Sunday, April 22, 2012

MRK - Tendai Biti And The Atlantic Council - The Neoliberal Shock Doctrine On Display

COMMENT - This is from what Tendai Biti (MDC, Finance Minister) said to his Atlantic Council audience on Zimbabwe's Independence Day, with commentary and real sources. Just as sinister is the manipulation of the number of dead during the 1980s, to where they equate the number of dead under Rhodesia's UDI. And of course, as a neoliberal, he refuses to take responsibility for the fact that it are the deregulation and privatisation of governments and financial markets, that have led to the present global economic crisis, not 'government spending' (on social services and food subsidies).

Getting Zimbabwe (And Africa) Back On Track, at the Atlantic Council.

" The second thing which we did was a “catch” budget. We eat what we kill. So if we – if we – if we catch a rat, we eat a rat. The problem with many governments – I have to be careful, given that I’m in Washington – (laughter) – the problem with many governments is that you catch a mouse and you have a party for an elephant. It doesn’t work. That is why there’s a problem in the eurozone. That’s why there is a problem in Greece, in Spain, in Italy, in Portugal. People have been spending. Cheap money has been on the markets irrespective of the supply side of their economy. And the men of these emerging countries – again, I have to be very careful – you have exported your jobs out. So even baseball caps are made in China. And that’s a problem. You – because you can’t be a consumer economy. You have to – you have to produce. "

Tendai Biti's neoliberal understanding of the financial crisis. 'People have been spending'. No, banks have been deregulated and are speculating to the tune of creating hundreds of trillions of dollars in toxic assets. Of course, jobs have also been 'exported out' because of deregulation. And now YOU are deregulating the Zimbabwean economy.

Also, it seems like a long time ago that Tendai Biti ate any rats.

" And oftentimes in Africa, as in other countries, the problem is not the budget deficit per se. You can run a budget deficit if you are constructing a dam. You can borrow to construct a dam. There’s nothing criminal about that. It is how you finance the budget deficit. In our case, we monetized the budget deficit by printing of money. And by 2008, broad money supply in Zimbabwe was 3000 percent. That means there was a lot of paper money chasing a few goods, and of course high inflation. "

If Tendai Biti was an honest man, and he is not, he would admit that the 'printing of money' was a direct result of the credit freeze put on the Zimbabwean government from January 1st 2002 onwards. The state printed money, under the guidance of Gideon Gono, to compensate for the fact that their lines of credit at international financial institutions had been frozen.

And Tendai Biti knows this, because it was the MDC that helped draft the Zimbabwe Democracy and Economic Recovery Act of 2001. Tendai Biti has even admitted to SW Radio Africa (4:39 onwards) that even the MDC could not govern while the economic sanctions are in place. (Quoting Tendai Biti: "It will be very difficult for us to 'move' when ZDERA is there.")

" And what we have done is not – is not – is nothing that comes out of a textbook. It’s just commonsense economics. You don’t need the IMF or the World Bank to tell you that hyperinflation is not sustainable, that printing money when you’re not producing is not sustainable, that you can’t – you can’t spend what you don’t have. You don’t need – you know, you know, you know, you know, my friend Joe Stiglitz to tell you that. And that is exactly what we – what we have – what we have done. "

And why 'weren't they producing'? Why did exports grow through 2001, but collapsed in 2002 when ZDERA came into force? Now we come to the heart of their neoliberal agenda:


" The second thing that we did was to supply-side economics. We aimed for capacity utilization of 60 percent from the zero to 2 (?) 10 percent that it was. We removed all kinds of restrictions that we – in the economy: price controls, subsidies. We had something called – export surrender requirements. So all companies that we’re exporting, we – to surrender their export earnings which we – in U.S. dollars for Zimbabwean dollars, we removed all kinds of restrictions in our industry. And that worked by the end of the year. In 2009, our capacity production had increased to 45 percent, to 15 percent. And by the end of the year, our growth rate in 2009 was 5.5 percent. Our inflation figures went from 7.7 percent from 500 billion percent. "

And this goes to the heart of the entire MDC-Tea Party agenda. Deregulation. Using the crisis they created through an economic credit freeze, to push through deregulation of the economy. It is a classical application of what Naomi Klein has called The Shock Doctrine.

" The third thing which we did was human development index pivot. Schools had closed; you remember, hospitals had closed. The state was dysfunctional. We’d call it, in Zimbabwe – typhoid. In Zimbabwe, in 2008, 4,000 people died from cholera. And cholera, as you know, is a disease of debt. It’s a disease of lack of planning. "

Actually it is a disease that occurs when municipalities can no longer import the chemicals needed to sterilize water. Because they don't have the hard currency, and because there are sanctions on Zimbabwe.

" So we put money into life expectancy in Zimbabwe. By 2008 it sank to 34 for women, 37 for men. Official statistics from our minister of health: 4,000 Zimbabweans were dying every week from hunger and starvation. That means in 10 months, 160,000 people were dying in beautiful, black, independent Zimbabwe, more than the 50,000 that died during the 25 years of our war of liberation.

So we have addressed the issue of social services. We created what are called vulnerable – people, sick; they fund – the people that we called “vulnerables” were child-run households – you know, ghetto children, 12-year-old, 15-year-olds were running households. Both parents were dead; they have gone into the diaspora or have died of HIV or other – some other disease – widows and so forth. So that was the – an important link, the human development index. "

Ghetto children? Job well done, MDC. UPDATED COMMENT (May 14th 2012) - I have said it earlier in this article, but they are trying to make independence look worse than UDI, when 50,000 Zimbabweans were murdered by the white minority regime, and Africans lived on reservations (Native Reserves). This is who the MDC is. The Rhodesian Front and Anglo-American De Beers, the same mining capital/settler/african laborer demographic pyramid that made up the colonial state for almost a century.

" Expanding the economy is critical because it loosens the grip of the old order. It loosens the power and tension agenda, expanding and dealing with the economy. And on this particular issue, the biggest issue which we are dealing with vis-à-vis our economy, is the question of debt, our sovereign debt of over US$9.1 billion. We have got huge arrears to the African Development Bank of over half a billion dollars, huge arrears to the World Bank of over $1.2 billion, huge arrears to the Paris Club of creditors of over $3 billion. And as you know, the Bretton Woods institutions – the World Bank, the IMF – you must have a relationship with them; otherwise your credit rating is high and so forth. So part of the things that we are dealing with, we are battling with, particular on this trip is, how do we engage and how do we deal with the issue of our crippling sovereign debt? "

Let me cite the relevant section of ZDERA, which deals with Zimbabwe not being allowed to reschedule it's debt for a decade (since Jan 1st 2002, when ZDERA came into effect):


(c) MULTILATERAL FINANCING RESTRICTION- ... the Secretary of the Treasury shall instruct the United States executive director to each international financial institution to oppose and vote against--

(1) any extension by the respective institution of any loan, credit, or guarantee to the Government of Zimbabwe; or

(2) any cancellation or reduction of indebtedness owed by the Government of Zimbabwe to the United States or any international financial institution.

In other words, according to ZDERA Sec4C (2), Zimbabwe' debt has not been rescheduled since 2002. This is what they now use to push through their deregulation program, and of course the privatisation of the diamond mines to Anglo-American De Beers.

" We – it’s not a debt crisis as far as we are concerned. The debt question finished in 1999 when we defaulted. It’s a development issue. It’s a development issue because to unlock those development funds, we have to deal with the question of debt. We require about US$14 billion to deal with our infrastructure – energy, water, roads, irrigation, technology and so forth – US$14 billion. And there is no way that we are going to be able to generate – to generate these funds. "

Zimbabwe has a trillion, possibly trillions of dollars in diamond reserves. Gee, I wonder what the MDC's suggestion for 'getting' $14 billion for infrastructure is going to be. Could it be: Privatisation?

" And the economy is important. I’ve said already that the growth must be inclusive because part of the source of conflict in Africa is exclusion, the sense of alienation, regional, even an unequal development. If you go to Bulawayo or if you go to the southwestern part of our country, it’s almost as if independence just passed it. They were innocent bystanders to the process of the democratization of the – our country, and the key thing is both – there’s been no development that has – that has been done there. Show me a new bridge. Show me a new skyscraper that has been built in the last 32 years in that part of the country. If you wake up someone who died in Bulawayo in 1968, he won’t get lost. (Laughter.) The big roads are still there; the small little colonial buildings are still there; there’s been no development. So inclusion and inclusive growth is important. Expanding the economy is very important. I’ve never heard of a country that is stable which does not have a functional economy. But of course on the – on the other side, there are bad, bad countries with functional economies. You know them better than I do. So the economy is critical. "

How about... Zimbabwe? Because no one thought that Zimbabwe was 'unstable' in 1994, when President Mugabe received a knighthood.

In Biti World, development means big buildings (foreign owned, of course). To ZANU-PF, development means raising average life expectancy and putting all children in school, which is exactly what they did during the 1980s, until the IMF/World Bank got a hold of their policy and imposed ESAP (Enhanced Structural Adjustment). Read: The Tragic Tale of the IMF in Zimbabwe, by Antonia Juhasz, March 7th, 2004:

Antonia Juhasz: During the 1980’s, the government put significant attention and resources into improving health services with remarkable success. For example, the infant mortality rate declined from 100 to 50 between 1980 and 1988 and life expectancy increased from 56 to 64 years. However, the entry of the IMF reversed this trend by imposing enormous cuts in public health spending which dramatically reduced access to services for the poor.

Spending per person on health care fell by a third from 1990 to 1996 with cuts in services out-pacing cuts in wages to health care workers. Thus, between 1988 and 1994, wasting in children quadrupled and maternal mortality rates increased. After many years of decline, the number of tuberculosis cases began to rise in 1986 and by 1995 had quadrupled. Friends of the Earth reports that prenatal care, which had previously been free, now required a fee, while primary care fees increased by over 500 percent. Low-income exemptions were all but eliminated, forcing the most vulnerable population to either pay for services they could not afford, or go without health care services altogether. The result was an easily anticipated decline in prenatal clinic attendance and an increase in the number of babies born before arrival at the hospital.

" The third issue is transitional justice. Zimbabwe’s been a conflict-ridden country, state in permanent crisis, as I called it. And it didn’t start with 1980, by the way. It didn’t start in the last three – in the last three – 32 years. In the last 32 years, we’ve had horrible things. We had Gukurahundi between ’82 and ’87: Thirty-thousand Zimbabweans were murdered in a genocide. "

I call BS. How did the Catholic Commission for Justice and Piece's 3,000+ turn into 30,000?

Even the inflated propaganda number is only 20,000, not 30,000. For a long time, I have been saying that the MDC and it's handlers are systematically increasing the number of Gukurahundi deaths, and systematically lowering the number of death killed by the Smith regime from 1965 to 1980, during the independence struggle. The aim is clear - to create an equivalence between self-rule and colonialism. They will probably start lowering the 50,000 deaths under Ian Smith's UDI even further, before they start saying - look at what independence brought you. Weren't you better off under white rule?

Because this is what the MDC is - an extension of the Rhodesian Front and Anglo-American De Beers. This is what the CCJPZ found, before land reform triggered the propaganda campaign against Zimbabwe:


The figures in the HR Data Base are clearly a base-line set of figures which can only grow in the future. Only one district in Zimbabwe was fairly comprehensively researched for this report - namely Tsholotsho. In addition, a pilot study was conducted in Matobo. Both of these studies resulted in a dramatic increase in existing knowledge of how events unfolded in these two regions in the 1980s, and both extended the named data base considerably, and allowed the incorporation of numbered victims. Numbered victims are generally excluded from all other districts.

What was also noticeable in Tsholotsho was how the gap between numbered and named victims closed as interviewing progressed, and a larger proportion of named as opposed to numbered victims began to be reported.

Deaths in Non-Case Study Areas in Matabeleland North: independent researchers in Lupane and Nkayi who have done extensive interviews for a different purpose in these regions in recent years, suggested that approximately 1300 dead would be a fair estimate for these two regions combined. Their intention was not specifically to "count the dead" in these regions, and they have not collected names. Their estimates are based on ward by ward estimates given to them by councillors in the general course of their interviews on other topics, but they feel these estimates are, if anything, conservative, and exclude the missing. As this estimate was put forward by researchers of proven integrity with a known understanding of events in these districts, and no possible motive for exaggeration or misrepresentation, it seems fair to consider including it in an estimate: this would add another 1000 to the figure for the dead, bringing it to around 3000+.

Deaths in Matabeleland South: Those who are concerned about putting a precise figure on the dead in Matabeleland South could choose a number between 500 and 1000, and be certain that they are not exaggerating.

Deaths in the Midlands: named and numbered dead and missing for the Midlands, suggest Gweru was worst hit with around 70-80 deaths, with deaths and missing for the whole Province currently standing at a conservative 100. Archival figures for unnamed victims suggest several hundred more deaths and disappearances - no more accurate suggestion can be made than this, without extensive further research.

FINAL ESTIMATE: The figure for the dead and missing is not less than 3000. This statement is now beyond reasonable doubt. Adding up the conservative suggestions made above, the figure is reasonably certainly 3750 dead. More than that it is still not possible to say, except to allow that the real figure for the dead could be possibly double 3000, or even higher. Only further research will resolve the issue.

MY COMMENT - Twice 3,000 would be 6,000. Even higher would I think be thrice 3,000 or 9,000. At no time in this pre-landreform report is the number 20,000 mentioned, let alone Tendai Biti's new number of 30,000. - MrK

" Then we had the violent land reform program. Nobody quarreled about the land reform program, but it’s the manner in which it was done. People were displaced, people were killed. "

That's not true. First, land reform was not very violent, I think only 6 to 11 white farmers were killed out of 4,500, over the course of the entire decade. That is not a violent program. Secondly, land reform was opposed by Britain even before it began, witness Clare Short's letter in November 1997 (on why Britain should not pay it's share in the Willing Buyer, Willing Seller program):

Claire Short, when she wrote:

I should make it clear that we do not accept that Britain has a special responsibility to meet the costs of land purchase in Zimbabwe. We are a new Government from diverse backgrounds without links to former colonial interests. My own origins are Irish and as you know we were colonised not colonisers.

" Then we had Operation Murambatsvina, the cleanup operation of 2005. Over a million people were destroyed; homes were destroyed. Then we had – then we had the violent election of 2008. People were killed, people were brutalized, and so forth. "

I call BS again. The number of people who lost their homes during the slum clearing exercise is massively exaggerated, for political gain.

If you can't make your case without lying or exaggerating, you've lost the argument.

But of course, if you are part of a party that lives on shocks as an opportunity to expand private enterprise, the greater the crisis the better.

" And I think there are three critical issues. Number one is to place our party in a position that we are able to win this election decisively. And that – I’ve absolutely no doubt about it. In terms of our connectivity with the people, in Morgan Tsvangirai we have got a leader who is essentially the face of the struggle, the face of change in Zimbabwe. He’s clearly the undisputed – undisputable leader of the change struggle in Zimbabwe. "


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At 6:40 PM , Anonymous MrK said...

UPDATE: The Atlantic Council's address for Tendai Biti's speech has changed. It is now here (with video) and the transcript is here in PDF format.


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