LONDON (Reuters Breakingviews) - Zimbabwe is a country in need of change – dramatic perhaps, but not sudden. The takeover of the government by the army on Wednesday, shortly after President Robert Mugabe ousted his deputy, could be the beginning of a long journey towards solving the grave economic problems that blight the African nation. Too severe an upheaval could leave the country further adrift.
The story of Zimbabwe is one of natural endowments and street-level entrepreneurship spoiled by top-level mismanagement. Among its main challenges are a civil service that sucks up 90 percent of government revenue, corruption, and a broken currency system. The rocketing stock market this year says more about the quest for stores of value – Bitcoin has also been a beneficiary – than it does about confidence in company earnings.
Much as Mugabe has taunted the West, it would be a mistake to think that the recipe for fixing those problems is simply getting rid of him. Even though there are 75 parties registered for next year’s election, the chair of the Zimbabwe Electoral Commission told local media, the state and the ruling Zanu-PF – which has held power since 1980 – are essentially indivisible. The military’s seizure of power is probably best seen as a measure to save the party rather than replace it. Army chief Constantino Chiwenga, who led the military action, criticised recent purges but remains committed to Mugabe’s “revolution”.
Those purges almost certainly include the deposition of Mugabe’s vice-president, Emmerson Mnangagwa. He is widely seen as a power behind Zimbabwe’s agreement to pay back debts to the International Monetary Fund in 2016 – a small but significant recognition that bringing back business confidence is a prerequisite for long-term recovery. As former security minister, Mnangagwa may differ in his views from Mugabe, but comes from the same system.
The long-term goal for Zimbabwe’s economy is to win back human and financial capital that has fled – plus fresh investment. Countries like China and Vietnam show that doesn’t require a Western-style multi-party democracy – just stability and predictability. That might mean Mugabe, after 37 years in power, is replaced by someone only somewhat better. Mnangagwa might be that person. If events in Harare point in that direction, there is reason for optimism, but also patience.
Reuters Breakingviews is the world's leading source of agenda-setting financial insight. As the Reuters brand for financial commentary, we dissect the big business and economic stories as they break around the world every day. A global team of about 30 correspondents in New York, London, Hong Kong and other major cities provides expert analysis in real time.
Sign up for a free trial of our full service at https://www.breakingviews.com/trial and follow us on Twitter @Breakingviews and at www.breakingviews.com. All opinions expressed are those of the authors.