ZIMBABWE: ECONOMIC CRISIS, NEW CURRENCY AND URGENT TASKS
The following is reprinted from our comrades of the Revolutionary Workers Group of Zimbabwe (Section of the International Leninist Trotskyist Tendency-ILTT)
INTRODUCTION
On the 5th of April the incoming governor of the central bank, Reserve Bank of Zimbabwe (RBZ), announced the annual Monetary Policy Statement (MPS) whose major highlight was the introduction of a new currency with immediate effect. The stated objective is to tame inflation and high prices of goods and services as well as the loss of value experienced by the previous local currency, RTGS/ZWL, against the US dollar (USD). Will the new monetary measures arrest inflationary tendencies and stabilise the exchange rate as anticipated by the monetary authorities? Will this anticipated stability result in an improved life for the working class and the poor masses reeling under the effects of an acute economic crisis? We intend to answer these questions from a working class point of view against the mainstream bourgeoisie and petit bourgeoisie superficial answers.
STATE OF ECONOMY
Formally and politically independent Zimbabwe inherited an economy enmeshed into the global imperialist system as a semi colony whose main role was the uninterrupted supply of raw materials at very cheap prices and being a market for processed and manufactured goods at exorbitant prices. The dependent nature of the economy relative to imperialist countries and the unequal world trade and market could not be solved by the national liberation struggle that accepted the right of capitalism to survive in the country, thereby failing to solve the fundamental objective of the national democratic revolution, the agrarian/land question through the distribution of land to the peasantry, which up to today remains only partially resolved.
Permanent revolution was substituted by permanent subjugation! As a result of the aborted permanent revolution national liberation was never fully achieved. With formal independence in 1980 the national political economy inherited semi-colonial economic dependency. The stalled revolution could not resist the consequences of the acute downturn in the prices of commodities in the 1980s. The IMF/World Bank imposed its neoliberal Economic Structural Adjustment Programme(ESAP) and its austerities were compounded by the costs of the DRC war, lump sum payments to veterans of the liberation struggle, unsupported and limited land reform, populist indigenisation policy, money printing, quasi fiscal activities by the central bank and regular droughts.
The combined effect of the above factors show how a dependent economy has its production of value extracted by imperialism, resulting in the futile attempts by the national ruling class to resolve the crisis in the confines of the capitalist system. The dominant imperialist powers manipulate the exchange rate so that the national currency is inflated against the USD. Most important has been the economic sanctions imposed by the US over the last two decades to bring about regime change, and the terminal decline of global capitalism since the start of the new millennium especially around the 2008 Global Financial Crisis (GFC), known as the ‘long depression’ causing a stagnating world economy.
At the same time, the emergence of China, and to a lesser extent Russia, as imperialist countries signalled a change in the imperialist balance of power with other semi colonies shifting their dependency towards the new imperialist states. Today the world situation is defined by the economic rivalry of these two imperialist camps. The semi-colonial world, Africa in general and Southern Africa in particular are navigating this realignment of great powers. Despite the realignment with the east, workers and landless farmers still suffer economic subjugation globally. This can be seen clearly in the shift in Zimbabwe’s dependence away from the US and towards China and Russia. As we will show, this is the context in which the MPS is understood as an instrument to try and ameliorate and resolve the stability of the currency by moving away from the USD to a basket of currencies developed by the BRICS Development Bank (BDB).
MPS AND NEW CURRENCY
The MPS is a monetary tool intended to make the system work for the national capitalists with only a modicum of relief for the masses. It is a reformist tool which cannot resolve the fundamental contradictions of capitalist degeneration and crisis in a semi colony still reeling from the effects of punitive sanctions imposed by western imperialist states for almost two decades after the land reform exercise at the turn of the century. Mainstream bourgeoisie and petit bourgeoisie commentators and functionaries are obsessed with the superficial aspects of the crisis. Those who are pro regime argue that the backing of the new Zimbabwe Gold (ZiG) currency by the country’s foreign currency reserves and minerals as well as pegging its value to the price of gold will result in a competitive and stable currency. The anti-regime petit bourgeoisie elements resort to superficial economic terms of supply and demand, lack of confidence, etc. as aspects militating against the new currency. Of course they do not consider the economy from the perspective of the working class’s historic fight for socialism, rather they seek to make adjustments that will serve the comprador class interests in taking a share of the national wealth.
These two main positions deliberately evade the key aspects of capitalist production. A background first. Without understanding the motive of capitalist growth in the age of imperialism we are stuck in an unresolvable contradiction. Capitalism as a system of profit making through the exploitation of labour power subordinated to the law of value survives by increasing labour productivity and being competitive. In Zimbabwe’s case ESAP crushed the few competitive local industries by exposing them to unfair competition from outside. Unfair in that labour productivity in the imperialist countries and some advanced semi colonies was more competitive in the sense of requiring less labour time to produce. The Fast Track Land Reform Programme (FTLRP) reduced productivity in the farms through the failure of the government to finance increased labour productivity through advanced machinery. Only mining and the service industry remained fairly intact but could not counter the deepening subjugation of the economy.
Any serious MPS should acknowledge the extra burden of relatively low productivity in the farms and industries in a semi colony as the basic problem that has to be corrected. Workers and poor farmers are now living in a highly informal and dollarised economy as a result of ESAP induced attacks on industries and the super-exploitation of labour productivity in agriculture and mining, the mainstays of the semi colonial economy. The only viable solution would be re-industrialisation and massive support for the resettled farmers, something the national bourgeoisie regime under the dictates of imperialism cannot do. Instead they have resolved to compensate former white displaced farmers and not enhance productivity through financial and technical support to small farmers. New mines and industries are being given to the Chinese and Russians engaged in primitive accumulation methods that ignore labour and environmental rights, as they rush to catch up and overtake Western imperialists.
The objective economic challenges have been compounded by primitive and crude accumulation by the corrupt comprador capitalists and their allies through looting of national resources. The traditional capitalists, together with the comprador and national capitalists are engaged in externalisation of profits and foreign currency, manipulation of books of accounts, etc. This has made a bad situation worse leaving the working class, vendors, poor farmers and poor masses worse off. What the MPS has achieved in the short term is the theft of value on incomes, savings and pensions through the manipulated exchange rates heaping the burden of economic stability on the already suffering working and poor masses. Without an attempt to resolve the issue of productivity and production it is impossible that the stability of the local currency will improve to result in consolidation of value and competitiveness. Is the regime not aware of this fact, or are they banking on the BRICS?
CASE FOR BRICS
Is it no coincidence that talk of a structured currency started at a time when the country had applied to be a member of the BDB? Again, it is no coincidence that a few days before the launch of the new currency, the main pro-government paper announced that the country is set to be admitted as a member of the BDB? China has made significant inroads into the national economy since the turn of the century taking advantage of retreating western states under the US led economic sanctions and its emergence as an imperialist nation in its own right. It has now become a major trading partner with interests in mining, agriculture and manufacturing. The relationship, as with other imperialist powers, is an unequal one with China exploiting the resources and labour of the nation in exchange for infrastructure development and geopolitical protection. The increasing economic dominance of China on the national scene together with the global trend towards reducing reliance on the USD therefore makes it highly probable that the MPS is centrally premised on the imminent admission of the country into the BDB.
WORKERS INTERESTS
Which class will pay for the continued crisis that expresses itself as hyperinflation? It is the workers and poor farmers who produce the labour value who are faced with a decline in the value of their own labour power. This is the same as the rate of exploitation increasing. It is not the capitalist class together with their middle class hangers who own assets which do not devalue like workers wages. The MPS is a weapon used by the ruling regime on behalf of the capitalist class to put on the shoulders of the working class the burden of stabilising the local currency and the economy through devaluation of incomes, pensions and savings as well as price hikes.
The existing multi-currency policy has served the regime and the commercial comprador fraction of the capitalist class well in that nearly all services and goods are priced or pegged in USD whilst incomes are still payable in the devalued local currency. However this arrangement is now threatened by ‘de-dollarisation’ as the USD is coming under threat from the rise of the BRICS and its trading bloc. The US facing the rise of Russia and China in Africa, recognises that the USD is under threat from the BRICS which has expanded at its expense over the last 20 years and is now rapidly growing as a result of its proxy war in Ukraine. This is why the US recently lifted its economic sanctions on Zimbabwe to free up Western FDI to compete with its main rivals while at the same time continuing to target sanctions on the Mnangagwa regime in an attempt to bring about a regime change favouring the collective West.
Feeling the heat of a devalued local currency against the USD in trade, the dominant state monopoly fraction of the capitalist class linked to the regime is opting for full de-dollarisation in order to gain regional and international competitiveness. But while the world capitalist economy is still in place, the only way this can be delivered is by the BRICS who are substituting for the USD a new financial system based on a trading bloc of countries comprising a basket of currencies representing the value of commodities produced by its member states including gold. The BDB will provide loans to member states backed by the value of the commodities produced and traded, measured by the value of the labour time required to produce them, and reflected in the value of their national currency.
In this way the member states will be able to avoid the USD and potentially realise more of the value of the commodities they produce. However, Chinese and Russian imperialism will extract their super-profits from the surplus value produced by workers and farmers who will not see their full share of their labour value any more under the BRICS currency swaps than the USD. There is no such thing as ‘’fair trade’ for those who produce the value. So long as capitalists rule they will expropriate their profits at the expense of workers and working farmers.
Therefore, workers and poor farmers do not benefit from these pro-business and capitalist machinations whose main effect is maximising their exploitation but cutting the value of their wages. Workers cannot win a living wage within a capitalist system, worse still a compliant semi colony. Neither can they enjoy improved working conditions when the law of the Tendency of the Rate of Profit to Fall (LTRPF) demands increased exploitation of labour power as the only way to save the national economy and global capitalism under crisis. All attempts at winning piecemeal reforms are bound to fail given the acute nature of the crisis and the rising Russia and China committed to smashing workers rights to enable global domination. For workers and poor farmers too survive capitalism and imperialism must die!
WAY FORWARD
We have no class interest in propping up imperialism! Our task is to change our situation regardless of the MPS which is but the latest trick in a long history of anti-working class strategies aimed at placing the burden of the economic crisis on the working class. Above all workers must fight for class political independence. We need our own working class party to put our class’s historic program on the agenda. Our task is to organise a new militant working class leadership in the unions across all industries, at plants, factories, farms and neighbourhoods level for class struggle actions guided by lessons learnt in combat nationally and internationally. Collaborationist union leaders, bureaucrats and phony labour aristocrats must be sidestepped by ordinary workers organised in action/strike committees ready to fight for political class independence in order to win a living wage and guided by this program:
Sliding scale of wages and prices and employment for all who can work; working conditions should improve for all workers!
Introduction of state projects to employ all the unemployed; Central and local government must stop the attacks on vendors!
Land must be distributed to all poor peasants together with a state bank to provide inputs to all small farmers!
Jobs for all with a reduction in working hours until all who want to work can find a job!
To provide jobs for all big and imperialist assets must be nationalised and put under workers control and self-management!
Workers form action committees to lead the resistance to the growing attacks on wages and working conditions of the poor and the livelihood of the majority poor!
Free and quality health care, Housing and Education for all!
Workers break with the mainstream bourgeoisie parties and form a worker’s party that truly champions the interests of the workers and the poor masses!
Workers form rank and file bodies to lead action in all unions and break with the reformist and collaborationist trade union leadership and bureaucracy!
Build a revolutionary workers party that fights for the workers government!
For a workers state that defends workers and peasants against the local and foreign capitalists!
No to US and Chinese imperialism fronted by the main opposition and ruling parties respectively!
For a workers and peasants’ government on the basis of the armed people to implement decisions that benefit the workers and the poor!
For a federation of socialist southern African workers states!
For an African socialist revolution as part of the international revolution that alone can guarantee a better life for all!
For a new World Party of socialist revolution based on the Transitional Program to lead the revolution to end capitalism and open the road to socialism!
