Friday, August 08, 2008

(AFRICAFILES) A new Zimbabwe? Eddie Cross and the MDC

Southern Africa Report Archive
vol 15 no 3

A new Zimbabwe? Eddie Cross and the MDC
Patrick Bond

Patrick Bond writes on the emerging, rather worrying role of Zimbabwean businessman Eddie Cross within MDC economic planning circles. Bond's findings are now rather more sobering than his last writing on Zimbabwe in SAR (Vol 14 No 3, May 1999) as he now documents the extent to which neo-liberal emphases have indeed found their way deep into the fabric of the MDC's alternative politics. (jbv)

Southern Africa Report

SAR, Vol 15 No 3, May 2000
Page 8



Patrick Bond is author of a 1998 book, Uneven Zimbabwe: A Study of Finance, Development and Underdevelopment, published by Africa World Press.

A leading official of the Confederation of Zimbabwe Industries (CZI), Eddie Cross, was appointed economic secretary of the Movement for Democratic Change (MDC) in February. His first public presentation, in mid-March, represented a decisive signal that the MDC has graduated from its initial "Workers' Party" image and constituency, to ally with big business elements.

While the balance of forces within the MDC remains fluid, the worker-capitalist alliance against Robert Mugabe's Zimbabwe African National Union (ZANU) regime will no doubt win the MDC a large - potentially majority - share of votes in the May parliamentary elections. But the implications are complex, because Cross appears intent on mixing divergent political traditions.

Cross comes from a faction that has long supported the introduction of structural adjustment, and which applauded Mugabe for turning to free-market policies during the 1990s. Even after a decade of failure, Cross told the Zimbabwe Independent in May 1999, "We in industry believe that the only way to make a significant impact is to comply fully with the IMF conditions."

Two months earlier, the International Monetary Fund had explicitly ordered Mugabe to reverse the only three progressive things he had done in recent years, namely his imposition of a) a ban on holding foreign exchange accounts in local banks (November 1997), b) price controls on staple foods (mid-1998, in the wake of mass food riots), and c) a luxury-goods import tax (late-1998). Although all three measures were emergency responses to a deep-rooted crisis, pressure from the CZI, IMF, World Bank and foreign donors, was sufficient to win Mugabe's consent and were rewarded with a temporary inflow of funds. But when Mugabe also pegged the Zimbabwe dollar to the US dollar after a speculative run in early 1999, holders of forex accounts began hoarding hard currency, and by late last year Zimbabwe ran out of foreign reserves and, in turn, could not pay for petrol imports. The crisis continued deepening, with Mugabe taking recourse in bashing the IMF, the British government and his own white subjects. But Zimbabwe's rich political terrain provides additional space for alternative strains of populism, as demonstrated in the speech given by Cross to a packed house at Harare's Book Cafe on March 16: "Zimbabwe at the Economic Crossroads: Which Way Forward."

From the corporate critique ...

Cross began with a diatribe against the massive state debt accumulated by the ZANU regime (there was no mention, until a questioner pointed it out at the end, that the debt was mainly built up as a result of the pro-corporate structural adjustment programme's logic). Cross turned quickly from the critical shortage of forex to the fact that Mugabe is "totally politically isolated," with only friends like Kabila, Nujoma, Mahathir and Qaddafi - "providing you don't ask them for money." He noted the total dependency of Zimbabwe upon one company, British Petroleum (for petrol imports) - but "you [Mugabe] go and kick them in the teeth. A telephone call to the chairman of BP and we are sunk!"

The point was becoming clear: only Cross can restore to Zimbabwe the confidence of economic elites. As for Mugabe's recently-announced economic programme, the "Millennium Recovery Programme," Cross railed,

It is toilet paper. It is worth nothing. Complete junk and if implemented it would simply compound our problems. They talk about exchange controls, they talk about price control, they talk about continuing to maintain controls on the Zimbabwean dollar. They talk control on wages. But nothing in the document to address the fundamental problems, absolutely nothing. I actually met with the IMF team after they had spent four fruitless days in Harare, going through the document, going through the planning with the Government and everybody that the Government could bring to speak to them - including Bernard Chidzero the ex-Minister of Finance - to plead with them to reconsider their position. They saw me after the process and said that there was nothing in the document that they could take back to Washington. Nothing. They said if they took that back to Washington they would be the laughing stock of the financial community in Washington. And I am afraid that throughout the financial institutions of the world, Zimbabwe is the black sheep.

Similarly, Cross remarked, the controversial trip to Harare by South African president Thabo Mbeki and several key officials in early March generated very little. A threatened cut to Zimbabwe's electricity supply from SA's Eskom parastatal due to nonpayment was reportedly deferred pending Eskom's takeover of Zimbabwean state facilities, but a US$120 million loan hinted at by Zimbabwe and widely reported as a bailout in the SA press was hastily denied by the SA Finance Ministry. As Cross interpreted,

South Africa is terrified of our situation here. When Thabo Mbeki was here he agreed to a programme of assistance with Mugabe and he agreed to a wide variety of other things. Went back to Pretoria and the guys in Pretoria said there is no way on this earth that we are going to allow you to prop up their regime in Zimbabwe. He had to go back to the drawing board, as you know. The financial proposals that were agreed to here in Harare were torn up and the South Africans are giving us very limited assistance.

What, then, does Cross propose to resolve the economic crisis?

First of all, we believe in the free market. We do not support price control. We do not support government interfering in the way in which people manage their lives. We are in favour of reduced levels of taxation. We are in favour of introducing Value Added Tax and we will do so quickly, within six months. We are in favour of a National Revenue Authority, these things are things which the government has been talking about for years. We believe they are sound developments. We would like to cap tax levels, both for individuals and for companies. We would like to reduce the levels of border duties ... The tax burden is simply not sustainable. It is negative in terms of the way it impacts on our society. Now that means we have got to reduce the size of government and not just talk about it.

On privatisation, Cross was especially brash:

We are going to fast track privatisation. All fifty government parastatals will be privatised within a two-year time frame, but we are going far beyond that. We are going to privatise many of the functions of government. We are going to privatise the Central Statistical Office. We are going to privatise virtually the entire school delivery system. And you know, we have looked at the numbers and we think we can get government employment down from about 300,000 at the present time to about 75,000 in five years.

This emphatic agenda has represented the medium-term wish-list of the CZI for several years. As Cross reaffirmed, "There is no doubt in my mind that the only way to grow the economy is on a free market basis."

... to anti-corporate populism? ...

Yet Cross is not without the sophistication required to work within a party formed by trade unionists. He talks of "a mixture of a highly conservative approach to economics and a strong social emphasis on improving the quality of life for the average Zimbabwean." Indeed, Rhodesia hosted a peculiar brand of white politics traceable to British working-class immigrants who during the 20th century brought their successful struggle for a generous social welfare state out to the colonies. Confirmed Cross,

My father was an alcoholic and I was raised by a single mom. My mother could not afford to pay school fees and I would not have received an education if the government of Rhodesia had not simply treated me like a special citizen and given me a free education of a very high standard.

At first blush, positive references to the IMF and "international community" may disguise the fact that historically, this political tradition often contested the interests of foreign capital. Indeed, to hazard a label, Cross is today a leading post-independence representative of a relatively patriotic white settler-bourgeoisie. Notwithstanding its British-colonial world-view, the assets of this class are more fully developed and cemented within Zimbabwe than anywhere else, thanks mainly to the 1960s - 80s period of rigid exchange controls (a large degree of capital flight occurred in the 1990s, but Zimbabwe remains an extremely comfortable habitat for wealthy whites).

The roots of Rhodesian populism are in intra-white struggle against Cecil Rhodes' British South Africa Company (BSAC), which formally ran the colony from 1890 - 1923. Various factions of the white community expressed such strong grievances - small miners over royalty rights; white unions over wages; settler farmers over their need to block black competition; and the church over social and political relations - that "self-governing status" was chosen in a 1923 whites-only vote. In 1933, struggling white farmers, artisans, and civil servants elected a "left"-sounding (yet very racist) Reform Party under the leadership of Godfrey Huggins.

Huggins promised to rescind BSAC's mineral rights, to impose protectionism, to nationalise key parts of the economy, to provide unemployment relief and white labour rights, and to establish a central bank for the colony. The election was, as Iden Wetherell observed in his seminal 1975 analysis of white politics, "fundamentally a populist protest designed to remind the State that its primary consideration lay not with the protection of profit, but with the promotion of institutional safeguards that would insure against a repetition of the recent experience."

After Huggins drifted towards establishment interests, angry white men reappeared on the political scene in 1962, when Ian Smith led the Rhodesian Front to power. Smith's broad coalition of white Rhodesians included not only those racists fearful of British decolonisation, but others who were adversely affected by the colony's early-1960s economic crisis. Indeed, the 1965 Unilateral Declaration of Independence (UDI), according to sociologist Giovanni Arrighi, "was directed as much against large-scale capitalism as against the Africans. The populist undertones of the UDI campaign were very noticeable." Those undertones harked back to the 1933 Reform Party victory, Wetherell insisted, since Smith's intention was "undoubtedly to conserve a system of safeguards that the radicals of the 1930s fought so hard to establish ... The inheritors of the pre-war populist or `left-wing' legacy [were] now self-defined as `right-wing'."

It is this uneasy combination which Cross appears to have inherited. It combines "conservative'' economic policies that meet the needs of the white-dominated business elites, with the memory of state support for a then-white, now-black working class. For even while punting rapid privatisation, the argument Cross makes has an anti-monopolistic flair:

An MDC government will sell our shares in the Dairy Board [the partially-privatised national milk and cheese marketing board] immediately, use the proceeds to retire debt and we will work actively to encourage competition. What about all the other cosy monopolies? What about Anglo American Corporation and their stranglehold on the sugar industry in Southern Africa? Let us open our border posts ... It is competition that will sort out the fat cats in the private sector.

Cross was especially scathing of his CZI colleagues:

They have been too complacent, they have been playing footsie-footsie with this government for too long. They need to be tougher. This Millennium Reform Programme - we see leaders of the private sector saying it is a good programme! It is, well I was going to use a rude word but I won't. It is absolutely nonsense.

... to corporatism and social democracy?

Critical of fat cats living off ultra-cheap Zimbabwe labour and acquiescing to ZANU power, Cross adds two additional pillars - corporatist industrial relations and an expanded social plan - to the foundations of the MDC programme:

On the social side we are going to re-visit the issue of minimum wages. Now I am an industrialist and I am well known in industrial circles for actually following this political strategy. I do not believe in low wages. I do not believe in an industrialist or anybody else being allowed to pay wages which are well below the basic cost of living in cities ... So we will, as a Government, and with the private sector through a social contract, and working with the trade unions and employers, work towards a situation where we will pay much higher wages in industry, even if it means losing jobs, so that people working in the cities will be able to afford to live in those cities on a whole family basis. He will be able to send his children to school, he will be able to rent or own accommodation which means he can live there with his entire family. For us that is fundamental.

In addition to "attacking that [migrant labour] system with everything at our disposal" - in part because of migrancy's contribution to the spread of AIDS - Cross sets out impressive social promises:

Education is the key and seven years of compulsory free education - free education - and free, not in the way we are doing it at the moment [with parent fees]. We mean free, parents will not be required to pay for it. And you ask, "Can we afford that?" Yes, we damn well can, we damn well can! And the international community has the resources to help us build that system and they are willing to do so ... We have a programme for housing - we are going to give tenure, freehold tenure, to everybody who holds tribal trust land leases, immediately we come to power ... The government has been talking about this for the past ten years, we are not going to talk about this, we are going to do it and we are going to fast-track the administration procedures through massive housing schemes, to provide site-and-service schemes in all our cities for the entire backlog of housing within five years. And you say, "Can we afford to do it?" Yes, we can! Yes we can, and the international community is prepared to help us with a programme like that ... We have got to have primary health care throughout the country. We have got to get our hospitals back on their feet ... Our social programme is going to be strong and it is going to be dynamic and it is going to be directed at the absolute poor, and there's no compromising that. We are totally committed to that, and you need to know it - this is not a rhetorical commitment, this is not a party of the "haves," this is not a party on the gravy train.

Beginning around 1990, Zimbabwe's have-nots were ferociously pummelled not only by Mugabe and his then labour minister (now vice president), John Nkomo - who tried often enough to fracture the trade union movement - but by the IMF and international community. Here arises the central contradiction. Cross, ironically, now implies that his own ticket to the MDC dance is IMF access.

This leads to the obvious question: what is, and will be, the balance of power within the MDC when the obvious choice between free education and free markets must be made? That will be the real crossroad.

To his credit, Eddie Cross is transparent about his agenda. But it will be up to the MDC's left-leaning populists, not populists who distortedly echo questionable traditions, to better represent the needs of Zimbabwe's black povo.

- 30 -

Disclaimer: Opinions expressed in this article are those of the writer(s) and not do necessarily reflect the views of the AfricaFiles' editors and network members. They are included in our material as a reflection of a diversity of views and a variety of issues. Material written specifically for AfricaFiles may be edited for length, clarity or inaccuracies.

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