By Garvin Karunaratne

I enclose a Paper I wrote way back in 2008 detailing what has happened to Zimbabwe, to illustrate how the Superpowers strangled Mugabe. This provides the background to understand  what is currently happening in Zimbabwe.

The conclusion deals with what was happening to the economy of Sri Lanka in 2008. That also helps us to understand our predicament of today. It is high time our leaders take charge of the economy of Sri Lanka before following the IMF any further.

Mugabe’s Zimbabwe Today: The Stranglehold of the Superpowers & the IMF in action. Lessons for Sri Lanka.

Mon, 2008-07-21 01:03 — admin

By Garvin Karunaratne

Many of my friends and contacts have been surprised at my statement about President Mugabe, showing him as a victim of the Superpowers- how they have actually strangled him in my paper: Zimbabwe’s Election Results; The Double Standards of the Superpowers(Asian Tribune 20/04/2008). I wrote:

Why are the Superpowers so angry with Mugabe? When Mugabe came to power the Whites were ruling the economy. They had established plantations on most of the ideal cultivable land which was taken over from them virtually by force. Earlier this land was controlled by the communities and worked for the welfare of the people. This happened in every country that was colonized and this included countries like Sri Lanka and Kenya. The British did this in a subtle manner by declaring all unoccupied land as belonging to the Crown. In pre-colonial days the forest land near habitations belonged to the villages as common land used for water retention, firewood collection, for forest produce, for habitation as the populations grew, for cattle enclosures during the cultivation season etc. The land was thereafter sold to the white planters for a song and in Kenya, within the forest sold were entire villages, including the people.

In Out of Africa Karen Blixen documents how the planters sold their land including full villages with the people. In Sri Lanka it is on record that the Police were used to throw out villagers when their villages were situated in forest extents sold to the planters.

When we think of the Third World countries today we tend to forget that the Third World was entirely conque red by the Colonial Superpowers. In the words of Cecil John Rhodes, the aim of the British Empire was to bring the whole of the uncivilized world under British Rule”. The colonial masters changed the self reliant economies to become economies that brought about an income for them. The colonies were made to produce raw materials required for their industries and the goods manufactured were sold to the masses in the colonies. In this process the Third World countries were exploited with riches accumulating in the Countries of the Colonial Superpowers. Zimbabwe, earlier Rhodesia, was thus exploited to the maximum.

Mugabe was a guerilla fighter who fought tooth and nail against the colonial domination of his country. At last in 1978 the guerilla forces forced the British to cede independence. Under the Lancaster House Agreement of 1979, Britain, the country that had ruled Rhodesia from 1890 to 1965, when Ian Smith declared independence unilaterally, agreed to pay compensation to white famers who will be dispossessed of their land when the land will be taken over and distributed to the indigenous people. This was argued necessary because the colonial ruler, the British had taken over these lands from the communities that controlled these unoccupied commonly held lands without the payment of any compensation and had thereafter sold these lands to foreign-mainly British planters at nominal- very low rates and they had established plantations and had thereby amassed fortunes over decades. The prosperity of the UK was brought about by the profits that came from the plantations The vast bulk of the cultivable land of Rhodesia was in this process bought and occupied by 6000 white farmers. The dispossessed local people had no employment. It was an attempt to make these impoverished landless people farmers that made Mugabe argue for the plantations to be taken over for distribution.

However this takes over of plantations was to be done on a willing seller” basis. In fact the question of compensation payments rocked and almost aborted the Lancaster House Agreement which took three months of discussions to complete. An important premise of this agreement was that no repossessions out side the willing seller concept could be done for ten years. In 1981 Britain pledged to pay GB Pounds 630 millon, but there was continuous disagreement and haggling and ultimately in 1997, the British Government of Tony Blair, reneged on its commitment and paid only pounds 44 million. According to a Report from the Zimbabwe Government the amount paid was only Pounds 17 million.

Independent Zimbabwe under President Mugabe did well initially after independence. Little land was taken over because of the terms of the Lancaster House Agreement to find willing sellers and the White Farmers continued to work their farms. The indigenous population continued to be landless. There was rapid growth in the Eighties. and then came the IMF’s Structural Adjustment Programme (SAP) which Mugabe embraced in 1990. However it did not take long for Mugabe to realize that the Structural Adjustment Program did not bring about any development and he ditched the SAP in 2001.. IMF withdrew balance of payments support in 1999 and withdrew providing Aid in 1999.

During the period of the Structural Adjustment Program loans were made available even for consumption. T he tenet of the SAP was to allow free trade, deregulate and reduce or abolish tariffs on imports on the basis that the IMF will provide easy loans to bridge budget deficits. In this process the foreign debt ballooned to $ 4,500 million in 2001 to the World Bank, the African Development Bank and the European Investment Bank. Earlier Zimbabwe was not an indebted country at independence. It was the IMF that ruined Zimbabwe.

In the words of Richard Saunders, “Loan agreements emanating from the Structural Adjustment Programme have stretched Zimbabwe’s foreign and domestic debt to unmanageable proportions.”(Saunders:30)

As explained by Patrick Bond and Richard Saunders: 1991 was the turning point… The US was suddenly the sole superpower and the IMF, the World Bank and GATT(later WTO), wasted no time imposing a global neoliberal iron heel. Zimbabwe had significant international debts and suddenly new debt service was conditioned on yielding to the global neo liberal dictatorship. The large State Sector and protected local industries inherited from the prior regime were condemned as inefficient and an Economic Structural Adjustment Program was adopted by Mugabe with considerable enthusiasm. The results were disastrous.

Manufacturing output declined by 40% from 1991 to 1995 accompanied by a similar decline in worker’s real standard of living and dramatic increase in inflation that ravaged savings and those in the informal economy….Domestic Industry was destroyed in 1990 by the ESAP(Bond & Saunders)

The Government however was under constant pressure from the people to provide th em with land and Mugabe had no alternative but to take over the plantations without paying compensation. Mugabe commenced repossession of plantations in 1997. In March 2002, all whites were ordered to leave their land without compensation. The Current aim is to transfer 30% of farmland to black ownership by 2014. Zimbabwe was suspended from the Commonwealth in March 2002 Mugabe established a one party state but by 1990 changed his ideas and held multi party elections.

Many world authorities are unaware of the real reasons for the disaster that Zimbabwe faces today. Professor Paul Collier of Oxford in his book: The Bottom Billion:Why the Poorest Countries are Failing and What can be done about it(Oxford 2007) states: Mugabe must take responsibility for the economic c collapse in Zimbabwe since 1998 culminating in inflation over 100.000 %.”

If the British Government had stood by the conditions that were agreed at the Lancaster House Agreement and had provided the 630 million pounds to be paid as compensation, there would have been no problem. But the British Government had reneged on its promise and President Mugabe cannot be blamed for this decision to take over the plantations. It was this act of President Mugabe that made the International Superpowers move sanctions on Zimbabwe.

No country with a massive foreign debt can face sanctions imposed. Though in the July 2008, G8 Meeting of the Superpowers, full sanctions were not agreed on because Russia and China did not support it, compliance with sanctions already imposed by Britain and Western Superpowers have ruined the economy.

Paul Collier has taken Mugabe’s present Zimbabwe out of context in castigating Mugabe. One has to castigate Tony Blair and his British Government for reneging on the aid that was agreed at the Lancaster House Agreement and also blame the IMF for implementing the Structural Adjustment Program that ruined local industry and local production. Once the development infrastructure in a country is abolished, it is an extremely difficult task to rebuild. Go through the IMF annals of ‘development’ and the Structural Adjustment Programme and one will find that each and every country that followed it have had their economies ruined.

In today’s context once a country has a high foreign debt which it cannot service and further its economy has been ruined by following the tenets of the Structural Adjustment programme, it has to depend on the grace of the International Superpowers for further Aid, if it is to pay its dues and survive. Mugabe came to a point where he had to displease the International Superpowers by his decision to take=2 0over the plantations without the payment of compensation and by his decision to not implement the Structural Adjustment Program. What happens is that through following the SAP the development infrastructure that is there in the country is abolished, the country’s assets are privatized and get into the foreign hands- hands of the multinationals and further through privatization of paying assets, the Government does not have a tax base to meet its development expenditure.

No country can face the sanctions of the International Community for long. Initially a country can raise a few foreign loans at high interest rates, through foreign banks, but this source dries up particularly because the countries cannot service those loans taken at high interest and further because the foreign banks eventually fall in line to the tunes of the International Community and the IMF.

Mugabe could not face the sanctions of the IMF and the International Superpowers. Thus his economy gradually got into ruins with the inflation rate reaching 7,000% in 2007 and this rising further to 100,000% in 2008. Today the unemployment rate is around 80% and about a fourth of the population work in foreign countries, mainly in South Africa. The people have their incomes from foreign funds remitted by the relatives working abroad.

So far I have never read anywhere that Mugabe had stached away dollars, as many other Third World rulers have done.

Due to the fact that the Presidential Election held in 2008 was inconclusive and at the run off the opposition backed out, Mugabe continues as the president. Mugabe faced an election and had every vote counted unlike the US Presidential Elections of 2000 and 2004 In 2000 George H. Bush20was pushed into the seat of the Presidency by the Supreme Court that abruptly stopped the recounts of ballots that were being counted in Florida under the instructions of the Florida Supreme Court. I was in the USA at the time of the election and this very undemocratic act of electing the US President without counting ballots made me document and write a book: The Administrative Bungling that Hijacked the 2000 US Presidential Election. The University Press of America) In 2004 it was the electronic voting machines that declared Bush the winner. The voting machines were prone to malfunction again and again- at times recording four million votes when only 400 ballots were fed into the machines. However as there was no paper documentation the fact whether the machines were correct or wrong in the totaling could not be verified. This very strange method of depending on errant voting machines to declare the winner made me document this new American style of holding elections in my book:The Electronic Stealing of the 2004 US Presidential Election.(Booksurge/Amazon.com).

What has happened to Mugabe and Zimbabwe is due not to Mugabe’s inefficiency, but entirely due to the fact that Mugabe failed to counter the machinations of the International Community that started imposing sanctions. In today’s neocolonialist era, it is the foreign funded Non Governmental Organizations (NGO) that are used by the Colonial Superpowers to sabotage the development of the Third World covertly. Overtly the Superpowers function as paragons of democracy and human rights and their educated Envoys in their verbosity continue to pose as if they are helping our countries and our leaders are snared. There is a catch in everything that the Superpowers tell us, if only we can decipher it.

There are a number of lessons for Sri Lanka from Mugabe’s Zimbabwe. The United National Party that ruled Sri Lanka from 1977 embraced the SAP and in the process the economy of the country was really ruine d. In 1977 when the SAP was embraced by President Jayewardene the Rupee was immediately devalued by 100%. The continued implementation of the Structural Adjustment Programme of high interest rates and free trade- allowing a free flow of foreign exchange to everyone for everything and meeting the excess with loans, increasing our debt is the easiest method of ruining any economy. See my book: How the IMF Ruined Sri Lanka & Alternate Programs of Success(Godages) for the process of ruination that took place. This is exactly what happened to Mugabe.

Sri Lanka has been kicked by the IMF and the World Bank. It is their refusal to give us aid that has made other financial authorities discredit us and it is this that has forced us to get loans with as high an interest as 8.25%. Why are we yet continuing the IMF precepts of the Structural Adjustment Program like high interest rates, which are the highest in Asia and due to which no local production can emerge. Why have we not commenced regulating the use of foreign exchange. Unfortunately Sri Lanka even free floated20the Rupee in 2001 under Chandrika’s Government with the result that the Central Bank no longer is in charge of the foreign exchange that comes to our country. We allow the Banks and this includes the foreign banks to use the foreign exchange that comes in- it is supposed to be according to the rules of supply and demand. In actual practice it has been proved that the foreign banks hoard the foreign exchange that comes in and bids the value of the foreign currency upwards as did happen on 25 th January 2001.( See pages 95-130 of my book: How the IMF Ruined Sri Lanka…)

Faced with sanctions by certain foreign superpowers and the IMF Mugabe, failed to take total control over the economy. He allowed the NGO to nibble at the economy and did not organize production to take place. Sri Lanka too has to face a grim future unless it is prepared to take total control over the economy, including its foreign exchange and control the use of foreign exchange in other interests of the country.

Garvin Karunaratne

16/11/2017