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Zimbabwe: Banana republic or casino economy?
(www.mmawere.com)
Posted
to the web: 04/01/2009 18:43:37
THE advent of the New Year provides us with yet another opportunity
to reflect on what has gone wrong in Zimbabwe.
Reserve Bank governor Gideon Gono, for self-serving purposes, has chosen to describe the economy that he inherited five years ago as a “casino economy” without addressing his role in undermining the rule of law.
Equally, the implementation of the GPA signed on September 15, 2008, is stalled over a dispute regarding the sharing of executive power but what is significant is that the state machinery continues to be used as a vehicle for intimidating opponents and theft of private property in violation of the provisions of the Constitution.
Whether Zimbabwe at this defining hour can be described as a “casino economy” or a “banana republic” will continue to be a subject for discussion.
A banana republic is used typically to describe a small country that is economically dependent on a single export commodity, such as bananas, and is typically governed by a dictator or the armed forces.
Although President Mugabe would argue that he is not a dictator, the victims of the regime over the last 28 years would tell a different story starting from Edgar Tekere to Jestine Mukoko.
During the last 24 months, I have chosen to devote a portion of my time to share my insights into various subjects including the political economy of Zimbabwe in the firm belief that I also have an obligation to contribute to the conversations of our time.
President Mugabe has framed the conversation for Zimbabweans around the issue of race and colonial injustice.
He has attempted to justify his administration’s actions on the basis that there is no alternative to the policies adopted given the purported intransigency of the white propertied class to issue around economic empowerment.
By craftily framing the issue around race, Mugabe has many supporters on the controversial land reform issue. Having framed himself as the last defender of indigenous rights and not the “Last King of Scotland”, Mugabe has sought to argue that the justice of his cause is the justice of his methods, and more significantly that the end justifies the means.
In the final analysis, the argument presented is that blacks will control the land under the umbrella of a benevolent government whose centre of gravity must never be allowed to shift from the true liberators - Zanu PF.
For many Zimbabweans, this argument makes sense to the extent that there is real fear that any regime change would mean a reversal of the so-called gains of the revolution.
To the extent that the majority of the Zimbabwean population is rural-based, such an argument makes sense.
After making the argument that all whites who own property in Zimbabwe must have stolen without compensation from the rightful owners, Zanu PF effectively took control of the political agenda and the kind of change that Zimbabweans ought to see.
It has, therefore, been easy for opponents to be labelled as apologists of the Western agenda. As a businessman, I also could not escape labelling only that I fell into the category of “parasitic capitalist” or a “robber baron”.
For how could I claim to have acquired significant assets without the active support of the government of Zimbabwe? Even if the acquisition was legitimate as confirmed by the recent ruling of the English Courts, I could not escape being labelled a “thief” merely for being in big business.
Gono has sought to defend his conduct as the Governor but nowhere in his book Zimbabwe's Casino Economy: Extra-ordinary Measures for Extra-ordinary Challenges does he mention that the government of Zimbabwe is dirty and often approaches the courts with dirty hands.
Many have questioned my motives in writing about my own story and, indeed, the calls for me not to write anything have come from the unlikely of all sources including the very people who claim to be championing the change agenda.
I have not been distracted and have continued to tell the story in the belief that I owe it to future generations to know the real stories of our time lest they will conclude that the actions of the government were justified to the extent that they are intended to correct a colonial injury.
Many have wondered how the state came to control my companies through the appointment by Patrick Chinamasa of an Administrator, Afaras Gwaradzimba, on September 14, 2004, although he started his duties on September 7, 2004.
The role of the RBZ in making this possible has not been previously unpacked and as we read the propaganda from Gono, we also have to appreciate his personal role in crystallising the formation of a “casino economy”.
He has sought to argue opportunistically that Zimbabwe is a victim of Western imposed sanctions and, therefore, his actions must be evaluated with this background in mind.
However, I should like to believe that the actions of the government of Zimbabwe in respect of my affairs were not sanctions-related but driven by some ulterior motives.
The primary relevant jurisdictional fact in my dispute with the government of Zimbabwe in so far the nationalisation of my assets is that it was the contention of the President that SMM Holdings Private Limited (SMM) was a state-indebted company that was unable or was unlikely as at September 6, 2004, when the expropriation decree was promulgated, to be able to make any repayment of a credit to it from public funds on a date when repayment is due or the state has become or likely to become liable to make any payment from public funds in terms of a guarantee issued in favour of a state-indebted company.
For those who have the time to read the court documents on this matter, it will become apparent that the Minister of Justice relied on a series of commercial debts that the company borrowed in the ordinary course of business. Such funds included amounts disbursed through the commercial banks as Productive Sector Facilities that were introduced by the RBZ after Gono assumed office.
In respect of all the indebtedness on which Chinamasa purportedly relied upon in issuing the reconstruction order, none falls within the concept of the debts required to enable a reconstruction order to be issued. SMM was not a “state-indebted” company.
On January 7, 2006 or 15 months after the placement of SMM under reconstruction, Parmanathan Mariemuthu, a director of SMM’s English parent company, SMM Holdings Limited (SMMH), wrote a letter seeking to establish the basis upon which loans advanced by commercial banks were now treated as if they originated from the state.
After the UK judgment, I took the time to review the correspondence that became available to ARL challenging the factual and legal basis of the contention by the government of Zimbabwe that as at September 6 SMM was indebted to it in respect of commercial loans that were granted by banks.
It was always clear to the government that there was no legal basis for the placement of SMM under the control of a state-appointed administrator without the active support of Gono.
So precisely how was Gono supposed to assist? He then constructed a scenario that converted commercial loans into state loans, albeit after the appointment of the administrator, confirming that at the time SMM was placed under reconstruction, there was no debt legally due to the state directly or indirectly through the RBZ.
The construction must have gone as follows:
1. On September 20, 2004, Elisha Mushayakarara, CEO of Finhold, writes a letter to Gono regarding a disbursement of Z$30 billion that took place prior the placement of SMM under reconstruction.
2. On November 3, 2004, Winnie Mushipe writes a letter to Mr. N. Molai of Zimbank confirming the concocted Gono version that all the funds disbursed under the Productive Sector Facility were now to be recorded not as a liability in Zimbank’s books.
3. Through this
rewriting of the facts of the SMM, Gono had created a nexus for state
intervention fully knowing that this was a manufactured outcome.
Copies of the above-mentioned letters are attachments to Mariemuthu’s
letter referred to above.
On January 26, 2006, well after the confirmation of the reconstruction scheme by a Zimbabwean court order, Fortune Chasi on behalf of the RBZ confirmed Gono’s version to the effect that commercial loans advanced to SMM in the ordinary course of business were unilaterally converted to direct RBZ exposure.
On February 13, 2006, Mariemuthu responded to Chasi requesting clarification of issues arising from his letter of January 26.
In October 2007, ARL’s lawyers were able to obtain letters from SMM’s banks confirming that the loans were not due and payable at the time SMM was placed under reconstruction. What emerges from the letters is the direct role of Gono and Gwaradzimba in manufacturing the circumstances that justified the intervention of the state.
Gono has sought to argue that he inherited a dysfunctional economy infested by thieves and yet the evidence in the documents available upon request through my email confirms the contrary. Here we see a state institution being abused in expropriatory activities.
As we start a new year, I though this information would assist in better evaluating whether, in fact, President Mugabe erred in extending the term of Gono when the evidence is available is that he will stop at nothing to create circumstances and even manufacture facts that suit the version that he should be a trusted “cop”.
As I reflect on the events of last year, I am satisfied that the battles of the last four years have been worthwhile not only for me personally but in helping expose the often misunderstood and ignored corporate tyranny that has been prosecuted principally by Gono over the last five years to distract attention from his misguided policies.
I do hope that people will take the time to read the correspondence and I have no doubt that the conclusions drawn will confirm a deeply held view that an inclusive government that is designed to gloss over some of the glaring abuses of the state is not only a danger to the future of the country but potentially undermines the integrity of those who have dedicated their lives to a genuine change agenda.
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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