The Chicago Boys reloaded

FINANCE minister Mthuli Ncube has his ducks in a row.

He is now simply executing his plan that he started in 2018 — getting Zimbabwe neoliberal the sole responsibility of the infamous Chicago Boys.

Ncube has been clear from his first budget statement in 2018 that business (capital) will take the lead.

It is slowly becoming clear that what capital wants, capital gets.

The fire at Mbare Musika, last week, was a convenient excuse for the radical economic policies that Ncube as the Treasury Czar has formulated, but was waiting for a convenient moment.

It is a public secret that Ncube has always been looking at means to formalise the informal sector.

• Budget dampens workers’ hopes
• Govt issues $24 billion Covid-19 guarantees
• Letter to my People:They have no answers for Nero’s charisma
• ZMX to enhance farm profitability

This is the sector that has largely been blamed for the economic ills afflicting Zimbabwe.

The informal sector has become the cancer to the economy and had to be burnt out of the system a form of radiotherapy.

A brief background about the Chicago Boys would suffice.

It is a term that Naomi Klein used in her book The Shock Doctrine and the Rise of Disaster Capitalism.

The term refers to Chicago University Department of Economics graduates.

The father of Chicago School of Economics is Milton Friedman, a right-wing scholar who believed in free market economics.

This is a school of thought that argues that governments/States have no role in economics, but private capital should have unfettered freedoms to experiment their theories.

At the base, Chicago Boys believe in privatisation as the panacea to all economic ills.

They believe in austerity, deregulation and privatisation.

Ncube is a classic example of the Chicago Boys.

My analysis of Ncube and the so-called second republic economic thrust would borrow heavily from the aforementioned Klein’s book.

Klein says Chicago Boys developed a new type of capitalism disaster capitalism.

This is a form of radical economic change during disasters — man-made or natural.

It is now common cause that during the COVID-19 pandemic, Zimbabwe accelerated privatisation of education and health.

Private players were at the forefront of providing personal protective equipment and two major hospitals changed ownership during that period going into the hands of a politically-connected mogul.

Informal trading was banned during the hard lockdown, but re-emerged slowly.

Probably because the people could not bear the brunt of austerity, privatised health and education and the formalisation of the informal sector all at once.

However, the Mbare disaster has provided a perfect moment for formalisation of the informal market.

The Cabinet on Tuesday said: “Government has to intervene and is promoting private sector participation to complement its efforts. Accordingly, Cabinet approved the engagement of a leading engineering, construction and development company to partner the government in re-building the Mbare Traders’ Market, under a design, engineering, procurement, construction and finance (DEPC+F) model. This model will ensure that high-quality facilities are completed and commissioned within the shortest possible time.”

The statement added: “In view of the fact that Zimbabwe’s economy has an informal sector, the plan will introduce simplified registration and minimum mandatory licensing requirements that promote formalisation of the economy through the Shop Licensing Act.”

It has to be restated that the committee that tabled the recommendations was chaired by Ncube.

This plan, while initially implemented at Mbare, will be replicated at Glen View Area 8 informal furniture market and other large informal markets across the urban centres.

In tandem with the Mbare disaster is the electricity crisis.

Zimbabweans are going through rolling blackouts that sometimes go for 16 hours a day.

As a solution, the Cabinet said: “To enhance revenue collection, Zesa has been directed to speed up installation of pre-paid meters in order to effectively deal with debtors, while the Mutapa Investment Fund (MIF) is establishing a foreign exchange discount facility against the Zesa debtors’ book to meet the current creditors.”

Lest we forget, the El Niño-induced drought was recently used to change the land tenure policy, again for the benefit of the elite and politically-connected.

The MIF is another creature by Ncube that brought together all State-owned enterprises, generally known in Zimbabwe as parastatals, under one roof.

The MIF has authority to privatise these entities or sell them outrightly to investors even by private placement and it can do that without Parliament oversight or backlash.

This is a process of selling the family silver. It is not new.

We witnessed it in Russia and the rise of the oligarchs.

Chances are high this would be repeated in Zimbabwe.

One last point on radical change is the proposed urban regeneration.

Mbare flats are a top priority.

Change is not bad per se, but lessons from Maboneng Precinct in Johannesburg, South Africa, are still fresh.

Many urban poor in that area could not afford to stay in the same area after its regeneration.

The urban middle class moved in, driving the poor back to the slums or streets.

One thing continues to replicate itself in these changes a few politically-connected businesses get the tenders for these projects.

There is no transparency and competitive bidding.

Disaster capitalism is not new.

It has happened in Argentina, Iraq and Libya under the watch of Chicago Boys.

It also happened in Western Europe and North America during the 2008/9 global recession.

States were compelled to bail private capital, but not the working class and urban poor who lost their homes during the economic disaster.

Heads or tails, capital wins always. They win during and after the disaster whichever way one looks at it. It is being normalised and comes clothed in the form of professorial advice by dons such as Ncube.

Is neoliberalism (privatisation) the only panacea to economic ills? The answer is a big NO. Nordic countries have demonstrated otherwise.

However, what we lack on this side is alternative leadership that can challenge Ncube narratives at the levels of ideas, break it down for the poor masses and win their hearts and votes.

For now, we know it needed a disaster at Mbare market, a fire to be precise, for the Zimbabwe administration to radically change its policy on the informal economy.

Zimbabwe is now in the age of disaster capitalism.

Beware, the Chicago Boys are back in town.

• Paidamoyo Muzulu is a journalist based in Harare. He writes here in his personal capacity.