Presidential Spokesman George Charamba was quoted by a State-owned daily on Monday January 27 2014 as saying: “The current government must author a new, efficient and result-oriented system to turn around the country’s economic fortunes.”
Painona with with Tapiwa Nyandoro
Could this be the first official acknowledgement that the Zimbabwe Agenda for Sustainable Socio-Economic Transformation (Zim Asset) comes somewhat short on viable strategies?
An opportunity to escape the embarrassing poverty that has gripped Zimbabwe is now visible on the horizon. Zimbabwe largely missed the Chinese and Indian- driven resource boom due to self inflicted political folly.
It should strive not to miss the bus again this time.
Xinhua, the Official Chinese news Agency recently reported tectonic changes in the products from its industries. In 2005 the Chinese minimum wage in the labour intensive manufacturing sector was around $100 per month.
“Factories in the World’s second largest economy are now churning out ever more sophisticated products for people around the world”, the Agency observed. “Rising labour costs and the Yuan’s appreciation has propelled exporters to move up the production chain”, the Agency further noted.
In 2013 the minimum industrial wage rose to around $450 per month. Low value added goods such as textiles, shoes and furniture are slowly, but surely becoming uncompetitive to manufacture in China.
This is at a time demand for the same in Africa, India and China itself is rising exponentially. Global brands and Chinese manufacturers of these labour intensive products are thus on the prowl for new manufacturing bases. Zimbabwe should stand guided and prepare accordingly. Kenya, Ghana, Nigeria and Ethiopia are already reaping the benefits.
China’s rising wages, migration up the production chain and the appreciation of the Chinese currency by as much as 36% from 2005 to 2013, are a product of highly successful economic policies.
At company level, however, Research and Development has become a key division. Adapt or die, if an entity is to continue exporting, is the new motto. And this adaptation, for most Chinese exporters, will include geographical diversification in pursuit of cheap labour and markets.
This is not anything new. The Americans, the Europeans, the Japanese and the South East Asian Tigers have done the same before, and are about to do it again, this time in Africa, alongside China.
The developments offer immense opportunities for well prepared African countries. Zimbabwe’s political elite must not disappoint again. It is time they put the interest of the country before their own.
Favoured with spy ware, and therefore intelligence that the CIO can only drool about, blessed with a multitude of think tanks that actually think, and secure in the knowledge that for a considerable period of time after China becomes the World’s biggest economy, the USA will still be the World’s most innovative country, Barack Obama will have taken note of the developments in Asia, and will have concluded, like his counterpart in China, that Africa’s labour resources and rapidly growing markets, are acquiring a new “strategic” outlook.
Hence the “indaba” in August 2014 called by the US President to which most African countries will be invited. It is an opportunity to seize. Those downplaying Zimbabwe’s missing invitation do the nation a terrible disservice. “Time and tide”, they ought to know, “wait for no man, or for that matter, nation”.
Zimbabwe has been in crisis since the year 1997. From the early 1990s there has been steady but relentless decay. Other countries and big Corporates react to crises by taking positive remedial action, such as Abenomics in Japan, austerity and loose monetary policy in the U.K and Quantitative Easing in the USA. Zimbabwe seems to pour oil over troubled waters.
A learning mindset, reputed to be only found in 10% of Executives, seems to be the missing trait in our leadership. Recent Press reports that Chinese Bankers did not find the Zim Asset document bankable, to the surprise of our leadership, if true, confirm the point. And yet they could learn from a plethora of recent turnaround strategies, both at country or corporate level, than were deployed successfully in response to the onset of the 2008 global financial crisis.
One such case study worth noting is the turn around of Ford Motor Company. Ford’s CEO borrowed $23,5 billion (something proving intractable for Zimbabwe’s Treasury) during the worldwide economic meltdown and turned Ford into a profitable company. One of the steps he took to turn around Ford’s fortunes may be applicable to Zimbabwe. According to him the likes of Zimbabwe need to:
“Deal with things the way they are, not how you think they should be, or how you wish they’d be. Include everybody, but also have a point of view about where you want to go with your business (projects / economy) and what kind of company (society / industry) you can create.
The reality in Zimbabwe is that the country needs billions of dollars, which it does not have, for mineral exploration, mining activities, agriculture, social services and infrastructure rehabilitation and development over the next five years if Zim Asset is to take off on the back of rising mineral production, agricultural outputs and exports.
The writing is on the wall. The economy is in shambles and on life support from “developmental partners”, including Britain’s DFiD and America’s US Aid. It is time for change; time to face reality. And prepare for the new horizon on a clean slate with “Faith, Hope and Love”.