Gono’s forlorn struggle
RESERVE Bank governor Gideon Gono faces his sternest test when he meets International Monetary Fund (IMF) officials during his trip to the United States this week over Zimbabwe’s relations with the Bretton Woods institution.
left>Gono last met IMF officials in Washington in June in a bid to stop Zimbabwe’s expulsion from the multilateral lending institution.
After its Article IV consultation meeting on July 7, the IMF’s executive board gave Zimbabwe until December to settle its US$295 million arrears or be cashiered for non-payment.
An IMF delegation was in Zimbabwe from March 17-31 ahead of the annual Article IV consultation. It reported that Zimbabwe’s real gross domestic product had declined by about 30%.
In another report released on September 17 the IMF again said Zimbabwe’s social and economic situation continued to worsen because of poor policies. In particular, the IMF said, the disorderly implementation of the land reform programme had precipitated a sharp decline in agricultural production.
The IMF further expressed concerns about the rule of law and human rights, and lack of clarity on property rights which have severely undermined investor-confidence and fuelled capital flight and emigration.
While these issues will prove to be an encumbrance for Gono at the IMF, the real stumbling block to the normalisation of relations with the institution — and by implication other lenders — will be politics back home. Zimbabwe needs the support and goodwill of the international community before it can think about economic recovery. Donors have made it clear to the RBZ governor that there is no prospect of their resuming support until there is a domestic consensus.
Despite his best efforts Gono will not succeed without a negotiated political settlement back home. Paul Mangwana’s attempts this week to portray government’s failure to raise funds for social recovery as the product of imperialist pique only serve to underline the extent of the international isolation Zimbabwe now faces.
Since his appointment last December, Gono has been trying to improve relations with the IMF. Everybody, except for dogmatic Zanu PF mandarins, knows that this is critical, not only for balance-of-payments support but also for our international rehabilitation. But Gono has been undermined, largely by President Robert Mugabe’s obduracy.
Mugabe has shown overt hostility towards the IMF. Only last week he attacked the institution again when he knew Gono was set to meet its officials over the Zimbabwe issue.
Grandstanding on international platforms to divert attention from real problems at home will not extricate Mugabe from the consequences of his disastrous policies.
This is where the problem lies for Gono.
Government’s fundamental policy contradictions and leadership failures have caused the current problems and its obduracy has prevented the sort of reengagement that Gono is attempting to engineer. As he would be the first to admit, nothing could be more important than resumption of balance-of-payments support as the country faces an ongoing forex crunch.
Mugabe wants to spin the country to face East. He admires prospering countries like China and Malaysia and dreams of emulating their achievements without adopting their sound economic policies. China did not get to where it is by accident. It launched economic reforms in 1978 and has since then maintained, for a quarter of a century, an average 9% growth rate.
A number of countries in the Far-East that Mugabe wants to endear himself to have implemented investor-friendly regimes to enhance economic relations with the West and the rest of the world.
Economic relations forged over a long period by a combination of trade treaties, open markets as well as private and public-sector networks, are difficult to redefine overnight.
They are not responsive to doctrinaire populist posturing, reckless demagoguery or unilateral government interventions.
Ideological self-designation does not help unless backed by social delivery. That in turn requires sensible fiscal policies. South African ministers have repeatedly made this connection clear to their constituents.
Our international economic relations, especially in the current global village, will certainly not respond to Mugabe’s caprices.
Mugabe, who is evidently locked in a dangerous ideological time- warp, must get real and understand this. The sooner he does, the better.
Gono will have a hard time explaining to the IMF the contradictory signals emanating from Harare. Exactly where does Zimbabwe stand on relations with the IMF, World Bank, UNDP and other multilateral institutions whose help the governor is seeking?
Until there is a balance between political and economic imperatives, his is a forlorn struggle.