Panic, Shock and Abandon: Bond Notes and the State in Zimbabwe

By Takura Zhangazha

Currently there is a familiar sense of panic in the major capitals of Zimbabwe. It has been induced largely by the announcement by the governor of the reserve bank that by October 2016, government shall introduce bond notes as a medium of exchange of goods and services.

So there has been a rush to the banks by the rich, those in what remains of the formal economy, the informal sector and pensioners to sweep up whatever US dollar savings or salaries they have in their bank accounts. The more entrepreneurial/ manipulative have set up a parallel money market attempting to sell hard currency at a profit.

All of this makes for economic drama, panic and tragedy that is somewhat reminiscent of the financial crisis/collapse of 2007-2008. Except that this time there is no Zimbabwean dollar to talk about. It is the invidious bond note that has taken the latter’s place.

And matters have not been helped by the fact that very few Zimbabweans understand the rationale being put forward by the government. Or even if they do, they simply do not trust the government and the banks.

Despite this lack of trust, panic and inevitable shortage of the US dollar, government does not appear to be particularly ruffled. Cabinet ministers have been fairly nonchalant about it. Parliamentarians’ hardly understand whats going on save for the portfolio committee on finance chairperson asking for assurances that the bond notes are not going to be printed/minted in Zimbabwe.

The opposition has organized, thus far, two marches against the new measures to limited impact despite a credible show of numbers. The common refrain has been to say to the ruling party, ‘you cannot rig the economy’, a statement that belies more a wait and see attitude than it intends to seize the moment. Nor does it signify any fundamental differences in approach to the national economy.

What is clear is that there is no broader debate about the economy in and of itself. This betrays a certain comfort that key stakeholders have with our current neo-liberal economic framework. Particularly for government and international financial institutions.

Hence the World Bank or the guarantor of the bond notes, the African Export and Import Bank are not decrying the introduction of these new measures. So long the economic fundamentals of the ‘free market’ are not challenged.

The realities for a greater majority of Zimbabweans is that they have to contend with difficult economic conditions with or without the bond note. In desperation, they will accept whatever eventually comes their way. Especially because of the current drought, endemic unemployment and the increasing politicization of everyday occurrences in light of either Zanu Pf factionalism and/or opposition mobilization for the 2018 elections.

So while there is panic, there is least likely to be any change to government policy and the introduction of bond notes. Cabinet assumes that eventually there will be grudging acceptance of the medium of exchange. Just as was the case with bond coins.

What government, big business and the global financial institutions are very pleased about is the fact that their policies are inducing an acceptance of neo-liberalism as what the Zimbabwean public considers as the panacea to their economic challenges.

The atomization/individualization of how to address an economic challenge essentially means that there will be less organized protests or social movements against the evident state abandonment of citizens in relation to the economy.

It is essentially something that has been tried in other parts of the world with dire consequences. The steps, though differing in context relate to how ruling elites, even where they do not understand what they are doing, are inevitably steamrolled by global capital to shock, awe and disempower their citizens.

Especially within the context of natural disasters such as the one we are undergoing in the form of the current drought. Zimbabwean society has essentially been reconfigured to function on the template of each man/woman for herself and everything else follows the market, real or imagined.

We should be questioning more the fundamentals of our undemocratic economic dispensation even as we see the real and contrived panic over bond notes. Such questioning would include tackling issues of state sanctioned/led corruption, externalization of money, and the privatization of social services.

Furthermore, we must have a broader ideological debate about what we perceive to be the democratic role of the state with regards the national economy.

What we have at the moment is a state that has abandoned its primary obligations of protecting the basic economic livelihoods of the people to the market. Bond notes and all. We need to stem this.

*Takura Zhangazha writes here in his personal capacity (takura-zhangazha.blgospot.com)