Friday, February 27, 2009


It is possible to buy the Opel automaker from GM for $4.2 BN.

Add $800,000 million and you can bailout the nation of Zimbabwe.

Now, consider the returns from either investment.

Aid for Zimbabwe needs to be seen in perspective and needs serious governance rules attached

Aid needs for Zimbabwe's reconstruction has been touted as being around $5bn. This seems to be an inordinately small amount of money in today's bailout environment. Consider that General Motors lost nearly twice this amount in the fourth quarter of 2008. Consider the hundred's of billions of dollars being pumped into the failed banking systems internationally and Zimbabwe's $5bn price tag appears paltry by comparison. What price for a nation?

It is not surprising that Zimbabwe's request for aid falls on deaf ears in the west and in Africa. Robert Mugabe's behaviour has sealed the country's fate and even the presence of a token opposition party in parliament has done little to mitigate for Mugabe's nearly three decades of rampant crimes against humanity. He and his cronies have robbed Zimbabwe blind. Handing this same gang of thugs $5bn is neither palatable nor prudent.

With proper international governance and monitoring however the problem could be simply resolved and probably within a relatively short timeline. If the United Nations and Imminent Group of Persons wished to do something useful in African now would be the time. All that is needed is continue the political house cleaning that seems to have taken hold with the introduction of the MDC to the political landscape. With no faith in ZANU-PF we are left with the MDC and must be hopeful that it will show leadership and integrity in returning the lives of good Zimbabweans to normality.

Story below from the BBC:

Western donors have resisted African requests to help rescue Zimbabwe's economy.

They say they are waiting for proof that the unity government is really working.

Zimbabwe has asked for emergency aid to revive public services and the business sector.

But as the summit began on Thursday, local people expressed concern as to whether their country could afford the aid burden, says the BBC's Mohammed Allie in Cape Town.

He points out that South Africa has recently lost thousands of jobs, particularly in the mining, clothing and motor car industry.
Mr Tsvangirai said last week it would cost as much as $5bn (£3.5bn) to fix Zimbabwe's economy.

The new administration urgently needs to tackle an economic meltdown that has led to the world's highest inflation, food shortages and a cholera epidemic.

More than half the population is believed to need food aid, while just 10% of adults have a regular job.

The Herald quotes African Development Bank President Donald Kaberuka as saying that Zimbabwe's economic recovery plan merits support. But he said Zimbabwe's foreign debts of $5bn (£3.5bn) had to be addressed, before more aid could be sent.

Thursday, February 26, 2009

Spwingter has arrived in the Fraser Valley

When spring and winter combine to form spwingter the valley can from time to time look pwetty.

Sunday, February 15, 2009

Water, water everywhere - not a drop to drink

Zimbabwe 'treason case dropped'

Mr Bennett, had only just returned to Zimbabwe.

Charges of treason against Zimbabwean politician Roy Bennett have now been dropped, and replaced with other allegations, his party says.

The new charge is conspiring to acquire arms with a view to disrupting essential services, the MDC said.

Mr Bennett, a deputy ministerial nominee, was arrested on Friday shortly before President Robert Mugabe swore in new ministers of the unity government.

His lawyer, Trust Maanda, said the treason case did not "hold water". (and even if it did hold water it would not be drinkable)

Friday, February 13, 2009

Park Zimbabwe in South Africa

Whither Zimbabwe - wither Zimabwe?

In the economic sense and in the health sense Zimbabwe is in desparate need of being sent to a rest home. The nearest and most convenient one is neighbouring South Africa.

Why? And what does this mean? With regard to 'why' it is simply because the leadership - even with the MDC apparently given some powers - it asks too much to expect that the MDC and ZANU-PF will be distracted by their political differences long enough to focus on extricating Zimbabwe's citizens from the hell they have come to call home. Politicians rarely have the community's best interests at heart. While this may sound rash to the average voter when describing the average sovereignty, in Zimababwe it is not only true, but a cliche.

In the past it has always seemed to Radio Haney that an eventual solution to fixing the broken Zimbabwe will come in the form of some sort of Chapter 11 arrangement or bankruptcy protection with South Africa as the 'Trustee in Bankruptcy' long enough for Zimbabwe to find its fiscal feet.

Now other voices - even from within Zimbabwe - are being heard making similar statements:

Zimbabwe's Prime Minister Morgan Tsvangirai has declared that his first priority will be to fix the country's basket-case economy.

Prime Minister Morgan Tsvangirai's battles are only about to begin
It is a challenge of biblical proportions - even when leaving aside the problems of sharing power with President Robert Mugabe.

"The expenditure needs of government stretch from the North Pole to the South Pole while its revenue options are as terse as the shortest verse in the Bible - 'Jesus wept'," observes the All Africa news service.

With most of Zimbabwe's schools and hospitals closed, its roads and sewers in tatters, and with at least eight in 10 people out of work, there is no shortage of areas where expenditure can be clocked up.

But raising the cash is a trickier task.

Take Mr Tsvangirai's first promise to his people, that "every health worker, teacher, soldier and policeman will receive their pay in foreign currency until we are able to stabilise the economy".
Doing so would make sense, given that the US dollar and the South African rand have become the de facto currencies in Zimbabwe, with most shops refusing to accept the Zimbabwean currency as payment.

This has rendered the salaries currently paid to civil servants pretty much worthless.
In turn, many have been forced to seek an alternative income, whether from other jobs or by turning to corruption, while others have simply left the country.

No assistance

The question is not whether civil servants should be paid in a currency that will pay for their food, but rather where the government will get the money from.

The impact on Zimbabwe has been particularly severe
Economist Intelligence Unit

Unlike many other African nations which receive aid from wealthy nations, Zimbabwe saw the International Monetary Fund turn off the taps a decade ago.
Donors, led by the US and the European Union (EU), have said they will neither ease economic sanctions nor provide development assistance until it is clear that Mr Tsvangirai has truly managed to wrestle power from President Robert Mugabe.

First, the EU would want to see "tangible signs of respect for human rights, the rule of law, and macro-economic stabilisation", it said in a statement.

"We'll just have to wait and see," agreed US State Department spokesman Robert Wood, calling for evidence of "good governance and particularly real, true power-sharing on the part of Robert Mugabe".

Direct investment into Zimbabwe from abroad has also all but collapsed, which leaves the government with just one way to get hold of foreign currency, namely exporting.

Severe impact

In the recent past, more than half its export earnings have been generated by its platinum, gold, ferrochrome and nickel mines.

It would not work unless Zimbabwe accepted that South Africa would control its economy, which would make it virtually a province of South Africa
Azar Jammine, senior economist at Econometrix

In recent months, these earnings have plummeted as global prices for precious metals have slumped, with some mining companies mothballing operations till demand picks up again.

"The impact on Zimbabwe has been particularly severe, " according to the Economist Intelligence Unit.

"All four sectors are in serious trouble, partly because of the global downturn but also the collapse of basic infrastructure, especially electricity and water supplies."
Zimbabwe's other foreign currency earner, agriculture, is a shadow of its former self after the wholesale looting of farms by Mr Mugabe's cronies during the early 2000s, when productive and profitable farms were either actively wrecked or left to rot.

These days they do not even produce enough to feed the country's starving population.
"Seven million people are in need of food aid"," says Mr Tsvangirai, so it is clear that significant export earnings from agriculture are out of the question.

The country no longer has a tourism industry to speak of, and it could take years before visitor numbers pick up.

Indeed, to make Zimbabwe attractive to tourists, the country's deadly HIV/Aids and cholera epidemics will need to be tackled and the rule of law must be re-established.
'Unhelpful and unacceptable'

With little scope for raising sufficient foreign currency from exports, another solution has been put forward.

Zimbabwe should adopt the South African rand as its currency, South African President Kgalema Motlanthe has suggested.

Zimbabwe's suffering people should not expect quick relief But there are plenty of sceptics.
"It would mean that Zimbabwe would have to follow very different policies than what they've followed up to now," says Rudolph Gouws, chief economist at Rand Merchant Bank.
"This would require Zimbabwe to give up its monetary and exchange rate policy sovereignty," observes Alide Dasnois, economist with the Governance of Africa's Resources Programme of the South African Institute of International Affairs.

Such a move would also leave Zimbabwe with "a very tight fiscal space in which to manoeuvre and pull itself out of its misery", he reasons in an article in the Cape Times.
And as the rand would be overvalued relative to Zimbabwe's situation it would "destroy the competitiveness of its exports" and hence remove any chance of an export-led recovery, he continues.

As such, adopting the rand would "paint Zimbabwe into a corner in its bid to revive its economy", though this is not the main reason why it is an unlikely scenario.

"It would not work unless Zimbabwe accepted that South Africa would control its economy, which would make it virtually a province of South Africa," adds Azar Jammine, senior economist at Econometrix.

Mr Mugabe in particular would resist any dilution of Zimbabwe's sovereignty, while Mr Tsvangirai would see it as "an attempt by South Africa to be party to the agreement via the back door", Mr Lwanda reasons, insisting that adopting the rand would be "unhelpful and politically unacceptable" to Zimbabwe.

Political battle

An economic solution to Zimbabwe's woes is clearly not forthcoming at this stage, so expect Mr Tsvangirai to focus on his political battles.
He will have to fight on two fronts.

At home he will need to make the power sharing agreement with Mr Mugabe work.
While on the international arena he will need to convince both government leaders and investors that he has truly established himself as the nation's genuine leader.

Only then will sanctions be lifted and both aid money and inward investment begin to flow.
Without such input from the international community, there is little hope that Zimbabwe's economy can begin to recover and the country's humanitarian crisis be brought to an end.

BBC Front Page News (Africa) Friday 13, 2009

Sunday, February 01, 2009

Government's role as a 'resistance movement'

Not many resistance movements, if any, can claim to be funded entirely by the enemy. Given the voter's role as a the sole provider of finance to government, the notion of government as an organization reliant on the citizen yet intolerant of his needs and wishes, may be worth closer study.

Why do governments for the better part resist the electorate.