It’s the politics once again, stupid

PRESIDENT Mugabe is puzzled by Zimbabwe’s distort

ed economic performance. In his speech opening the Fourth Session of the Fifth Parliament on Tuesday Mugabe spoke of a paradoxical situation in which companies were doing well in an economy that is officially in decline.

Mugabe’s observation is spot on. There are contradictions in the Zimbabwean economy but these are consistent with the absurdities of his policies. The economy of Zimbabwe is crumbling under his supervision and he should look no further than Munhumutapa Building to find reason for the current morass.

Earlier this week Jonathan Moyo, who should be the voice of government, attributed Zimbabwe’s problems to the formation of the opposition MDC. This was in pursuit of a strategy that has become a tradition of government — shifting the blame for our perennial problems from Mugabe’s populist and damaging policies.

The folly of the Zanu PF government’s policies is the major paradox that is saddling the country. Plain as the nose on his face are incongruities in Mugabe’s policies which are symptomatic of an off-track regime bereft of solutions to the nation’s problems.

The paradox of the Zimbabwe economy is a direct result of bad political fundamentals which, until they are put right, will always see key economic players refusing to co-operate with the government.

This has been manifest in Mugabe’s quest to take Zimbabwe back into the dark days of archaic Leninist command economic principles. Over the past two years the government has introduced price controls and pegged the value of the dollar at a respectable but unrealistic rate to the US dollar. The agricultural sector has been decimated in the name of correcting a historical injustice. This quick-fix approach to a major national resource has been a huge disaster.

Mugabe this week said government would “adopt effective measures to address this paradoxical situation whose destructive impact is vividly illustrated by the impoverished condition of the common man”.

The proposed remedies are disconnected from reality.

Government wants to intensify black empowerment by enacting an Indigenisation Bill which will force companies to cede a minimum 20% shares to employees. How about offering better incentives to investors and assurances that investments are safe?

The government, through Zesa, intends to buy a stake in Hydro Cahora Bassa (HCB) power station of Mozambique when it is failing to rehabilitate local power plants and owes regional power utilities nearly US$110 million. It owes HCB US$22 million.

Finance minister Herbert Murerwa in his budget speech last year said price controls were killing the economy. In parliament this week Mugabe proposed to “strengthen price monitoring mechanisms while simultaneously encouraging companies to increase their capacity utilisation to get more goods at affordable prices”. How does industry reconcile the two?

Mugabe has not learnt that you cannot deal with inflation by commanding businessmen to hold down prices. There will be three types of response: defiance, deceit or closure.

Mugabe believes that the combination of his tainted agrarian reform and the stillborn National Economic Revival Programme (Nerp) will revive the economy and empower the marginalised. Evidence of the failure of the agrarian reform is manifest. Elsewhere in this issue we report that the government this week ran to the United Nations cap in hand for humanitarian assistance. The government has no money to finance new farmers and to put up supporting infrastructure.

If anything, the government has, through the agrarian reform, created a new class of poor landowners. Quite oblivious of this anomaly, Mugabe said the government would once again amend the Land Acquisition Act to speed up the acquisition of gazetted farms. What is the logic of expropriating more farms when half the land acquired in the past three years has not been put to productive use?

There is also no popular ownership for Nerp which was formulated in the dark corridors of Munhumutapa Building without consultation with business and civic society and is already behind schedule. The would-be panacea to the country’s economic problems is set to fail as were the others before it like Esap and Zimprest.

The paradox of our economy will remain with us so long as Mugabe fails to consult before coming up with strange decisions that drive the economy into a blind alley. No name-calling or finger-pointing can pull us out of this mess. Mugabe should wake up to the reality. What Zimbabwe now needs is an “economic cabinet” that has political clout to push its decisions through Zanu PF’s moribund policy gatekeepers — the politburo.

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