PRESIDENT Robert Mugabe will come face-to-face with the devastating consequences of misrule and economic mismanagement when he participates in the 17th Domestic Non-Aligned Summit in Venezuela this week.
By Kudzai Kuwaza
The deepening economic crisis in the Latin American country is characterised by angry protests by citizens calling for the country’s leader Nicholas Maduro to step down. The government blames an economic war by foes and “imperialists” as one of the reasons why the oil-rich state is in economic dire straits.
A severe recession now in its third year, triple-digit inflation, and a widespread shortage of basic commodities are all indicators that the centerpiece of the Bolivarian Revolution is in the throes of an economic meltdown. Prices of foodstuffs have shot up frighteningly, with a crate of eggs costing a whopping US$200.
Even toilet paper has become a scarce commodity with Trinidad and Tobago derisively offering Venezuela a tissue-for-oil barter deal. Opposition calls for the country’s leader to step down as a result of the economic collapse, which they say emanates from 17 years of failed socialist policies and entrenched corruption, have become more strident, resulting in bloody clashes between protestors and the police.
The Venezuelan economy shrank by 5,7% last year and it is being projected to contract by another 8% in 2016. Meanwhile, inflation is raging wildly out of control. According to the International Monetary Fund (IMF), the official inflation rate in Venezuela will be somewhere around 720% this year and 2 200% next year.
The problems faced by Maduro are strikingly similar to those confronting Mugabe. The food shortages and price controls currently rocking Venezuela also give Mugabe a deep sense of déjà vu when he attends the summit.
It also serves as a warning and a fresh reminder to him that Zimbabwe could easily find itself on a similar boat again after the 2008 implosion, given the alarming economic decline in the southern African country.
The economic crisis demonstrated by empty shelves in Venezuelan supermarkets, the proliferation of the black market for basic goods, high levels of inflation as well as the government’s effort to control prices will be eerily familiar to Mugabe who presided over a similar crisis in 2008 which led to his first-round defeat at the hands of MDC-T leader Morgan Tsvangirai in the disputed presidential election that same year.
At the height of Zimbabwe’s hyperinflation, soya chunks and toilet paper were in abundance on shop shelves, while basic commodities were nowhere to be seen. This followed government’s decision to impose price controls on various goods through the National Incomes and Pricing Commission chaired by Godwills Masimirembwa.
As in Venezuela, all basic products including cooking oil, sugar and maize-meal were sold on the black market at a premium. On the rare occasion basic commodities were available in shops, long queues, at times stretching kilometres, would form outside shops, sparking chaos which usually required the intervention of the police.
Record inflation levels at that time decimated the Zimbabwean dollar with financial experts estimating that it will take between 20-25 years for the country to have its own currency.
The runaway inflation being witnessed in Venezuela and the hyperinflation recorded in Zimbabwe are not peculiar to the two countries. Hungary has witnessed the highest inflation ever at 41,9 quadrillion percent. High inflation rates have also been witnessed in several countries including Germany, eastern European and Latin American nations.
It shows that inflation has no boundaries and is triggered wherever there is mismanagement.
As a result of the economic mismanagement, Venezuela, like Zimbabwe, has been rocked by protests.
To ensure the summit is not disturbed by protestors, Venezuela is apparently hosting Heads of State and Government at an island. The people of Venezuela, though, view that summit as yet another example of the government’s insensitivity to their plight.
While ordinary people suffer, Venezuelan government officials have continued wining and dining, much like their Zimbabwean counterparts.
“We’re angry and frustrated as we see the nation’s money mis-spent to feign a false normality. Our children do not drink milk and people eat once or twice a day — while the politicians demand the best champagne and wine at their banquets,” Nathalie Gomez, a 36-year-old Venezuelan hotel worker from Margarita, was quoted as saying by Reuters.
Gomez’s sentiments strike a chord with those of Zimbabweans where the country’s economic turmoil has been worsened by high levels of unemployment and drought, spawning poverty and hunger. This has not stopped Mugabe from holding birthday bashes, including this year’s which cost nearly a million dollars in Masvingo, a province hard hit by drought and gallivanting around the world.
State police have brutally crushed anti-Maduro demonstrations as evidenced by the bloody clashes between police and protestors on September 1 this year. Similar heavy-handedness by police on protestors has been witnessed in Zimbabwe as they have crushed several protests which include the August 26 demonstration by the opposition which resulted in the arrest of 69 demonstrators. Among those arrested was a 68-year-old man which drew the ire of magistrate Tendai Mahwe when he appeared in court. It begs the question as to how the two countries, on two different continents, have gotten to this stage.
A wave of expropriations since 2005 left many companies in state hands, run by the late Venezuelan leader Hugo Chavez’s corrupt and incompetent cronies under the ideology popularly known as Chavismo, now continued by Maduro.
Mugabe similarly has wrought economic ruin with the chaotic land reform programme which has transformed the country from being the bread basket of the region to a net importer of food. The situation has been aggravated by the toxic indigenisation policy signed into law by Mugabe in 2008 which has dashed hopes of significant investment. That Mugabe is still clarifying the law in 2016, eight years after it became law demonstrates the problematic nature of the law.
Economist John Robertson said the problems experienced in both Venezuela and Zimbabwe are typical of members of the Non-Aligned Movement.
He said Mugabe will gobble up taxpayers’ funds by going to the summit with a delegation that will require allowances and “shopping money” at a time the country’s economic crisis is deepening.
Martyn Davies, the managing director of emerging markets and Africa at Deloitte and Touche, aptly captured the parallels between Zimbabwe and Venezuela, saying “Zimbabwe is the Venezuela of Africa without the oil.”