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Eric Bloch Column

Overdue New Year resolution

By Eric Bloch

IT is customary to formulate resolutions for change and improvement at New Year, and those who do so are supposed thereafter to strive to pursue those resolutions with determ

ination, changing them from wishes to reality. It is improbable in the extreme that the Zimbabwean government will have done so as the abysmal 2007 came to an end, and 2008 began, and yet one must hope that it did.

The Zimbabwean economy has been in a devastating decline ever since the millennium, with that decline escalating at an immense pace in 2007, and all indications being that the downward momentum is not only continuing, but is becoming evermore pronounced. As the economic decline intensifies, so too does the poverty, the hardships, and the miseries of the overwhelming majority of the Zimbabwean population. If for no other reason but to reverse the economic afflictions which are causing such widespread suffering, a genuine and lasting economic metamorphis is long overdue, and it is incumbent upon government to ensure that such reversal occurs.

Thus, the primary resolution that should have been made by government is that instead of endlessly trying to attribute blame to others for economic ills, it will focus upon bringing about an economic upturn. Endless vituperative accusations against others that they have deliberately, for their own self-centred and malicious reasons, sought the destruction of the economy does not trigger reversal, but in fact worsens an already horrific circumstance.

Moreover, no matter how often government seeks to deflect perceptions of culpability from itself to the western world in general, the European Union in particular, and especially Britain, over and above blaming captains of commerce and industry, the political opposition, and others, the majority of Zimbabweans hold government responsible.

Most disbelieve the accusations, recognising them as being naught but fabrications and deceptions in an endeavour to avoid being held responsible. As the population’s circumstances become more and more distraught, people blame government for not taking constructive actions to end the hardships. The stance of the majority of Zimbabweans is that whatsoever, or whosoever may be the causes of the economic ills, the onus is upon government to take appropriate remedial action, and it has failed to do so.

The hope, albeit probably an unrealistic one, is that government belatedly has recognised, or will recognise, that it is time for it to do that which is necessary, instead of just pointing its accusative finger at others, whilst misdirecting and misleading itself as to the facts, and attempting to do likewise to the population. The hope is that such recognition will have resulted in some very overdue, but positive, New Year resolutions. The key ones of those resolutions would have been:

* Real actions have to be taken to contain the appalling, heinous inflation, instead of just blaming the business community (which admittedly is sometimes guilty, but usually not so). Those actions must include, first and foremost, free up exchange rates, thereby eliminating the alternative foreign currency markets, which are major fuellents of inflation. Concurrently, vigorous actions are necessary to achieve export viability for the manufacturing, mining, tourism and agricultural sectors, so as to ensure markedly increased availability of foreign exchange (to be traded in an open, market-force driven, free foreign currency market). Freeing up exchange rates would be a major step in assuring exporter viability, but can be reinforced by constructive export incentives, improved infrastructural delivery of essential energy, water, transportation, and telecommunications operating inputs, and wide-ranging economic deregulation.

Inflation reduction must also be pursued by containing money supply growth. To do so, government must desist from forcing the central bank to engage in quasi-fiscal activities, and concurrently government must markedly reduce its expenditure, and its deficit. To a major extent, the deficit could be eliminated if government positively and rapidly pursued privatisation of many parastatals.

Concurrently, it must resolve that it will energetically reduce expenditures. This can well be done by reducing the immensely great public service (not by retrenchment, but through natural attrition), with special reference to the excessively-sized armed forces. It can do so by dispensing with the luxury of a senate, by reducing the great number of embassies, consulates, trade missions and the cabinet.

Government must also reduce inflation by removal of grossly excessive duties, levies and taxes on petroleum products, and by discontinuing abused and exploited agricultural subsidies, replacing them with subsidies linked to productivity.

* Fundamental to economic recovery and wellbeing is the transformation of the devastated agricultural sector. The first step towards doing so is for government to recognise and acknowledge the realities, which are that 2007/8, will not be “The Mother of all agricultural seasons” (unless one accepts that that mother is barren!), and that the land reform programme is far from the success government claims it to be. That programme needs to be reformed, with 99-year leases being accorded negotiability and transferral status, in order to vest holders with collateral value, and a sense of ownership. Those who are not using, or are abusing, the lands, must be displaced and removed, much overdue fair compensation must be given to the those who were unjustly deprived of their lands, including full compliance with Bilateral Investment Promotion and Protection Agreements, and formerly productive farmers must be given the opportunity to return to the land. Concurrently, realistic prices which assure viability must be guaranteed for all strategic crops.

* Yet another essential for economic recovery is that Zimbabwe become an investment-conducive and welcoming environment, for domestic and foreign investors alike. This requires very considerable changes from present governmental policies and attitudes, including that there must be very substantial deregulation of the economy, enabling investors to be masters of their own destinies.

The policy and attitude changes must also bring about a truly democratic political environment, unreserved governmental respect for human and property rights, a wholly free, unbiased and just judiciary reinforced by an unequivocal respect for law. Concurrently, with complete unambivalence, Zimbabwe must pursue reconciliation with the international community, abandoning recourse to vitriol, insults, and unmitigated hatred, and instead resorting to constructive, conciliatory reconciliation.

* Government must also rethink its stance on economic indigenisation and empowerment. It is of vital importance that there is widespread indigenised involvement in the economy. But this cannot be achieved by forced transferral of ownership of existing enterprises. That is naught but taking from the rich to give to the poor, so that the rich become poor, and a few poor become temporarily rich.

Far more can be achieved by stimulating economic growth, concurrently with dynamic facilitation of indigenisation in that growth.

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