'It's a miracle how we survived'

Continued from yesterday

You once described yourself as “a development-oriented governor”. Yet under your watch, Zimbabwe’s economy imploded, looking back, what would you say was the real cause or causes? Many people have propounded theories about the causes. I want it from the horse’s mouth.
(laughs).

A: Zimbabwe’s economy never imploded. Yes, it suffered but never imploded. It depends on which matrix of survival you choose to use but nevertheless, I will start by referring you to what president Mugabe once said during a State of the Nation address. He said: “We are all witnesses to the futility of trying to turn around our economy in an environment of pointless conflict. ”

In other words, he was pointing us to the elephant in the room, which was conflict among and between Zimbabweans, pointless conflict.

In our situation, it is a fact that the economy is subservient and highly susceptible to the politics of the day, it is a servant of the political unity or disunity in the country and the politics between Zimbabwe and its trading partners, as well as the goodwill or otherwise of those with the power to upset our economic welfare.

The political history of our country that led to what others call economic “implosion” can be traced back to October 1997 when we started the process of land identification in terms of the 1992 Land Identification Act.

On the genesis of our problems, our president has always said: “It was always about the land. It is today about the land, and it will always be about the land. ”

The land issue has been at the centre of the economic sanctions imposed on us, which I have alluded to earlier, and everything around us revolves on the land. Over and above the land-induced sanctions, it is very instructive — and many people don’t know this to point out that Zimbabwe had never at any time during its history been without external aid and support of one form or another. During Federation days, it’s Britain and the others who used to help the country financially with balance of payments support.

During the days of Ian Smith (1965-1979), again, it was some British, South African, and American innovative financial structures that helped ameliorate the funding impact on the economy and country at large. Then from 1980 to 2001 (after the new State of Zimbabwe was born) the country received a total of $2,5 billion of IMF, World Bank, and AfDB balance of payments support.

Now, from 2002 until I left the central bank in December 2013, nothing, and I mean zero funds, came to Zimbabwe from the IMF, World Bank, Af DB, and other donors in the form of balance of payments support. Absolutely nothing! Zero!

I became governor in 2003, two years after the beginning of the drying up of external support. Therefore, people who talk about my era of governorship and try to compare it with that of any other governor are misinformed because the periods are different, with different challenges. It is a miracle how we survived.

When you see the impact of the lack of support graphically, you begin to appreciate what we had to do. In short, it is the illegal sanctions, which I equate to terrorism, that led to the deterioration and near collapse of our economy.

Q: So, in effect, you are saying the implosion, or whatever you call it, was not due to your and the government’s mismanagement of the economy as your critics say?

A: No, what was there to mismanage, tell me? If anything, it is heroic survival. The figures are there for all to see. So we had to think outside the box, guided by the President! It was like having a car that has no fuel, and yet you must take the children to school in Mutare (the capital of Manicaland, 250km away). You have to think outside the box how to get there!

Q: During that time, Zhnbabwe’s economy operated as a cash economy, with no lines of credit. How difficult did this make your work as governor?

A: It was extremely difficult. I mean the Zimbabwean economy became a casino economy. And you don’t go and play in a casino with cheque books, you go with cash. And casino economies are not normal economies.

So, superintending over an abnormal system implied that one needed to act abnormally in a world that believes in normality. Therefore, to say it was difficult is an understatement. But surprise surprise, the human mind, if stretched, will always produce incredible results.

I will give you an example. We had a real challenge when Germany, (who we relied on for the supply of paper and ink to print our local currency) decided overnight to break a 40-year relationship that we had enjoyed, by refusing to give us any more paper or ink or spare parts for our currency- printing establishment known as Fidelity Printers.

This was at the height of our cash economy where there was no usage of cheques or electronic transfers. Everything was by cash. And for 40 years we had always relied on Germany to meet part of the supplies of our currency, so we had not create a factory capacity that would print the currency for our entire requirements as Zimbabwe.

Germany’s refusal to give us our ink, spare parts and paper was part of the grand plan to cripple the Zimbabwean economy because it takes 18 to 24 months to build a new factory facility or to expand it. So what did we do?

Workers were demanding to be paid in cash, suppliers wanted cash, factories demanded cash, supermarkets wanted to transact in cash. And we only had a limited physical capacity to print or produce a number of pieces bearing my signature.

So we had a real difficulty on our hands, and had to stretch our minds to overcome it. We had to use gymnastics in order to still continue to get ink and paper to print money. And we did it by using one or two countries in the neighbourhood to order ink and paper, put it on their requirements and pass the balance on to us; and we survived. You would not believe the gymnastics that went into this operation of getting ink and paper to print money.

Q: Your story reminds me of one of your predecessor governors, N. H. B. Bruce, who was seconded fronmSouth Africa,from 1965 to 1976, to serve as governor of (Rhodesia) Zimbabwe’s central bank, and his role was sanctions- busting, to make the economy survive the sanctions under Ian Smith, what inspiration did you draw from him?

A: The period under which he served can only be of relevance in as far as he was under sanctions.

But those sanctions were picnic stuff, they were child play, compared to what we went through because South Africa was always there to help Rhodesia break the sanctions.

Q: You have been saying that “sanctions are equivalent to massive military action against poor societies”. Is that how dramatic it is?

A: It is worse than that. It is genocide. It is indiscriminate. Therefore, it is a fallacy, the height of hypocrisy, for any nation to have said these were targeted sanctions. What targeted? When a country cannot get funds to buy drugs, there is nothing “targeted” about it.

The lack of medicines in hospitals affects the unborn, it affects the woman who is in labour, it affects the newly-born, it affects the elderly, it affects the child who is going to a kindergarten, it affects teachers, nurses, priests, drivers; it affects adults who are supposed to be working, it affects even the dead in the sense that when they are in the funeral house waiting to be taken to their final places of rest, they stay in the morgue longer than they should.

The reason being that the hearse does not have fuel or has broken down, and there are no spare parts. This is the nature of the banditry called sanctions.

Q: Again in 2000 you said: “The last line of defence is the power within ourselves to print money. We don’t need foreign exchange to build roads and dams. We need local currency. So we print the money here to finance infrastructural development, because infrastructure is not inflationary.

This is why your critics say the subsequent economic implosion was all your fault. You printed too much money?

A: But if we had not printed money, which was our only line of defence, what would have happened to the cholera victims, what would have happened to the disaster-recovery programmes that were executed by our very able, well-equipped, well-trained, and well-fed soldiers who, without the printed money, would have left flood victims to die?
Today, the same critics are sitting in the comfort of their offices because they still have the breath of life in their chests. If we had not printed money, by now they would have been eaten up by moths, and most of them would not have probably made it to heaven.

Q: You are also on record as having said: “Printing money to sustain lives, to build infrastructure and a springboard from which to leap forward, cannot be bad. The United States had to print money to finance some of the infrastructure that the current generation are proud to have... It gives us a sense of great pride that we, in Zimbabwe, are doing this on our own.’

Looking back at your programme of printing money and the consequences thereof would you still say you are proud of it?

A: I am very humbled by the wisdom of president Mugabe who led the operation. If he had not done so, he would not be in office today to lead us to the finalisation of the ‘Third Chimurenga (third war of liberation), and now going into the Fourth Chimurenga of production and economic prosperity.

If President Mugabe had been removed from office by the forces of regime change at that time, this continent, this region, this country and this generation, would have been condemned to a perpetual road of regret. So we are very lucky, through his leadership, we were able to do whatever we could.

Q: Again, in 2000, you said: “We are guided by conviction and not convention, and where convention meets conviction, well and good.

“What drives us is the belief that what we are doing is the correct thing.” My question is: If what you were doing was right, why did the country ditch the Zim dollar for the US dollar as its national currency, and you later became a fervent advocate of the non¬return of the Zim dollar?

A: Whenever you are fighting a war, you ought to be guided by pragmatism. We are a pragmatic people.

We know when to take two steps back in order to make 10 forward. The stage at which we are now is a stage where we are re-starting our engines, we had cooled them down. Re-starting your engines or cooling them down is no sign of defeat at all.

It is only a pause, and a pause is not a defeat.

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