HARARE – Zimbabwean voters on July 31 have a choice to elect a party that has revived the country’s failed economy or one that slashed it by 45 percent in a decade.
That is the message being put across by captains of industry, workers and the unemployed.
The message has been repeated by Prime Minister Morgan Tsvangirai on a campaign trail around the country.
The forthcoming vote is widely seen as a last chance for Zimbabwe to forge ahead with a comprehensive structural reform programme to revive the economy, heal a rift with Western countries crucial for fiscal support, and strengthen financial sector stability.
Pitting Tsvangirai and his long-time foe President Robert Mugabe, the result of the election is set to have a rallying effect on Zimbabwean markets.
An agreement brokered by the 15-nation Southern African Development Community (Sadc) after the last violent and disputed elections in 2008 gave birth to a fractious unity government that has stabilised the economy after nearly a decade of decline and hyperinflation critics blame on Mugabe.
Tsvangirai is claiming credit for that stability on the campaign trail, arguing that his entry into the coalition government in 2009 saw the economy grow by 6.3 percent in that year after a decade of economic contraction, accelerated by 9 percent in 2010, grew by 10.6 percent in 2011 and the growth cooled to 4.4 percent in 2012 and is projected to grow by 5 percent this year.
While analysts say the growth was largely in response to changes in the political construction rather than changes influenced by effective policy frame-working by the MDC, on the stump, secretary general and Finance minister Tendai Biti is saying the MDC has adopted use of the multiple currency system, introduced cash budgeting, and discontinued quasi-fiscal operations of the Reserve Bank of Zimbabwe (RBZ) resulting in strong economic growth averaging about 7 percent, single-digit inflation below 5 percent, and a doubling of fiscal revenue collection from 16 percent of GDP in 2009 to an estimated 36 percent of GDP in 2012.
The 89-year-old Mugabe, the only leader Zimbabwe has known since independence from Britain in 1980 and his party Zanu PF reject repeated assertions that their policies have driven the nation once known as Africa’s breadbasket to virtual economic ruin.
Psychology Maziwisa, junior Zanu PF spokesperson, said the economic dislocation since 2000 was a result of “economic sanctions” not bad policies as alleged by the MDC, accusing Britain and the United States of seeking to oust Mugabe by imposing punitive measures.
“Everything is clear, it’s because of sanctions,” Maziwisa said.
“The (economic) stability is attributable to dollarisation, it’s attributable to honourable (minister of Justice and Legal Affairs Patrick) Chinamasa. Dollarisation was introduced by minister Chinamasa in January 2009. All this is an attempt to hoodwink the electorate, its propaganda.”
As in the 2008 presidential election, which Tsvangirai won after beating Mugabe, the energetic 61-year-old leader is once again creating a buzz as he criss-crosses the southern African nation ahead of the July 31 vote as his soon-to-be nonagenarian rival scales back on campaigns.
A centrist politician who admires free-market economics with strong welfare policies, Tsvangirai vows to end Mugabe’s “elitist” indigenisation and economic nationalisation programme for a broad-based empowerment programme while keeping the best of the veteran leader’s anti-poverty projects.
At every turn, Tsvangirai baits Mugabe using Zimbabwe dollars to depict him as an incompetent economist who wrecked the economy by recklessly minting cash, and is eager to reinstate the discredited currency if he wins re-election.
“This money was not able to buy anything for breakfast,” Tsvangirai told a whistle-stop rally in Masvingo on Sunday while waving Zimdollars.
“Bush economics has no place in a new Zimbabwe. The economy can only be revived by people with a vision.”
Trevor Maisiri, a senior southern African analyst at the International Crisis Group, said Tsvangirai cannot directly conclude that Zimbabwe’s GDP growth over the past five years was due to effective policies by the MDC, saying the main driver has been the confidence brought by the semblance of political stability following the formation of the GNU.
Maisiri said Zimbabwe faced a difficult choice.
“Should MDC win the elections, you are likely to have an FDI-driven growth, given that the party is open to foreign investments and willing to engage any global players on a business-to-business basis without the strict limitations of political ideology,” Maisiri told the Daily News.
“For Zanu PF, an election win will only bring growth dependent on what political line the party takes. If the party continues on a ‘hardliner’ channel, there will be less opening up of the economy to global trade and investment, except maybe to the traditional players — Eastern bloc.
“However, if Zanu PF adopts a business-like approach with less political ‘hardliner’ stance, then this will likely attract some level of economic activity — given that even the Western countries seem willing to engage with a post-election Zanu PF that internally reforms and pursues ‘sober’ economic and political policies.”
Mugabe’s Zanu PF manifesto threatens to “take back the economy” by creating $7,3 billion in value from 1 138 indigenised firms across 14 key sectors of the economy, creating 2, 265 million jobs, proposing an economy run along the same rigid lines that crippled eastern bloc economies for much of the 20th century.
Benefiting from one of the world’s largest diamond reserves, critics say Zanu PF is kept afloat by a torrent of diamond dollars.
Tsvangirai wants to revive preferential alliances with Zimbabwe’s Western friends, improving ties with southern African neighbours, creating one million jobs by 2018, increasing economic growth rates exponentially, further reducing inflation, delivering a $100 billion economy by 2040, improving electricity generation and building a social contract.
The election affords Zimbabwe a respite from a painful and weak economic recovery, it is likely to heal a rift with the country’s foreign creditors, who are talking a debt write-off of Zimbabwe’s over $10 billion arrears.
The international re-engagement is crucial to a country with 80 percent unemployment rate and the rising prospect of social unrest.
The IMF, which has said it was prepared to discuss emergency loans and changes as soon as a new government was in place, noted in its latest country report on Zimbabwe that “significant downside risks to the outlook remain” including “possible resurgence of political instability ahead of the elections expected in 2013, policy slippages, a deeper global downturn, fluctuations in global commodity prices (especially for precious metals and stones).”
Tsvangirai’s party, which has surged on a wave of economic revival sentiment and spooked Zanu PF with its talk of tearing up indigenisation agreements, has earned a thumb up from investors.
Economists say the future health of the Zimbabwean economy weighs heavily on the outcome of the forthcoming election.
Businessman Mutumwa Mawere says if Mugabe were to be re-elected, the country will continue on the same destructive path.
“The fact that president Mugabe campaigns relying on the past is well established,” Mawere said.
“However, present day and future challenges will not be addressed by listening to the ghosts of yesterday.”
In a sign of the high stakes for financial stability, the White House and the European Commission have both urged Zimbabwean political leaders to stage a free and fair contest and that they will be prepared to work with any democratically-elected government.
Roeland van de Gee, an EU envoy said: “If the outcome of the elections is clear, is accepted, who are we, all Europeans, to say… we continue with our sanctions, but it has to be clear, that’s true.”
Any new leader will face an uphill battle to inject confidence into a paralysed Zimbabwean economy that depends heavily on the continued infusion of money from its only remaining lifeline, taxes.
The Zimbabwean economy and a deficit-ridden government have lost most of their ability to raise new revenues or borrow money to continue operations.
But political analysts said no matter what government was formed, it would face a crisis of expectation and will be hard-pressed to persuade lenders to extend loans, which could be tied to deeper economic reforms and drastic spending cuts.
For many Zimbabweans, the election is a choice between hope and fear.
Tsvangirai has billed the election as “watershed” likening it to the 1980 vote that ushered in majority rule, capturing the momentum of those hungry for change at almost any cost from a political system that is widely seen as corrupt and ineffective.
It also had support from voters who felt betrayed by the Zanu PF socialists, whose party has been in power since 1980.
In the end, fear of imminent collapse, or the slow death of the economy and society, appear to drive a majority of Zimbabweans towards new democracy.
For Zanu PF national chairman Simon Khaya Moyo, this “do-or-die” election will be about preserving the liberation legacy.
“If by unforeseen circumstance we don’t win this election, the legacy of our president is gone and is gone forever, the legacy of our party is gone and gone forever, and we would have squandered the future of our children and our people,” Khaya Moyo warned.