, such resources will not emanate from citizens. Rather, it is expected that the state and its organs will be engines of growth. Citizens are then expected to work for the state while accepting that personal growth is not on offer.

President Mugabe has many supporters in advancing the argument that the state should be at the centre of change in nation building. He also has many admirers when he argues that the market system should not be trusted as a resource allocation mechanism.

Zimbabwe finds itself in 2008 mired in an unprecedented economic crisis characterised by record breaking inflation, massive unemployment and business confidence at its lowest ebb. President Mugabe is convinced that Zimbabwe, like him, is a victim of a regime change agenda and, therefore, it would not be in the national interest if he was removed from office.

President Mugabe’s argument is persuasive to many when it is located in the land reform debate. It has been naively argued that if President Mugabe had not upset the apple card by implementing the land reform program, Zimbabwe would not be in its current state. By expropriating land from white Zimbabweans, President Mugabe has made the argument that he managed to successfully alienate MDC from its core constituency.

If the land reform was an effective tool for disturbing the regime change agenda, President Mugabe is now arguing that the indigenisation law coupled with price controls will achieve the same purpose of creating a so-called compliant and patriotic business sector. It is no wonder then that President Mugabe renewed his warning that anyone operating a business in Zimbabwe who operates independently of the state by pricing commodities using the market system will risk losing their business.

In making this threat, it is significant that Mugabe effectively made the concession that the very private sector he is threatening have been responsible for producing what the country has been feeding on. Now he wants to replace such actors with imaginary indigenous players at a time when the country can barely feed itself.

If Mugabe was a good general for the economic emancipation war that he has now belatedly adopted as his own, he should have anticipated that prices will increase if the supply side is challenged by bad policies and structural impediments. It would surprise no rational person that a capitalist system that Zimbabwe inherited requires a market friendly pricing system. No successful economy exists to my knowledge that uses price controls as a policy instrument.

What is perceived to be market failure by President Mugabe may have absolutely nothing to do with the behaviour of non-state actors, but rather needs to be located squarely at the government’s corner.

In targeting wealth creators, Mugabe is making the argument that Zimbabwe does not really need risk takers and can sustain a civilisation in which the state will be the provider without providing any explanation on the source of funds. President Mugabe has no qualms about mortgaging the future of the country to the Chinese, but appears to have a problem with actors who have been operating in Zimbabwe for the past 28 years by contributing to the tax base. One has to ask the question of where President Mugabe’s government has been getting resources to run the state during the last 28 years.

It is common knowledge that the so-called 400 British companies still operating in Zimbabwe have not been able to freely repatriate dividends to their parent companies, and if anything, their shareholders have been badly treated. Now they face an uncertain future if President Mugabe is re-elected.

The implications of the land reform program on employment have been well documented. However, President Mugabe appears to be unaware that the maize that Zimbabwe is currently importing from Zambia has been produced by no other than victims of the land reform program. Is it not laughable that President Mugabe now wants to export jobs once again by using the same tactics and strategies against the private sector?

If President Mugabe is not shown a red card at the elections, it is clear that a bumpy ride awaits the private sector and the risk of Zimbabwe sinking further into a mess is higher.

Mutumwa Mawere's weekly column is published on New Zimbabwe.com every Monday. You can contact him at: mmawere@global.co.za
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