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The New Depression

The business and political elite are flying blind. This is the mother of all economic crises. It has

We are living through a crisis which, from the collapse of Northern Rock and the first intimations of the credit crunch, nobody has been able to understand, let alone grasp its potential ramifications. Each attempt to deal with the crisis has rapidly been consumed by an irresistible and ever-worsening reality. So it was with Northern Rock. So it was with the attempt to recapitalise the banks. And so it will be with the latest gamut of measures. The British government – like every other government – is perpetually on the back foot, constantly running to catch up. There are two reasons. First, the underlying scale of the crisis is so great and so unfamiliar – and, furthermore, often concealed within the balance sheets of the banks and other financial institutions. Second, the crisis has undermined all the ideological assumptions that have underpinned government policy and political discourse over the past 30 years. As a result, the political and business elite are flying blind. This is the mother of all postwar crises, which has barely started and remains out of control. Its end – the timing and the complexion – is unknown.

Crises that change the course of history and transform political assumptions are rare events. The last came in the second half of the 1970s, triggered by the Opec oil price spike and a dramatic rise in inflation, which marked the end of the long postwar boom. Its political consequences were far-reaching: the closure of the social democratic era, the rise of neoliberalism, the discrediting of the state, the embrace of the market, the undermining of the public ethos and the espousal of rampant individualism. For the next 30 years, neoliberalism - the belief in the market rather then the state, the individual rather than the social - exercised a hegemonic influence over British politics, with the creation of New Labour signalling an abject surrender to the new orthodoxy.

The modalities of this present crisis are entirely different. Extreme as they may have appeared to be at the time, the economic travails of the 1970s were progressive rather than cataclysmic. The old system did not hit the wall, but became increasingly mired and ineffectual. What swept the social democratic era away was not the force de frappe of an irresistible crisis but that it was accompanied by the steady rise of a new ideology and political force in Thatcherism - and Reaganism in the United States - and its victory in the 1979 general election.

In contrast, the financial meltdown of 2007-2008 demolished the neoliberal era and its assumptions with a suddenness and irresistibility that was breathtaking. The political class, from New Labour to the Conservatives, is standing naked. They are still clinging to the wreckage of their old ideas while acknowledging in the next breath that these no longer work. The financial crisis is a matter of force majeure; political ideas and discourse change much more slowly, even when it is obvious that the old ways of thinking have become obsolete. Meanwhile, there is no political alternative waiting in the wings, refining its radical ideas in think tanks ready to storm the citadels of power as there was in the 1970s, notwithstanding the fact that think tanks are now far thicker on the ground. Instead, it has been the mainstream which senses that neoliberalism no longer works, fatally undermined by events and, ultimately, the author of its own downfall. This crisis will have the most profound and far-reaching political consequences and will in due course transform the political landscape, but it remains entirely unclear in what ways and when that might be.

In all these senses the financial meltdown has far more in common with the Great Depression than the Great Inflation. When the financial crisis consumed Wall Street in 1929 and proceeded to undermine the real economy, engulfing Europe in the process, it was not accompanied by a radical shift towards Keynesianism, but rather a reassertion of sound finance orthodoxy, followed in due course by the adoption of protectionism. The political mainstream as represented by Labour's Ramsay MacDonald and Philip Snowden and the Conservative Stanley Baldwin all sang from the same hymn sheet. Only Keynes and a faction of the Liberal Party enunciated a plausible alternative. Eventually a programme of fiscal deficits and public works was pursued by Franklin D Roosevelt in the United States, but in Britain Keynesianism was not properly embraced until rearmament and the approach of war. Indeed, it was not until 1945 that the combined legacy of war and the Depression belatedly resulted in a fundamental political realignment and the birth of the social democratic era.

The Grim Reaper has finally spoken:

a boom pumped up by credit steroids and a bust that takes us back to the 1930s

Since the financial meltdown dramatically intensified in September 2008, Gordon Brown has managed to ride the economic storm rather more successfully than the Conservatives, or, for that matter, than Tony Blair would have done. It is Vincent Cable, the Liberal Democrats' econo­mics spokesman, however, who has indubitably emerged as the political sage, unafraid of confronting neoliberalism's shibboleths, demonstrating a clarity of mind and the political courage to tell things as they are, in a way that has escaped all other prominent politicians. Although Brown was the economic architect of the past decade and was responsible, more than anyone else, for its excesses and was shaping up to be a rather disastrous Prime Minister, he displayed last autumn, at least initially, an agility of mind and nimbleness of foot that defied the expectations of those who believed he was capable of neither. He revelled in the sense of purpose and vision offered by the crisis, seemingly prepared to jettison the thinking that had imbued his previous decade as chancellor.

But Package Part I, widely hailed at the time and imitated elsewhere, proved woefully inadequate, and the financial system remains frozen. Meanwhile the waters are rising up the Good Ship UK, threatening to transform the banking crisis into a fiscal and currency crisis. It seems unlikely that, if that should happen, Brown will survive the next election.

Even if it does not happen, Brown faces a serious problem about his own past role, because Britain’s crisis has been greatly exacerbated by the soft-touch regulation, easy credit, runaway house inflation and overexpansion of financial services over which he presided and for which he is accountable. So far he has refused to admit or accept responsibility for his actions – he initially had the temerity (or foolhardiness) to argue that the UK was better placed than other countries to deal with the credit crunch, even though it has become abundantly clear since that the very opposite was the case. So while Brown remains in denial, the plausibility of his new turn, and his understanding of what is entailed, must be seriously doubted.

Indeed, after its initial boldness, the government now seems trapped by its past actions and its former ways of thinking. Brown's failure to accept the need to nationalise the banks suggests the limits of his new-found political courage, and his inability to embrace the logic and imperatives of the new situation. He is still a prisoner of his old timidity and his conversion to the neoliberal cause. It is his good fortune that the Cameron Conservatives have been hugely wanting in their response to the financial meltdown. Having spent his first years as leader of the opposition seeking to reassure the country of his centrist credentials, David Cameron, at the first whiff of gunfire, has turned on his heels, rejected Keynesianism and, at the very moment when events have shown Thatcherism to be deeply flawed and historically out of time, headed back to the Thatcherite womb of sound finance, arguing that a government must balance its books and that deficit financing, Keynesian-style, is reckless and irresponsible.

But all this, it must be said, is the small change of politics. The crisis threatens in time to sweep away the political world as we know it and those who fail to grasp its magnitude and meaning. Far more is at stake than the fortunes of a few leaders, be their name Brown or Cameron. Who knows where things will be this time next month, let alone next year or, indeed, in 2012? The financial meltdown now rapidly plunging the western world into what increasingly looks like a depression is the first great crisis of globalisation. There was plenty of warning. The Asian financial crisis of 1997-98 proved a salutary lesson about the dangers posed by huge capital movements that were subject to precious little regulatory control. Three economies capsized (South Korea, Thailand and Indonesia) and others stood on the brink.

There were other earlier warning signs, notably Mexico in 1995, when GDP fell by 9 per cent and industrial production by 15 per cent, following a run on the peso. These crises were blamed on the immaturity and fecklessness of national governments - in the case of east Asia on so-called crony capitalism (which, incidentally, prompts the question of how we should describe Anglo-American capitalism) - which the International Monetary Fund obliged to engage in swingeing cuts in public expenditure as a condition of their bailouts.

Yet what if such a crisis were to be no longer confined to the peripheries of global capitalism but instead struck at its heartlands? Now we know the answer. The crisis has enveloped the whole world like an uncontrollable virus, spreading from the US and within a handful of months assuming global proportions, at the same time mutating with frightening speed from a financial crisis into a fully fledged economic crisis. In so doing, it has undermined the foundations on which the present era of globalisation has been built, namely scant regulation, the free movement of capital, a bloated financial sector and immense reward for greed, thereby bringing into question the survival of globalisation as we now know it.

Enormous international flows of unregulated capital have capsized the international financial system - with disastrous consequences for the real economy - in a manner akin to the effect of a roll-on, roll-off ferry shipping too much water. We can now see the cost of free-market capitalism and light-touch regulation. Iceland may provide an extreme example of the consequences of the credit crunch but it also illustrates the dangers facing the more vulnerable economies, the UK included, in a deregulated world where the market rules: a small, open economy; a large, internationally exposed banking sector; an independent currency that is not a serious global reserve currency (of which there are only three); and limited fiscal strength. These propositions have constituted the core economic beliefs - from Thatcher and Lawson to Blair and Brown - that have informed policymaking over the past three decades and without which, it was claimed ad nauseam, an economy could not succeed. Heavy-handed regulation and an overbearing state would serve only to frighten off capital and condemn a country to slow growth, stagnation and global marginality. Now we know the fallaciousness of these claims and the consequences of "letting the market decide".

Like Iceland, albeit not as extremely, Britain has been living in a fool's paradise. A failure to regulate the banks and other financial institutions in any meaningful fashion allowed bankers to behave in a grossly irresponsible and avaricious fashion; a boom that was made possible only by a government-enabled credit binge in which people borrowed recklessly; a bloated financial sector that grew to represent over 8 per cent of the total economy and which was found to have been built on foundations of sand; an overvalued currency that made manufacturing exports uncompetitive and thereby resulted in an unnecessary and counterproductive contraction in the manufacturing sector which must now be reversed; an absurd belief that boom and bust had been banished for ever, allowing the banks to turn a blind eye to the inflating of various asset bubbles and display a profound ignorance of the history of capitalism; a persistently chronic current account deficit that can no longer be compensated for by inward capital flows; monstrous salaries for those at the top of the financial and corporate tree, which were justified in terms of a trickle-down effect that remained a chimera, and as the reward for risk which was, in fact, a reward for greed and failure; growing inequality, which was justified in the name of a more competitive economy accompanied by declining social mobility in the cause of an open and flexible labour market; and, finally, the mushrooming of what can only be described as systemic corruption on a mega-scale as the state ignored the gargantuan abuses of those who ran the banks and other financial institutions, while regulatory authorities willingly colluded in their excesses.

This is the sad story of the New Labour era.

The ultimate cost of this debacle as yet remains unknown. What began as a financial crisis is threatening, as the government seeks to bail out a bankrupt financial sector, to become a currency crisis, with foreign investors concerned about the effects this might have on the value of sterling, and perhaps even worse, ultimately a sovereign debt crisis, with growing doubts about the UK’s financial viability. Until there is some end in sight to the financial crisis, and a line can be drawn under the banks’ indebtedness, we will not know the answer to these questions. One thing is clear, however: whatever the limitations of the social democratic era, it was never responsible for such an all-enveloping and cataclysmic crisis as the one that the neoliberal era – and the Thatcherites and New Labour – have managed to produce. After all the boasting about the virtues of the Anglo-American model of capitalism, the Grim Reaper has finally spoken: a boom pumped up by credit steroids and a bust that takes us back to the 1930s.

There are two key aspects to this crisis: national and global, with the latter promising to be rather solutions are concerned, we are in uncharted territory, with close to zero interest rates, a Keynesian-style fiscal boost that may prove inadequate to the task and could well fail, a hugely indebted financial sector that threatens to leave us with an enormous future tax burden and a greatly expanded national debt. All of this, furthermore, must be addressed in the context of an open-market regime which is very different from those of previous eras, and which could render Keynesian-style national solutions ineffectual. What would greatly assist any national recovery is a co-ordinated global response to the crisis; in other words, global co-operation at the highest level. This cannot be ruled out, but it would be a brave person that would bet on it. It was exactly the lack of international co-operation that bedevilled recovery in the 1930s and eventually led to the Balkanisation of the world into regional currency and trading blocs.

The most important single question in this context is the relationship between the US and China. Will the Obama administration be able to resist the slippery slope of creeping protectionism? Will arguments over the revaluation of the Chinese renminbi be resolved amicably? If the answer is in the negative, then the global outlook will be very bleak indeed and so, also, as a result, will be the prognosis for national recoveries. Indeed, the prospects would look disturbingly like those of the 1930s, with growing international antagonism and friction and a continuingly intractable crisis at a national level, with only the very slowest of recoveries.

Around the world there is growing evidence by the week of a resort to national solutions at the expense of others: measures to subsidise industries that are in severe difficulties; the Buy American clause that was inserted by the House of Representatives into Barack Obama's latest package (though since weakened); the industrial action in Britain against foreign workers; the withdrawal of banks to their national homes; the attack by Timothy Geithner, the US treasury secretary, on China as a currency manipulator. No Rubicon has been crossed but the warning signs are clear. A retreat into protectionism and beggar-thy-neighbour policies will deliver the world into a second Great Depression.

So what will be the political effects of the financial meltdown? Some are already evident. Just as the Great Inflation of the 1970s played to the tunes and concerns of the right, with its invocation of the market, the New Depression suggests the opposite, the inherent limitations of the market and the indispensability of the state. Indeed, the speed with which the neoliberal refrains and invocations have unravelled has been breathtaking. The single most discredited aspect of the social democratic legacy was nationalisation, and yet the government, with the most extreme reluctance, has been obliged to nationalise Northern Rock and partially nationalise the Royal Bank of Scotland and the merged Lloyds TSB and HBOS. Who would have ever imagined, at any point during the past 30 years, that no less than the financial commanding heights of neoliberalism would have ended up in the hands of the state, with precious little opposition from anyone except a few disgruntled shareholders? Even now, however, the Labour government, still trapped in the ideological straitjacket of New Labour and displaying extreme timidity in the face of powerful vested interests, which has always been a New Labour characteristic, is running scared of the inevitable logic of the situation, namely that all the high-street banks should be taken into public hands until the mess is sorted out. Anything else leaves the public responsible for all the debts and risks, while the banks continue to be answerable to the very different interests of their shareholders. But such is the fury and depth of the crisis that this scenario is highly likely.

The state is experiencing an extraordinary revival. The credit crunch is the most catastrophic example of market failure since 1945. It became almost immediately obvious to wide sections of society that there was only one institution that could potentially sort out the mess: the state. Far from being a rational distributor of resources, the market had proved the opposite. Far from bankers and financial traders embodying the public interest, they have been exposed as irresponsible and dangerous risk-takers whose primary motivation was voracious greed. If trade unionists and the nationalised industries were the demons of the 1970s, bankers and the financial sector have assumed the mantle of public enemy number one in the late Noughties. In fact, the irresponsibility of bankers, and the damage they have inflicted on the economy, hugely exceeds anything that the unions could possibly be held responsible for in an earlier era. Meanwhile, the fallen heroes of the pre-Thatcher era, most notably Keynes, are duly being exhumed, restored to their rightful position, and pored over for their ability to throw light on the present impasse and what might be done; if the recession turns into a depression, Marx will once again become required reading.

This political shift is not just a British phenomenon, but a more general western one. The most striking feature of President Obama's inaugural speech was the way in which it embraced and legitimised African Americans for the first time in American history. But it also had another powerful theme, namely its invocation of the public interest and public service. After decades during which American political discourse has been dominated by the language of individualism and the market, it came as a shock to hear a US president articulate a very different kind of philosophy, renouncing private greed in favour of the public good. Obama's election can in part be seen as a response to the failure of the neoliberal era, as well as of Bush's neoconservative agenda; certainly his election represents a remarkable shift to the left in US politics, in contrast not just to Bush, but every recent US president, including Reagan, Bush Sr and Clinton. That Obama is the first African-American president also represents a remarkable redrawing of the political landscape. There is no more powerful - nor difficult - way of redefining society or to embrace a new form of representivity than to include a racial minority that has been excluded.

This brings us finally to what might be the longer-term global consequences of the crisis. Again, we are inevitably stumbling around in the dark because so much depends on whether the recession metamorphoses into a fully fledged depression and in what way and shape the world eventually emerges from the debacle. That said, two key points can be made. First, the credit crunch signals the demise of the Anglo-American, neoliberal model of capitalism, which has exercised a hegemonic influence over western capitalism and been the blueprint for globalisation since 1980. Because of its catastrophic failure there seems very little chance of its resurrection. The process of recovery - whenever that might be - will be accompanied by an overriding concern to ensure that the events of 2007-2009 are not repeated in the future, just as happened in the US in the 1930s with the strict regulatory framework that was introduced for the banks after their comprehensive failure in 1929. This will include the search for a new global regulatory framework that controls and constrains international movements of capital, as well as strict controls over the financial sector at a national level. A new set of political priorities - and with it a new political language - will be born.

Meanwhile, the influence and prestige that the US, and to a far lesser extent Britain, have enjoyed will vaporise in the same manner as their neoliberal model. Their 30-year project has failed and they will be obliged to pay the price in their reputation and the esteem in which they are held. The countries of the former Soviet Union and the casualties of the Asian financial crisis that were forced to swallow the neoliberal medicine will have good reason to feel aggrieved and resentful. The west has been forthright in accusing the non-western world of corruption. The financial meltdown suggests that the west has been guilty of huge hypocrisy. Systemic corruption has lain at the heart of the western financial system. An entirely disproportionate and extortionate level of bonuses has ensured the enormous enrichment of top executives in the financial sector, all in the name of reward for success, when in fact it was the reward for failure. In addition, we have had the collusion of the credit-ratings agencies; a regulatory system characterised by its failure to act as any kind of constraint; and governments that ensured the continuation of this web of relationships and applauded its achievements. The corruption was on a breathtaking scale as evidenced by the size of the bailouts required to rescue the banks. It will be difficult for western governments to make these kinds of accusations of others in the future. That Obama represents such a voice of hope will help to mitigate the inevitable ill-will towards the US, but this should not be exaggerated amid the euphoria surrounding developments in Washington.

The second point is more far-reaching. It is doubtful whether we can still describe ourselves as living in the American era or, indeed, the Age of the West. If not yet quite over, both are certainly drawing to a close, and it seems likely that the effect of the financial meltdown will be to accelerate the rise of China as a global power. The contrast between the situation in China and that in the US could hardly be greater, even though it has been partially obscured by the depressive effect of the western recession on Chinese exports and on China’s growth rate. While the US economy is contracting, China’s grew at roughly 9 per cent in 2008 and is projected to grow at about 6 per cent in 2009. Its banks, far from bankrupt like their US counterparts, are cash-rich. China enjoys a large current account surplus, the government’s finances are in good order and the national debt is small. This is a crisis that emanates from the US and whose impact on China has been essentially indirect, through the contraction of western markets. It is the American model that has failed, not the Chinese.

One of the factors that intensified the Great Depression, and indeed was part cause of it, was Britain's growing inability to continue in its role as the world's leading financial power, which culminated in the collapse of the gold standard in 1931. It was not until after the war, however, that the US became sufficiently dominant to replace Britain and act as the mainstay of a new financial system at the heart of which was the dollar. The same kind of problem is evident now: the US is no longer strong enough to act as the world's financial centre, but its obvious successor, namely China, is not yet ready to assume that mantle. This will undoubtedly make the search for a global solution to the present crisis more difficult and more protracted.

Martin Jacques's new column will be published fortnightly in the New Statesman. His book "When China Rules the World: the Rise of the Middle Kingdom and the End of the Western World" will be published in June (Allen Lane, £25)

the global downturn in numbers

    0.5%

    IMF prediction for global growth in 2009 - worst since WWII

    Up to 40 million

    Number of people who will lose their jobs this year, according to the International Labour Organisation

    $9.7trn

    Total pledged by the US alone towards solving the crisis

    3.6%

    Proportion of GDP pledged by the G7 and BRICs countries towards fixing the crisis (1.5% this year)

    2.3m

    Number of US properties that received a default notice or were repossessed in 2008. In the UK, 45,000 homes were repossessed - another 75,000 are expected to be taken in 2009

    14

    Number of major global banks which collapsed, were sold or were nationalised during 2008

    200,000

    Number of European companies expected to fail this year; an additional 62,000 are expected to fail in the United States. These figures represent record levels of insolvency

    52%

    Increase in UK company failures between late 2007 and late 2008

    14%

    Drop in level of Chinese exports during January

    1%

    Current UK interest rates (down from 5% in October 2008). In the US, rates have fallen to between 0 and 0.25%

How the crisis unfolded

13 September 2007 Run on Northern Rock begins when it is revealed that the bank has requested emergency support from the Bank of England

21 January 2008 FTSE suffers worst falls since 11 September 2001

February 2008 Northern Rock nationalised

17 March 2008 JP Morgan Chase takes over the US investment bank Bear Stearns

12 July Mortgage lender IndyMac collapses - second biggest US bank in history to fail

9 August 2007 European Central Bank pumps ?95bn into banking market

7 September Financial authorities step in to rescue Fannie Mae and Freddie Mac

9 September Bradford & Bingley becomes second British bank to be nationalised

15 September Lehman Brothers files for bankruptcy

16 September AIG, biggest insurance firm in the US, receives $85bn rescue package

3 October 2008 US government announces $700bn Troubled Assets Relief Programme

8 October UK launches its first bank bailout plan, making £50bn available

October 2008 Iceland's banks collapse. IMF extends £1.4bn ($2.1bn) loan a month later

24 November Alistair Darling announces a temporary cut in VAT from 17.5 to 15 per cent

23 January 2009 UK enters recession

28 January US Congress passes Barack Obama's $819bn stimulus package

5 February UK Monetary Policy Committee votes to cut interest rates to 1 per cent - the lowest in over three centuries

Michael Harvey

Martin Jacques is a journalist and academic. He is currently a visiting fellow at the London School of Economics Asia Research Centre and at the National University of Singapore. Jacques previously edited Marxism Today and co-founded the think-tank Demos in 1993. He writes the World Citizen column for the New Statesman. His new book on the rise of China, When China Rules the World, will be published in June.

This article first appeared in the 16 February 2009 issue of the New Statesman, The New Depression

FRÉDÉRIC COURBET/PANOS PICTURES
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The last days of Robert Mugabe

Zimbabwe is engulfed, and not only by a political crisis. While its leaders fight, its economy is in meltdown.

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With considerable trepidation, I took the lift to the sixth floor of the ministry of justice in central Harare to interview the minister. It wasn’t just that I lacked the accreditation foreign journalists must obtain to work in Zimbabwe – the interview had been arranged through unofficial back channels. The minister, Emmerson Mnangagwa, also happens to be the vice-president, Robert Mugabe’s notoriously brutal chief enforcer for the past 36 years, and the most feared man in the country. “They don’t call him ‘The Crocodile’ for nothing,” said a Zimbabwean businessman who knows him well. “He never says a word but suddenly he bites. He’s very dangerous.”

But Mnangagwa, still powerfully built at 74, proved courteous enough as we sat in deep leather armchairs in his bright and spacious office. It was not in his interest to be hostile – not at this time. He is determined to succeed Mugabe and he will need Western support to rebuild his shattered country if he does, which is presumably why he gave me an almost unprecedented interview.

Aged 92 and the world’s oldest head of state, Robert Mugabe is fading. He falls asleep in meetings, suffers memory lapses and stumbles on steps. He delivered the wrong speech at the opening of parliament in September last year and had to deliver the right one to a specially convened session the following day. As long ago as 2008 a WikiLeaks cable from the US ambassador reported that he had terminal prostate cancer, and he frequently flies to Singapore for unspecified medical treatment – blood transfusions, perhaps, or steroid injections. A diplomatic source talked of Mugabe’s “dramatic deterioration in the last two years”, and said: “He could go at any point.”

Mnangagwa did not admit he wants to be president, of course. Given Mugabe’s paranoia, that would have been political suicide. On the contrary, he was studiously loyal. When I asked which politician he most admired he immediately replied: “The president.” He refused to discuss the possibility of Mugabe dying. “Under British constitutional law you don’t conceive or desire the demise of Your Majesty. Why would you want to conceive or desire the demise of my president?” he asked. He even denied that he would seek Mugabe’s job when, to borrow the euphemism with which some Zimbabweans refer to the coming cataclysm, “the portrait falls off the wall”.

“I don’t see myself doing that,” he said. Of the decades he had worked with Mugabe, he said, “I was not serving to be president. I was serving my country.”

Nobody will believe Mnangagwa’s denial – certainly not close allies such as Christopher Mutsvangwa, a former Zimbabwean ambassador to China and the leader of the “war veterans” who seized the country’s white-owned farms in the 2000s.

I had met Mutsvangwa a few days earlier in the unlikely setting of a coffee shop in the affluent Harare suburb of Mount Pleasant. It was another encounter between a senior regime figure and a Western journalist of a sort that is becoming increasingly possible in the turbulence of Mugabe’s twilight days. Mutsvangwa told me he was “100 per cent” sure that Mnangagwa would be Zimbabwe’s next president. Indeed, he and other allies of the vice-president are already locked in a vicious struggle over the succession with Mnangagwa’s potential rivals in the ruling Zanu-PF party.

Grace Mugabe, 51, the president’s intensely ambitious and avaricious wife, set things going in late 2014 after her husband made her the head of Zanu-PF’s Women’s League and a member of the party’s Politburo. She persuaded Mugabe to expel the previous vice-president, Joice Mujuru, and her supporters from the party for allegedly plotting against the president. Mujuru – who as a teenage guerrilla during Zimbabwe’s war of independence in the 1970s gave birth in the bush, shot down a helicopter with a rifle and earned the nom de guerre Teurai Ropa (“Spill Blood”) – has now set up an opposition party, Zimbabwe People First (ZPF).

Having disposed of Mujuru, Grace and a group of “Young Turks” known as Generation 40, or G40, then turned their attention to Mnangagwa, seeking to oust him as vice-president and purge his supporters from critical posts in Zanu-PF. Grace made no secret of her ambitions, flying round the country in the presidential helicopter to address “meet the people” rallies. “They say I want to be president. Why not? Am I not Zimbabwean?” she asked. To give herself gravitas, she acquired a PhD from the University of Zimbabwe in three months; the degree was presented to her by the chancellor – her husband.

But Mnangagwa has his own cabal of older party members who fought in the liberation war and despise the G40 “upstarts”, who did not – Mutsvangwa calls them “power-grabbers” and “village head boys”. His so-called Lacoste faction (the clothing company’s emblem is a crocodile) has hit back hard, using Mnangagwa’s control of Zimbabwe’s Anti-Corruption Commission to launch high-profile criminal investigations against G40 leaders. For good measure, Mutsvangwa’s war vets have turned on Mugabe himself. In July they issued a communiqué condemning his “dictatorial tendencies . . . which have slowly devoured the values of the liberation struggle”. In November they sacked him as their patron.

A secret Zanu-PF document passed to me by a reliable source shows how sulphurous the infighting has become. Emanating from Mnangagwa’s camp, it accuses G40 of plotting “political euthanasia” against the party’s founding generation and of “coercing the First Lady into a spirited campaign against VP Mnangagwa”.

The document suggests Mugabe himself created G40 because, behind his “feigned love” for his deputy, he “has always felt threatened by VP Mnangagwa and the prospect of his presidency being outshined by that of his protégé”.

The nine-page document then sets out a detailed plan to destroy G40’s leaders through “brutal character assassination”, fomenting “fights and chaos” within the group, and sowing “seeds of distrust” between G40 and Grace Mugabe.

In short, the party that has governed Zimbabwe since 1980 is sundered as never before. Beneath the bright-blue jacaranda and orange flamboyant trees that shade Harare’s broad avenues, vendors hawk newspapers that gleefully proclaim “Crunch time for Zanu-PF factions”, “Zanu-PF implodes” and “Blood on the floor”. “They’re at each other’s throats and it’s not unlikely it will end in a violent confrontation,” Ibbo Mandaza, a political analyst in Harare, told me.

But Zimbabwe is engulfed, and not only by a political crisis: while its leaders fight, its economy is in meltdown.

 

***

 

In the 2000s Robert Mugabe destroyed agriculture, the mainstay of the Zimbabwean economy, by seizing farms owned by whites and giving them to his cronies. Now the country’s industrial base is collapsing for lack of investment: it imports twice as much as it exports. The international financial institutions will lend the regime no more money without root-and-branch reforms and repayment of its $1.8bn arrears. Having abandoned its national currency in 2009, when inflation reached 500 billion per cent, Zimbabwe is quite literally running out of the US dollars that it has used for cash ever since.

“It’s a disaster of the worst order. We are in an economic recession that’s fast-tracking itself into an economic depression,” said Tendai Biti, an outspoken lawyer and opposition politician who served as finance minister for the Movement for Democratic Change in Zimbabwe’s ill-fated government of national unity between 2008 and 2013. “The regime can rig elections but they can’t rig the economy,” he said, as we chatted in his cluttered office in central Harare.

The government’s response to the liquidity crisis has been to issue bond notes as a surrogate currency – a move likely to make matters even worse. Nobody trusts the Monopoly-type notes, which look like ordinary currency and carry the words “Reserve Bank of Zimbabwe”. They believe the Treasury will print them with the same reckless abandon with which it printed Zimbabwean dollars in the late 2000s. Those who can are rapidly moving their US dollars out of the country, accentuating the cash shortage. Zimbabwe is bracing itself for a return of hyperinflation, fuel shortages and empty supermarket shelves.

The manifestations of economic collapse are already apparent. Driving around central Harare, I saw outside every bank the long queues that form before dawn each day because withdrawals are now limited to $50 or less per person per diem. The industrial estates of southern Harare are full of shuttered and closed-down factories: John Robertson, an economist based in Harare, reckons the industrial base has contracted 65 per cent since 2000. In a country where unemployment exceeds 80 per cent, street vendors, beggars and – at night – teenage prostitutes proliferate. The small number of adults who are employed mostly work in a public sector bloated by “ghost jobs” reserved for Zanu-PF supporters.

In rural areas the situation is even worse. Ben Freeth, a white farmer who was forcibly evicted by the war vets in 2009, sneaked me in to Mount Carmel, his family’s former property 110 kilometres west of Harare. He showed me the barren fields where maize and sunflowers once grew in abundance, and the dying mango and citrus orchards that used to produce 1,200 tonnes of fruit a year. The farm’s 2,400 hectares were commandeered by a then cabinet minister, Nathan Shamuyarira; today they yield nothing.

Freeth now farms 100 acres of rented land, but his former workers have suffered far worse than he has. We met some of them in the ruins of Freeth’s home that the war vets torched. They had no money, no food, no running water or electricity. They could no longer afford to send their children to school. Though it was planting season, they could not afford seeds to grow maize. “It was a good life, but now we’re starving,” Peter Asani, Freeth’s old foreman, said.

We drove on to the nearby town of Chegutu, which is dominated by 12 towering silos, each capable of holding 5,000 tonnes of grain. An employee told us just one was full, though the harvest had only recently ended and Chegutu is surrounded by some of Zimbabwe’s richest farmland. Instead, workers were unloading a goods train bringing maize from neighbouring Mozambique. “This used to be the grain basket of southern Africa, and here we are importing maize to prevent us starving,” Freeth said.

We stopped at the David Whitehead textiles factory, which once employed 4,000 people but closed in 2012. Today a few gaunt men are guarding the premises. They are paid four loaves of bread a day by the owners, and pass the time playing draughts with bottle tops on cardboard. They turn up in the forlorn hope that they will be first in the queue for jobs, should the factory ever reopen, and because there is no other work. “If I don’t do this what else would I do?” one of the men said.

Zimbabweans are mostly gentle, passive people, but even their capacity for stoic endurance has limits. Last spring and summer Harare witnessed protests on a scale the country had seldom seen before. Bypassing the splintered and ineffectual opposition parties, activists used Facebook and Whats­App to harness public anger and channel it into a succession of one-day strikes and street demonstrations, some of them attended by thousands.

“Social media is the government’s worst nightmare. It has completely changed the dynamics,” Promise Mkwananzi, a 35-year-old dissident who leads a protest movement called Tajamuka (“Outraged”), told me over coffee. A few days later he was arrested for the third time this year.

Fearing a “Zimbabwe spring”, the regime has detained dozens of leading activists. It hastily installed a senior intelligence officer as head of POTRAZ, the state agency that regulates the country’s mobile networks. It drafted legislation banning the use of social media to destabilise the country. It has even outlawed displays of the national flag after another protest group, #ThisFlag, co-opted it as its symbol.

The government has also resorted to its default tactic: violence. At 1am on 17 Nov­ember, the security forces abducted Patson Dzamara, an organiser of a protest against bond notes and corruption planned for later that day; at 9am that same morning I found Dzamara lying on a gurney at the Avenues Clinic in Harare with a huge swelling on the back of his head and vivid red weals across his back. He told me how three cars had blocked his own at a junction, two in front and one behind. The occupants then opened fire, burned his vehicle, and beat him for 20 minutes before driving him away – blindfolded – in a van.

“The only thing they said to me was, ‘You didn’t learn from what we did to your brother and now it’s your turn,’” said Dzamara, whose older brother Itai was abducted last year and never seen again. But instead of killing Dzamara, they dumped him naked by a road, telling him: “You’re lucky. You were supposed to die today.” A passing motorist took him to a service station, where he telephoned for help.

I left the clinic to find riot police backed by water cannon occupying the city’s streets. After word of Dzamara’s abduction spread on social media, fear prevailed and the protest fizzled out, leaving activists despondent. “We’re never going to have a successful protest in Zimbabwe again,” said Linda Masarire, a former train driver and widowed mother of five children who was jailed for 84 days last summer.

However, the government faces an increasingly grave problem of its own. It is running out of money to pay the security forces on which it depends for its survival, and the people’s anger is spreading to rank-and-file soldiers and policemen.

In the privacy of my car, one soldier who was hitchhiking near the town of Gutu, 225 kilometres south of Harare, complained bitterly about being poorly fed and paid late, how his family was struggling to survive, and how the army told him how to vote. It was time for Mugabe to go, he said.

Tendai Biti told me how, during one protest last summer, he was chased down by an unmarked vehicle whose occupants told him: “We’ve been sent to arrest you, so please run away.” Biti said: “It’s only their bosses that are eating. They’re not.”

The war veterans’ leader Christopher Mutsvangwa readily acknowledged that one reason why his 30,000 members had rounded on Robert Mugabe was that “there’s nothing to bribe us with any more. The economy is finished.”

I asked Mutsvangwa whether Mugabe should step down. “We need to have a new look at the management of the economy,” he said. “Since he’s the elected president he has to either deliver on that or make it possible for someone else to deliver on it. We would hope it’s the latter.”

He did not name Vice-President Emmerson Mnangagwa, but it was obvious whom he had in mind.

***

Over lunch at his charming old home in rural Sussex a few years ago, Denis Norman, a white farmer who served in three of Mugabe’s cabinets between 1980 and 1997, told me of his last meeting with the president after losing his farm and before he left for Britain in 2003.

“I asked: ‘Where did it all go wrong?’ He replied: ‘Has it gone wrong?’ I said: ‘I know it’s gone wrong. You know it’s gone wrong.’ He paused before replying, softly: ‘It’s not going right, is it?’”

The anecdote captures the tragedy of Robert Mugabe – the architect of Zimbabwe’s independence who has reduced it to penury; the guerrilla leader who freed his country from white-minority rule only to subject it to far greater repression.

Mugabe grew up a village 100 kilometres from Harare. His father, a carpenter, abandoned the family when he was ten. The principal of the local mission school, an Irish Jesuit priest named Father Jerome O’Hea, nurtured him instead.

Mugabe trained as a teacher; at Fort Hare University in South Africa he encountered the black nationalism sweeping across Africa. He went to teach in Ghana, which had just won independence from Britain, and there he married his first wife, Sally.

In 1960 the couple returned to Rhodesia, as Zimbabwe was called then. Mugabe joined its liberation struggle, became secretary general of the Zimbabwe African National Union (Zanu) and was imprisoned for nearly 11 years. Ian Smith’s government refused to release him even for the funeral of his infant son. He took several degrees through correspondence courses with the University of London and gave lessons to his fellow prisoners. Released in 1974, he fled to neighbouring Mozambique, where he orchestrated the guerrilla war against white-minority rule in Rhodesia.

In 1979 Mugabe attended the Lancaster House peace talks in London that led to independence. He was “secretive, seemed not to need friends, mistrusted everyone. Devious and clever, he was the archetypal cold fish,” said Lord Carrington, the British foreign secretary who chaired those talks.

He returned home from London a hero and duly won Zimbabwe’s first democratic elections in 1980. At first he confounded his critics. He allowed Ian Smith to remain in Zimbabwe, and, learning from what had happened in Mozambique after the Portuguese left in 1975, Mugabe urged white Zimbabweans to stay and rebuild the country, which had been destroyed by 15 years of war and sanctions. He built schools and hospitals for black Zimbabweans and encouraged agriculture.

The new president appeared to display no animosity towards Zimbabwe’s former colonial masters. He sought Britain’s help to forge a new national army. He formed a surprising friendship with Lord Soames, the last British governor of Rhodesia, and rebuked his cabinet for celebrating when Margaret Thatcher was deposed in November 1990. “Who organised our independence?” he asked them. “Let me tell you – if it hadn’t been for Mrs Thatcher none of you would be here today. I’m sorry she’s gone.”

Mugabe was an Anglophile who adored the royal family, and urged Denis Norman to invite Prince Edward to open Zimbabwe’s Royal Agricultural Show. He encouraged Zimbabweans to play cricket because it “civilises people and creates good gentlemen”. He read the Economist, wore Savile Row suits, and upbraided his first cabinet for dressing inappropriately: “If you wish to remain as ministers I expect you to dress as ministers.” A frugal, ascetic man, he rose before dawn, worked long days, ate simple food and neither smoked nor drank.

There was, however, a darker side to this apparently model leader. What the world did not see, or chose not to see, was his crushing of Joshua Nkomo’s opposition Zapu party in the mainly Ndebele-speaking Matabeleland region. Mugabe’s North Korea-trained and predominantly Shona Fifth Brigade razed villages, tortured and raped, killing an estimated 20,000 Ndebele civilians in Operation Gukurahundi (gukurahundi is the Shona expression for “the early rains that wash away the chaff”).

Mugabe’s relations with white Zimbabweans began to sour when they backed Ian Smith’s Republican Front Party in the 1985 parliamentary elections. He sacked Norman as minister of agriculture. “He wrote me a note saying he had no place for me because he had offered the hand of friendship to the farming community, and they obviously didn’t appreciate what he and I had done for them, so he was going to give them a black minister,” Norman told me.

In 1992 Sally Mugabe died of kidney failure. He lost a “great stabiliser and calming influence”, Norman said. “She was the one person he could actually confide in, someone who could keep him on a level plane.” In 2008 I visited her grave in Heroes Acre, a monument to Zimbabwe’s independence fighters on Harare’s western fringe. Fresh flowers lay on the black marble. My guide said Mugabe brought them every week, early in the morning when no one was around.

In 1996 he married Grace, a State House secretary 41 years his junior, with whom he already had two children from an affair that began before Sally’s death. Grace was Sally’s polar opposite, and under her influence the other side of Mugabe’s personality – the African strongman – gained ascendancy. Their wedding ceremony was attended by 12,000 guests. The couple built a mansion set in 44 landscaped acres in the affluent Harare suburb of Borrowdale. Mugabe celebrated his birthdays with increasingly lavish parties costing hundreds of thousands of dollars. His popularity began to fade.

 

***

 

In 2000 the Movement for Democratic Change (MDC), a new opposition party led by Morgan Tsvangirai, defeated a constitutional referendum that would have increased Mugabe’s powers. He responded by unleashing the war vets, who seized thousands of white-owned farms over the next few years in an orgy of drunken violence and retribution.

The seizures served the president’s political purposes well. They punished the farmers, many of whom had backed the MDC morally and materially, and dispersed and destroyed a reservoir of a million potential MDC voters among the black farmworkers and their dependants.

In every other way they were a disaster. Zimbabwe’s economy, heavily dependent on agriculture, collapsed. Food production plunged. Factories, hospitals and schools closed. The government responded by printing ever more money, fuelling such rampant inflation that prices were doubling every 24 hours. At one point the Reserve Bank issued a note worth Z$100 trillion.

Mugabe resorted to yet greater repression. In 2005 he destroyed the homes and livelihoods of 700,000 restive slum-dwellers in Operation Murambatsvina (‘‘clean up filth’’). He neutered the judiciary and ­independent media. He stole the 2008 presidential election so blatantly and violently that not one other African head of state attended his swearing-in. Britain withdrew his honorary knighthood, and he was forced into a power-sharing agreement with the MDC.

The “government of national unity” restored fiscal sanity but it also allowed Zanu-PF to regroup. By 2013 the world’s attention had moved on. Using subtler methods – bribery, intimidation, control of the electoral roll – Mugabe stole that year’s general election, too, and Zimbabwe returned to one-party rule. An “indigenisation” law requiring majority black ownership of large companies further deterred the investment that Zimbabwe’s struggling industries desperately needed to retool and boost exports. There was no currency to devalue. “We sabotaged our own productive capacity,” said the economist John Robertson.

Mugabe inherited a country that, for all its faults, was blessed with fine infrastructure, functioning institutions, a benign climate and fertile soil. Today it is a failed state in all but name: a nation of hawkers, foragers and scavengers. A quarter of the population has left; in other words, more Zimbabweans now work overseas than at home. The average monthly household income is $62. Life expectancy is 55 years, one of the lowest in the world. Four million of Zim­babwe’s 14 million people survive on food aid, and a quarter of its children are stunted by malnutrition.

The country’s hospitals can no longer afford painkillers for major operations. Its embassies cannot pay their rent and utility bills. Its national airline can no longer fly to Heathrow, because of outstanding debts. It sells its elephants, giraffes and other wildlife to China. Beyond its urban centres, the country has reverted from tractors to ox-drawn ploughs, light bulbs to candles, the wheel to foot, cash to barter.

It is also corrupt from top to bottom, ranking 150th out of 168 in Transparency International’s global corruption index. By Mugabe’s own admission, its leaders have siphoned $15bn from the Marange diamond fields in the east since 2008 – four times Zimbabwe’s annual budget. Several times I was stopped at police checkpoints whose purpose was not to enforce law and order but to fleece motorists. I was fined once for not having honeycomb reflectors on the front of my rental car, and a second time for not coming to a complete stop at a junction. “The whole system is infested with leeches sucking the remaining blood from the rotten corpse of Zimbabwe,” a white businessman told me.

Mugabe no longer mingles with the ordinary Zimbabweans whom he claims to champion. He lives behind high walls in his heavily guarded mansion. A bomb-proof Mercedes carries him to State House along the only well-maintained roads left in the capital. His motorcade includes two decoy Mercedes, an ambulance and truckloads of soldiers. Police outriders clear the traffic and use the butts of their AK-47s to bludgeon dawdlers. Making gestures at the president is a criminal offence.

He survives in office – his sole concern – by playing off one Zanu-PF faction against another. He rents his lieutenants’ loyalty by letting them plunder the country. He uses hunger as a weapon by swapping food aid for support. “Mugabe has an insatiable thirst for power. I’ve never come across another human being who worships power like that man,” Biti told me.

Mugabe has already declared his intention to fight the next election in 2018. Few believe he will ever step down voluntarily. Three times this year he is said to have thwarted efforts by regional leaders to discuss his retirement, abruptly cancelling a visit to Ghana in August when he learned the issue was on the agenda. He rebuffed attempts by his military commanders to raise the matter during the summer protests.

“He has no friends, no hobbies, no in­terests,” said a Zimbabwean businessman who has dealt directly with Mugabe. “The only thing he has is a political persona. Without that, he’s nothing, and for that reason he will not voluntarily surrender his power. He will die with his boots on in his office.”

If that is so, Mugabe’s final legacy to Zimbabwe will be his failure to provide for an orderly succession. Instead, he will bequeath to it an unprecedented and dangerous power vacuum.

 

***

 

Predictions of Robert Mugabe’s imminent death should be treated warily. David Coltart, a white opposition politician, notes that the president’s mother lived beyond 100, and that for twenty years British and American ambassadors have arrived in Harare expecting Mugabe to die on their watch, only to leave disappointed.

He still maintains a punishing travel schedule, and attended Fidel Castro’s funeral early in December. Many Zimbabweans believed that he had died when his plane inexplicably diverted to Dubai in September. “Yes, it’s true I was dead. I resurrected as I always do,” Mugabe taunted the premature celebrants on his return a few days later. It is now widely believed in Harare that he went there to rescue his wayward son Robert, Jr, who allegedly faced drugs charges.

When Mugabe does die, Zanu-PF will have 90 days to convene an extraordinary congress and choose a successor to serve as president until the next election. It is unlikely to be a peaceful or democratic process. Vice-President Mnangagwa is thought to have the support of Constantine Chiwenga, the commander of the national defence forces, as well as most of the military hierarchy, the war vets and the state media, but the burning question is whether Grace Mugabe would dare to challenge him.

Variously named “DisGrace”, “Grasping Grace” or “Gucci Grace”, to reflect her extravagant foreign shopping trips, the first lady knows her power will evaporate once her husband dies, and she needs to protect her three children and enormous wealth. The Mugabes own 14 farms and she is said to take a cut of almost every big deal in Zimbabwe. “If you want anything business-wise here, you have to go and kneel before Grace,” one political analyst said.

She has options. She could flee the country; seek Mnangagwa’s protection in return for her support; back a surrogate candidate; or run herself.

In recent weeks she has ceased attacking Mnangagwa and distanced herself from G40. The vice-president’s allies suggest that the military has given her some sort of démarche. “Army commanders would have said: ‘You’re destroying the party from within. You’re becoming a security threat,’” a member of Mnangagwa’s entourage said.

“I’ve noticed a certain measure of silence. The reckless exuberance of the past is gone,” Christopher Mutsvangwa, the war vets’ leader, said. “Once someone knocks some sense into her about the aftermath of the morrow she will realise you don’t go against the state apparatus.”

That said, nobody is ruling Grace out. Zimbabweans detest her, and she has little standing within the party or the military because she did not fight in the liberation war – but those who know her describe her as “delusional”. As a prominent businessman who supports Mnangagwa told me: “She believes in her heart that the people love her, because in Zimbabwe we have ritual fawning.”

She could yet persuade her husband to undermine Mnangagwa in some way. She could try to whip up Shona clan tensions – the Mugabes are Zezurus while Mnangagwa is a Karanga. She could even announce that her husband had given her his blessing on his deathbed. But Mnangagwa’s supporters have little doubt what would happen if she did. “If Grace runs, the military will step in. They will go and brutalise her supporters,” the businessman said. “It would be nasty, very nasty.”

There are other possible candidates of lesser stature, and there would be a high risk of violence as rival camps sought to coerce local and regional party officials to support them. But for now, at least, Mnangagwa is the front-runner. And that, on the face of it, is bad news for Zimbabwe. “He is associated with all the darkest periods of our history,” Biti told me. A prominent human rights worker in Harare said: “He’s really, really bad. He’s toxic. He’s killed a lot of people.”

Mnangagwa does have a human side. He is a Methodist, a Chelsea supporter (because he adored Didier Drogba), and he has nine children by two wives – the first died of cancer in 2000 and the other is an MP. One son is a popular DJ; another serves in the presidential guard. But he is so hated by Zimbabweans that he twice failed to win a seat in parliament, Zanu-PF’s standard electoral practices notwithstanding. In 2000, thugs poured petrol over Blessing Chebundo, his MDC opponent in Kwekwe, and Chebundo survived only by clinging to one of his assailants. Later they torched his home.

Mnangagwa, who says he was born in 1942 (though many sources say 1946), was inspired to join the black nationalist movement when Mugabe taught in his village after returning from Ghana. He trained as a guerrilla in Egypt and China, blew up a locomotive near the Victoria Falls, and escaped execution only by claiming to be under 21. He spent a decade in prison instead. He was kept in solitary confinement for three years and tortured by the Ian Smith government. Hung upside down and beaten, he lost the hearing in his left ear. “My torture was so bad that if I talk about it I relive it, and my tears come down,” he told me during our interview.

He attended Mugabe’s prison classes, took O- and A-levels, and after his release he trained as a lawyer in Zambia before joining Mugabe in Mozambique. After independence, as the country’s chief of security and intelligence, he was widely believed to have orchestrated the Gukurahundi massacre, allegedly calling Nkomo’s Zapu supporters “cockroaches” and the Fifth Brigade the DDT that would eradicate them.

A UN report accused him of plundering diamonds when Zimbabwean troops intervened during the civil wars in the Democratic Republic of Congo in the late 1990s. In 2002 he seized a farm near Kwekwe whose owner, Koos Burger, told me in a telephone call from Florida that he sought political asylum in the US after receiving death threats. Mnangagwa is thought to have masterminded the theft of the 2008 presidential election, from which Morgan Tsvangirai was forced to withdraw in order to halt the slaughter of his supporters. Today he is said to control the lucrative gold industry in his home region, the Midlands, where he is known as “The Godfather”.

Mnangagwa denies such accusations. “How do I become the enforcer during Gukurahundi?” he asked me. “We had the president, the minister of defence, the commander of the army, and I was none of that. My own enemies attack me left and right and that is what you are buying.”

 

***

 

A Mnangagwa presidency might offer Zimbabwe one thing: economic recovery. He is sharp, organised and business-savvy; more pragmatic and less ideological than Mugabe. And, unlike the president, he understands the urgent need for reform, if only so that he can pay the security forces and fill the trough at which his Zanu-PF comrades guzzle. “For all his historical problems he understands the running of the economy better than Mugabe, better than most Zanu politicians,” David Coltart said.

In the course of our interview, Mnangagwa explained his plans for reviving the economy. He declared that “capital goes where it feels comfortable and warm, and if it’s cold it runs to a country which gives it better weather”. Mugabe, an avowed Marxist,
would never make such a statement. Mnangagwa spoke of the need for Zimbabwe to re-engage with the international community, stamp out corruption, revive agriculture and attract foreign investment. He also said that he wanted all the professionals who have left Zimbabwe – black and white – to return. His model is China, which he praises for the “discipline” that has transformed it from the backward country where he once trained as a guerrilla.

A few nights earlier I had listened to Mnangagwa giving the keynote speech at the annual awards dinner of Zimbabwe’s Institute of Chartered Secretaries and Administrators, at Harare’s plush Rainbow Towers Hotel. To my surprise, he quoted the New Testament’s parable of the talents, with its overtly capitalist creed.

“Mnangagwa is a brutal man, a hard man,” said the businessman who has extensive dealings with the regime. “He’s been involved in butchery and pillaging and everything else, but there’s no question in my mind that he’s pushing to reform Zimbabwe’s economy, and fighting against the inertia of Robert Mugabe, who believes any change is dangerous.”

Mnangagwa’s problem is that he lacks Mugabe’s aura, and most Zimbabweans know only of his reputation for brutality. As things stand, he could not possibly win a free and fair election. That is why, according to multiple sources, he is discreetly reaching out to Morgan Tsvangirai, Joice Mujuru and other opposition leaders with a view to forming some sort of coalition government after Mugabe’s death, and perhaps postponing the next election.

Such an arrangement would lend Mnangagwa legitimacy, appeal to international donors and buy him time to resuscitate the economy, so that Zanu-PF would not need to rig the next election too blatantly.

Whether Tsvangirai and Mujuru would agree to enter such a coalition is another matter. They might calculate that they could win even a rigged ballot if – a big “if” – they could agree on a single presidential candidate. For all his flaws, Tsvangirai remains Zimbabwe’s most popular politician, and Mujuru still has support within Zanu-PF.

On the other hand, the MDC is fractured, disorganised and short of money, and Tsvan­girai has colon cancer. Mujuru’s ZPF has barely got off the ground and its own senior members question her leadership abilities. Both might be tempted by offers of positions that would give Mujuru a way back to Zanu-PF and Tsvangirai the perks and privileges he cherishes (he still lives in the handsome official residence he occupied as prime minister during the unity government). “They’re not going to get power any other way,” said Derek Matyszak, a Harare lawyer and constitutional consultant.

Opposition activists would demand political as well as economic reforms in order to loosen Zanu-PF’s grip on power: a proper electoral roll, an end to patronage and intimidation of rural voters, a truly independent electoral commission, a free media and votes for Zimbabweans in the diaspora.

They would almost certainly be disappointed. When I asked Mnangagwa whether he saw the need for political reforms he replied that Zimbabweans had long ago secured what the British denied them: human rights and one man, one vote. A Mnangagwa supporter told me he might make token concessions, but “it’s all about the veneer of respectability rather than respectability”. Others invoked the example of President Paul Kagame, who has transformed Rwanda’s economy with the help of international financial institutions that choose to ignore his authoritarian excesses.

To activists such as Linda Masarire, it would be “totally unacceptable” for the opposition parties to join a coalition in such circumstances. “Even if the economy is revived, who will be the beneficiaries? It will be the same old people, the ones with political power who have been looting the country for the last 36 years,” she said.

Biti mocks the idea of Mnangagwa as a reformer of any sort. “No one can name any act of reform he’s ever carried out . . . He can’t start now. He’ll just tell you what you want to hear.” He added: “I don’t think anyone who’s committed crimes against humanity should lead us.”

But Mnangagwa has already won the tacit support of Zimbabwe’s business sector, as well as South Africa and China, all of which want stability. Western donors are also anxious to avoid Zimbabwe’s total disintegration. It’s a fair bet that ultimately they would choose pragmatism over principle and give Mnangagwa the bailout he would urgently need. They would probably ignore his
election-rigging provided it was discreet.

The businessman put it this way: “Maybe you don’t like Mnangagwa and his history, but you’re faced with a choice. Do you allow Zimbabwe to crash and burn and let its people suffer? Or do you try to negotiate a rescue so they have a future?”

Martin Fletcher is an NS contributing writer. His assignment in Zimbabwe was financed by the Pulitzer Centre on Crisis Reporting

This article first appeared in the 15 December 2016 issue of the New Statesman, Christmas and New Year special 2016