The Case of Zimbabwe
Originally published as a post on the author’s Facebook page. Re-published here with slight edits.
I will bet my bottom dollar that Mthuli Ncube will turn out to be the worst mistake we ever made in Zimbabwe. Save this for 10yrs and then we review. The reason being, the man is a white man in black skin who is reinstating the colonial structure of factors-of-production control for the benefit of his masters in Europe.
This is why
● he is privatizing parts of Fidelity Printers and Refiners;
● he has not made a move to support our currency with a basket of Zimbabwean strategic minerals;
● he has not upped corporate tax on all foreign-owned companies, mining companies exporting unprocessed minerals, companies that import without import substituting, gambling houses and luxury imports, to drive savings in a Sovereign Wealth Fund as Dubai, Norway and Saudi Arabia have done over the years;
● he has not offered financial support or a stimulus package to indigenous manufacturers; resource processors in lithium, PGMs, diamonds, gas etc.; import substitutors; home-biased investors; local miners and farmers, in the same way he wants to borrow on the nation’s tab to reward foreign white farmers for so-called developments;
● he removed indigenization to facilitate the control and looting of our factors of production by foreigners, depriving us of sequential technology transfer, experience and learning curve dynamics and the elusive triple rent.
How does a finance minister develop a people and a nation, by taking on debt his people can’t repay, to reward thieves who stole the same people’s land and impoverished them; or by giving control of their economy and critical strategic minerals to foreign capital, without local beneficiation or ownership?
How does his country skills-transfer and capital accumulate by outsourcing wealth creation to foreigners, while its people are mere cheap labor?
How does he push local beneficiation policies in foreign-owned companies, without local ownership and directorship?
Westerners don’t just rely on African government policy to influence policy in our countries, but they get their investment banks and shadow banks to control stakes (shares) in our local banks, insurance companies and businesses, to influence the selection of their directors, to drive their own policies from inside (think Delta, Innscor and Econet). This means ownership and directorship in companies in an economy matters more in controlling economies than just government policy.
In China, all companies must have a communist party board and local control. That is because modern colonialism (and even the former) is driven by corporations, as we saw with BSAC, Lonrho, British East India Company and Anglo American today.
In a depressed salary earnings environment like Zimbabwe, where will the locals get the opportunity to grow capital, while working for slave wages from wholly foreign-owned companies that are depleting the easy-to-reach minerals, without leaving savings to reinvest and grow tomorrow?
Remember, we have already had the Rhodesian colonial case study from 1889 to 1995, until we fought not only to end colonialism, but to decolonize and indigenize the economy, because it wasn’t benefiting Africans. In Rhodesia, and the new Zimbabwe, we know very well that 110yrs of only European FDI and economic policies created by European Finance Ministers, didn’t create black wealth, they just made us slaves while our minerals were being pillaged.
In that process MaDzimbabwe lost over $1trillion in stolen land, resources and excess value created by underpaid labor. This is why, today, we don’t have savings to replace and maintain the same Rhodesian industry or infrastructure used to loot Zimbabwe, because the surplus wealth and savings we should have been setting aside in a Sovereign Wealth Fund for reinvestment in the future, ended up as supernormal profits in the pockets of the same (FDI) foreign investors who only care about harvesting excess value (exploiting).
It’s for the purpose of siphoning these supernormal profits gained from exploiting our resources and labor, that over $3.5 billion in foreign investment was enticed to invest in the Zimbabwe Stock Exchange between 1990 and 1997, to make it the second biggest exchange in Africa. The ZSE and the JSE were the biggest returning exchanges (to European investors) in the world then, because of monumental exploitation of black labor and resources that generated super normal profits that flew out of the country to western centers.
Then, it looked like Zimbabweans were doing well but, the fact is, we were being paid peanuts, to wear ties and suits, to incur debt, facilitate the pillaging of our resources and externalize the supernormal earnings harvested from our economy.
We were similar to people assisting the people who were robbing us to move our own stolen property into their warehouses. And the moment indigenization wanted a share of those earnings generated by exploiting our country, and labor laws began to tighten, white capital withdrew their $3.5 billion investment on Black Friday and externalized it, knowing that colonial supernormal profits would simply enrich and grow black wealth, which would have demanded more control and eventually wrestled monopoly of our economy from them in the long term.
Our clownish economists failed to see the matrix and so they blamed the Black Friday flight of capital on government paying a mere US$4,000 per war veteran, in local currency. However, over the past few years, since the banking crisis, we have learnt that this claim was nonsense, because a local currency based injection to war veterans who used it to build houses, start businesses and drove up consumption in the economy, would have stimulated the economy in the same way quantitative easing has done in America, EU, China and Asia over the past fourteen years, benefiting investors. But white investors deliberately sabotaged our war vet economic stimulus package by withdrawing capital earned from exploiting our economy for a century, to prevent wealth transfer to blacks.
In fact, paying war vets should have been Zimbabwe’s equivalent of a mini–Marshall Plan, better yet, the GI Bill stimulus given to white US soldiers (at the exclusion of black soldiers) in 1944, to compensate them for fighting in WW2. But it wasn’t supported by Europeans (the same who still control strategic industries in Zimbabwe today) who pulled the rug from under us (a rug created by our wealth and exploitation) to kill the black economy, because we allowed them to dominate our markets. Their divestment was concomitantly followed by sanctions and we are all living the aftermath.
Down in South Africa we have another case study where 93% of that economy is controlled by whites and 80% of it is in the hands of just five companies Anglo, Old Mutual, Rupert Empire, Bidvest, Sanlam and the government they control. This means they are holding the black economy and at ransom, in that they can use their monopoly on the economy, to sabotage it and then sway local government policy.
As a result, that country is in a crisis as the gold, iron, low sulphur thermal coal and easy-to-reach platinum are depleted; so, mining companies that depleted these resources like Anglo Gold, have moved to Europe exchanges. The resources that remain are still tightly in the hands of white miners who exploit them without returning much to the nation. The black government is broke; the country is indebted to a point it can’t maintain parastatals and infrastructure that were used to loot South Africa, without leaving a sovereign wealth fund to develop the country in future. And in all this the ANC can’t do a thing because white capital has a gun to their head, threatening to collapse the economy if they stop the looting.
That’s the colonial capital exploitation Mthuli is reinstituting by removing indigenization; lowering taxes for foreign-owned corporates that are looting our resources and externalizing; not pushing technology transfer or local beneficiation and allowing wholesale dividend repatriations along with forex allocations without import substitution.
He is simply repeating 150 of years Berlin Conference economics in Africa.
Mthuli is recreating the same failed system of colonialism for whites to again cream excess value and leave us Zimbabweans with the bill of developing roads, bridges and ports of entry for foreigners to loot our resources more efficiently as our cattle and pole taxes did for 90 years of colonialism.
Why would we repeat a strategy that does not work for Africa?
We Zimbabweans are expecting a man who takes a sovereign debt of $3.5 billion to pay foreigners for colonizing us and vandalizing our property, to advance us?
No matter what the IMF says, all decisions taken by Mthuli, while he focuses us on giving value to paper money (warehouse receipts), as he destroys the factor-of-production ownership structure of the economy, is a recipe for failure. It’s the Bernard Chidzero toolkit of disastrous Washington Consensus and neo-liberal deindustrialization economics that specializes in diminishing return activities and technology dead ends of resource extraction and assembling foreign goods to sell in our market at the expense of local industry, which simply harvests our savings and excess value.
This can only leave us with more deindustrialization, brain drain, low savings, low capital accumulation, asymmetric trade, skewed balance of payment and high indebtedness, in a world run by western AI block chain payments systems, which will put our resources on the foreign side of the balance sheet in the blockchain.
This man we trust with our nation couldn’t even successfully manage his own investment bank, Barbican, but we trust him with our national economy just because he was an employee in Swiss banks that even accepted Jewish wealth looted by the Nazis?
It seems that we forget that all of Smith’s finance ministers and investors came directly from England (the home of international banking) and they were educated in Oxbridge, but they failed to prosper Zimbabwe for 90 years, because European economic theory was never designed to develop Africa, but to loot and impoverish Africa. What’s even more interesting is the same British economists have presided over the fall of the British Empire economy, which tumbled from number 1 to 5 or 7 (I can’t keep track) in the last century.
These Europeans can’t even manage their own economies, because they were built on stealing, slavery, killing non-white competition, monopolizing African, Asian and South American resources and labor and colonizing; and not the economic theory we trust Mthuli to lift Zimbabwe with.
Wake Up Zimbabwe, history is clear here. Economics is a theory and is not the practice, it’s not what built Europe. They built Europe by looting, enslaving, colonizing, not paying Africans reparations but giving us debt and continuing to control our resources that they stole over 567 years (since the Doctrine of Discovery in 1454).
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Rutendo Bereza Matinyarare was born in Zimbabwe but he lives in South Africa. He studied marketing and project management, but now works as a full time Afrikan social engineer. His life's creed is captured in his words: "As a man I seek to die having fulfilled my destiny to humanity, not having consumed much.”