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Editorial: Surviving Transitions

By Patrick Smith
Posted on Monday, 27 July 2009 00:00

A gaggle of suited

professionals was chatting animatedly in a bar on the top floor of a

skyscraper with stunning views across the city as dusk morphed into

mid-evening. The talk was of mergers and acquisitions, opportunity costs, yield curves, getting in at the ground floor and, of course, of sport; of Grand Slam tennis and of the uneven performance of the British Lions rugby team. There was an occasional remark about the venality of politicians. As they told us about new business openings, a bulky barman kept our glasses full. Affluent, voluble and well-travelled, this crowd of business and sports-obsessed alpha males could have been meeting after work in any Western capital. But they were not. In fact, the group had brought myself and a colleague to the club room of a fast-growing local bank in Harare.

On the lower floors of the skyscraper there is a formidably efficient banking operation. Our hosts’ purpose was less to showcase their institution and more to remind us about where Zimbabwe had come from. Before its lost decade, Zimbabwe was the second-biggest economy in Southern Africa with one of the most highly-educated labour forces and some of the best infrastructure in Africa.

They are all 200% behind the transition. Their logic is that once local companies and employment start to recover, a critical momentum will build. A big risk in political transitions – especially those involving power sharing between historic rivals – is that the parties lose interest if the benefits fail to materialise. Add to this the outbreaks of vitriol between loyalists of President Robert Mugabe and Prime Minister Morgan Tsvangirai over constitution-making or economic policy, and the wobbles can look worrying.??

For Zimbabwe’s business class, credit lines are more important than aid programmes in sustaining the transition, although everyone accepts that huge resources are required to reopen schools and clinics. So far, most of the new credit facilities have come from institutions such as Afreximbank and the governments of Botswana, South Africa and China, but little so far from the rich West which could now make a substantial difference.

Harare businesses are also puzzling over the West’s inconsistent sanctions policy on the power-sharing government. Minister of justice and ZANU-PF loyalist Patrick Chinamasa can travel to Europe on official business while mines minister Obert Mpofu (also ZANU-PF) is barred from entry to Britain, although he was invited by one of London’s biggest law firms to address a conference seeking funds for Zimbabwe’s mining sector. Other ZANU-PF officials can travel to the West but are not allowed to see the most senior officials.??

Zimbabwe’s transition is problematic but a still more delicate transition is taking place several thousand miles to the north in the wake of the 8-10 July summit of the Group of 8 in L’Aquila, Italy. Although the intervention of US President Barack Obama rescued the summit from total fiasco under the chairmanship of Italy’s beleaguered Premier Silvio Berlusconi, little concrete policy emerged from the proceedings. The agreement to make 80% reductions in greenhouse gas emissions by 2050 will mean little until the member states explain how they intend to achieve this.

The $20bn pledged for food security is welcome but is more of a curtain-raiser to wide-ranging agriculture negotiations at the G-20 meeting in Pittsburgh, USA, in September. The reaffirmation by the G-8 of the aid commitments made in 2005 looks irrelevant. Already, the G-8 is $20bn behind those commitments and stands almost no chance of achieving its target for the provision of universal access to HIV/AIDS treatment by 2010. So far, just 30% of those who need treatment are getting it and the effects of the global financial crisis mean that about 1.7m people could lose access to treatment because of budget cuts.

Accordingly, officials and people outside the rich countries’ club are asking what is the point of the G-8. At all its substantive meetings, the host must now invite Brazil, China, India, Mexico, Egypt and South Africa to make up the G-14. But the emergence of the G-20 as a political force last November, and with it much stronger representation for Africa, means that some hard decisions have to be taken about the G-8. Should it be dissolved or should the European representation on it be cut to one or two and replaced with developing country representatives? What looks certain at least is that Signor Berlusconi’s distracted chairing of this year’s G-8 summit has thrown the organisation into transition without an agreed agenda or destination.

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