So you thought Sanral was dancing to its own tune?

THERE’S an interesting link between Robert Mugabe’s Zimbabwe and the almost fanatical commitment by the SA National Roads Agency (Sanral) to force electronic toll roads down the throats of South African consumers… but it’s not the one you might think.

Everyone tends to think Mugabe himself has been solely responsible for the decline of his country’s economy and the diaspora that has seen millions of his people go into exile abroad (mainly to South Africa) merely to survive.

If that were the case, then Zimbabwe would have collapsed in the early years after independence in 1980, when the country came out of a ruinous civil war and had to cope with a hostile apartheid government in South Africa, which was hell-bent on destabilising all the countries in southern Africa. Yet, in the 1980s and well into the 1990s, Zimbabwe was a success in economic terms.

There was a significant budget deficit, true, but exports of resour- ces were strong and, thanks mainly to the commercial farming community (and also to the growth of smallscale farming, which exploded in the 1980s with government support), Zimbabwe was a net exporter of food. In the early 1980s, more than a million tons a year of top-quality Zimbabwean white maize were exported to South Africa.

In 1985, the Zimbabwean dollar was worth R1.50. True story.

So, what happened to bring a strong economy crashing down?

For one thing, Mugabe attracted a lot of adverse publicity because of his supposed commitment to socialism or, more correctly, Marxist-Leninism. Despite all of his rhetoric, though, in financial terms he largely kept the status quo he inherited from the white government of Ian Smith.

That status quo was itself reminiscent of a command economy. There were many artificial restrictions – like import controls (through tariff structures aimed at encouraging local industry); exchange controls (in 1985, for example, the emigration allowance for those leaving the country was not much more than R1 000); and subsidies.

That sort of economic system worked well for white Rhodesia under Smith, because it was essentially a country under siege from international sanctions.

One of the most important sets of subsidies was that for foodstuff, perhaps because the white administration realised hungry Africans could well become violent Africans.

In the end, the subsidies didn’t help prevent or slow the civil war that eventually led to independence. However, they did, in the estimation of many, keep the population from starving.

Zimbabwean government money, garnered from taxes, was used for subsidies in the same way Smith had done. The prices of basic commodities like white bread (brown was not subsidised), milk, sugar, cooking oil, meat and paraffin were kept stable.

The subsidies were, in effect, a way of wealth redistribution, because the taxes came mainly from those with money and went to support those who didn’t have much. So far so good. But “socialist” systems like subsidies – especially when applied by uppity black governments – do not go down well with organisations like the International Monetary Fund (IMF) or the World Bank, the regulators of the international economy. Essentially representative of a Western, capitalist view of the world, the two organs hold enormous power over even sovereign states. And their view – to simplify it, admittedly – is that socialist support policies are anathema to a healthy economy.

They are also anathema to the tenets of the Western financial system, which is supposedly a laissez- faire one of: don’t interfere, allow the market (private enterprise) to work its magic.

The IMF and World Bank prefer a “user pays” approach. Ah hah! Where have you heard that before? From Sanral – but we’ll get to that in a moment.

Robert Mugabe did overspend – there is no denying that – and he did need to approach the international finance community (IMF and World Bank) for loans. Over a barrel, he had to agree to their draconian terms. That was what was known as the Economic Structural Adjustment Programme and it came to be implemented in the 1990s.

The world financial bodies saw the policy as opening up a closed market, for the benefit of all in the long run (and for overseas business particularly); ordinary Zimbabweans saw only increasing food prices and the start of what would become runaway inflation.

When the war veterans – a key Mugabe constituency – became restive and even special payments made to them were not enough to keep them quiet, Mugabe seized upon the land question. The reality was that he had been lied to by the British, who failed to honour their promises after the Lancaster House agreement in 1979 to help fund land reform. So he began kicking white farmers off their land – and the downward spiral accelerated. How is that relevant to toll roads? South Africa, despite its similar claims to making the country a better place for all, definitely plays the international monetary game. And that game says, simply: no subsidies. “User pays” is the mantra that drives the world, because therein lie plenty of opportunities for the free market to make profits. The fate of ordinary people is secondary to that of the money class.

In addition, there is another wrinkle in our toll roads saga. While it would, obviously, be simpler – and far cheaper – to have paid for the renovations to the Gauteng freeways through a fuel levy, it would not have allowed a foreign company to make billions by collecting tolls.

A foreign company from a part of the world (Europe – but much of the West is the same) where markets are mature or stagnant and the only hope of profits comes from selling to the developing world. We demonstrated that as a country previously when we bought a sub-standard arms package from European manufacturers who struggled to sell their ageing or uncompetitive products in their own markets.

So what Sanral (and the government) is doing is what the big international players want.

They don’t want simple solutions, they want profits. And you don’t get them with subsidies, you get them with “user pays”.

But subsidies are not a dirty concept. They can be a useful tool for development and for social cohesion and stability.

If you want to know what happens when the IMF and the World Bank make your government dance to their tune, just ask a Zimbabwean…