TCS Daily

As Zimbabwe Goes...

By Roger Bate - March 8, 2002 12:00 AM

JOHANNESBURG -- Tomorrow the electorate in Zimbabwe will attempt to go to the polls; whether they will be able to vote for the candidate of their choice is another matter. With the opposition leader, Morgan Tsvangirai, charged with treason, and the President, Robert Mugabe, riding roughshod over democratic principles (freedom of speech, protection of citizens and private property, and the rule of law) it appears the election will be far from free and fair.

But while Zimbabwe is temporarily a lost cause, South Africa -- by far the most powerful economy in Africa -- could head in the same direction. If South Africa, even partially, becomes the next Zimbabwe then Africa will truly become the Dark Continent, with the competent minority of blacks and whites leaving in droves. SA can avoid that fate but only if it resolves a key issue - reasonably equitable allocation of rights to land and water resources and enforcement of those rights. The signs are not promising.

When Robert Mugabe came to power in 1980, he promised to re-allocate land from the white minority to the black majority - especially those who fought in the struggle for independence. As the former Southern Rhodesia, Zimbabwe's minority white rule had held out 16 years longer than in its neighbour, Northern Rhodesia (Zambia). The latter had gained its independence from Britain in 1964, and the darling of the left, Kenneth Kaunda, became President. By nationalising most of the resources and following myriad idiotic communist policies, Kaunda impoverished his country. Zambia was twice as wealthy as South Korea in 1964; today it is 27 times poorer. Zimbabwe's white minority, watching the devastation north of their border, fought a bloody battle to maintain white rule. But inevitably -- and deservedly -- they lost.

However, Mugabe is nothing if not shrewd, and when he took the reins of power in 1980 he did not throw the white man out, as he had threatened to do, but relied on the successful industries the whites had created - notably tobacco farming. Consequently he never got round to reallocating land. He gave small parcels of previously government-owned land to his friends and political allies, but left most farms in the hands of white farmers, for fear that exports would fall off and his hard currency would dry up.

Rather than put in place a gradual re-allocation of resources, and train impoverished blacks to farm, he did what many African politicians have done -- he built uneconomic 'hero' structures such as dams (often with World Bank assistance), bought jet aircraft and ignored the basic inequities he had campaigned against for the previous decade. Mugabe only raised the land inequity issue when he wanted to berate the former colonial master in London. British guilt about its colonial past meant that this was always a good way of deflecting intervention against democratic abuses.

But from 1996 onwards the wheels began to fall off the economic wagon, with fuel and food shortages and street riots. From then on Mugabe, desperate to hold on to power, has been throwing white farmers off the land and promising blacks greater land access and hope for the future, indirectly sending the economy into a spiral from which it will take decades to recover.

Even if by a miracle Mugabe loses the election and leaves power with the grace he has never shown in 22 years as President, the economy is still not going to recover in the short run. Crucially, it was reported in South Africa last week that the big American and British tobacco manufacturers are thinking of not purchasing leaf from Zimbabwe because assurance of supply is now so low. Brazil looks set to benefit from the proposed change in buying policy; the remaining tobacco farmers in Zimbabwe may go bankrupt very soon.

So how will the Zimbabwean implosion affect South Africa and what can be done to avoid it becoming another Zimbabwe? Since 1994, when Nelson Mandela became President, the South African currency has depreciated from 3 Rand per dollar to 11 Rand today. One key reason for the depreciation is because of the geo-political risk posed by Zimbabwe - and the likelihood that SA will head in the same direction.

Water is the Key

There are many differences between the two economies for example South Africa has a large and sophisticated farming sector, producing sugar, mangoes, fruits, nuts and citrus on a large scale, exporting much to the North in winter, whereas, Zimbabwe relies on one crop to make its money. But land problems are similar in both countries because like Zimbabwe the most fertile land is controlled by white farmers and the SA government is reluctant to oversee the inevitable fall in export productivity that would follow reallocation.

Furthermore, little effort has been made by the South African government, in the past 8 years, to train blacks in farming techniques and management. For South Africa, land is important, but water is crucial, as the country is much drier than Zimbabwe. There is an old SA farming saying that goes: 'When you buy land you are buying water.' A fair allocation of water is technically difficult - many rivers are subject to drought and routinely run dry in winter.

The technical fix - sophisticated hydraulic infrastructure -- is expensive and relatively difficult to implement so it persuades politicians to leave such a situation in the hands of the officials in Pretoria. The market solution of water rights trading is largely ignored by these same officials since they wish to retain power over water allocation decisions. The 1998 Water Act nationalised water to allow for re-allocation, but little has yet been done - not least because white Afrikaner farmers are strenuously resisting change. Worse, this legislation has increased uncertainty for farmers, resulting in falling investment and a short-term approach. Irrigation equipment deteriorates and becomes wasteful, high water-demand annual crops, such as sugar, are selected for a fast return, with little regard for their neighbor's interests or next year's water supply.

The present situation is untenable. Unemployment is already reaching 50% in some locations, creating an aggressive and upset majority. Without a program of organized and gradual changeover of land ownership and water allocation rights, any incipient popular revolt is likely to trigger a short term political reaction a la Mugabe - land grabs.

Zimbabwe is already the worst of a bunch of sad Southern African basket cases, even if Mugabe loses the election. More worrying for the rest of Africa is that unless the SA government learns from the mistakes made in Zimbabwe, its rural sector is destined to follow in its footsteps.

Roger Bate's book about South Africa, The Cost of Free Water was published last week by the South African Free Market Foundation.

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