‘Mnangagwa must copy Singapore Strategy’ – Controversial US Economist

Steve Hanke, professor of applied economics at Johns Hopkins University, speaks during a panel discussion at the Bloomberg via Getty Images Global Inflation Conference in New York, U.S., on Thursday, Sept. 8, 2011. The event will look at global inflation in the wake of recent events, from protests over food prices that ushered in the Arab Spring, to the U.S. debt crisis, to China's ongoing struggle to keep its economy under control. Photographer: Ramin Talaie/Bloomberg via Getty Images

UNITED STATES controversial economist and self-proclaimed currency expert, Professor Steve Hanke of Johns Hopkins University has advised President Emmerson Mnangagwa to adopt the strategy of Lee Kuan Yew, Singapore’s first prime minister if he wants the country’s economy to recover.

In the last few weeks, prices have been increasing due to fluctuating rates of foreign currency on the black market.

According to Hanke, Zimbabwe needs to adopt four principles: stable money, no foreign aid, first-world competitiveness and the protection of private property and the public’s safety to grow its economy and become affluent. In an article written for Forbes Magazine, Hanke says

So, what should the Mnangagwa government do to put Zimbabwe on a road to recovery and liberty? Zimbabwe should adopt the strategy of Lee Kuan Yew, Singapore’s first prime minister. That strategy was based on four principles: stable money, no foreign aid, first-world competitiveness, and the protection of private property and the public’s safety.

Mr Lee’s near-perfect execution of the strategy was a result of the fact that he surrounded himself with first-class civil servants and paid them first-wages. As a result, Singapore escaped the grinding poverty it faced in 1965 to become one of the world’s most affluent countries.

So far, the Mnangagwa government has not expressed interest in adopting any of the elements of the Singapore Strategy. Nor have members of his government displayed the kind of competence required to tow the economy out of the abyss. Zimbabwe remains in an economic ditch and the storm clouds are gathering.

After the fall of former President Robert Mugabe, Hanke offered the same advice. In an article written for the New York Times, Hanke said,

Mr.Mnangagwa does not remind one of Mr Lee. Indeed, he was a pillar of Mr Mugabe’s regime. Unlike the impoverished populace, Mr Mnangagwa and his supporters in the military and party have done well under Mr Mugabe’s system of spoils…To deliver, Mr Mnangagwa must prohibit the issuance of New Zim dollars. The dollarization rules followed by the unity government should be restored. Mr Mnangagwa should also announce that private enterprise is Zimbabwe’s future.

….By adopting such a strategy, confidence and the economy would both soar. Zimbabwe’s G.D.P. per capita would reach the same level as Botswana’s current level in about 16 years. Zimbabweans’ level of income would then be almost six times its current level. Zimbabwe would once again be the “jewel of Africa.

Hanke’s first academic appointment was at the Colorado School of Mines in 1966, when he was 24. During this time, Hanke developed and taught courses in mineral and petroleum economics, while completing his Ph.D. dissertation on the impact of meter installation on municipal water demand.

Hanke then joined the faculty of the Johns Hopkins University, where he initially specialized in water resource economics. After six years at Johns Hopkins, including a one-year visiting professorship at the University of California, Berkeley, Hanke attained the rank of Full Professor.

n the past, Hanke has come under fire for his advocacy of currency board systems, particularly from local government officials in countries where he has worked as an adviser, as well as from rival economists.

For example, Former Bulgarian bureaucrat Krasimir Angarski who was tasked with the introduction of the currency board has contested the often repeated claim that Hanke is the “father of the Bulgarian currency board” and has added that Hanke had no knowledge of the Currency Board law because Angarski refused to provide him the manuscript he was working on.

Angarski’s claim is contradicted by the fact that Hanke first proposed a currency board for Bulgaria in 1991, with his book “Teeth for the Bulgarian Lev: A Currency Board Solution.” Hanke later helped bring about its adoption in 1997, when he served as an adviser to President Petar Stoyanov. In July 2013, Hanke’s work on the Bulgarian currency board was praised by Bulgarian Prime Minister, Plamen Oresharski, as well as by the Bulgarian Academy of Sciences, which in 2013 awarded Hanke the degree Doctor honoris causa. Then in 2015, the Varna Free University awarded Hanke another degree, Doctor honoris causa, in recognition of his currency reform efforts in Bulgaria.

In December 2013, the Bulgarian newspaper Trud published an exposé refuting Angarski’s claims and revealing that the Bulgarian National Audit Office had used official resources to propagate Angarski’s claims. The head of the Bulgarian National Audit Office, Valeri Dimitrov, was subsequently dismissed.

In the article “Rupiah Rasputin” written in 1998 for Fortune, Paul Krugman presented Hanke as “a self-promoter whose image as a successful country doctor has been pumped up by resume inflation.” and accused him of fraudulently claiming that he is an adviser to former Argentine Finance Minister Domingo Cavallo: “Cavallo himself tells a different story, though. He claims Hanke first became involved three years after the board was established, when he volunteered his services as a publicist.“. Krugman additionally claimed that creating a currency board in Indonesia “was probably a bad idea right now“, because it would interfere with payments for imports or debt service.

During the 1989-91 period, Hanke worked closely with Congressman José María Ibarbia and his colleagues (the so-called Alsogaray faction) in the Argentine Congress to develop a blueprint for a currency board system. That blueprint was published in Buenos Aires, “Banco central o caja de conversión?,”and contains a preface written by José María Ibarbia.