THE opposition Movement for Democratic Change (MDC) las
t week launched its economic blueprint designed to tackle Zimbabwe’s mounting economic crisis — which it says have seen living standards plunge to pre-1970 levels.
MDC President Morgan Tsvangirai was however quick to point out that his party was not promising any “quick-fix” — saying the crisis was far too severe and deep-seated to allow instant recovery.
Known as Reconstruction, Stabilisation, Recovery and Transformation (Restart), the MDC leader said the programme addresses Zimbabwe’s immediate stabilisation and reconstruction needs, which would also see the launch of his party’s industrialisation strategy, through which jobs and economic growth would be sustained in the long-term.
Finance minister Herbert Murerwa says Zimbabwe’s economy is estimated to have contracted by 13,2% last year while inflation peaked at about 620%. In the rest of the Southern African Development Community (Sadc) countries, positive performances were experienced with average growth rates of 2,6% and inflation of 15,3% in 2003, with a further decline to 8,1% this year.
“With the re-establishment of the rule of law, Restart will succeed under the transparent and participatory government which MDC will establish,” Tsvangirai said in his preface to the document.
The ruling Zanu PF, in power since Independence, has already written the document off, saying it is cheap politicking, and only lays the groundwork for the MDC’s election campaign.
Some analysts point out that while the programme provides various tangible solutions to Zimbabwe’s burning economic problems, the major obstacle facing the MDC is that it is not in power and, therefore, the document could be a mere pipe dream.
“As long as the MDC is not in power this document will remain a pipe dream,” said an economist. “It is however pleasing to note that they (MDC) have a programme ready if and when they do come into power after the next election.”
Political analyst Brian Raftopoulos said the document was “brave and well considered”.
The MDC is very optimistic and says its programme could be implemented as early as July this year. The opposition party however admits that a “durable political settlement in Zimbabwe is a precondition for the implementation of Restart”.
“Put in stark terms, it is essential that political legitimacy be restored in Zimbabwe, following the electoral fraud of 2002,” the MDC said. “Legitimacy can come only through a free and fair election in which Zimbabweans are freely allowed to express their will. Such an election can take place only on the basis of a new constitution to ensure democratic space for Zimbabweans.”
Zanu PF stalwarts, especially the External Affairs secretary Didymus Mutasa, however point out that this is wishful thinking on the part of the opposition.
They say Zanu PF has been given a new lease of life by the Reserve Bank of Zimbabwe (RBZ) Governor Gideon Gono’s 2004 Monetary Policy Statement released in December last year.
They contend that because of the “success” of this policy in such a short space of time, Zanu PF is “back in business”. Gono took over at the RBZ on December 1.
His new policy has resulted in the foreign currency parallel market tumbling from highs of $7 000 and $10 000 to the US dollar and the pound respectively, to about $3 500 and $6 000. The Zimbabwe dollar had been pegged at $824 against the greenback and analysts said this was “devaluation in disguise”.
The financial sector has been tightened, interest rates are decreasing, but on average Zimbabweans are still considerably poorer than they were at Independence!
“Zanu PF is riding on Gono’s document and will ensure that it works out for them because this is the last straw as far as their survival is concerned,” one analyst said.
Analysts say because Zanu PF is in power it “really has nothing to lose” and will continue dragging its feet even over the succession issue.
“The possibility of a negotiated settlement with Zanu PF that leads to a transitional process of change is foreseeable,” the MDC says in the document. “However, any transitional economic programme should be derived from Restart, enabling the process of recovery and transformation to begin at the earliest possible opportunity. Every day of delay makes the conditions for implementing Restart exponentially more difficult.”
Restart is a five-year programme situated within the context of the MDC’s overall policies.
It replaces the opposition party’s earlier economic blueprint, known as Bold, Revitalising and Innovative, Development, Growth and Employment (Bridge) which formed a key element of the 2002 presidential election campaign.
University of Zimbabwe head of Business Studies Department and economic analyst Anthony Hawkins said Restart was good in that it would be approved by the international community, especially the World Bank and the International Monetary Fund (IMF) which had abandoned Zimbabwe because of its lopsided programmes.
He said this could release balance of payments support that Zimbabwe desperately needs right now. He pointed out the emphasis on good governance in the document.
Gono has already said he will be seeking audience with the IMF and World Bank to try and get Zimbabwe back on the international donor map.
“Behind the evolution of Bridge was an understanding and belief that the MDC’s candidate (Tsvangirai) would win the election and be free to embark on the party’s programmes defined in its February 2002 election manifesto,” the MDC said.
“The figures, forecasts and prognosis in Bridge were based on an execution date of March 2002. The economic reality that the country now faces is far more grave, requiring a wholesale revision not just of the numbers but also of the approach.”
The MDC said as the March 2002 presidential election was “stolen” Bridge never saw the light of day as a programme for implementation, but as a policy framework it opened debate within the party on the core objectives of recovery and transformation and how these might best be achieved.
It said Restart was thus a product both of changing external conditions and of internal political dialogue on meeting economic, social and political goals in a balanced manner.
Among some of the expected scenarios under Restart are that if it is implemented in July this year, real gross domestic product (GDP) growth would be high but for this modest rates of 4% to 5% in 2004 until 2006, followed by 7% in 2007 and 2008, are assumed.
Initial recovery of employment should be faster than GDP growth as labour-intensive sectors such as tourism and agriculture would be taking the initial lead but thereafter employment growth is likely to be lower than GDP growth.
The MDC said responding to progressive restoration of positive real interest rates and monetary stability, these were set to increase from the externally low rate in 2003 (4% of GDP) to 22% of GDP by 2008, with a corresponding recovery in investment.
It said the effect of the Restart macro-economic strategy would be to dramatically cut the growth in money supply, but the huge inflationary momentum in the system implied a slower reduction in inflation.
“For 2004 as a whole, the scenario gives an average rate of inflation of 640%,” the MDC said in its document.
On exports and imports, the MDC said the favourable environment for exporters should result in rapid growth of export revenues from goods and services, the average growth in United States dollar terms over the period being 14,6% per annum.
“This figure sounds ambitious, but part of what will be reflected as export growth will arise from exporters repatriating export revenues previously diverted into capital flight,” the MDC said. “Increased availability of foreign currency will allow for growth in imports of around 10% per annum, a significant portion of the increase being importation of capital goods required for much higher levels of investment.”
On the country’s arrears and external debt Restart envisages the clearing of arrears and a start being made on the payment of accumulated debt, less any debt which is found to be odious.
It says the pace will however to a large extent depend on the level of external support received for the programme.
“The MDC’s economic development programme lays the basis for a profound transformation of Zimbabwe,” the document said.
“This programme presents a major “restart” after more than two decades of Zanu PF’s misrule, which has been characterised by policies that have failed to address underlying structural issues and were implemented via misdirected state intervention, accompanied by massive corruption…Restart is a process and a goal, an ideal and a target, through which the potential of our people will be galvanised towards achieving a just and equitable society.”