Mbeki's public display of support had clearly been intended to shore
Mugabe up. When it failed to work, Mbeki began to backtrack
immediately. First it was announced that no specific agreement had
been signed, then that there was no loan at all but that South Africa
would guarantee a rand-denominated Zimbabwean bond, and then that
Mbeki would mediate for Mugabe with the World Bank. All of this
quickly collapsed to nothing. It was clear that there would be dire
consequences for South Africa's own credit rating if it were to
guarantee Mugabe's debts--after all, the country does not even
guarantee bonds issued by its own parastatals such as Eskom and
Telkom. Neither the World Bank nor the IMF is willing to negotiate
via intermediaries, and in any case both have attached conditions to
lending to Zimbabwe, such as the withdrawal of its troops from the
Congo, budget deficit reduction and so on, compliance with which
Mbeki could hardly guarantee.

In the end the deal was pronounced never to have existed, though
originally it had been announced to the press by Zimbabwe's finance
minister in Mbeki's presence. Sasol, however, announced that it had
just concluded a deal--reportedly its "biggest ever export contract
for fuel"--to supply fuel to Zimbabwe. While the oil company insisted
that the deal was made on a purely commercial basis, Zimbabwe's
chronic shortage of foreign exchange made this an extremely
speculative venture, to say the least. All that had really happened
was that South Africa promised it would go on supplying Mugabe with
enough electricity and oil to prevent a complete economic
collapse--and pray that it would get paid some day.

Escalation

This situation was transformed, however, by the occupation of white
farms by "war veterans", which began on the weekend of February 26-7,
2000. The veterans were actually mostly young, unemployed Zanu-PF
activists paid for their "work" by the party. The occupations were
illegal, involved the mass beatings and torture of farm workers
suspected of supporting the opposition, and continued throughout the
year despite repeated judicial rulings that they must cease. From
this point on South African aid was being given to a regime that
openly refused to accept the rule of law--even the law that it had
itself legislated over the previous twenty years. Mugabe followed up
by ramming through parliament (in which Zanu-PF then held 147 of the
150 seats) the clause of the constitution that had been popularly
rejected, allowing him to expropriate land without compensation.
These two steps immediately cut off all possibility of IMF or World
Bank aid and quickly led to the cancellation of aid by the United
States, Sweden, Norway and Holland. A new bill was also published--a
cyberworld first--allowing the government to vet all email and punish
anyone found criticizing the government.

Both domestic and international opinion waited for Mbeki to react:
How could he possibly continue to preach the African Renaissance if
he did not take a stand in favor of the rule of law, against the
straightforward suppression of both civil and property rights, and
against the open resort to mass beatings, torture and murder?
Moreover, Mugabe was intent on insulting the British premier, Tony
Blair. Having previously referred to the Blair government as "gay
gangsters", he now followed up with attacks on Blair's "gay
philosophy and gay way of life." Mbeki, as chairman of the
Commonwealth, might have been expected at least to distance himself
from his neighbor's unprovoked attacks on Blair. Not only did Mbeki
not react, however, but on March 23 it was announced that Eskom was
extending further aid to Mugabe by consolidating $14.4 million of its
$20 million debt into a loan and rescheduling payment for the rest.

The South African business community reacted with near stupefaction.
The markets were thoroughly alarmed by the principle of expropriation
without compensation and the spectacle of a ruling African
nationalist party making it clear that it would use all manner of
violence rather than allow a democratic alternation in power. If
Mbeki failed to take a strong and public stand against Mugabe, the
conclusion could only be that the ANC, faced with a major electoral
challenge, might behave in the same way--and that property might be
seized in South Africa as well.

At the beginning of 2000, the influential Templeton investment
supremo Mark Mobius had selected South Africa as his most promising
emerging market, but both he and other fund managers were overwhelmed
by a flood of selling as foreign investors dumped South African
equities and bonds, causing the rand to plunge. Most analysts had
forecast a strengthening of the rand for 2000--according to almost
any measure it was chronically undervalued in purchasing power--but
in fact the currency went into free fall, ending the year almost 25
percent down. Last year was, indeed, South Africa's worst year for
foreign investment since the arrival of democracy in 1994, and
consumer confidence fell throughout the year, finishing at a level
last seen in 1993, when large-scale violence and civil disorder
seemed poised to engulf the country. Normally, the South African
Chamber of Business is loath to criticize the government, but its
ceo, Kevin Wakeford, could not contain himself. The rand's fall and
the large capital outflows the country was suffering were, he said,
directly due to Pretoria's silence on the Zimbabwe issue: "South
Africa has no option but to take a position", he pleaded.

President Mbeki greatly dislikes being lectured by white businessmen.
Government spokesmen were immediately instructed to deny that the
rand's fall had anything to do with Mbeki's silence on Zimbabwe. In
fact, the finance minister averred, it was caused by the general
weakness of emerging market currencies, the strength of the dollar,
and the fall of the euro. This convinced no one, but it now became
almost a point of honor for the government to deny the significance
of the Zimbabwe factor. Thus on April 9, 2000, Mbeki, as he left for
the Group of 77 meeting in Havana, was asked whether he would have
any message for Mugabe when he saw him there. "Why should we?", he
replied. "We are regularly in touch with Zimbabwe about all sorts of
things. If the Zimbabwean government thought they needed to brief us
on anything in Zimbabwe, they would do so."

Futile Diplomacy

Parallel with its insistence that Mbeki's silence on Zimbabwe was not
the cause of the rand's collapse, Pretoria now strove to convince
business that this silence masked an energetic "quiet diplomacy" and
"constructive engagement" with the Zimbabwe problem. Privately it was
suggested that Mbeki was only too conscious of how disastrous a
leader Mugabe was, but he could have more impact on the situation if
he could use an attitude of sympathy and friendship to nudge Mugabe
in the right direction.

This campaign quickly had some impact. South African businessmen are
a timorous lot, as keen to be on board with the ANC government as
with the apartheid governments of the past, and many were so scared
by the implications of the Zimbabwean crisis that they wanted to find
something more comfortable to believe in. Symptomatic of this new
mood was the Business Day editorial of April 17, which strongly
supported Mbeki's refusal to comment on Zimbabwe and pleaded for a
more sympathetic understanding of his position. Tony O'Reilly's
Independent Group newspapers, always ready to respond to government
pressure, quickly followed suit. The pressure on business to side
with government ultimately culminated in the placement of
advertisements in the press by a major business organization
expressing support for Mbeki's stance on Zimbabwe--although finding
any businessman who actually believed this remained virtually
impossible.

If constructive engagement was to deserve support, it had to show
results. Moreover, the draft protocol of the SADC organ on politics,
defense and security has, since 1996, committed the organization to
intervene in member states where instability had arisen as a result
of a breakdown in law and order. Thus far the smaller SADC countries
had all followed Mbeki's lead and refused to comment on the
Zimbabwean crisis.

This was the background to the Victoria Falls Summit of April 21,
2000, attended by Mbeki, Mugabe and the presidents of Namibia (Sam
Nujoma) and Mozambique (Joaquim Chissano). According to Mbeki's
spokesmen, he and the other presidents got Mugabe to agree to stop
the violence and facilitate the ultimate withdrawal of the war
veterans from white farms, while Mbeki also asked Mugabe to cease
public attacks on Blair and Britain. In return it was agreed that the
other presidents should give Mugabe their public support, and that
Mbeki would try to get Britain to make aid available for land reform
in Zimbabwe and continue his efforts to mediate with the IMF. Mbeki
apparently felt sanguine enough about things to phone Blair to tell
him that a new chapter had been opened on the land reform question
and that there would now be speedy progress in settling all the other
outstanding issues. Britain cautiously welcomed the summit's outcome,
again declaring its readiness to finance land reform that respected
the rule of law and whose beneficiaries were poor Zimbabweans, and
not (as in the past) fat cats and Mugabe's cronies.

Essay Types: Essay