Weak economy to ignite TNF talks

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The underperformance of the economy and a restive labour market could force government, business and workers back on the negotiating table as parties attempt to forge a social contract to boost productivity, analysts have said.

By Bernard Mpofu
Acting Business Editor

With low business activity on the back of limited capital inflows, Zimbabwe could be hit by labour unrest. But will a social contract be a means to the end or the end in itself?

Literature on forging a tripartite negotiating forum may be found in history books, but will a social code yield much?

Experts say the hyperinflation era which ended in 2009 forced business and individuals alike to adopt rent-seeking behaviour which may be addressed through a global pact.

The Zimbabwe Congress of Trade Unions seems to have given up the fight to peg monthly salaries against the poverty datum line (PDL) estimated at $500.

The labour body has already psyched up workers, warning them of piecemeal salary adjustments. Government has already set the tone, effecting a token salary increment for the civil service.

The manufacturing sector, whose capacity utilisation declined to 39% in 2013 from 44% is on its knees and any push to drive costs for local companies, experts say, could trigger collapse. Bulawayo, once the country’s industrial hub has been relegated to an industrial carcass as many companies struggle to remain afloat, let alone competitive in the face of stiff competition from imports.

Despite the underperformance of most companies, workers still believe that they deserve more. They argue that the lavish lifestyles led by some executives were bleeding companies. Companies, on the other hand, say the high perks and wages awarded to executives are commensurate with their skills, especially in a country where many skilled workers have emigrated.

Labour and Economic Development Research Institute of Zimbabwe director Godfrey Kanyenze said this was the time to resume talks of a social contract, which has on several occasions been stalled.

“The challenge that we have is that labour is fighting for poverty datum line-pegged salaries. Against such an environment, we need to focus on sectoral interests. The tensions and contractions among labour, business and government call for a social code,” Kanyenze said.

Independent economist John Robertson contends that employers should pay productivity-based salaries as opposed to PDL salaries to get ailing firms on their feet.

“The idea of a social contract is a good one. Labour has to accept that for local business to be more productive, production costs should be lowered. Wage increases should be accompanied by an increase in productivity. Business, on the other hand, should invest in boosting production efficiency. This can be done through training. At the current levels, high wages will drive the employer out of business,” Robertson said.

Presenting the National Budget last month, Finance minister Patrick Chinamasa said government would this year push to amend the country’s labour laws which have been criticised in some sectors for being heavily skewed in favour of workers.

“It is also necessary that we introduce in our labour laws, flexibility in the hiring of workers, as well as alignment of wage adjustments to labour productivity. In this regard, resuscitation of the social contract between government, labour and business will be useful,” Chinamasa said.

In 2010, President Robert Mugabe launched the beginning of a publicity campaign for the Kadoma Declaration under the theme —“Towards a Shared National Social and Economic Vision”. The launch was supported financially by the International Labour Organisation/United Nations Development Programme project on strengthening social dialogue and tripartite co-operation.

The campaign was preceded by a declaration signed by the tripartite partners on September 4, 2009 and was first discussed by the tripartite partners in the TNF in 2001 in an attempt to address macro-economic problems facing the country, including the “country-risk factors” and their causes.

The identified causes, among others, included failure by institutions of governance to function effectively; mismatch between policy and action; delay in policy implementation; the overall spread of wealth in the country and continued racial imbalance in the ownership of the means of production; lack of political tolerance and lack of respect for human rights.

To address the problems, the parties agreed that de-politicisation of workplaces, commitment to implement policies, democratisation of the economic landscape and implementation of policies of social equity, prioritisation of macro-economic stabilisation, desisting from acts of violence and timely resolution of disputes, respect for trade union rights, and ensuring good governance would minimise country risk and boost economic growth.

Critics, however, argue that Zimbabwe’s poor ratings in implementing key policies have often resulted in false starts.

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