Eric Bloch Column

The real state of the nation

AS Zimbabwe completes its 24th year of Independence, and targets towards the attainment of

its first quarter-century, Zimbabweans will once again be recipients of a state of the nation address, as occurs annually in close proximity to Independence Day.

That address will undoubtedly acknowledge that the economy is in a distressed state, and will ascribe that condition to malevolent acts of Zimbabwe’s enemies in general, and of Tony Blair, George Bush, John Howard and Zimbabwe’s minority white population (in an alleged unity of purpose to destroy Zimbabwe, led by former commercial farmers and exploitationist industrialists) in particular.

However, Zimbabweans will also be assured that transformation to a state of Utopia is imminent, thanks to the deep-seated concern of the Zimbabwean government for the wellbeing of Zimbabwe’s people. That transformation will be a direct result of the government’s brilliantly executed programme of land acquisition, redistribution and resettlement, and its constructive measures to restore the economy as a whole to a state of good health.

It may be apposite, therefore, that by way of contrast there be a review of the real state of the nation, distinct from the imaginary one. That state is an extremely sorry one. It is one where the economy is on a continuing decline, albeit that the pace of that decline has been marginally reduced by some constructive new monetary policies initiated by the governor of the Reserve Bank of Zimbabwe, Dr Gideon Gono. As vigorously as he has sought to address the appalling circumstances of the economy, he could not — and cannot — reverse them. Although he is able to format monetary policies, he has limited ability to effect fiscal policy reviews, for they be in the hand of the President, the Cabinet and, in particular, the Ministry of Finance and Economic Development. And he has no authority to achieve required modification of politically-driven policies. As it is the impacts of government’s policies and its fiscal acts of omission and commission that are the key contributants to the economic malaise, the governor’s policies can only have a minimal positive economic impact although he would dearly wish to engineer an economic transformation.

Some of the specifics that evidence that the economy is in a state of almost total collapse, resulting in the state of the nation being one which is destitute and derelict, include:

The foundation of the economy has always been agriculture. No other economic sector has yielded as great a contribution to Gross Domestic Product (GDP), generated as much foreign exchange, or employed as many, as has the agricultural sector. But that is something of the past. Today the tobacco crop is one-quarter of that of four years ago. Commercially produced maize is now approximately one-sixth of national need, whereas previously Zimbabwe was not only self-sufficient, but it was also able to supply much of the needs of neighbouring countries. Similarly, Zimbabwe no longer produces the quantities of wheat that it requires, and output of most other agricultural commodities has also fallen very considerably.

Government will, of course, attribute these disastrous circumstances to allegedly adverse climatic conditions, to the unwillingness of displaced white farmers to exacerbate their overwhelming losses by gifting their irrigation equipment, tractors and other movables to those settled on the lands formerly occupied by them, and the inexplicable reluctance of suppliers of inputs to supply at sub-economic prices and with extended credit. However, all but the naïve and those that revel in self-delusion know otherwise. They know that government fabricated and disseminated a belief that the white commercial farmers had “stolen” the land, notwithstanding that most of Zimbabwe’s lands had been unoccupied and unutilised prior to those commercial farmers rendering them productive.

Having falsified and distorted history, government then dissembled that it would ensure that all, irrespective of race, as desirous of farming the land, would be entitled to one farm, subject to size limitation, but instead it deprived the majority of the white commercial farmers of all the lands they had worked productively, to the benefit of the nation, for many years. The government redistributed the land to its chosen few, promised them the wherewithal and inputs necessary but recurrently breached its promises, and did not even give those settled upon the land any lawful title to that land. Thus, those settled neither had collateral to support borrowings of working capital, nor the assurance of continuing occupancy. That assurance was a prerequisite to motivation and endeavour and, without finance, inputs and motivation, most of the lands became unproductive.

The mining industry has also been a victim of government and of the economic environment. Production costs have soared upwards, as the national hyperinflation and increased costs of imports rose steadily. However, revenues did not rise commensurately, reducing most mining operations to ongoing losses. Gold producers were exceptionally hard hit. For some incomprehensible reason the major producers are paid one-third of the price, per kilogramme of gold, as are small-scale producers, despite the former’s costs of production being markedly higher than those of the latter. Many mines have had to discontinue operations, whilst others have been forced to scale back production considerably.

From the late 1980s to the late 1990s, the tourism industry was one that enjoyed spectacular growth. Rising from a few hundred thousand to over two million, tourists poured into Zimbabwe to revel in the splendour of the Victoria Falls, the awe of the Matopos Hills, the majesty of Zimbabwe’s diverse wild life in Hwange National Park, Gonarezhou, Matusadona and other fantastic wild life reserves, the excitement of Lake Kariba, the beauty of Nyanga, Vumba and Chimanimani, and the mysteries of Great Zimbabwe and of Khami, and much more. Although government repeatedly blames others for destroying Zimbabwe’s image and, as a result, for the decline in tourism over the last seven years to the low levels of 24 years ago, the reality is that it has been government itself that has cast a deep shadow over the Zimbabwean image. It is government that fomented a disregard for law and order, and then failed to restore a state of law and order essential for tourists, foreign investors, and others to perceive Zimbabwe as a secure destination.

The manufacturing sector’s distress is as great as that of the other economic sectors. Local market demand is as deflated as a burst balloon, for hyperinflation has eroded consumer purchasing power, and mass unemployment has vastly reduced the population’s disposable income. At the same time, the ability of industry to export has fallen sharply, for the inflation which has ravaged Zimbabwe in recent years radically escalated production costs. Nevertheless, exports would have remained viable if the government had allowed the Zimbabwean dollar to depreciate to its real (minimal!) value.

But that it was not prepared to do. In a vain attempt to contain inflation, and in an equally vain attempt to preserve national pride and not admit, even if only by implication, to economic failure, government obdurately resisted all pressures and economic needs for the nation’s currency to devalue to realistic levels. In the process, it destroyed export market competitiveness, collapsed many export-orientated industries, intensified unemployment, and worsened the scarcity of foreign exchange. That scarcity fuelled the parallel and black markets, causing massive exchange rate movements which, in turn, stimulated intense growth in the very rate of inflation that government had sought to reduce.

Thus, the present state of the nation is one of an extremely frail economy on the threshold of total demise. It is one where over 75% of the employable population is unemployed, and there are now very considerably more Zimbabweans employed abroad than are employed in Zimbabwe. The nation is one that has witnessed an immense brain drain, with many thousands of skilled Zimbabweans seeking more lucrative employment in other countries than available to them at home.