By Dr Tafataona Mahoso

IN the first part of this instalment, I demonstrated that Zimbabwe’s economic challenges were not a textbook case. As a result, it was necessary for all patriots and the Government to communicate with the people effectively, explaining the causes of the problems they were facing.
Two elements which distinguish the Zimbabwe economic situation from those of other countries are the continuation of Western sanctions against the country and the existence of a political party and mass media outlets supporting it who foolishly think they stand to gain political mileage by sabotaging the economy with the help of greedy speculators.
Nevertheless, this unique complication makes it even more necessary for patriots and the Government to communicate the reality to help the people.
In the 1930s, Marrinner Eccles, the man whom the US Congress and President Franklin Delano Roosevelt agreed to appoint and confirm as chairman of the US Federal Reserve Board, had come face-to-face with the power of expectations and speculation before he was appointed.
One morning in Colorado, a big mob of depositors queued in front of one of his banks wanting to withdraw all their funds on the basis of rumours spread by speculators long before the age of ‘social media’.
He gave his chief cashier and the bank tellers instructions to slow operations so that fresh notes would arrive from the Federal Reserve while most of the mob was still there at the bank.
He then jumped onto a high platform and addressed the mob as trucks were just entering the premises with new notes.
He told the mob that there was absolutely no need for all of them to have come to the bank at the same time for the same purpose of withdrawing funds.
There would be enough money in the bank for those who needed it when they really needed it.
There would be enough left over for those who would need money later and for many days and weeks in the future. There was also enough money at the Federal Reserve for all necessary transactions in the future and people should come to the bank when and if they needed their money to meet their obligations and engage in daily business.
This underlined the importance of effective communication in any economy and about the public aspects of banking.
Those who were coming out of the bank also confirmed to those still queuing that they got all the money they had demanded.
As a result, the majority of those who had queued outside the bank decided to go back to their jobs and businesses, since they really did not need their money that day.
The bank then resumed normal operations at a normal pace and the stampede was neutralised.
Communications are now more complicated than they were in the 1930s; but the basic principles remain the same.
Each depositor must be addressed, reassured.
This is not easy.
Coming to Zimbabwe, some of us went to various retail outlets and supermarkets on the eve of the then Reserve Bank of Zimbabwe (RBZ) Governor Dr Gideon Gono’s monetary policy statement in early 2007.
As the Governor confirmed the next day, most players in the economy had expected an official devaluation of the Zimbabwe dollar ranging from 1 000 to 3 000 Zimbabwe dollars for each US dollar.
On the eve of the statement, these players had removed most price tags, ready to mark up prices the following morning in response to the anticipated devaluation.
A two-litre container of Mazoe orange crush in some stores had already been marked up in anticipation of the devaluation, from $6 000 to $17 000.
When the Governor of RBZ refused to announce the expected devaluation and the police threatened to arrest those who went ahead and implemented their own devaluation as if it had been authorised, the price of the same two-litre Mazoe orange crush had to be scaled back from $17 000 to $6 000 in a number of supermarkets.
This illustrated the power of media-driven expectations.
A casual look at newspaper headlines in Harare in the period leading up to the monetary statement on January 31 2007 reveals the role of the media as follows:
On January 5 2007, The Daily Mirror published a letter to the editor titled ‘Zimbabwe needs sound monetary policy’. Among other things, the writer referred to the Governor of the RBZ, Dr Gono, saying: “The nation has faith in him and we are eagerly awaiting his policy.”
On January 17 2007, The Business Herald did an interview with the President of the Confederation of Zimbabwe Industries (CZI) Callisto Jokonya who demanded a devaluation of the Zimbabwe dollar deep enough to boost the export sector.
That is what the CZI expected in the monetary review statement and the interview was titled ‘Restore economic value.’
On January 29 2007, the same Business Herald published another story titled ‘Speculation rife ahead of monetary policy review.’
The same day, The Daily Mirror carried two items.
The first was a story under the ‘Bourse watch’ column titled ‘Mixed trading as all eyes focus on Gono.’
The second was a letter to the editor titled, ‘RBZ policies should be geared to fight inflation.’
The number of media outlets in 2018 has now multiplied more than 10 times since 2007.
A comprehensive survey of the media over a month or longer would reveal a similar pattern.
The media tend to narrow and limit the public view of the national economy to just three sites, all of them depending on the exchange rate.
These sites are the stock market or bourse; the money market; and the illegal foreign exchange ‘parallel market.’
This fixation on the three sites damages the larger economy by excluding from analysis and attention the real productive economy.
When we examined the key players in those three sites in 2007, we realised that they were dominated by the same firms, sometimes using proxies and fronts.
These dominant players occupying the three sites were also likely to benefit from devaluation, because they employed large numbers of labourers whose labour became cheap but whose products, made by the same workers, appreciated because they had access to foreign currency or because they owned huge properties which also appreciated in a devaluation.
A few of them were genuine exporters.
Most were just speculators.
In the context of Zimbabwe in past decades, a speculative devaluation could not be followed by an automatic revaluation or appreciation, and the key speculators never made losses precisely because they had no competition and because most of them were also foreign owned or foreign controlled.
And, contrary to Friedman’s theory, the fact that they were always making huge profits did not create stability in the economy or in the society.
In fact, the profit-making activities of these few big companies on the stock market, on the money market, and on the illegal foreign currency market were immensely destabilising.
The impact of speculation and manipulation centred on currency devaluation was monotonously predictable in Zimbabwe, with one devaluation creating the need for the next and the next creating the need for many more devaluations.
This was because there were no major players in the economy to provide the competition and countervailing input against those few big companies on the Zimbabwe Stock Exchange (ZSE), on the money market and on the foreign currency parallel market.
The only potential countervailing input could have come from the state.
But the state itself was hampered by sanctions.
The ‘Zimbabwe is Open for Business’ approach may overcome this spiral by bringing into the economy a diversity of private and public players.
If we then add to this scenario the illegal sanctions imposed on Zimbabwe and the demonisation of the country through the global mass media, through foreign-sponsored NGOs and through international financial institutions, we realise why economic expectations about Zimbabwe have destabilised the economy and have appeared to be programmed in one direction.
The global mass media, the internet sites, the foreign-sponsored NGOs, the international financial institutions – all tend to converge in setting up, pinpointing, prompting, driving and accelerating negative expectations about the Zimbabwe economy.
This does not mean Zimbabwe is helpless in the process.
It only means that patriots must understand that the key to resistance against these forces lies in not inciting and not rewarding the speculators.
This means, first and foremost, that we manage our mass media and our communications in such a way that our public opinion is not offered foreign escort services through foreign-owned media.
The aim of these foreign escort services is to get the majority of our people to expect, as inevitable, that which the foreign escorters want to happen.
The foreign escort services want to take our public opinion and public morale to a stage where we commit the required sabotage or terror against ourselves, as happened in Rwanda, as happened in Somalia, as happened in Iraq.
As far as the Zimbabwe economy is concerned, the foreign escort services have partly succeeded in getting our public picture and opinion of our own economy where they want it, where we do the sabotage of ourselves.
Therefore, before we can reclaim our economy, our assets, for ourselves, we must reclaim our own opinion of our economy away from where the foreign escort services have brought us.
In a book called Power, Crime and Mystification, Stephen Box explained that most ordinary people find it difficult to recognise corporate crime, let alone to fight it with certainty and confidence.
Box wrote, thus:
“Corporate crime is rendered invisible by its complex and sophisticated planning and execution, by non-existent or weak law enforcement and prosecution, and by lenient legal and social sanctions which fail to reaffirm or reinforce collective (majority) sentiments on moral boundaries.
In addition, the type of media to which the majority of people expose themselves under-reports corporate crime.”
It is important to note that, even when the business people accept that they have contributed to the current economic problems, they will first blame the state and then downplay the significance of their own behaviour.
This mystification of criminal behaviour is most obvious in the tendency to delete the customer or consumer.
Here is one skewed admission by the late Erich Bloch in The Zimbabwe Independent on March 30 2007:
“Since the beginning of February (2007), much of commerce and industry has been pursuing operations in a manner that can only hasten the Zimbabwean economic collapse.
The captains of business – are apparently now driven to pursue self-destruction or, in other words, to commit hara-kiri, but to do so with the same philosophy as suicide bombers, being to destroy not only themselves, but also all others … ever greater numbers of industrialists, wholesalers and retailers abandoned the traditional approach of determining selling prices by aggregating direct costs of goods produced, the proportion of operational costs as attributable to the sale of such goods, and the desired profit margin. Instead they have resorted to calculations based on anticipated replacement costs, plus a forecast inflation-adjusted profit margin.”
This was an admission by one businessman that his colleagues decided to become prophets and seers whose main survival strategy now rested on guessing what inflation should or would be next year and the year after.
Yet anyone with some elementary social science knowledge and history would notice two things which made the whole exercise foolish: First of all, all the seers wanted to see only skyrocketing inflation.
None of them was calculating downwards.
Second, the effect of the majority or all of the so-called captains of business calculating future inflation upwards and only upwards merely created a situation of self-fulfilling prophecy and made the businessman himself the key driver of that inflation in unison with all his colleagues and all the saboteurs.
In other words, there could be no hope of ever bringing the inflation down in such a scenario.