Robert Mugabe’s Zanu PF regime had carried out the most comprehensive destruction of a productive system seen in modern times short of war.
Prices were doubling every 24 hours, a feat matched only by Hungary in 1946. Zimbabwe was surviving on dollar and rand remittances from a diaspora of three million refugees.
Schools and hospitals were shut. Confiscatory exchange policies had caused almost every mine, mill, and factory to close. Capacity use was under 10pc.
Violent land invasions had crippled farm exports. Proud Zimbabwe had become the world’s top recipient of food aid per capita. White farms were seized, of course, but so were black farms – if owners were thought to harbour MDC sympathies.
It is hard to imagine a more poisoned chalice for the long-suffering MDC as it entered into a power-sharing deal with President Mugabe. Yet somehow the economy is coming back from the dead.
"The fundamental change is that we have stopped printing money to cover our deficit," said Tendai Biti, the MDC’s finance minister, who shrugs off death threats.
The hyperinflation crisis has in a sense solved itself. The Zimbabwe dollar faded away as the army and then everybody else refused to accept it. The US dollar is now the coin of daily life. Prices have been stable for months. "Forget about a local currency," said Mr Biti.
Zimbabwe’s central bank – an arm of state terror under Zanu PF enforcer Gideon Gono – has lost its cash cow. It is no longer able to skim profits from exchange rate arbitrage. The bank has allegedly been involved in the illicit buying of smuggled diamonds from the Marange field (seized illegally).
Harare’s stock exchange is humming again. Volume has increased 20-fold, all now in US dollars. The mobile phone firm Econet – again able to import kit from China – has paid its first dollar dividend. Delta Beverages has installed a new bottling line after a surge in beer demand, a telltale sign of returning prosperity. The MDC has begun to lift exchange controls. It plans to privatise chunks of the economy, embarking on the most radical free market policies seen in Zimbabwe for half a century.
"It is extremely investor-friendly," said Elton Mangoma, the economic planning minister.
London-listed metals group Mwana Africa is reopening mines. "We were being paid worthless Zimbabwe dollars for our gold, so there was no point continuing," said Kalaa Mpinga, the company’s chief executive. Under new rules, Mwana keeps 100pc of foreign exchange earnings. It began pouring gold at its Freda Rebecca mine last month, just in time take to advantage of record prices at $1,100 an ounce.
The MDC pleads with outsiders to keep matters in perspective. "Our problems have never degenerated into armed conflict over the years, as it has in other countries," said Mr Mangoma.
Power-sharing spats are just "a quarrel in a marriage," he said. "Commentators want to paint a picture of total chaos, but we are now in our 10th month. Give us another two years and you will be very surprised at what we can do."
Hope or self-deception? While the MDC tries to lure investment by promising to allow 100pc foreign ownership, the Zanu-PF "indigenisation" law on the books still says foreigners must provide all the capital but hand over a majority stake to locals. "These promises mean nothing until the law is actually changed," said a Zimbabwe mining veteran. "I know from hard experience."
Mugabe retains the army, police, and the apparatus of repression, which his cadres are still using to terrorise pockets of the country. The repression is surgical, but the message is clear.
One can doubt whether such a lopsided arrangement has any chance of succeeding. Yet power is more evenly balanced than it looks. The West is aligned behind the MDC. The young leaders of South Africa and the Congo are tiring of Mugabe’s pretensions. Beijing is less friendly these days. "The Chinese don’t want to back the wrong horse," said one diplomat.
Mr Mugabe dares not shut parliament altogether, so he is chipping away at the MDC’s majority by arresting its MPs on trumped up charges. MDC Treasurer Roy Bennett starts his trial today for alleged terrorism. It is sickening, of course, but what shines through is the deeper resilience of Zimbabwe’s civil society.
At 85, Mugabe must at least be tempted to end his rule on a better note, as Fidel Castro is doing in Cuba. He will soon be gone in any case, leaving behind a nation with literacy rates in the mid-90s, the world’s biggest platinum belt, and Africa’s richest prairie – all at a time when Asia’s growth has put a premium on resources.
They say that Africa is the leveraged way to play China. If so, Zimbabwe is the leveraged way to play Africa. For brave investors, it is the ultimate rebound story.