ZIMBABWE – Yesterday the national broadcaster ZBC, in its morning news bulletin, carried an item in which the Governor of the Reserve Bank of Zimbabwe dismissed messages doing the rounds on social media that the Chinese currency, Yuan, was due to replace the US dollar as the country’s official currency.
The reports reportedly said today would be the day for such changeover.
Dr John Mangundya, while dismissing the claims, said something to the effect that the rumour, or those behind the rumour, were bent on causing chaos and despondency in the country and that the information was the work of economic saboteurs.
This is all fair and fine.
The RBZ chief was doing his job and stating the monetary position, which is that there has never been such an instruction or injunction.
However, there is a deeper and disturbing issue that is currently assailing Zimbabwe than simply a rumour that is obviously baseless.
The first thing to attempt to unpack this disturbing phenomenon is to ask: Why the yuan, which is among the currencies in the basket of denominations in use today in Zimbabwe’s multi-currency regime?
Why were the rumours not suggesting the euro, pula or pound?
The simple answer lies in putting up China as some sought of bogey to scare Zimbabweans from an alien invasion by China, which is not exactly a new thing.
Does it not remind one of one Arthur Mutambara, who a few short years ago, counselled us not to hate China on behalf of Americans and other westerners? This point about China will be demonstrated shortly.
But another word comes to mind: it is phobia.
Phobia is variously defined as an unreasoned fear or dislike of something.
The watchword there is “unreasoned”.
It has been pointed out above that Zimbabwe has the Chinese yuan, also known as the remnimbi, in its basket of foreign currencies, it being a rather late addition to a buffer of stable currencies that were meant to cushion Zimbabwe from hyperinflation that ravaged the local currency leading to its shelving.
The multicurrency system was hailed as a masterstroke and is still considered in many circles the best way to keep the economy afloat and stable, barring of course the challenges associated therewith.
Now, the International Monetary Fund just last month adopted the Chinese yuan as one of the world’s reserve currencies.
In simpler terms, the IMF approved and certified the yuan as a store of value, just like the US or Euro.
Here are the circumstances:
Bloomberg reported last month that the move meant that at ” 10.92 percent weighting, topping yen, pound . . . China’s currency meets ‘freely usable’ standard.”
The inclusion of the yuan heralded “the first change in the SDR’s currency composition since 1999, when the euro replaced the deutsche mark and French franc. It’s also a milestone in a decades-long ascent toward international credibility for the yuan, which was created after World War II and for years could be used only domestically in the Communist-controlled nation. The IMF reviews the composition of the basket every five years and rejected the yuan during the last review, in 2010, saying it didn’t meet the necessary criteria.”
The leading business publication said the decision “establishes the yuan as a fixture in the very international monetary system Chinese leaders criticised following the global financial crisis” and that “the decision is a ‘win-win’ for both China and the world.
In light of the above demonstration of the growing importance of the currency of the second largest economy in the world which the IMF endorses as a milestone, it is perplexing how anyone should try to scare Zimbabweans or any other nation for that matter regarding the use of the yuan.
What is even more perplexing is how an educated nation, as such as Zimbabweans pride themselves to be, can allow themselves to be scared out of their bowels by the supposed bogey of the yuan being adopted as the official currency.
One thing is certain, even if the Chinese currency were to be adopted today, lives would move normally, if not better.
Fickle people will always be there but what have we learnt from the bond coin/rand use of late?
War that is not ours
Professor Mutambara, as highlighted above, spoke to the larger politics of the global world in which currently China is fighting western hegemony and is head to head with the western superpower, the US.
And it is a historical war, too, that is steeped in the binaries that are older than Zimbabwe and have more to do with shaping the world and drawing its boundaries and defining its paradigms by war and conquest and soft power.
The currency wars are part of the global soft power that also includes diplomacy.
The West is afraid of a rising China which is on the threshold of ruling the world due to its grown and growing wealth and influence.
When China comes to Africa and Zimbabwe the West is miffed.
Somehow, some amongst Zimbabweans feel obliged to fight on behalf of the West.
It is maybe because the west are the former colonial masters and the mental slaves in some of us feel duty bound to save the masters’ house.
To all intents and purposes, this is plain stupidity.
Equally, it would be folly to allow the Chinese to lord over us, however improbable, as the new colonial masters.
What Zimbabweans need to focus on is, what value can be extracted from both or all available prospects?
This is why some have posited that Zimbabwe does not need to look east or west but everywhere for salvation.
But this piece will end on an authoritative note to locate the yuan scaremongering.
On December 2, Mark Fahey, Nicholas Wells wrote a piece titled, “Who loses when the renminbi joins the IMF basket?”
They explain: “The International Monetary Fund’s decision to include the renminbi in its reserve currency basket is a major benchmark in China’s push to internationalise its currency, but it could also be a sign of decline for the currencies it is replacing . . . The basket determines the currency mix that countries receive when the IMF disburses financial aid. The decision to add the renmimbi, also known as the yuan, will likely increase demand for the currency. The elevation of the renminbi means that other currencies in the basket will be losing some of their share — notably the euro, which will lose 6.5 percentage points, and the pound sterling, which will lose 3.2 percentage points.”
Professor Arthur Mutambara, wherever he is now, was so right. Whose war are Zimbabweans fighting? Why turn western propaganda against China into our own?