Under rather inauspicious circumstances involving the refusal of he Police Band to play the national anthem, the Medium Term Plan (MTP) review has come and gone, and would have been a big yawn, were it not for the illuminating address by the world bank economist and the pregnant comment by the Chinese ambassador, as regards walking the talk.
Opinion by Tapiwa Nyandoro
British Prime Minister David Cameron, speaking on the Euro crisis recently, is quoted as saying: “We must study how the Asian countries have done it.”
The World Bank’s presentation shows that the institution too, has had a hard look at the relentless Asian Tigers’ economic growth. The Communist Party of China (CPC), for example, runs the huge country the way America’s GEC or Japan’s Toyota is run; that is as a corporate body.
China’s economic growth trajectory landscape is different from the likes of the UK and the US as it has had no colonies or raw materials to exploit. The Chinese strategy considers Africa to be “its continent of choice” and according to a recent survey, aims to turn raw materials from Africa into Chinese products at a fraction of cost of Western produced goods. Chinese officials have been quoted as saying there are four players in China’s strategy:
- The West, which supplies brands, technology and markets;
- Africa and other developing countries, which supply raw materials and markets;
- The Chinese people, who are the most “disciplined” workforce in the world. They also happen to be world’s greatest savers providing cheap capital to both government and industry;
- The Communist Party, which runs China as a corporation.
Three lessons here stick out for Sadc and Zimbabwe:
- China had a global vision. It did not just look inwards or to the West. As a result of a pragmatic political stance, China was granted by the US “Most Favoured Country” status allowing it to be the labour intensive industrial zone of US companies. In contrast, Zimbabwe is under sanctions.lChina leveraged its competitive advantages in its abundant human capital. The Chinese also provided reliable, affordable and efficient infrastructure as well as industry-friendly labour laws. For Zimbabwe, and Sadc to enhance economies of scale, they must also review their competitive attributes.
- National governance was corporatised to enable resource mobilisation and appropriate allocation targeted at increasing productivity and competitiveness. Further, China provided a large domestic market. State capitalism took root via State-owned and controlled enterprises. Full Sadc integration will produce efficiencies in all economic activities minimising administrative, regulatory, distribution, production, marketing and security costs.
The MTP, as written, is said to be better than previous attempts. Most probably it is because it has some projects linked to the rhetoric. However, had the authors approached the strategic plan in a classical corporate body strategic plan crafting exercise, the first task would have been a look at the markets; domestic, regional and global and then determining the products, commodities and services that the nation can competitively produce and supply.
The marketing scan would have shown most probably that there is virtually no domestic market to talk about on the scale that we need. The mining sector, especially the PGM, iron ore, nickel, ferrochrome, gold, diamonds and coal would have stood out as potential world-class suppliers. Then, of course, India and China, which are hoping to double their GDPs per capita within a decade, would also have stood out as potential viable customer for commodities including food.
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The corporate body approach would have also led to an analysis of the various landscapes to be managed. The unstable political and regulatory landscapes, inclusive of land reform, would have stuck out as needing addressing before the cloak ticks on the MTP. The heavy debt burden would have surfaced as well as a major economic landscape obstacle. Year zero of the MTP should have been reserved for fixing these three landscape impediments to foreign direct investments (FDI). The chances of the MTP attaining the rest of the set goals would have then improved dramatically once the landscapes were free of the glaringly obvious obstacles. As it stands, due to the “fear of politicians who go mad during an election year”, 2013 is virtually lost. With nothing much to show for 2011, 2012 and 2013, the five-year plan is as good as dead like most Zimbabwean economic development blueprints before it.
An analysis of Zimbabwe Incorporated’s strength, weaknesses, opportunities and threats would have highlighted the lack of capital from the domestic market as the biggest weakness and threat. The landlocked geographic position, the small domestic and regional demand and the long distances from major markets in Asia, Americas and Europe do not suit export-oriented manufacturing industries. This is why the World Bank may have suggested we model our initial economic recovery and growth strategies on mining and agriculture. In both sectors, we have significant strengths and opportunities. To get these two going well, infrastructure needs to be upgraded. Electricity generation, water management and transport, both railways and roads, including ports, need to provide an efficient, cost-competitive supporting role.
The MTP thus needs urgent revision so that it narrows down to the key sectors of mining and agriculture and attendant infrastructure requirements.
The emphasis on mining and agriculture could see gas-to-liquid or coal-to-liquid plants, or indeed both being commissioned to produce liquid synthetic fossil fuels, thus giving Zimbabwe much-needed energy independence and an instrument to turn around the trade and current account deficits. Our Beira-Feruka pipeline should be used for exports, and not imports. Besides by narrowing priorities, an opportunity is presented for whittling down recurrent expenditure through drastically reducing the number of ministries, some of which actually act against the thrust of the MTP by discouraging FDI.
A corporate body’s approach, which focuses on low hanging fruits and maximising returns, would have helped. It is thus my hope that the paper presented by the World Bank’s Nadia Piffaretti finds space in the in-baskets of the Ministers as well as those of all GPA Principals.
The World Bank’s way, in the initial phase, possibly covering the first ten years post toxic landscape cleaning, is the route to take.
To prepare for the sprint, we have to shed some weight, even in the MTP itself, as well as some of our toxic habits. Send your feedback to [email protected] or [email protected].
