Tim Jones blogs from Zimbabwe
Finding optimism in an unlikely place
I am asked at dinner whether Zimbabwe is what I expected. My reply is that after three days in Harare, it is more optimistic than I thought it would be.
Last week I turned 30, a similar age to Zimbabwe. For its first decade optimism was high as there were significant advances in improving social services, tackling poverty and reducing inequality. But in the 1990s this all changed; regulations were removed, public spending cut and poverty and unemployment increased. From 1997 things went from bad to worse, culminating in 2008 with an almost complete breakdown in the economy after the government's printing of money led to hyperinflation.
The economy has now stabilised after the US dollar becoming the official currency. There is a coalition government which has survived three years without breaking down into civil war. Central Harare feels like most other cities: lots of traffic, banks, shops, adverts, newspapers - and inequality. The Zimbabwean upper classes are benefiting from high prices for exports of the country's minerals such as gold and platinum.
These valuable commodities lie at the heart of the economic challenge of the poor majority seeing their living standards improve. The all too-often traveled path is for these resources to leave the country, quickly followed by the wealth they earn, whether taken out of the country by local elites, foreign companies or lost through debt repayments.
I meet with fifty activists from local civil society organisations, who are discussing strategy for dealing with Zimbabwe's debt. The government's roughly $7 billion debt was created mainly in the 1980s and 1990s with lending from private companies, institutions such as the World Bank, or foreign governments. In 2000 the Zimbabwe Coalition on Debt and Development was formed by a cross section of civil society organisations to campaign for the debt to be cancelled. In the same year, with debt repayments swallowing up 25-50 per cent of the country's earnings from exports, the government stopped repaying many of its foreign debts.
Within the Zimbabwean government there are two main proposals for dealing with the debt. One side says revenues from mineral exports, particularly diamonds, should be used to repay the debt. The other says Zimbabwe should apply to join the Heavily Indebted Poor Countries initiative run by the IMF and World Bank.
Both these options are opposed by many of the activists. They want resources from minerals to be properly invested in the country to build infrastructure and industry, creating an economy with more jobs and greater equality. Not squandered on debt repayments.
They fear the IMF and World Bank, with memories still fresh of how structural adjustment increased poverty and started the country's economic decline in the 1990s. One Christian Pastor tells me: "Why would we want to get medicine from the same doctor who made us sick last time we went to see him."
Applying to join the Heavily Indebted Poor Countries process would also mean debt repayments would increase - whilst it offers to cancel some debts, in return others have to begin to be repaid. The incentive to do so is to be eligible to get loans from the like of the World Bank and African Development Bank again. Some debt is cancelled so that the country can get back into debt.
Which is why the Zimbabwe Coalition on Debt and Development is campaigning for an alternative - a debt audit. An audit would analyse the lending which created the current debt to find out how it did and did not benefit ordinary Zimbabweans. This would learn the lessons of the past, helping to prevent past mistakes being repeated. Three senior officials from the Zimbabwean Ministry of Finance attend the all day strategy meeting, attentively listening to these alternatives.
On arriving at Harare airport, as a British citizen I had to pay $55 for my visa. There were notices up saying that Chinese citizens have to pay $60. The East Asian country is undoubtedly the new power in town. One local says to me “We used to be in the British Empire, but maybe we are entering the Chinese Empire now.”
In the same way as the UK in the 1980s and 1990s, China is giving loans to Zimbabwe to buy their goods; which are then to be repaid by earnings from mineral exports. There feels little difference between a recent Chinese loan for a defence college and past British loans for the police to buy UK made land rovers. The Zimbabwe Coalition on Debt and Development is working with allies in parliament and government to get greater scrutiny and accountability over such loans.
A debt audit is a vital step in this process; learning the lessons of the past so that the cycle of mineral earnings being squandered on debt repayments is not repeated. It is part of the hopeful vision of those fighting for justice in Zimbabwe, where the country's wealth is invested in building the economy and providing jobs.
The simple story of Zimbabwe taught to me in the UK has been challenged by the much more complex reality. There is optimism and hope that justice can prevail through the undoubtedly messy future which lies ahead. I wonder whether we in the UK are brave and capable enough to stand in solidarity with the Zimbabwean people in their challenges to come.