HomeOpinion & AnalysisColumnists‘Start with the people’

‘Start with the people’

-

AN objective assessment of the current must be followed by a clear diagnosis of the current challenges and what needs to be done going forward.

Report by Joseph Mverecha

Dim and indistinct views of the current challenges will give rise to wrong prescription and ultimately wrong medication.

The challenges of the past decade were amplified by the government’s preoccupation with addressing the symptoms and not the underlying structural problems of the economy.

In planning for the economy, our preoccupation must be in respect of attending to the deep structural macro and micro issues that impede the rapid expansion of the economy’s capacity to produce goods and services. And these are many — the energy and power issues, labour market reforms, access to financing, support for SMEs, investment in infrastructure and the external debt and arrears clearance.

A unifying national theme
Our nation is clearly at crossroads — it is a unique moment that recurs once in many generations, for our generation can redefine the growth path of this country. The choices couldn’t be more starkly diametrical.

From here we can march into the Promised Land, change the landscape of our economy, with millions of Zimbabweans out of poverty on a sustained progression. The physical, economic and social transformation will dramatically change the livelihoods of our people, with ever expanding new frontiers of business and national economic development.

In this regard, we have a few things to learn from Americans. The political divide in the US is all too evident. But there is one thing that unites Americans of all shades — Republicans, Democrats, greens, left of the left, the right wingers, (Ku Klaxklan), and Black Panthers, agnostics and those of faith – it is the American national interest.

They can fight to the death against each other on anything and all things, but for their national interest, it is as though they have one mother.

Understanding global context, dynamics
The war of independence for Zimbabwe was fought in a bipolar world – two great powers and their alliances vied for global geopolitical and economic dominance. On one hand the USA (and her North Atlantic Alliances) and on the other, the USSR (and the Warsaw Pact), including China.

The tapestry of the global geopolitical situation has evolved considerably and is much more complex. We live in a unipolar world, with one superpower following the demise of the Soviet Union, a few decades ago. From an economic standpoint, a new China has emerged as a burgeoning economic giant, overtaking Japan as the second largest economy and stands poised to overtake the USA as the largest economy, in perhaps a decade.

China is not alone. The shifting global balance of power must acknowledge India, another rising giant, then Brazil and Russia (the BRICS). The balance of power for the global economy is steadily and perceptibly shifting in favours of the BRICS and their progressive dominance is very much on course.

Accordingly, the global geopolitical shift spawns more questions than answers and these must be critically evaluated for long term planning for Zimbabwe. Of necessity our strategic positioning in the global context will benefit from an objective assessment of the following questions:

  • Will the fragile global economic recovery be stabilised and improved by better conditions prevailing in the BRICS –which has near term implications for global demand and international mineral (commodity prices), which has a bearing for domestic growth momentum?
  • Will the new arrivals, the BRICS, espouse to a more equitable, globally win-win, shared growth relationship with the developing and emerging economies or will their voracious appetite for raw materials spawn a one-sided extractive model?
  • Will the BRICS, like a new male lion intent on taking over a prime pride opt for an apocalyptic ‘war” for raw materials with the West for Africa’s resources?
  • Are small open emerging market economies such as Zimbabwe, truly strategic to the BRICS in the very sense of the word, or we exist quite at the margin?

If I was entrusted with crafting a long term growth strategy for Zimbabwe in an uncertain global environment, as at present, I would proceed exactly along the same lines that Deng Xiaoping did for China in 1979. The basic foundations of the Deng Principles are simple yet time tested and fundamental. Among them are:
Begin with the people in mind
The economy is its people, in their varieties and colouring – everyone must have a stake in the economy, whether blue, green, yellow – the beak nosed and the bow legged, like everybody else, must also claim a growing stake in the economy to remove the seeds of long term social instability. That means our economic policies must resonate with the time-tested principles promoting private sector growth, individual enterprise, inventiveness and innovation, equity, fairness and opportunity for all.
Deng Xiaoping, the father of the Chinese economic miracle, had a unique insight of the linkages between micro, and the macro policies. Always beginning with the end in mind, Deng sequenced economic reforms targeting the micro sectoral, structural and macro, as an integrated set of mutually reinforcing policies.
Rebuild bridges
The strategic imperative of the 21st century is that Zimbabwe simply has to rebuild bridges with everyone. As a country, in global terms, our GDP is less than 0.1% of the largest economy and less than 0.01% of the global economy. That does not mean we are not important, but we can amplify that importance 10 times by building strategic bridges across the globe. When Deng commenced reforms in China, he went all over the world – Japan, USA, Europe and Singapore to build strong strategic ties even with former enemies like the USA and Japan.
We know that we have suffered terribly at the hands of foreigners — from colonialism to the war of independence — but important as it is, we cannot afford to be immobilised by the pain of our past.
Shared pain and shared gain
In order to galvanise our collective energies, there has to be an abiding principle of shared gain and shared pain. This embeds the principle of fair distribution of the costs of adjustment across all stakeholders, the government, business and labour.
Disproportionate and unfair appropriation of such costs and subsequent benefits breeds mistrust among internal stakeholders, undermining the social compact — one of the key pillars for sustaining economic recovery. It is simply untenable. We may appear to make progress for a few years, but such gains will unravel.
The contribution to the burden of taxes must be fair and not tilted in favour of the rich. Our leaders in business and the government must walk the talk as far as austerity is concerned and identify with the people. Any recovery programme based on austerity only for the poor has no long run sustainability — all stakeholders buy-in is critical.
Win long term relations
It is important that we focus on the long term growth of the country and poverty eradication. That cannot be achieved with our excessive pre-occupation with the urgency of short term exigencies. There has to be a paradigm shift, focusing more on the long term in our policies, while doing our best to meet the needs of the now.
In rebuilding our economy, we must learn to avoid the great strategic blunders that have ruined the development aspirations of many a nation, impoverishing the people and living only a scarred economic landscape and occasional grand relics as testament and monuments to failed economic policies.

  •  Joseph Mverecha is Chief Economist of Agribank. He writes in his personal capacity and can be reached on jmverecha@gmail.com.

Recent Posts

Stories you will enjoy

Recommended reading