How China broke the mould from poor to rich: Lessons for Zimbabwe
By Tendai Kwari
China and Zimbabwe are comparative authoritarian and excessive bureaucratic comrades; both with a dictatorial stranglehold on their citizens.
In 1949, China had a highly extractive economy. In 2015, Zimbabwe has got a highly extractive economy. The Chinese Communist Party dominated the political arena. Zanu PF is still dominating Zimbabwe politics since 1980, and a lot of opposition party obituaries.
Just like Mugabe in Zimbabwe, Mao dominated the Communist Party and the government. Mao nationalized land and industry. He abolished all kinds of property rights. As with all extractive institutions, Mao’s regime was attempting to extract resources from the vast country he was now controlling.
The Chinese Communist Party had a monopoly over the sale of produce, such as rice and grain, which was used to heavily tax farmers. Mao claimed that in fifteen years, China would catch up with British steel production, yet, there was no feasible way of meeting these targets.
To meet the plan’s goals, scrap metal had to be found, and people would have to melt down their pots and pans and even agricultural implements such as hoes and plows.
Workers who ought to have been tending the fields were making steel by destroying their plows, and thus their future ability to feed themselves and the country. The result was a calamitous famine in the Chinese countryside.
In Zimbabwe, on October 2013, Zanu PF, through its economic blue print ZimAsset, claimed that it is going to create 1.5 million jobs by 2018. The Vision of the Plan is “Towards an Empowered Society and a Growing Economy”.
The execution of this plan will be guided by the following mission:
“To provide an enabling environment for sustainable economic empowerment and social transformation to the people of Zimbabwe” [ZimAsset.pg 9]. Today, the ZimAsset is reduced to a mere decorative document as Zimbabwe’s economy is crumbling down. The state is reduced to a nation of vendors.
However, in China, one Deng Xiaoping argued, “No matter whether the cat is black or white, if it catches mice, it’s a good cat.” It did not matter whether policies appeared communist or not; China needed policies that would encourage production so that it could feed its people. Deng was soon to suffer for his new found practicality.
Mao announced that the regime was under threat from “bourgeois” interests that were undermining China’s communist society and wishing to recreate capitalism.
Mao’s announcement strikes a chord with the speech given by the President of Zimbabwe, Robert Mugabe in September 2013, when he berated the United States and former colonial power Britain and its allies for trying to control his nation and its resources, telling them to remove their “illegal and filthy sanctions.”
“Shame, shame, shame to the United States of America. Shame, shame, shame to Britain and its allies,” “Zimbabwe is for Zimbabweans, so are its resources.
“Please remove your illegal and filthy sanctions from my peaceful country. We paid the ultimate price for it and we are determined never to relinquish our sovereignty and remain master of our destiny. Zimbabwe will never be a colony again.”
In China, Mao responded to Deng’s argument by introducing the Cultural Revolution. The Cultural Revolution was an attempt by Mao to reassert his beliefs in China. Soon the Cultural Revolution would start wrecking both the economy and many human lives.
Units of Red Guards were formed across the country: young, enthusiastic members of the Communist Party who were used to purge opponents of the regime. Many people were killed, arrested, or sent into internal exile.
Again in Zimbabwe, we are reminded of the so called “Green Bombers”. This was a national youth service programme, whose graduates were derogatorily dubbed the “Green Bombers” because of the colour of their uniforms.
It was launched by the late Youth minister Border Gezi in 2001 to “transform and empower youths for nation building through life skills training and leadership development”.
The programme was, however, discontinued due to lack of funding and after recruits had been widely accused by opposition parties of inciting political violence especially during election time.
The government was accused of conscripting desperate and unemployed youths into its controversial national youth service and brainwashing them to become blind and violent zealots of the ruling Zanu PF party.
However, Mao retorted to concerns about the extent of violence, stating, “This man Hitler was even more ferocious. The more ferocious, the better, don’t you think? The more people you kill, the more revolutionary you are.”
Similarly, President Mugabe once retorted, “I am still the Hitler of the time. This Hitler has only one objective: justice for his people, sovereignty for his people, recognition of the independence of his people and their rights over their resources. If that is Hitler, then let me be Hitler tenfold. Ten times, that is what we stand for.”
China only managed to turn around its ailing economy after Mao’s death. I am not insinuating that we, in Zimbabwe, cannot turn around our economy with Mugabe in power.
However, it would be difficult to do so because the extractive economic and political institutions he has presided over are still in existence. We need to restructure them and make them inclusive. We need political and economic reforms.
With Mao gone, there was a true power vacuum in China, which resulted in a struggle between those with different visions and different beliefs about the consequences of change. Even after Mugabe, many Zanu PF stalwarts will not abolish the extractive institutions they had created.
They are part of the same group of people brought to power by the Zanu PF revolution. The Gamatox and the Zvipfukuto faction groups in Zanu PF are culprits; both had presided over the current economic and political institutions bedevilling our economy today. Today’s China has maintained its extractive bureaucratic political institutions inherited from Mao.
However, in China, Deng found himself in power after intra-political struggles. Deng did not want to abolish the communist regime and replace it with inclusive markets.
He thought that significant economic growth could be achieved without endangering their political control: they had a model of growth under extractive political institutions that would not threaten their power, because the Chinese people were in dire need of improved living standards and because all meaningful opposition to the Communist Party had been obliterated during Mao’s reign and Cultural Revolution.
To achieve this, they had to repudiate not just the Cultural Revolution but also much of the Maoist institutional legacy. They realized that economic growth would be possible only with significant moves toward inclusive economic institutions.
At the Twelfth Nations Congress in September 1985, Deng achieved an almost complete reshuffling of the party leadership and senior cadres. In came much younger, reform minded people. Deng and his new reformists launched a series of further changes in economic institutions. The rural economy took off first with the introduction of incentives, which led to a dramatic increase in agricultural productivity.
In the urban economy, state enterprises were given more autonomy, and fourteen “open cities” were identified and given the ability to attract foreign investment. Market incentives in agriculture and industry, then followed by foreign investment and technology set China on a path to rapid economic growth.
China’s Achilles heel would be her inability to completely abandon her extractive political institutions. For instance, one Chinese dissident commented that in today’s China, “Big companies can get involved in huge projects. But when private companies do so, especially in competition with the state, then trouble comes from every corners [sic].”
Growth under extractive political institutions is quite unfavourable to foreign investment. The Communist party in China controls the media, including the Internet.
Some school of thought has noted that China has achieved economic growth not thanks to its extractive political institutions, but despite them: its successful growth experience over the last three decades is due to a radical shift away from extractive economic institutions and toward significantly more inclusive economic institutions, which was made more difficult, not easier, by the presence of highly authoritarian, extractive political institutions.
In August 2015, President Robert Mugabe signed into law the Reserve Bank of Zimbabwe (RBZ) debt assumption bill. The development means government has taken over the central bank’s $1.2 billion debt which includes some $200 million given out as agro-support to top officials in the ruling party.
It also means that Zanu PF top chefs who benefited from the farm mechanisation equipment supplied by the RBZ never paid for it. The bill was passed in parliament despite the spirited objection from opposition MPs. This is a clear case of an extractive economic institution benefitting the Zanu PF elite. In fact, shuffling a debt from one extractive institution to another will not alleviate the problem.
The suffering we are facing in Zimbabwe is sufficient enough for us to demand for change. History is not destiny. Extractive institutions can be replaced by inclusive ones. But it is neither automatic nor easy. A confluence of factors, in particular a critical juncture coupled with a broad coalition of those pushing for reform or other propitious existing institutions, is often necessary for a nation to make strides towards more inclusive institutions.
We cannot continue to have extractive economic institutions, which are synergistically linked to extractive political institutions, which concentrate power in the hands of a few Zanu PF cronies. China managed to break the mould from poor to rich. We can do it in Zimbabwe. However, if we, Zimbabweans, cannot remove Zanu PF, we must push it to make political reforms first.
You can follow Tendai Kwari on twitter @tendaikwari