Tendai Biti *Online Exclusive*
In the Know features an interview, opinion or analysis from the people making the news in Africa.
Here, an interview with Zimbabwe’s finance minister Tendai Biti from mid-June 2009 on power-sharing, the Zim dollar and ideological differences between the MDC and ZANU-PF.
THE AFRICA REPORT: There is a lot of scepticism among Western nations about the power-sharing government. Are you winning the argument?
TENDAI BITI: There are three cases that we have to make. The first case is that the money we want is going to genuine government activities, and not to the pockets of some bureaucrats, politicians, or to some dictator. The second case we have to make is that we are now worthy of re-engagement. The third is that that we’ll be able to deliver and live up to our own promises in the Global Political Agreement. These three cases require one thing that is common. We have to show sincerity in addressing the mischief that give rise to Zimbabwe’s isolation in the first instance. What were those issues? It was violence, it was dictatorship, it was abuse and assault of the rural poor, it was the total absence of democracy – stealing elections and so forth.
How do you rate the government’s performance so far?
I think what we’ve done so far they should be given a pass mark. However, we could have done more. For instance, we should have more newspapers by now. So people have a right to be concerned. The constitution-making process could move at higher speeds. But there are areas where we’ve sprinted. In the area of economic stabilisation, we have certainly sprinted.
Does the short-term recovery programme commit the government to irreversible economic reforms?
We wrote the short-term recovery programme (STERP) in four days and the budget itself in record time. In a short period of time there is an opening up. The opening up that is proposed is important in an economy that was so constrained by bureaucratic controls. What we have done is a breath of fresh air: multiple currencies, the elimination of quasi-fiscal activities [discretionary spending by the Reserve Bank which drained state funds]. Four years ago, one of my predecessors was fired even for suggesting devaluation. Now we are using multiple currencies. That’s a serious, serious leap.
How will the reform of the Reserve Bank work?
We have agreed a limitation of the Reserve Bank. We’ve removed anything that gave [the Reserve Bank] a right to do business, including a provision that allowed the government to order it to do business outside its core mandate. The second thing is creating a bank with oversight facilities.
How will the new management and directors of the Reserve Bank be appointed?
They’re appointed by the President on consultation with the minister, so I gave the names to the President, which is routine. We’ve limited the capacity to borrow by insisting that all foreign deposit liabilities must be guaranteed of 100%.
After the Reserve Bank reforms, do you intend to reintroduce the Zimbabwe dollar and on what basis?
I have got two options that are realistic. The first one is bring back the Zimbabwean dollar, which would remain denominated one-for-one with the South African rand or the US dollar. That’s a real option. The second real option is to bring back the Zimbabwean dollar and just float it openly.
Would you adopt the South African rand as Zimbabwe’s currency and say this is a prelude to monetary union in Southern Africa ?
It’s an option. The South Africans have a much, much stronger economy. Realistically, you have to bring your own currency and then link it with the rand. Then the role of the national central bank becomes very limited. You don’t control your money supply, so you can’t just wake up and print Zimbabwean dollars.
What is your time scale for reaching a decision on the currency? A year, two years?
Within a year, yes. What’s decisive is the strength of the Zimbabwean economy. Do we have exports to support the currency? Do we have an industrial policy? At the moment we don’t have these things. We have to increase our in the agricultural capacity and increase in our exports, so that we have an economy that can sustain a currency.
Are there still big ideological differences on economic policy between the MDC and ZANU-PF ministers?
There are clearly issues where ideology comes into it. On privatisation, ZANU-PF have misplaced the ideology because ZANU-PF doesn’t believe in socialism or Marxism, but it’s more fossilised [as] “We have to own this!” They are coming from this falsified, fossilised, nationalist government, standing on its position. It is a battle. Everything that I do is a battle.