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| author/source:Cape Times (SA) |
| published:Mon 9-Jul-2007 |
| posted on this site:Mon 9-Jul-2007 |
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| Article Type : News |
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| He may be about to be neo-colonised from an unexpected quarter |
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Comment
It now seems that, while President Robert Mugabe has been aggressively defending Zimbabwe's sovereignty against the neo-colonialist designs of Britain, he may be about to be neo-colonised from an unexpected quarter - South Africa, his ostensible ally in his fight against the Brits. Tomaz Salamao, executive secretary of the Southern African Development Community (SADC), is reportedly considering a proposal that the Common Monetary Area (CMA) should include Zimbabwe. SADC leaders have mandated Salamao to find an economic solution to the Zimbabwe crisis, and President Thabo Mbeki a political solution. Mbeki has persuaded Zimbabwe's ruling Zanu PF party and the opposition Movement for Democratic Change to start substantive negotiations today for a just political dispensation to enable free and fair elections to be held, probably around March next year.
Meanwhile, Salamao is reportedly close to completing a report proposing Zimbabwe be brought into the CMA - or the Rand Monetary Area as it used to be called. The CMA now has South Africa, Namibia, Lesotho and Swaziland. Though the smaller countries have their own currencies and central banks, these seems to be sops to national pride. In practice, they have a common currency, the rand. The other currencies are pegged to the rand at par, and CMA monetary policy essentially emanates from Pretoria. So it seems that, under Salamao's proposal, the rand would likewise effectively replace the Zimbabwe dollar, which is now virtually worthless, with inflation running at around 5 000% and the real exchange rate to the US dollar now somewhere in the region of 250 000. Zimbabwean economist John Robertson told the Sunday newspapers of this group that he has long advocated the idea of extending the CMA to cover Zimbabwe as the only possible cure for the country's terminal economy.
Of course, the idea would not be easy to sell to Mugabe since it would entail him surrendering real independent control of his economy, not just monetary policy, and also, effectively, of political policy. For Zimbabwe to join the CMA currency union it would have to bring not only financial indicators such as interest rates into line with the CMA, but also fiscal indicators such as external debts and deficits. These are the implicit constraints in national policy-making which any country accepts on entering a currency union. Apart from that, though, Salamao's proposal would apparently be explicitly conditional on Mugabe accepting the sort of fundamental political reforms which are to be negotiated in the Zanu PF and MDC dialogue in Pretoria. That is unavoidable since only a return to sane politics could restore enough confidence in Zimbabwe to persuade the world to do business with it. In the meantime, though, the Salamao proposal apparently includes the South African and Botswana Reserve Banks infusing money into Zimbabwe.
Would Mugabe surrender de facto sovereignty? Perhaps, since the Salamao plan would presumably staunch the runaway inflation which is now plunging the country into dangerous chaos and which could spark unstoppable riots. Or, less dramatically, persuade so many people to vote against him next year that even he will be unable to rig a plausible victory. From Mbeki's perspective, this looks like a much bigger version of his 2005 offer to Zimbabwe of a R1 billion loan to repay its debts to the International Monetary Fund - also conditional on political reforms. Mugabe refused to take the bait then, preferring to beg, borrow and probably steal the money elsewhere. Now his options are closing so fast he might have to agree to being neo-colonised by South Africa. Is there a danger to the South African taxpayer that Mbeki might offer Mugabe too much to sweeten this bitter pill? Then West German Chancellor Helmut Kohl offered East Germany an overly-generous exchange rate for its weak currency at unification in 1990 to help boost the East. That stifled the new united Germany's economy for some time. Would Mbeki do something similar?
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