Zimbabwe’s financial system is living on borrowed time – and borrowed money



File 20171031 18730 lzg8n8.jpg?ixlib=rb 1.1
An illegal money changer holds bond notes outside a bank in Zimbabwe’s capital Harare.
Reuters/Philimon Bulawayo

Roger Southall, University of the Witwatersrand

Zimbabwe’s financial system increasingly resembles a house of cards. Were one card to give way – for instance, if South Africa’s power utility, Eskom, were to have the temerity to suggest that Zimbabwe actually pay for the electricity that it’s supplying the country – the entire edifice would collapse.

To put it another way, the government is bust. It is again printing money to cover its spiralling costs, and inflation is rising. And given that there’s an election looming in 2018, Zimbabwe’s ruling party, ZANU-PF doesn’t want to cut-back. Far from it, it wants to carry on spending, as fast as it can.

The rot goes back to the early 2000’s. ZANU-PF profligacy had been fuelled by acontinuous cycle of simply printing more money, and resultant runaway inflation. Mega-inflation meant that ordinary people lost their pensions and whatever savings they had, as the Zimbabwe dollar lost its value and people resorted to barter or the use of other currencies.

Ultimately, the government faced no choice but to accept reality. In 2008 it scrapped the Zimbabwe dollar in favour of a basket of other currencies, although within a short time, this meant in effect the reign of the US dollar.

“Dollarisation” allowed for the pursuit of more rational policies by the coalition Government of National Unity which followed the disputed 2008 election. However, its control of the electoral machinery ensured that ZANU-PF won a resounding victory in the 2013 election. Within a short space of time it returned to its familiar policy mix of profligacy, corruption and populist economics.

Yet ZANU-PF faced major problems. Above all, “dollarisation” meant that the cost of Zimbabwe’s exports on international markets was high. Worse, the dramatic collapse in agricultural production since the early 2000s (following the appropriation of white farms) alongside the decimation of the country’s manufacturing industries meant that there was relatively little to export anyway. Tobacco production has recovered a little, but the quality is less than it used to be, so returns are relatively less.

Meanwhile government insistence that mines should be 51% Zimbabwean owned has done nothing to entice inward investment or boost exports.

In short, the capacity of the economy to earn US dollars by selling goods externally has fallen dramatically, and the supply of money circulating within the country has dried up. Unemployment stands at around 90%.

President Robert Mugabe’s latest response has been to replace finance minister Patrick Chinamasa, who had been warning of the structure’s fragility in ever more urgent tones. The new finance minister is Ignatius Chombo, a party loyalist, who will brook no talk of any need for structural reform.

The bond notes

Faced by a looming crisis, the ZANU-PF government has resorted to three key strategies.

One has been the issue of “bond notes” (of different denominations) by the Reserve Bank of Zimbabwe. Officially, they’re designed to swell the amount of money in circulation within the country. The problem is that apart from having no value outside the country, nobody trusts them as they have been issued by a ZANU-PF government, and it was this government that presided over the hyperinflation.

ZANU-PF’s announcement that it was issuing bond notes was met with a run on the banks as depositors sought to withdraw dollars as fast as they could. Their assumption was that this was a government ploy to reintroduce the Zimbabwean dollar. The Reserve Bank of Zimbabwe responded by limiting the amount of dollars individuals could withdraw.

People are reluctant to use the bond notes. But they’re still sometimes forced to accept them because of the sheer shortage of “real” money. As a result when they can, they rush off to the local bus station where they can sell them for dollars to currency traders – albeit illegally.

The second strategy has been the rapid expansion of country’s ability to manage electronic transactions. Its aim has been to expand the amount of money in circulation without using up “real” dollars.

Accordingly, government employees are now largely paid electronically Similarly, government employees (and everyone else) now pay nearly all their bills within the country electronically.

And Zimbabweans are rarely able to convert the notional sums of dollars they hold in the bank into real cash – unless they make use of the currency traders in illegal transactions.

Meanwhile, with the rate of inflation continuing to rise combined with the widespread lack of faith in the banks, many Zimbabweans spend their bank balances on consumer goods as quickly as possible rather than attempting to “save”. After all, if times get hard, you won’t be able to get rid of your bond notes, but you may be able to sell your fridge.

Fanciful financial system

But it’s the third strategy which the government has pursued which is really fuelling a fanciful financial system.

Since 2013, government expenditure has steadily increased year by year, despite the country earning very little internationally. The ZANU-PF government may have hoped to fund this by its old trick of literally printing money, that is, by expanding the supply of bond notes.

But such was the negative popular sentiment that the Reserve Bank of Zimbabwe seems to have restricted their issue. Supposedly the issue of bond notes is backed by a USD$200 loan by the Afreximbank, but no-one really knows how many have been issued because the central bank provides no information.

What the government has done instead is to fund its rising costs by issuing treasury bills (whereby the government touts for loans on the capital market against promises of later redemption). No-one in their right mind would want to buy them, but Zimbabwe’s banks today have little option. As inward investment into the country has dried up to a trickle, there is little else for them to spend their money on, and the interest rates that the government promises to pay are, at face value, attractively high.

The coalition government of national unity recorded budget surpluses for three of the four full years in which the opposition controlled the Treasury. For its part, the ZANU-PF government recorded deficits of USD$186 million and USD$125 million in 2014 and 2015. Recently, the then finance minister Chinamasa projected a deficit of USD$1.41 billion for 2017. As of June 30, 2017, there were USD$2.5 billion worth of Treasury bills on issue.

The ConversationIn other words, the spending will continue. Zimbabwe’s financial system is living on borrowed time and borrowed money. It will again end in financial ruin, as it did in 2008. But all ZANU-PF cares about is ensuring that it wins the next election and allowing its political elite to “eat”.

Roger Southall, Professor of Sociology, University of the Witwatersrand

This article was originally published on The Conversation. Read the original article.

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Christians Accused of Desecrating Quran Freed in Pakistan


Country’s notorious ‘blasphemy’ law used against innocent father, daughter.

LAHORE, Pakistan, December 16 (CDN) — A Christian in Faisalabad district and his 20-year-old daughter were released on Monday (Dec. 14) after 14 grueling months in jail on false charges of blaspheming the Quran.

Khalil Tahir, attorney for Gulsher Masih and his daughter Ashyana Gulsher (known as Sandal), said the case was typical of the way Pakistan’s blasphemy laws can be used to harass innocent Christians.

“Christians are the soft targets, and most of the people implicated in these inhumane laws are Christians,” Tahir said. “We Christians are fighting for the same, noble goal – to provide justice to the victims of blasphemy laws.”

Masih said that inmates beat him at least five times since he was arrested on Oct. 23, 2008. His daughter was arrested two weeks earlier, on Oct. 10.

“These long 14 months seemed like ages,” Masih told Compass. “There was one inmate, Ghulam Fareed, a rich man, who always harassed me, trying to coerce me to convert to Islam by saying he would make me rich and would send me abroad.”

Fareed, who also promised high quality education for Masih’s children, joined with Islamic extremists jailed for terrorist acts to beat him in an effort to force him to “come into the fold of Islam,” Masih said. While in jail, he said, his wife told him that their daughter had been beaten several times by the superintendent of police.

Masih and his daughter were charged under Section 295-B of the Pakistan Penal Code for blaspheming the Quran. Before charges were filed in October 2008, Masih said an initial incident occurred on Aug. 25, when Ashyana Gulsher found some burned pages of the Quran in a garbage dump outside their community of Chak No. 57, Chak Jhumra in the district of Faisalabad.

Masih said she handed the charred pages to a woman, Lubana Taj, saying, “These are the holy page of your Quran and I found them in the garbage, so you take it.”

There were still some pages left, which she gave to their neighbor, Khalida Rafiq, who burned them, he said.

“She had borrowed wheat from us a few weeks ago, and when my wife demanded it back, Khalida Rafiq said that we had burned pages of the Quran and was now accusing us of taking wheat,” Masih said. “Some other women of the village also accused my children of making paper airplanes of the pages of the Quran.”

The escalating conflict was defused with the help of other neighbors who knew the truth, he said, and local Muslim cleric Amam Hafiz Muhammad Ali also intervened, saying Masih’s daughter had done a good deed and questioning why the neighbor women were repaying her with evil.

“We thought that the matter was buried, but it arose again on Oct. 7, 2008,” Masih said. On that day 20-year-old Muhammad Qasim went throughout the village on bicycle exclaiming that Christians had burned the Quran, Masih said. Upon hearing this, village landlord Rana Sarwar called Masih and told him that his children had burned the Quran and had used pages to make paper airplanes.

“I told them that I was working in Asghar Christian Colony and never knew about the incident, and the son who had been accused of blasphemy had gone to school,” Masih said.

His accusers were unmoved, he said.

“In the evening when I was returning home, I heard announcements from several mosques that Christians had burned the Quran,” he said. “After hearing the announcement, people began pouring in. These announcements were made by Tariq son of Hafeez, Maqbool son of Hafeez and Maulana Tawaseel Bajwa.”

When Masih called emergency police, they arrested him and sent him to the Jhumra police station, Faisalabad.

“The police asked me where my children were, and when I told them that the children were in the village, the police went back to arrest them,” he said. “Rana Sarwar, Wajid Khan and Rana Naeem Khan came into the police station and argued that my children had blasphemed, so why was I the one being beaten? I told Rana Sarwar in front of the police that if my children have done this, then I was ready to bear consequences.”

Police told them that the crowd outside wanted to hang him and that this was why they had arrested him. Masih said that the next day Deputy Superintendent of Police (DSP) Yousuf Zai came and asked him why he had committed blasphemy.

“Rana Sarwar then told the DSP that it was all a political ploy, and that I had been implicated in the case for voting for the opposition party,” he said. “If that day those Christian Members of Parliamentary Assembly had spoken up, then the police complaint wouldn’t have been registered against me.”

Masih added that the station house officer felt that he was innocent but had become legally entangled due to lack of support from the community. Masih said that the next day, Oct. 8, a few Muslims gave conflicting statements against him when charges were filed.

“One said he saw me burning the pages of the Quran at 10 a.m., the other said that he saw me burning the pages at 12 p.m. and still another said that he saw me burning the pages of the Quran at 2 p.m.,” he said. “When I was sent in jail, the investigation office swore that I was innocent.”

In a further contradiction, the complainants accused him of cutting up pages of the Quran and tossing them in the air, not burning them, Tahir said.

The complainant in the case was Mohammad Farooq Alam, and other prosecution witnesses named were Mohammad Maqbool Ahmad and Mohammad Akber, according to Tahir.

Masih said that initially he appeared before Judge Zulfikar Lon, but that whenever a judge asked for witnesses, he was transferred.

“In this manner eight months passed, and then Judge Raja Mohammad Ghazanfar came” and refused to be transferred, Masih said.

After Tahir’s cross-examination of witnesses, Ghazanfar dropped all charges and ordered their release.

“During cross examination, I proved that the whole case was concocted, frivolous, fake and that the charges against the accused Christian brother were unfounded,” Tahir said.

Tahir said that he had provided only legal assistance to the victims, with Johnson Michael, chairman of the Bishop John Joseph Shaheed Trust, providing paralegal assistance. An MPA in the Punjab Parliament, Tahir is the body’s secretary for Human Rights and Minority Affairs and also serves as executive director of advocacy group Action Against Discriminatory Laws Trust Pakistan.

Report from Compass Direct News 

INDIA: CHRISTIANS FALSELY ACCUSED IN CLAN-FIGHT MURDER


Hindus opposed to pastor’s evangelistic efforts name him, three others.

NEW DELHI, August 31 (Compass Direct News) – Hindus opposed to a pastor in a village in Madhya Pradesh, India have falsely charged him and three other Christians in the murder of a young man killed in a gang fight between two clans, according to area Christians.

Pastor Kamlesh Tahed, 32, of Mehendi Kheda village, Jhabua district, told Compass he was not even in the village on Aug. 8, the day 22-year-old Roop Singh Baria was killed. Pastor Tahed, who spent 20 days in jail on false charges of “forcible conversion” in 2001 before a court declared him innocent, is in hiding.

“I was away in another village to pray for a sick person the day the murder took place,” Pastor Tahed told Compass.

Three other Christians from his clan – Kasna Tahed, 25, Ramesh Tahed, 26, and Vasna Tahed, 36 – are in police custody, also charged in the murder of Baria, of nearby Negadia village, even though they were not present at the site of the melee either, Pastor Tahed said.

“We four had nothing to do with the fight and murder,” Pastor Tahed told Compass. “The report that was filed in the police station had not only the names of the 13 suspects involved in the fight, but also the four Christians who were not even present at the site of the fight.”

He added that 10 of the 13 Hindus charged are in custody, and three are on “the run.”

All 17 men are booked under all the same charges – murder, rioting, rioting with a deadly weapon and unlawful assembly – with the courts to determine which charges actually apply to which suspects.

The murder came amid a mob fight after the Baria clan attacked the Tahed clan over 1,000 rupees (US$20) that one of the Tahed family members had borrowed, area Christians said. Members of the Baria clan filed the First Information Report (FIR) on the melee and named Pastor Tahed because he is a Christian leader, said another area pastor who has suffered the same fate.

Pastor Bahadur Baria of the same village’s opposing clan told Compass that in all previous conflicts – personal, religious or social – sympathizers of Hindu extremists falsely accuse area Christians as well as bait them into conflicts.

“There are RSS [Hindu extremist Rashtriya Swayamsevak Sang] sympathizers living in both villages,” Pastor Baria said, “and they have inflamed the tribal Hindus to hook the Christian families into all rioting, murder, and other cases in the village so that the Christians are troubled from every side.”

Pastor Baria said what happened to Pastor Tahed also has happened to him; a member of the Tahed clan was murdered by a Baria clan gang, and his name appeared in the FIR. Only after a costly court process was he exonerated from murder charges, he said.

“This has not been once but every time something happens, the Christians are dragged into it,” he said.

Pastor Tahed said he used to participate in the clan conflicts before becoming a Christian.

“I once was one of them, but in the 20 years since I became a Christian, they have been dragging me into false cases and hate me for my work of evangelism,” he said. “They hooked me into a similar case in 2001 with additional charges of ‘forceful conversions,’ and I was behind bars for 20 days. Finally the court set me free as I was proved innocent.”

While Christian friends search for a lawyer to represent him and the three other Christians, Pastor Tahed has fled the area.

“These almost regular court procedures involve a lot of money, and being an evangelist with no fixed source of income, I cannot afford them,” he said.

In retaliation for the murder of Roop Singh Baria, two days later the Baria clan set on fire 12 houses of the Tahed clan, he added.

Pastor Tahed has a small plot of farmland as the only source of income by which he supports his wife, six children, parents and four children of his deceased elder brother, he said. Of the other three Christians charged, Kasna Tahed has three children, Ramesh Tahed has two and Vasna Tahed has three.

For the security of the families left behind, four police guards are posted Mehendi Kheda village and four at Negadia village.

“This is to prevent further mishaps in both the clans,” Pastor Tahed said.

Report from Compass Direct News 

BANGLADESH: CHRISTIAN FAMILY BEATEN, CUT – AND FACES CHARGES


Muslim neighbors, local council threaten to burn home if they file assault case.

MALUMGHAT, Bangladesh, December 8 (Compass Direct News) – The harassment that Bangladeshi converts from Islam face from Muslim neighbors in this southeastern area near Cox’s Bazar can take serious turns – as it did last month, when an attack by about a dozen Muslims left a Christian family with machete wounds.

Confident that no police would side with Christian converts from Islam, the Muslims in Chakaria town, near Cox’s Bazar 380 kilometers (236 miles) southeast of the capital city of Dhaka, later filed false charges of assault against the wounded and limping Christians, family members said.

The smallest of claims can serve to provoke such attacks. Laila Begum, a 45-year-old Christian convert from Islam, said she was helping to make disbursements for a local non-governmental micro-credit agency called Darpan in Chakaria town on Nov. 1 when 10 to 15 Muslim neighbors blocked her way and demanded 200 taka (US$3).

Begum told Compass she had borrowed 2,000 taka (US$30) last year from a neighbor, a Muslim woman who goes by the single name of Kohinoor, and this year paid her back with interest. Telling the group she would give them no more money as she had already repaid the loan, Begum said, she asked why they were demanding more.

They began beating her, snatching a pair of gold ornaments from her ear.

“Suddenly they got equipped with sticks, iron rods, knives and machetes,” she said. “Several places of my head were lacerated by machetes and iron rods. They also cut two of my fingers when I tried to fend off their attacks. They beat me in several places of my body by iron rods and sticks.”

Begum said her husband Abdur Rahman, a 48-year-old gatekeeper at Memorial Baptist Hospital, and her 27-year-old son Selim Rahman, heard her screams and were also beaten when they rushed to help her.

“They thrust at my son with machetes and a sharp knife and stabbed him in his thigh,” she said. “They beat my son with sticks and iron rods, knocking him down. They also beat the kneecap of my husband and other parts of his body.”

When her 18-year-old daughter Rosy Rahman came to their aid, the attackers punched her in the neck and chin, she said.

“They beat her in various parts of the body with sticks,” Begum said. “Shamelessly they removed her wrap over the breasts in front of dozens of onlookers.”

One of the attacking neighbors, she said, told her, “Nobody will come to save you if we beat you, because you are converted to Christianity from Islam.”

Begum, her husband and elder son were admitted to a nearby hospital. Her husband is still hobbled, walking with the aid of a stick.

“Muslim neighbors filed a case against us where they mentioned that we had beaten them – it is a false case,” Begum said. “They beat us and they filed a false case against us.”

Police Sub-inspector Manjurul Alam confirmed that the Muslim neighbors had filed a case against Rahman’s family, and that Rahman had also filed an assault case against the attackers.

“We are investigating it,” he said.

Begum said local Muslims threatened to beat the Christians again if they filed a case against them.

“They threatened that if we file a case, they will carry out an arson attack, and our house will be burnt to the ground,” she said. “They will evict us from the locality. They will beat us again and our life will be in great trouble.”

The family informed local governing council members about the attack, but they demanded 20,000 taka (US$300) to settle the matter and also threatened them, she said.

“The local council officials also told us that if we file any case in the police station, our houses will be burnt to ashes and we will be evicted from the locality,” she said. “The Muslim neighbors are spreading rumors that we beat them, that we borrowed 22,000 taka from them and that we did not pay them back the money. But we do not have anyone to stand beside us and listen to us.”

 

Belligerent Attitude

Because the family members are converts from Islam, they said, neighbors and distant relatives often pick quarrels with them over any small issue, with villagers later joining in to threaten or attack them.

“If we go to the market or any public places, Muslim people push us roughly from behind and use filthy words against us about Christianity,” said the oldest son, Salim Rahman.

The entire family is living in isolation due to their conversion, which the female members said is especially difficult for them.

“Whenever I go outside, local people look at me with evil leers,” said the oldest daughter, Rosy Rahman. “Everyone bad-mouths me and casts aspersions on our faith.”

She said such harassment forced her to stop going to school in 2004.

“If I had not stopped going to school, my life would have been in trouble,” she said. “I feel insecure and mixed-up, because local people always want to deflower me. If anything bad happens to me, no one in the society will stand beside me. What did we do against the society? We did nothing against them, we simply changed our faith.”

She said the ostracism and societal misconduct sometimes lead her to contemplate suicide.

 

History of Resentment

When the family and others converted to Christianity in 1991, area resentment festered and finally broke into violence in late 1992, when local Muslims vandalized and burned the local church and several Christian-owned homes.

The government deployed more than 2,000 police and other law enforcement personnel to bring the situation under control, and some local Muslims were arrested for arson.

“The arrests made the local Muslims very angry,” said pastor Benu Barua of Memorial Christian Baptist Church of Malumghat.

Rage dating back to the events of the 1990s may be at the root of the beating of Begum’s family, he said.

“The Muslim neighbors beat them for such a small amount of money – any small issue to the Muslim neighbors is like a red rag to a bull,” Barua said. “This kind of oppression, what happened to Begum’s family, is less common on other traditional Christians or those who converted from the Hindu religion. But Muslim-converted Christians are more oppressed here.”  

Report from Compass Direct News