Somewhere in Africa - McClatchy Newspapers
Buying time - and little else - in Zimbabwe

Posted by Shashank

Mon Jul 21, 5:47 AM ET


Word comes today that Robert Mugabe and Morgan Tsvangirai are ready to start negotiations over last month's universally condemned election in Zimbabwe. The BBC says the two sides "are close to signing a deal outlining a framework for talks." This, for Zimbabwe, qualifies as a breakthrough, although I wouldn't be too quick with the champagne.

It's been four weeks since Tsvangirai pulled out of the election due to violence against his supporters. Despite world furor over his tactics and leadership, Mugabe -- with help from friends in South Africa, Russia and China -- has hung on long enough since the vote that nothing short of a miracle will overturn June's election result, however flawed.

Mugabe's goal all along appears to have been to buy time, wait for Zimbabwe to fade from world headlines and then negotiate from a position of strength. Obvious enough if you have no intention of leaving office, but there may also be a financial imperative. As reported Friday by the always-excellent Africa Confidential, a London-based journal, ruling-party officials since the election have quietly been socking millions of dollars away in offshore bank accounts in South Africa, Namibia, China, Malaysia and elsewhere.

Reserve Bank governor Gideon Gono and other Mugabe cronies are laundering money through Zimbabwean companies with links to reputable institutions in the UK and South Africa, and then shifting it to more opaque destinations "to avoid the threat of tightening sanctions and the possibility of financial scrutiny by a power-sharing government," AC writes.

It is this outflow of capital that is more than anything else destroying Zimbabwe's economy. Zimbabwe's capital exporters have intensified their operations as political and economic conditions have deteriorated, promoting a cycle of decline.

No coincidence, then, that today Gono's Reserve Bank rolled out Zimbabwe's latest ridiculous bank note: the 100-billion-dollar bill, which, as of this writing, is worth about 2 U.S. dollars. Spend it now, because it could be worth less than a single greenback by the weekend.