A Handsome Investment Opportunity: Washington’s Plan for a Post-Mugabe Zimbabwe

A Handsome Investment Opportunity: Washington’s Plan for a Post-Mugabe Zimbabwe
Posted in Imperialism, Zimbabwe by gowans on July 21, 2009

By Stephen Gowans

Washington’s plan for a post-Mugabe Zimbabwe has been sketched out by Michelle D. Gavin, White House advisor and Senior Director for African Affairs at the National Security Council [1], while she was a research fellow at the influential Council on Foreign Relations. In Planning for Post-Mugabe Zimbabwe [2], a paper which spells out “a vision for (Zimbabwe’s) future and a plan for how to get there,” Gavin explains how the “existing roster of (Zimbabwe’s) civil society leaders…lends itself to the U.S. desire” to put Zimbabwe’s valuable natural resources, including its farmland, up for sale to U.S. investors. Gavin cautions that a populist and nationalist reaction against the U.S. plan could arise, and recommends three counter measures: a job creation program; co-opting the corps of Zimbabwe’s middle-level military officers with training programs, exchanges and pay increases; and entrepreneurship programs to divert the energies and attention of politicized youth.

What is the Council on Foreign Relations?

The Council of Foreign Relations (CFR) is the largest U.S. ruling class policy organization. Founded in 1921 by bankers, lawyers and scholars interested in carving out a larger role for the United States in world affairs, the organization’s membership is today dominated by finance bankers, corporate executives, and lawyers, supplemented by journalists, scholars and government and military officials.

The CFR is funded by corporations, wealthy individuals and sales of its journal, Foreign Affairs. Its most important function is to bring together small discussion groups, of 15 to 25 corporate executives, State Department and Pentagon officials, and academics, to explore specific issues in foreign affairs and identify policy alternatives. Discussion groups often lead to study groups, led by a research fellow, Gavin’s role at the CFR. As sociologist William Domhoff explains,

“The goal of such study groups is a detailed statement of the problem by the scholar leading the discussion. Any book that eventuates from the group is understood to express the views of its academic author, not of the council or the members of the study group, but the books are nonetheless published with the sponsorship of the CFR.” [3]

The books and papers are sent to the State Department, where their recommendations are often adopted, either as a result of the prestige of the CFR or because members of the CFR circulate freely between the organization and the State Department and National Security Council. Gavin herself is emblematic of this career path.

Gavin’s Analysis

It is quite astonishing that the United States can deny that it is imperialist, when scholars, government and military officials and CEOs, meet under the auspices of the CFR to plan the future of other countries. In an affront to democracy and geography, Gavin, a U.S. citizen, articulates the CFR’s “vision for (Zimbabwe’s) future and a plan for how to get there.”

Gavin attributes Zimbabwe’s economic difficulties to “gross mismanagement,” rather than U.S. efforts to undermine Zimbabwe’s economy, a commonly practiced deception by U.S. officials. While “President Mugabe and his cronies frequently claim that Western sanctions are sabotaging the Zimbabwean economy,” she writes, this cannot be true because “there are no trade sanctions on Zimbabwe.” True, there are no formal trade sanctions, but there are plenty of financial sanctions, a point of which Gavin must surely be aware. She was a long-serving foreign policy advisor to U.S. Senator Russ Feingold, a co-sponsor of the Zimbabwe Democracy and Economic Recovery of Act of 2001 (ZDERA), along with Hillary Clinton (now U.S. Secretary of State), Joseph Biden (now U.S. Vice-President) and the arch racist Jesse Helms. Gavin, herself, describes ZDERA as “a law prohibiting U.S. support for both debt relief and any new assistance for Zimbabwe from the international financial institutions.” This means that Zimbabwe has been barred from accessing development assistance and balance of payment support since 2001, a virtual economic death sentence for a Third World country. Gavin’s deception extends to claiming that while “it is true that major donors oppose extending any additional support to Zimbabwe at international financial institutions, Zimbabwe’s own deep arrears and the ZANU-PF government’s unwillingness to pursue sustainable economic policies prevent this support from being extended anyway.” If this is true, why did the U.S. government go to the trouble of creating ZDERA? And why is Zimbabwe’s Ministry of Finance, now under the control of the U.S.-backed Movement for Democratic Change, complaining that ZDERA is undermining its efforts to bring about an economic recovery? In May, Finance Minister Tendai Biti pointed out that,

“The World Bank has right now billions and billions of dollars that we have access to but we can’t access those dollars unless we have dealt with and normalized our relations with the IMF. We cannot normalize our relations with the IMF because of the voting power, it’s a blocking voting power of America and people who represent America on that board cannot vote differently because of ZDERA.” [4]

As bad as ZDERA is, it’s not the only financial sanctions regime the United States has used to sabotage Zimbabwe’s economy. Addressing the Senate Foreign Relations African Affairs Subcommittee, Jendaya Frazer, who was George W. Bush’s top diplomat in Africa, noted that the United States had imposed financial restrictions on 135 individuals and 30 businesses. U.S. citizens and corporations who violate the sanctions face penalties ranging from $250,000 to $500,000. “We are looking to expand the category of Zimbabweans who are covered. We are also looking at sanctions on government entities as well, not just individuals.” She added that the U.S. Treasury Department was looking into ways to target sectors of Zimbabwe’s critical mining industry. [5]

On July 25, 2008 Bush announced that sanctions on Zimbabwe would be stepped up. He outlawed U.S. financial transactions with a number of key Zimbabwe companies and froze their U.S. assets. The enterprises included: the Zimbabwe Mining Development Corporation (which controls all mineral exports); the Zimbabwe Iron and Steel Company; Minerals Marketing Corporation of Zimbabwe; Osleg, or Operation Sovereign Legitimacy, the commercial arm of Zimbabwe’s army; Industrial Development Corporation; the Infrastructure Development Bank of Zimbabwe; ZB Financial Holdings; and the Agriculture Development Bank of Zimbabwe. [6]

Two other aspects of Gavin’s comments on Zimbabwe’s economy must be addressed.

First, her reference to senior Zimbabwe officials as “cronies” of Robert Mugabe: This is a transparent effort to discredit Zimbabwe’s government through name-calling, a hoary practice that, during the Cold War, led U.S. officials and mass media to adopt differential terminology depending on whether they were referring to capitalist or socialist countries. The Soviet Union had a “regime”, “secret police”, “satellites” and an “empire” while the United States had a “government,” “security organizations,” “allies,” and “strategic interests.” The propaganda function of the term “cronies” becomes evident when used against the United States. Were we to talk of Obama and his cronies (his top advisors and cabinet officials) we would be dismissed as crude propagandists. “Cronies” not only serves a clear propaganda function, it also reflects Washington’s frustration with Mugabe’s having built up a loyal circle of advisors and political lieutenants, whose members the United States has been unable to co-opt.

Second, Gavin’s attributing “Zimbabwe’s own deep arrears” to international lending institutions to the former “ZANU-PF government’s unwillingness to pursue sustainable economic policies,” requires some explanation of what sustainable economic policies are. Sustainable economic policies, from the point of view of the World Bank, IMF and the North Atlantic financial elite that dominates these organizations, are policies which benefit the lenders. Credit does not come without strings attached, and the strings are often deeply inimical to local populations. The economic policies the Mugabe government pursued, under the guidance of the World Bank and IMF, hardly sustained the people of Zimbabwe.

“In January 1991, Zimbabwe adopted its Economic Structural Adjustment Program (ESAP), designed primarily by the World Bank. The program called for the usual prescription of actions advocated by Western financial institutions, including privatization, deregulation, a reduction of government expenditures on social needs, and deficit cutting. User fees were instituted for health and education, and food subsidies were eliminated. Measures protecting local industry from foreign competition were also withdrawn.

“The impact was immediate. While pleasing for Western investors, the result was a disaster for the people of Zimbabwe. According to one study, the poorest households in Harare saw their income drop over 12 percent in the year from 1991 to 1992 alone, while real wages in the country plunged by a third over the life of the program. Falling income levels forced people to spend a greater percentage of their income on food, and second-hand clothes were imported to compensate for the inability of most of Zimbabwe’s citizens to purchase new clothing. A 1994 survey in Harare found that 90 percent of those interviewed felt that ESAP had adversely affected their lives. The rise in food prices was seen as a major problem by 64 percent of respondents, while many indicated that they were forced to reduce their food intake. ESAP resulted in mass layoffs and crippled the job market so that many were unable to find any employment at all. In the communal areas, the rise in fertilizer prices meant that subsistence farmers were no longer able to fertilize their land, resulting in lower yields. ESAP also mandated the elimination of price controls, allowing those shop owners in communal area who were free of competition to mark prices up dramatically…By 1995, over one third of Zimbabwe’s citizens could not afford a basic food basket, shelter and clothing. From 1991 to 1995, Zimbabwe experienced a sharp deindustrialization, as manufacturing output fell 40 percent.

“The government of Zimbabwe felt it could no longer endure this debacle, and by the end of the 1990’s, started moving away from the neoliberal program. Finally, in October 2001, the abandonment of ESAP was officially announced. ‘Enough is enough,’ declared President Mugabe.” [7]

Zimbabwe: A handsome investment opportunity

Gavin estimates that the overall costs of undoing the damage of U.S. economic sabotage “fall between $3 billion and $4.5 billion over five years,” representing a substantial investment for the U.S. government. But “such a substantial investment makes sense,” Gavin concludes, because “private investors have expressed strong enthusiasm for Zimbabwe’s long-term potential.”

However, taking advantage of Zimbabwe’s long-term investment potential may not be easy, she cautions, for the suspicions of populist and nationalist Zimbabweans must be overcome. “The United States and others should be aware of nationalist and populist sensitivities,” she warns. The creation of “a reform agenda” and “a more favorable investment climate” could lead Zimbabweans to believe that U.S. involvement ”is leading to a selling off of valuable natural resources in deals that are lucrative for foreign investors but do little for the Zimbabwean people.”

Zimbabweans’ experiences with World Bank and IMF economic structural adjustment programs of the 1990s, and the experiences of Serbia – in which the United States created a reform agenda and more favorable investment climate after the socialist-inclined Slobodan Milosevic was ousted in a U.S.-backed coup – serve as warnings. In Serbia, U.S. involvement led to a selling off of publicly and socially-owned assets in deals that were lucrative for foreign investors but did little for the Serb people.

“In Serbia dollars have accomplished what bombs could not. After U.S.-led international sanctions were lifted with Milosevic’s ouster in 2000, the United States emerged as the largest single source of foreign direct investment. According to the U.S. embassy in Belgrade, U.S. companies have made $1 billion worth of ‘committed investments’ represented in no small part by the $580 million privatization of Nis Tobacco Factory (Phillip Morris) and a $250 million buyout of the national steel producer by U.S. Steel. Coca-Cola bought a Serbian bottled water producer in 2005 for $21 million. The list goes on.” [8]

Meanwhile, in the former Serb province of Kosovo, the

“coal mines and electrical facilities, the postal service, the Pristina airport, the railways, landfills, and waste management systems have all been privatized. As is the case across the Balkans, ‘publicly-owned enterprises’ are auctioned for a fraction of their value on the private market with little or no compensation for taxpayers.” [9]

Prior to the U.S. corporate takeover, the Yugoslav economy consisted largely of state- and socially-owned enterprises, leaving little room for U.S. profit-making opportunities, not the kind of place U.S. banks, corporations and investors are keen on. That the toppling of Milosevic had everything to do with opening space for U.S. investors and corporations was evident in chapter four of the U.S.-authored Rambouillet ultimatum, an ultimatum Milosevic rejected, triggering weeks of NATO bombing. The first article called for a free-market economy and the second for privatization of all government-owned assets. NATO bombs seemed to have had an unerring ability to hit Yugoslavia’s socially-owned factories and to miss foreign-owned ones. This was an economic take-over project.

To lull Zimbabweans into accepting the selling off of their valuable natural resources, Gavin recommends that U.S. investors establish “a corporate code of conduct that takes into account these sensitivities” and that they “be sensitive to Zimbabwe’s urgent need for job creation when considering how they might protect and nurture long-term investments.”

This says that U.S. investors should tread carefully when gobbling up Zimbabwe’s valuable natural resources, and that creating jobs may be a way to stifle nationalist and populist sentiment.

The outcome of “the more open investment climate,” of course, would be to deliver ownership of Zimbabwe’s natural resources and economy to the corporations, investment banks and wealthy investors represented among CFR members, while Zimbabweans are relegated to the subordinate role of employees. U.S. investors would create jobs to reduce nationalist opposition, but this would be a sop. The Zanu-PF program of making Zimbabweans masters in their own house would be reversed, and Zimbabweans would return to the role of creating wealth for foreign owners, mired in poverty and condemned to perpetual underdevelopment.

Restoring private property rights

Zimbabwe’s long-term potential for U.S. investors can’t be realized unless investments are protected from expropriation. “The core conditions for a resumption of assistance” therefore “must include…repeal of the legislation passed in recent years” that “gutted private property rights,” Gavin writes.

Restoring private property rights is also critical to Washington’s plan for Zimbabwe’s farmland. The essence of the plan is to clear “away obstacles to private investment,” by according ownership rights to families on redistributed land. They would be able to sell their land, transferring ownership to the highest bidder. At the same time, expropriated white farmers would be fully compensated, thereby acquiring the means and the legal structure to reclaim their farms. Foreign investors could also buy large tracts of lands, helping to “facilitate the consolidation of small parcels into more economically viable entities.” This is a vision of a commercial agricultural sector based on ownership of vast tracts of land by foreign corporations and white farmers restored to their former dominant positions, in which black Zimbabweans are relegated to the role of farm workers, or, once again, to the least favorable land.

Gavin worries about politicized youth, especially those who participated in “farm invasions and youth militia activities,” presumably because they represent an activist nationalist sector likely to oppose the selling off of Zimbabwean’s natural resources, including its farmland. In order to divert their energies, Gavin recommends “programming for youth through credit schemes, technology-focused skill building, programs to foster entrepreneurship and empowerment initiatives designed to give young people an ongoing, institutionalized voice in government.” This borrows from the successful strategy of ruling class organizations in the United States to move the civil rights and anti-Vietnam war movements off the streets and to bog them down in legalistic and bureaucratic activities. This was done, in part, by funding voter registration drives and lowering the voting age to 18 from 21 – anything to remove militants from the streets and to bring them into formal institutional structures the ruling class dominates.

“By 1963, the civil rights movement was becoming more militant, and the ‘black power’ slogan, first used by the Student Non-Violent Coordinating Committee, made elites nervous. The Ford and Rockefeller foundations responded by creating the National Urban Coalition to transform ‘black power’…into ‘black capitalism’.” [10] This was done by providing funding for the same kinds of activities Gavin wants to promote in a post-Mugabe Zimbabwe: micro-credit loans, entrepreneurship programs, and engagement of youth in electoral and parliamentary processes.

The culmination of this program in the United States was the election of Barack Obama, who, in a recent speech to mark the centennial of the NAACP, described his election, blacks in political office, and black CEOs running Fortune 500 corporations, as the final goal of the civil rights movement. Because a militant black power movement was hijacked and turned into a movement for black capitalism, the United States remains profoundly unequal in employment, income, opportunity and education, with blacks on the bottom rung of the ladder. By Obama’s own admission, “African Americans are out of work more than just about anybody else…are more likely to suffer from a host of diseases but less likely to own health insurance than just about anybody else…” and “an African American child is roughly five times as likely as a white child to see the inside of a prison.” [11] To illustrate how effectively the co-opting of the black power movement has emasculated efforts to end oppression of blacks in the United States, the best Obama can offer to redress the appalling level for racial inequality is to urge black U.S. citizens to do what he urged Africans in his Ghana speech to do: stop blaming others and try harder.

“We’ve got to say to our children, yes, if you’re African American, the odds of growing up amid crimes and gangs are higher. Yes, if you live in a poor neighborhood you will face challenges that somebody in a wealthy suburb does not have to face. But that’s not a reason to get bad grades—that’s not a reason to cut class—that’s not a reason to give up on your education and drop out of school. No one has written your destiny for you. Your destiny is in your hands—you cannot forget that. That’s what we have to teach all of our children. No excuses. No excuses. You get that education, all those hardships will just make you stronger, better able to compete. Yes we can.” [12]

There’s nothing wrong with a determined approach to overcoming obstacles, but there’s an ambiguity in Obama’s message that borders on racism. It’s clear that he acknowledges that blacks face obstacles, and it’s also clear that he does not foresee the obstacles being removed, otherwise why would he urge blacks to overcome them, rather than act collectively to eliminate them? The ambiguity arises because Obama urges blacks not to attribute their condition to the obstacles they face. Why not? If the obstacles are real, why not acknowledge them, and organize politically to remove them? The alternative interpretation is that Obama means the obstacles are not formidable, and that blacks are using them as an excuse to cover up for personal failings. If this is indeed what Obama means, his analysis is deeply racist. By contrast, Zanu-PF has worked to remove obstacles to black Zimbabweans left in place by the country’s colonial heritage and hasn’t adopted the Obama approach of leaving racist structures in place while bidding the victims to pick themselves up by the bootstraps.

To consolidate its control over Zimbabwe, Washington plans to energetically engage “middle-level officers” of Zimbabwe’s military, purged of “clearly political actors,” in “a dialogue about security sector reform.” Middle-level officers would be targeted for pay increases, to be underwritten by “donors other than the United States,” who Gavin believes would “be best equipped to assist with this.” It is standard operating procedure in the imperialist playbook to engage the officer corps of countries to be subordinated to outside control. As Szymanski and Goertzel explain, imperialist military power can be

“exerted through the support of local military institutions and the resultant gratitude of the officer corps. The local military establishment frequently are willing to support the imperialists against their own people. Metropolitan countries train the officers of Third World armies, either in the metropolitan countries (the top officers), or in Third World countries (low-level officers.) They provide military advisers at all levels of the chain of command, and they provide the modern weapons of war—airplanes, tanks, artillery, etc.—on which Third World armies are totally dependent.” [13]

This is the CFR’s vision for Zimbabwe. True to imperialist practice, Gavin recommends that the United States secure the loyalty of Zimbabwe’s middle-level officers with training programs, exchanges and technical assistance. She expresses frustration that Zimbabwe’s senior officer corps, many of whose members are ideologically committed to national independence, remain loyal to Mugabe and his nationalist goals. Middle-level officers would be promised promotions to replace loyal senior officers, who would be purged.

Conclusion

While working as a research fellow at the CFR, Michelle Gavin set forth the vision of the United States’ top executives, investment bankers and corporate lawyers for Zimbabwe’s future and a plan for how to get there. Not surprisingly, the future the CFR envisions is one of a more open investment climate in which U.S. corporations, banks and investors can buy Zimbabwe’s valuable natural resources and purchase vast tracts of farmland to establish profitable commercial agribusinesses. Having moved to the U.S. National Security Council as Senior Director for African Affairs, Gavin is ideally situated to see the CFR plan and vision she articulated converted into action.

To guard against the United States realizing its plan to plunder their wealth, Zimbabweans should recognize that:

* The United States is working through civil society actors to achieve its goal of reversing the gains of land reform and selling off Zimbabwe’s valuable natural resources.
* Washington has followed a two-step approach to Zimbabwe’s economy. First, sabotage it, and then attribute the country’s economic difficulties to “mismanagement.” In this way, Washington creates the conditions to bleed support for Zanu-PF, if it can control Zimbabweans’ understanding of why their economy is in crisis. Washington created the economic hardships Zimbabweans face, through the Economic Structural Adjustment Programs of the 1990s and financial sanctions since 2001. It’s important for Washington to avoid blame for Zimbabwe’s crippled economy, and to attribute blame wholly to Zanu-PF. Accordingly, Washington will continue to minimize, if not hide altogether, the role of its financial sanctions in undermining Zimbabwe’s economy, citing mismanagement as the cause. The North Atlantic mass media, which tends to uncritically reflect the pronouncements of U.S. officials on foreign affairs, will echo Washington’s fabrications.
* If Washington manages to sideline Zanu-PF, and the U.S.-backed MDC secures a decisive grip on power, Washington will pressure the MDC to create a reform agenda that emphasizes the creation of an investment climate favorable to the sale of Zimbabwe’s natural resources, and its state-owned assets, including arable farmland, to foreign investors.
* Programs to promote entrepreneurship, training and skills development will be used to depoliticize Zimbabwe’s youth so that their patrimony can be stolen from under their feet. Job creation will be used as a sop to mollify nationalist sentiment. In this, Zimbabweans should recognize that the economic sabotage policies of the United States and its North Atlantic partners are implicated in the problem of mass unemployment, and that foreign investors, while promoting job creation as a necessary political maneuver to guard against a populist reaction to the sell-off of Zimbabwe’s assets, will allow unemployment to rise again once Zimbabwe has been parceled out to foreign investors.
* The United States will seek to safeguard the investment of its banks, corporations and wealthy individuals, by co-opting the middle-level officer corps, and using Zimbabwe’s military as an extension of U.S. military power, to suppress populist revolts.

1. http://myafrica.allafrica.com/view/people/main/id/07UF2C6ymSBPq5-O.html. Accessed July 20, 2009. “Opinion: Obama’s Africa Policy,” Maternal Health, Medical News Today, July 13, 2009, describes Gavin as a White House advisor. http://www.medicalnewstoday.com/articles/157217.php
2. Michelle D. Gavin, Planning for Post-Mugabe Zimbabwe, CSR No. 31, October, 2007. Council on Foreign Relations, http://www.cfr.org/content/publications/attachments/Zimbabwe_CSR31.pdf
3. G. William Domhoff, “Who Rules America? Power and Politics, McGraw-Hill Higher Education, Fourth Edition, 2002.
4. The Herald (Zimbabwe) May 5, 2009.
5. TalkZimbabwe.com, July 16, 2008.
6. The New York Times, July 26, 2008; The Washington Post, July 26, 2008; The Sunday Mail (Zimbabwe), July 27, 2008.
7. Gregory Elich, Strange Liberators: Militarism, Mayhem, and the Pursuit of Profit, Llumina Press, 2006.
8. Elise Hugus, “Eight Years After NATO’s ‘Humanitarian War’: Serbia’s new ‘third way’”, Z Magazine, April 2007, Volume 20, Number 4.
9. Ibid.
10. Joan Roelofs, Foundations and Public Policy: The Mask of Pluralism, State University of New York Press, 2003.
11. Remarks by the President to the NAACP Centennial Convention, New York, July 17, 2009.
12. Ibid.
13. Albert J. Szymanski and Ted George Goertzel, Sociology: Class, Consciousness, and Contradictions, D. Van Nostrand Company, 1979.