Good and bad news from Zimbabwe

I mentioned two days ago that Zimbabwean authorities were holding a two-year old child prisoner, along with his activist parents. Denford Magora drew my attention to the situation, and has been orchestrating an online campaign to seek the child’s release.

The AP reports today that Nigel Mutemagau has been released to relatives, but that his parents are still being held. AFP quotes reports from opposition figures that point out that the child was held for 76 days in prison before being released.

So that’s very good news. The bad news is that at least 28 activists remain in custody, facing trumped up charges of plotting to overthrow the state. AP notes that the detained activists have not been formally charged, which raises suspicion that the charges against them are fabricated.

While the story of Nigel’s detention received very little media coverage until this past week, information generally flows quite freely from Zimbabwe despite efforts to constrain the press. Writing in Foreign Policy Passport, Elizabeth Dickinson believes that’s about to change. The culprit – dollarization.

As everyone knows, Zimbabwe is facing hyperinflation. This is a deeply ugly phenomenon if you’re paid in local currency – a salary that might be comfortable on Monday no longer buys a loaf of bread by Friday, as the $Z100 billion goes from being worth $200 to $0.20. But hyperinflation can come in handy when you hold dollars, pounds or rand. If the fee for a journalist’s license (yes, Zimbabwe licenses journalists, and the consequences for reporting without a license can be severe) is unaffordable today, it will be very cheap Friday, as currency devalues lots faster than the government can change prices.

As long as mobile phone companies accepted payment in Zimbabwe dollars, it was possible to arbitrage exchange rates and buy minutes cheaply if you had hard currency. More importantly, it was possible for ordinary Zimbabweans to purchase minutes with local currency. Dickinson points out that, in a dollarized Zimbabwe, it’s going to be much harder for all Zimbabweans to purchase phone time and internet access, which may lead to less information coming out of the country. She also notes that the government has issued new license fees for journalism licenses, denominated in dollars and priced so high – $1,000 and $3,000 for accreditation of local journalists, and $30,000 for foreigners – that independent journalists will no longer be able to work legally.

I’m not sure I agree with Dickinson’s predictions. In my experience, much of the information coming from Zimbabwe is coming from citizens contacting friends in Botswana and South Africa, not from people working as journalists. The situation is more likely to affect press access to formal government functions than reporting on situations on the ground. The implications of mobile phone pricing are harder to predict. Mobile phone service has proved essential to propping up Zimbabwe’s economy, as it’s the channel of communication between Zimbabweans in country and those in South Africa who are sending rand home to support their families. My guess is that carriers will sell lots of minutes in hard currency, but that less money will be available for other essentials like food and fuel.

In the long run, dollarization is probably the only way to slow the collapse of the Zimbabwean economy. It will be intriguing to see how it affects the stability of the government. Gideon Gono, the central bank governor, can print as many rapidly devaluing Zim dollars as he can afford paper and ink for, but can’t print dollars. If the government has to pay salaries for military and security personnel in dollars – which they don’t have – it’s likely that unrest will come about quickly. Yes, journalist fees in hard currency are yet another windfall for the government, reputed to be making a fortune in the currency black market, but a fully-dollarized Zimbabwe would likely be very difficult to accomplish without dramatically shrinking security forces, and possibly putting unemployed people with weapons on the streets.

For anyone interested in expanding their understanding of Zimbabwe beyond “Mugabe’s nuts and has run the country into the ground”, Mahmood Mamdani offers a great deal of useful information and perspective in his piece in the London Review of Books, “Lessons of Zimbabwe”. Focusing primarily on land redistribution in Zimbabwe after the overthrow of the Ian Smith government, he concludes that land reform was neccesary, botched in part by the British in the Lancaster House agreement, and not quite as disastrous as generally understood. The piece is not an apologia for Mugabe’s authoritarianism, but adds a great deal of complexity to the understanding of the current situation.

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