Mthuli Ncube: A firefighter in a Greek tragedy?

Finance Minister Mthuli Ncube/PHILIMON BULAWAYO/REUTERS

By Perry Munzwembiri (@PMunzwembiri)

AT its very core, Zimbabwe is battling neither a monetary nor a fiscal problem.

That this seemingly self-evident truth needs explanation is perhaps a sure sign of the deep hole the country finds itself in. Yet listening to the central bank governor, John Mangudya and finance minister Mthuli Ncube one would think that the panacea to all of Zimbabwe`s problems lies in tinkering with monetary and fiscal fundamentals.

The Zimbabwean problem is a political one!

Politics, by nature, is never for the faint-hearted. It is brutal, unforgiving and, in Zimbabwe, often ends in short-lived public service careers for “outsiders”.

ZANU-PF, Zimbabwe`s ruling party, is an outfit caught between  embracing a fresher liberal identity, while holding on to its long held populist ideals, which appeal to a significant base of its supporters.

OUTSIDER

Enter Mthuli Ncube! Balancing this liberal and populist dichotomy in the ruling party as an “outsider”, will require nothing short of a tour de force from him. Can he succeed at all?

Leaving behind a pleasant life abroad, after a successful career in both the private sector and academia, Ncube has taken up arguably the hardest job in the country. He has the unenviable task of fixing a moribund economy, a task made even more difficult by the fact that the ruling party does not have wide support among the urban population, the majority of whom are directly affected by the austerity measures he is pushing for.

Ncube has announced that his focus will largely centre on cutting the excessive government expenditure and broadening the tax base. These proposals are popular. One can only imagine the pushback if they are being implemented by an administration whose mandate is disputed, on a populace that feels hard done by a self-serving political system with fundamentally broken political institutions.

The finance minister will inevitably be the face of this new Zimbabwean reality.

Potential messiah or the eventual fall guy, his fate hangs in the balance.

Greece’s Finance Minister George Papaconstantinou gestures during a news conference at an Ecofin meeting in Madrid April 17, 2010. REUTERS/Andrea Comas

GREEK TRAGEDY

Greece had such a guy! George Papaconstantinou, a sharp, eloquent, ebullient technocrat who took over the reins as the Greek finance minister in 2009. This was at a time when Greece was in the throes of a severe debt crisis, which shook the country to the core. Its circumstances at the time were not unlike those faced by Zimbabwe.

A massive budget deficit, rising unemployment, inflationary headwinds and capital controls on bank withdrawals of a mere €60 a day, became common themes tied to the Greek economy narrative. Having joined the eurozone, Greece’s central bank had no monetary autonomy.

If all this sounds eerily similar to the Zimbabwe situation, then the distinct parallels between George Papaconstantinou and Mthuli Ncube`s career paths are even more uncanny.

Papaconstantinou graduated with a PhD in Economics from the prestigious London School of Economics, and worked as a senior economist for a multilateral institution, the Organisation for Economic Development and Co-operation (OECD). Just like Mthuli Ncube, Mr Papaconstantinou was a visiting professor at the Athens University of Economics and Business, teaching Economics.

All this, with the exception of not having dabbled in banking, closely mirrors Mthuli Ncube`s career. A PhD holder in Mathematical Finance, Ncube served as the African Development Bank`s chief economist, and has previously taken up lectureship positions at various universities including Wits Business School and the university of Oxford`s Blavatnik School of Government.  One would hope that this is where Mthuli Ncube and George Papaconstantinou`s similarities in career paths end.

Greek anti-austerity protesters

UNHAPPY ENDING

Papaconstantinou`s stint as Greece`s finance minister did not have a merry end. When the public started rioting and striking in protest of his public sector wage reductions and tax hikes, Papaconstantinou had to go. The moment he was seen to be a political liability, when the then Greek ruling party`s populist tendencies kicked in, he was thrown under the proverbial bus, and re-assigned to a “lesser” post as minister of Environment, Energy and Climate Change, before his eventual departure from politics.

In 2009 however, shortly after becoming minister, with authority and sombreness befitting the full extent of the mess the Greece was in, Papaconstantinou announced to the world that the previous administration had been spending well beyond its means and hiding the true size of the country`s budget deficit.

Sounds similar to Mthuli Ncube`s moment explaining to the nation how Zimbabwe`s total public debt has grown to $16.9 billion?

Papaconstantinou successfully negotiated two bailout deals for the Greek government with the European Central Bank and the European Commission, which saw Greece avoid becoming the first sovereign debt defaulter in the euro zone. At the time of his departure from the finance ministry in 2011, Papaconstantinou had lowered Greece`s budget deficit by about 6%.

Papaconstantinou became a target for protesters

‘THEY FORGET THE ARSONISTS, HATE THE FIREFIGHTER’

However, many will remember him for the painful wage cuts, higher taxes, pension cuts  and a host of other necessary but unpleasant austerity measures that came attached with Greece`s bailout deals. To this day, Papaconstantinou, and not the previous government which actually raked up huge budget deficits, is blamed for Greece`s austere years and is commonly called “Greece`s most hated man.”

As the Walls Street Journal put it in a 2016 article: “Today most Greeks have forgotten the arsonists who laid the fire. Instead they blame those, like George Papaconstantinou, who tried to put it out.”

This is the fate that quite possibly awaits Mthuli Ncube as he presses on with his economic reform agenda. As if the task to turn around Zimbabwe`s finances is not difficult on its own, Ncube will undoubtedly have to contend with Zanu PF`s entrenched populist tendencies.

There will be elections to win, and this will require giving free inputs to farmers, especially in the rural areas, and buying vehicles for chiefs and other worthy “enablers” of this cause. A restive civil service withstanding the worst of the high costs of living will need to be pacified by salary increases and bonuses. Will Mthuli Ncube have the latitude to say no?

In his book, “Game Over: The Inside Story of the Greek Crisis,” Papaconstantinou reflects, “You do the job to the best of your abilities. And you take the hit, but at least you can live with yourself.” He tried to do the job to the best of his abilities, and he most certainly took the hits.

But as he later found out, politics is nasty, and one`s career can end quite prematurely and the tag of “Greece`s most hated man” is something he will definitely carry for the rest of his life. So bad is the situation, he only ventures out of his house with body guards.

Does the same fate await Zimbabwe`s finance minister, Mthuli Ncube? Only time will tell.

 

LEAVE A REPLY

Please enter your comment!
Please enter your name here