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Daylight robbery of pricing at 4:1, but giving change at 1:1

Opinion & Analysis
As economic recovery measures are implemented, let's discuss this wrong mentality — yes, wrong — that nothing works until everything works because in real life there are no quick and easy fixes.

As economic recovery measures are implemented, let’s discuss this wrong mentality — yes, wrong — that nothing works until everything works because in real life there are no quick and easy fixes.


For one, we should also be wary of armchair and doctrinaire socialists outrightly condemning the whole economic stabilisation programme as neoliberal and capitalistic. Instead, we should heed pragmatic socialists like United States Senator Bernie Sanders, who has observed thus: “Capitalism does a number of things very well: it helps create an entrepreneurial spirit; it gets people motivated to come up with new ideas, and that’s a good thing.” Indeed, capitalism does not have an ugly side only. It can be used as a springboard to a more equitable social democratic state. Sanders does not let ideology get in the way of useful information.

Two, it has become obvious that some sections of politicians are determined to make the measures fail. They are on a mission to sabotage whatever step Finance minister Mthuli Ncube takes — and this was shown in the drama in Parliament last month when Ncube presented the 2019 National Budget. Fortunately, many Zimbabweans, including white compatriots, saw through this naked ruse and smokescreen and condemned it without reservation.

Patrick McCosh, a white Zimbabwean, observed: “The MDC strategy appears to be to provoke scenes, ignore the Speaker and then resist physical ejection in a way to promote as much chaos as possible. The Speaker could have adjourned Parliament, but that would have been a victory for the MDC’s disruption strategy. To be fair to the Zimbabwe Republic Police, they really tried to be polite, but firm. I was deeply embarrassed as a Zimbabwean.” Who would fault the restraint of the police?

Nigel Rennie wrote: “The whole thing was a circus. This was an example of children trying to mix it up with adults. What did the MDC think they could achieve? The MDC need to accept and realise that ED (President Emmerson Mnangagwa) is the man and that Zanu PF is the governing party, like it or not. As offensive as it is to a lot of people, it is what it is. Deal with it and work with it. Shape up or ship out. As Zimbabweans, we need to work with what we have, together. There is no alternative. Nothing is going to be easy. We all know that, but sulking like spoiled kids will not solve anything.”

And Belinda Sharples wrote: “What did the MDC hope to achieve by boycotting what seems to be a constructive and pretty well-thought-out budget?”

Indeed, the economic stabilisation measures are constructive and well-thought-out as also observed by local asset management and financial services firm Zimnat in its holistic, informed and educated take of what Ncube is trying to achieve. Observed Zimnat last week: “Economic stakeholders were expecting big and bold policy pronouncements, especially around currency reforms and RTGS value preservation, but clearly the Minister of Finance held back. Prematurely devaluing RTGS dollars, under the current unstable macroeconomic environment, may cause irreparable damage to confidence, national savings, the financial sector, and the overall economy. We, therefore, agree with the Finance minister that currency reforms must be undertaken only after the economy and its markets have stabilised.”

Who can really find fault with the minister’s systematic route to avoid the 2008 economic meltdown? Ncube himself has clearly said: “It is important to note that this value preservation arrangement is hinged on consistent implementation of prudent fiscal and monetary policies, as well as disciplined market conduct by all economic agents as espoused in the Transitional Stabilisation Programme.”

Yes, “disciplined market conduct” on the part of one and all, each and everyone of us at every level is key to the success of the economic stabilisation programme because we are “all economic agents” to various extents.

But one economic agent — in the form a supermarket chain of stores —is not playing ball as far as “disciplined market conduct” is concerned. This supermarket chain increases the price of this item from 10 bond notes to 40 bond notes ostensibly because of the bond note/United States dollar discrepancy.

You produce US$10 at the till, but they now say the US dollar is now equal to the bond note. ln that shortest of distances from the shop shelves to the till, the US dollar bafflingly and mysteriously crashes in value to become equal to the bond note.

As one can see, if you give some people an inch, they will take a mile. If you agree to give someone something that they want, they will then want to take more. Make a small concession and they will take advantage of the situation in a much larger way. You give them a small amount of freedom to do something, they will exploit that to the maximum, as seen in that supermarket. One begins to read between the lines and then sees the wisdom — not stupidity — of Ncube officially holding the bond note at par with the US dollar. Had he announced that it’s now 1:4, as some people are clamouring for, the black market rate would by now be around 1:16. Only the blind or straight-line thinkers cannot see Ncube’s tactical holding operation, without which the situation would now be much worse.

Yes, we need to solve problems in the right way, with determination, but with the consciousness that there are universal scientific laws where the reality is discovered — not invented as in the “X” moving claim. And that these scientific laws are discovered not on the side of Zanu PF or MDC, but to educate and edify people for the greater good.

In the same way, economics laws —the empirically derived concepts of economic behaviour — are not on the side of Zanu PF or MDC. Ncube is working within the constraints of those economics laws, and whoever comes after him will be simlarly constrained and would largely implement the same austerity measures that Ncube is.

So instead of becoming prey to the claims/counter claims of political parties that they can do miracles, people themselves should get involved in setting the agenda as economic agents in their own right. Political parties cannot do miracles, but people can.

If people can innovate economically or socially — by boycotting retailers and supermarkets impoverishing them daily — that can bring in some major breakthroughs into economic and social development.

Thus, the sooner people reject the science fiction that someone, an individual, holds the keys to the economy, the better for the nation because it is up to us all to make the turnaround succeed through observing universal economics laws and acting against this daylight robbery of pricing goods at 4:1, but giving change at 1:1.

Conway Nkumbuzo Tutani is a Harare-based columnist. Email: [email protected]