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Erich Bloch Column

Obduracy destroys economy

By Eric Bloch


SAVE for the government itself, there are undoubtedly very few naïve enough to believe that government is incapable of fault.

 Most believe that the government is imbued wit

h an endless array of faults, and that belief is regrettably very well founded. 

However, among the greatest of those faults must be the total inability of those who govern Zimbabwe to recognise error, and their failure to try to avoid repetition of error.
 
And one of the foremost errors that the government repeatedly makes is to resort to counterproductive, authoritarian dictates which critically impair the economy, and thereby subject the populace to intensifying, horrendous hardships.  

The ironic and tragic characteristic of the government doing so is that it recurrently attributes its recourse to those destructive actions as being motivated to minimise the hardships confronting the Zimbabwean people, to protect them, and to ensure their well-being, whereas in reality the reverse is the case.

The government needs to recognise that excessive regulation, tantamount to dictatorial rule, is not only oppressive but more often than not does not only not achieve the declared objective but, in fact, worsens the lot of those that the government alleges that it seeks to protect. 

There are innumerable examples that can be cited.

Zimbabwe embarked upon a programme of land reform that was intended to ensure black economic empowerment in agriculture and to procure increased agricultural production, assuring food security for the country and the region.

However, after eight years, virtually all that has been achieved is that 300 000 farm workers have been rendered unemployed, resulting in destitution for them and their families.

Over one million have been rendered poverty-stricken!  Concurrently, a country that previously had food security now produces half, or less, of its needs, and foreign exchange generation from agricultural exports has fallen catastrophically.

Moreover, through the injustices applied in implementing the land reform programme, much of the international community has been alienated, and foreign direct investment discouraged.

Had, in the alternative, the government progressed land reform non-confrontationally, cooperatively with the pre-land reform farmers, and with the international community, instead of domineeringly, arrogantly and despotically, the land reform programme could have been a great success.

The government had agreed to do so at the 1998 Harare Donor Conference, and again at Abuja in 2001, but reneged on its agreements, spuriously alleging that the other parties to those agreements had reneged on them.

A pronounced example of the negative consequences of state authoritarianism has been the frequent impositions of price controls.

On each occasion, the alleged justification was to protect consumers from exploitation and profiteering on the part of commerce and industry, instead of recognising that the only effective ways of curbing price increases are by ensuring that supply exceeds demand, thereby prompting competitiveness, and by facilitating increased productivity, thereby minimising production costs.  

Instead, the government has invariably resorted to heavy-handed price controls, which were welcomed by consumer representative bodies and by consumers, but which placed the survival of businesses at risk.

Products became scarce, which fuelled inflationary black-market operations, businesses sustained losses, necessitating their reducing numbers of employed and constraining spending in the downstream   economy, and the price controls did naught but to worsen the distressed economic environment. 

Although price controls have consistently failed to achieve the declared objectives of the government, nevertheless the government endlessly resorts to them, responsive to demands from consumers, and anxious to be perceived by the populace as a caring government.

Yet another example of disastrous regulation was when, in mid-2005, Education, Sport and Culture minister Aeneas Chigwedere, exceeding his powers in law, imposed draconian constraints upon the operations of independent schools, with special emphasis upon restricting fee increases. 

Not only did he place the continuance of operations of some of the schools in great jeopardy, to the immense prejudice to the education of many Zimbabwean scholars, but there were also massive harmful economic repercussions.

Hundreds, if not thousands, of parents became deeply concerned as to whether standards of education would decline, and they decided to depart Zimbabwe, in order that their children’s access to good education could be assured. 

An already massive “brain drain” was radically exacerbated, depriving the Zimbabwean economy of desperately needed skills, and thereby greatly worsening the very emaciated and distressed economy.

But the government has demonstrated a complete inability to learn from its mistakes, and therefore keeps repeating them.

The most recent such occurrence was last week when Health and Child Welfare minister David Parirenyatwa invoked the Medical Services Act of 1998, ordering private doctors, clinics and hospitals “to temporarily suspend fee increases” pending a committee appointed by the ministry completing a detailed evaluation. 

Although the minister said that is was not the government’s intention to control fees, he also said that it was his role to supervise both private ad public health sectors, and that there were “no sacred cows”. 

There can be little or no purpose in suspending fee increases, even only temporarily, while an evaluation is carried out, unless it is contemplated that thereafter certain or all charges are to be controlled, for what otherwise is the purpose of the suspension and the evaluation?

Therefore, despite his assurances to the contrary, one must ponder whether the minister is not actually contemplating imposing certain controls.

The minister’s concern for the inability of many to access requisite healthcare, due to rising costs, is very commendable.

But resorting to actions that can result in healthcare not being available is pointless in the extreme, and not in the interests of the community.
 
And imposing constraints upon fees and charges will very greatly reduce healthcare availability. 
Zimbabwe has witnessed an appallingly extensive amount of emigration by doctors, radiologists, physiotherapists, dentists, optometrists, psychologists, nurses and other healthcare providers in recent years due to the depressed economy, concerns as to the availability of quality education and as to the political environment. 

If their livelihoods are now to be controlled and impacted upon, even more will leave, and those in need of health services will be unable to obtain them, irrespective of whether or not they have funding to pay for them.

The minister’s freeze on fees and charges followed agreement between healthcare providers and medical aid societies for fees increases of between 76 and 96%, with effect from April 1, 2006.

Such increases are well below many of the cost increases sustained by healthcare providers, who use drugs, medications and other health requisites which increased in cost (according to the Central Statistical Office) by over 950% in the year to February 2006, and who use transportation whose costs have risen by over 1 000%. 

They pay rents which, in the month of February, rose by 151,4% (and, in the year to February, by almost 2 084%!).

They incur telecommunication costs which rose by 282% in the two months of January and February 2006. And almost all other costs sustained by them will also have increased considerably.  

If their incomes do not rise, they cannot meet their increased costs, and generate an acceptable livelihood, so they will depart Zimbabwe to more conducive environments. 

Far from protecting those in need of healthcare, the minister is jeopardising them, and he should urgently reverse his stance.

The private healthcare sector is essential, for the public sector cannot meet national needs. It is understaffed, under-equipped, under-funded, with evermore deterioration in service delivery.

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