Eric Bloch Column

Government just won’t face realities

By Eric Bloch


LAST week President Robert Mugabe delivered three key-note addresses. The first was his State of the Nation Address to parliament, whilst the sec

ond was when he addressed the 64th Zanu PF Central Committee meeting, ahead of the ruling party’s “Eighth Annual People’s Conference”.  


The third of his addresses was at the official opening of that conference. Each of the addresses evidenced irrefutably the extent to which Zimbabwe’s government is oblivious to realities.  


The magnitude of that oblivion is so great that government does not only blind itself to that which is necessary to restore the economy to one which can sustain the Zimbabwean populace, but also causes government to adopt stances and determine policies which are diametrically opposite to those which are needed.  


Compounding this calamitous circumstance is that government remains convinced that it is incapable of error, misjudgement, and that therefore anything that may be wrong is the fault of others.  


With extreme paranoia it believes that it is the victim of diabolical malice of Britain, which it spuriously contends wishes to “repossess” and “recolonise” Zimbabwe, and of whites in general, but especially those who were displaced from their farms, or are active in commerce and industry.


The catastrophe of those specious convictions, and of the inability to recognise the realities, economic and otherwise, is that not only does government fail to pursue the actions necessary to bring about, and thereafter to entrench, economic well-being, but that its myopic perspectives continuously drive the economy further downwards.  Worsening this circumstance even more is the absence of coordination of thought and policy between the president and his ministers, for he will say one thing, whilst they will say the opposite. 


Equally appalling is that it is clearly evident, from the extent that actual circumstances are at variance with those contended by the president, that certain of his ministers, advisors and their personnel continue to misinform him. Undoubtedly they feed to him that which they believe he wishes to hear, irrespective of any lack of substance to their contentions, or that which will, they assume, protect their retention of their posts.


In his State of the Nation Address, the president understandably placed some considerable emphasis upon the land reform programme and upon agriculture, for the agricultural sector was the country’s economic foundation, until government destroyed it, and must be restored to its former glory if there is to be any prospect of economic revival.  


He suggested that the infamous Constitutional Amendment No 17, which placed government above the law, has given “finality to the process of land acquisition”, and will enable newly-settled A1 and A2 farmers to “go about their agricultural production business without legally technical hitches that obstructed them in the past”. 


The actualities are that those so-called “legally technical hitches” accorded former farmers some limited opportunities of justice, and their removal was tantamount to legalising the state’s unjust expropriations of land.
 
And, as government has still not issued the new farmers with any form of transferable legal tenure on the land, be that by way of negotiable and assignable 99-year leases or otherwise, the new farmers still have no collateral to access necessary funding. 


In addition, with an ongoing, inadequate and non-timeous availability of inputs, agriculture cannot recover.   The president referred to a $1 trillion facility for inputs now being in place, but that money is meaningless if the inputs are not available due to foreign currency constraints or otherwise. 


He further stated that he was “also reliably informed that the entire nation’s requirements for seed have now been met” but, in practice, there is still a widespread shortage of seed. 


The degree to which he has been the victim of disinformation was also evidenced by his reference to a present availability of tobacco seedlings, saying “tobacco seedlings point to a crop of between 43 000 and 53 000  hectares”. 


Unfortunately, seedlings are only indicative of likely crop size if they have been planted. Their mere existence does not auger a crop. They must be placed in the ground (in properly prepared fields), and then must be tended and cared for. And, within the tobacco industry, informed sources contend that only some 26 000 to 30 000 hectares are being cultivated this season. A year ago government projected a winter wheat crop of at least 400 000 tonnes.  The president now expects 270 000 tonnes will materialise.  But despite years of proven mis-forecasts, the president continues to accept projections devoid of substance.


It is intriguing, however, that only nine days after his eulogising the developments of the agricultural season, he spoke somewhat differently. 


In the second keynote address of the last week, the president stated that “the future of agriculture will remain severely constrained as those with implements — maybe the whites — continue to charge exorbitant and inhibitive hire charges”. 


Was this possibly the first seeds of a “cop-out” to explain, at the end of the agricultural season, why projections have not materialised? After all, present indications are that it is unlikely that government will be able, with any credibility, to blame another poor agricultural outturn upon drought. 


And who could possibly be a better scapegoat for blame than the insignificant number of whites remaining in Zimbabwe. Those whites have been unceremoniously and unjustly, often violently, displaced from their farms, and in a vast number of instances been deprived of their tractors, their irrigation equipment, and their implements, and are now accused of charging exorbitant and inhibitive hire charges. Even those few still fortunate enough to have some of their farm equipment, are surely entitled to charges which not only address the depreciating capital value thereof, but also yield fair return on the capital involved, that return having to be responsive to an inflationary environment in which annual inflation exceeds 500%.


For years government has applied price controls on diverse commodities, driven by a misguided belief that doing so was protective of consumers.  In reality, it was prejudicial to consumers, for those controls precluded operational viability for many manufacturers, distributors and retailers.  As a result, immense scarcities prevailed, fuelling black market operations where the gargantuan higher prices severely worsened the lot of the consumers. 


All the advice of international bodies, of economists, of the captains of commerce and industry, and of many more, were studiously ignored by government.


Eventually, however, “crunch time” arrived, with the vast non-availability of products, collapses of businesses, resultant unemployment, and other factors driving government into stating, albeit reluctantly, that price controls would be discontinued and market related-forces would prevail.  


As experienced in numerous other countries over many years, market forces motivate competition, which contains prices, with compensatory efforts to enhance productivity and efficiency. 


The change of the government’s position on price controls was widely welcomed in the private sector, restoring an element of the, until then, almost non-existent business confidence.


This was reinforced by the Minister of Finance, Herbert Murerwa, who reiterated the intended discontinuance of price controls, when he presented his 2006 budget.  But only a week later, the president said: “Government will not abdicate its duty to protect consumers from arbitrary increases of prices of essential commodities.”


He blamed those increases upon “unscrupulous business people” whom he alleged were “profiteers”. 


Obviously, facts such as wage increases of 300% to 500% in the last year, massive increases in charges by government’s parastatals, inevitably necessary, huge exchange movements and many other cost factors borne by those business people, do not justify (in the mind of the president) price increases. As a result, the president claims that “the ever-rising cost of living is due to insensitive price increases being effected by the manufacturing sector” and that, therefore, government “cannot protect the people except through the regulation of the prices of essential commodities”.


In one fell swoop, with his contradiction of his Finance minister’s statement, whatsoever little confidence had been restored to the economy and towards creating an investment-conducive environment, was immediately obliterated.

Top