We have got to turn the cash around.

I spent last weekend in the Nyanga Mountains doing nothing and a bit of fishing. After two days of rain and mist, the weather cleared and at about 11.00 hrs I was able to get down the Lake and throw a line into the water with a fly on the end. For two hours I caught rainbow trout - eight in all, putting six back and keeping two for dinner that evening. When the fish are hungry, fishing is great.

While up there we paid a visit to a friend who runs a small farm and over tea she told me about her experience over the past 30 years, she said had learned that to survive 'you have to turn the cash around'. Like many in Zimbabwe she does not have a bank account and simply operates on a cash basis.

When I got back into Parliament I was told that the Governor of the Reserve Bank had issued a Monetary Statement and as soon as I could I read through the document - nearly 100 pages of it! Strangely the Governor quoted another author who said the same thing as my farmer friend - quoting Lynne Twist who said 'money is only useful when it is moving and flowing'.

Money is only a recognised form of exchange between buyers and sellers. It has a crucial function as a store of accumulated surplus and can be used to transfer wealth and value between countries, companies and individuals. Just this morning I watched the news about Venezuela where shortages of just about everything are besetting the economy. We have been there and I do not have to read a report by the Reserve Bank in Caracas to know that the reasons are linked to how the regime in that country is managing its money.

If you have exchange controls and try to manage what people do with their money, they simply go underground and shortages and distortions become the norm, often associated with widespread corruption. Remove the controls - as we did in February 2009, and overnight the shortages disappear. Money, real money not printed paper, suddenly emerges from the underground economy and the markets do the rest.

People store their surplus incomes in currency - most of it in US dollars. So I am told that today there is over $100 trillion in surplus cash in accounts all over the globe and constantly looking for opportunity and security. So China in 1979, just four years after the end of the Red Revolution, began its long dash to the 21st Century, for the next 35 years growing its economy at nearly 15 per cent per annum - an extraordinary achievement which has created the second largest economy in the World. But to do that they had to borrow two dollars or more for every new dollar of output.

This has built up their national debt until today the Chinese owe global money lenders 280 per cent of annual GDP - perhaps the largest national debt in the world. They were helped by the fact that global interest rates for 'secure' investments were at an all time low. If you can borrow money in unlimited amounts at 2 per cent or less, you can do anything. Then what you do is allow economic freedom and consistency in all policy matters and keep your currency below its real value by buying USD on the open market and you complete the 'miracle' and create both a global economic giant and a pile of US dollars which you use to convince the money lenders that their money invested in China is safe. Even if the stock market is overvalued by three times its real value and property prices inflated.

That is how you do it and it's all about 'keeping money moving'. The Governor of the Reserve Bank of Zimbabwe goes to great lengths to try and explain the present deepening economic crisis by saying that people are externalizing their liquid assets (money) illegally. But in fact by doing so he does not in any way explain why this is happening. It is very simple really - the people who make real decisions here, are not confidant that their money is secure and that Zimbabwe is a safe destination for investment in any form.

We have had experience of an otherwise intelligent Governor who printed money without any regard to the economic fundamentals and in so doing gave us 500 million per cent inflation in 2008, destroying in the process the accumulated wealth of 100 years of enterprise and work. In my personal case my entire savings after 60 years of work, were wiped out and overnight I was changed from a substantially wealthy person to a destitute and it has taken us a long time to recover to even a modest extent.

So when the G40 say they are going to reintroduce a local currency - we know what that means and we take our money out of the Bank and put it somewhere safe. It's logical and there is nothing the authorities can do about it. The consequences are dire and immediate and affect all who live in crazy places like Zimbabwe.

The Governor (who is a nice guy and trying hard) says that the State has done all that it needs to do in the '10 point plan' and the recent reshuffle on indigenisation and the 'ease of doing business'. Nothing could be further from the truth. The reshuffle on indigenisation is just that - the cards have not changed and no one in their right mind is going to accept the new dispensation. The total conflicts that grip the Party, Zanu PF means that the regime is unable to make any decisions and all major projects are not going forward. We have no idea at all of where we are going - if we are going anywhere at all.

I personally think that the collapse of the reengagement deal with the IMF/World Bank is only a matter of time and already the international Community is pulling back from the deal in the expectation that the Government will not deliver on the targets that they agreed to in Lima in 2015. So our status as a pariah State continues and our club of fellow failed States continues to wallow in self pity and degradation.

In 2008 the state of the Nation and our economy was not clear to those of us living in the country as it was concealed by a vast cloud of inflation - prices and numbers changing so fast that no one could keep track anymore. When finally the clouds lifted after dollarization in February 2009, we were faced with total devastation - banks insolvent, pensions worthless, saving's worth nothing. Total hard currency in official circles was equal to 60 cents per capita, not even the price of a loaf of bread.

What saved us then were the people hiding in the underground. Slowly they came up to look and when convinced that real change had come, they came out and started trading openly. Today what is happening is that many of those same people are again going underground and the reverse is taking place.

They will not come back up and resume business until they are sure that real change is happening and the old regime is no longer in charge. The problem with that is that their money is not moving - it's stuck in bank vaults and under mattresses where the Governor and his cohorts cannot get their hands on it.

Eddie Cross
Harare, 10th February 2016