Eric Bloch Column

Catastrophic measures in pipeline


NOT surprisingly, the state-owned press has been ecstatically enthusing over the heavy emphasis of the current parliamentary session upon matters economic, as outlined by President Mugabe when he addressed the session’s official opening t

wo weeks ago.


His address did demonstrate that there are many economic issues that critically need attention. Unfortunately, as focused upon in this column last week, and although some of the measures to be introduced by parliament are positive, many of them are catastrophically negative or based upon unrealistic premises.


Space constraints precluded all being commented upon in that column, and yet some comment is necessary, in the vain hope that when the parliamentarians deliberate, they do so founded upon the actualities of the Zimbabwean economic environment, instead of upon wishful thinking or upon misinformation.


Very correctly recognising that exports are, in many respects, the life-blood of the economy, for they must provide the bulk of Zimbabwe’s foreign currency needs, the president said that “negotiations aimed at improving the flow of Zimbabwe’s exports to countries in the region and the Far East will continue”.


Without in any way deprecating the importance of achieving exports to the Far East, Zimbabwe should not place such great emphasis on those exports as distract from stimulating exports elsewhere.


The most urgent need is to advance the negotiations intended, according to the president, to impact favourably upon regional exports, for export growth can most rapidly be achieved if targeted at markets closer to home.


First and foremost, government must prevail upon Zambia to discontinue that which is tantamount to a trade sanction upon Zimbabwe. Despite many and prolonged representations, Zambia persists in applying a unilaterally determined exchange rate to the Zimbabwe dollar, for purposes of determining the value of imports from Zimbabwe for the assessment of Value Added Tax (Vat). That rate has consistently been almost double the official exchange rate, and is justified by the Zambians by alleging that Zimbabwean import content of the relevant goods is financed through the parallel market.


This Zambian policy does not help Zambia, for it merely motivates the Zambian importers to source their requirements from South Africa, or elsewhere, but it deprives Zimbabwe of access to the Zambian market.


If Zambia continues to be intractable on this issue, Zimbabwe should resort to an appropriate, reciprocal, sanction.


Pleasingly, the president veered away from his previously expressed view that Zimbabwe should concentrate almost exclusively upon trade, and other economic relations, with the Far East. (It’s only two months ago that he said Zimbabwe must look East, for that is where the sun rises, rather than to the West, where it sets.)


Still referring to export generation, he said that “at the multilateral level, government will use the platform of the African, Caribbean, Pacific-European Union (ACP/EU) co-operation framework to negotiate the establishment of new trading arrangements with the European Union by 2008. “This is a more positive stance than Zimbabwe has taken for sometime but, nevertheless, it is too constrained. Zimbabwe produces, or can produce, many commodities and products that would be saleable to USA, Canada, Australia, countries in West and North Africa, and in South America as well as to the countries within the southern Africa region and in the European Union (EU). There needs to be a concentrated, on-going promotion of trade with all, instead of an emphasis upon the Far East, and on a distant target to penetrate the EU.


On the other hand, Zimbabwe continues to delude itself as to its tourism industry. The president told parliament that “notwithstanding the repeated attempts to insulate the country, our tourism sector continues to show signs of strong recovery”.


The actual circumstances are markedly different. The first quarter of 2005 had a lesser inflow of tourists than the equivalent period of 2004, even if the department of immigration figures suggest otherwise.


Those figures include cross-border traders, one day trippers, back-backers, caravaners, campers and those availed of private accommodation, but the tourism industry depends mainly upon hotel patronage with over-nights stays.


The president also repeated the oft-stated contention that “granting of Approved Destination Status by the People’s Republic of China provides opportunities for further growth”. That is correct, but solely because the present extent of tourist arrivals from China is minimal (approximately 29 000 during the whole of 2004!) whereas the tourism industry is geared to handle over two million international tourists per annum. But the prospects of major increases in arrivals from China are slim. Chinese tourists’ first destination preferences are Europe and the USA, not Southern Africa.


In addition, the Chinese are as much influenced by Zimbabwe’s abysmal international image as are the populace of other countries. Zimbabwe needs to polish up its image (but certainly is not doing so at present. Instead, it is worsening the image further, with inhumane actions such as “Operation Clean-up”, carried out with grossly excessive authoritarianism, violence, abuse of law by the so-called enforcers of law and many instances of Gestapo-like bestiality).


Zimbabwe is faced with a rapidly intensifying energy crisis due to an ageing and inadequate energy-generation infrastructure. Recognising this, the president said that “several initiatives to attract investors in the development of both existing and new power generation projects as well as alternative forms of energy are being pursued, especially within the context of the ‘Look East’ policy”.


Those initiatives are overdue, and very necessary, but Zimbabwe should not allow its present infatuation with the Far East in general, and with China in particular, to blind it from the possibilities of attracting investors and technology transferral from other parts of the world, including Europe and South Africa.