r economic collapse. Zimbabwe: a lesson in self-destruction, and a warning to others Over the past half decade. Zimbabwe has transformed from one of Africa’s rare success stories into one of its worst economic and humanitarian disasters. Its destruction, like that of Nicaragua two decades earlier, offers important, cautionary lessons for other developing countries. Since 2000 Zimbabwe has been in an economic tailspin. Reviewing International Monetary Fund reports, Zimbabwe simply appears to be a country falling apart under the collective weight of countless bad policies. But how the country lost 50 years of economic progress in only five years can be traced to a single policy: its fast track land reform programme, under which the Mugabe government, beginning in 2000, seized thousands of white-owned commercial farms. The other “inappropriate” policies adopted by the Mugabe government exacerbated the damage, but they were not the underlying cause. A puzzle remains: the farming sector was only 18 percent of the entire economy. Other sectors, such as banking, tourism, manufacturing, and mining, also shrank dramatically during this time, however. How, then, to explain the discrepancy? The damage done to property rights by the land reforms caused a series of ripple effects throughout Zimbabwe’s other economic sectors. The destruction of Zimbabwe represents a grim “natural experiment” that illustrates the tremendous negative consequences of ignoring the rule of law and provides a cautionary lesson for other developing countries. Unfortunately, the rebuilding of an economy after property rights have been revoked is likely to be contentious and slow, akin to rebuilding trust in a relationship after a serious betrayal. The case of Nicaragua with its history of land expropriation under the Sandinistas, its resulting collapse, and its long and difficult struggle toward recovery provide useful clues for what a post-Mugabe future might hold. By the late 1990s, a broad consensus had taken shape that land reforms in Zimbabwe were needed, and as late as 1998 the IMF predicted that the Zimbabwean government’s land reform would unfold in a fair and legal manner. However, the IMF – along with everyone else who trusted the Mugabe government – was soon proven wrong. Beginning in 2000, Harare began seizing control of white-owned farmland, with no compensation for its owners, and then redistributing it to political cronies in the Zanu (PF)political party, rather than poor rural farmers. Land titles were declared null and void, and all contracts and mortgages related to the farmland were suddenly worthless. If the usual explanations for Zimbabwe’s implosion, such a drought or so-called ‘sanctions’ are insufficient, why do the country’s land reforms provide a better explanation? The argument here is straightforward: the expropriation of land without compensation destroyed property rights–the foundation of the economy–and led to a chain reaction, which was exacerbated by additional actions of the Mugabe government. Watching Zimbabwe’s economic unravelling is chillingly reminiscent of watching a building collapse in slow motion after a series of timed explosions. The case study also reveals how the hidden yet fragile architecture of capitalism can so quickly fall apart once its substructure is substantially harmed. In 2000 the Zimbabwean Supreme Court declared the fast track land reform unconstitutional. It was then, for the first time that Mugabe openly ignored the rule of law. He replaced unfriendly judges with cronies, securing his desired ruling in December 2001. Land titles and private land ownership had become a thing of the past. Newly resettled Zimbabweans were assigned plots of former commercial farmland but were forced to lease it year to year from the government. With no means to borrow against their land, the new farmers could not obtain loans. Moreover, their knowledge of farming was often meagre. – Craig Richardson is the author of The Collapse of Zimbabwe in the Wake of the 2000-2003 Land Reforms. (Edwin Mellen Press, 2004) cjr@salem.edu www.aei.org
NEXT WEEK: In Part II Dr. Richardson argues that South Africa and Namibia should learn from the Zimbabwe disaster.
Post published in: News