Erich Bloch:Endless Economic Implosion

GOVERNMENT’S unceasing recourse to one economic destruction measure after another belatedly forces an inevitable conclusion that, albeit for some inexplicable motive, it is resolutely determined to destroy the Zimbabwean economy in its entirety.

 

No one can be that stupid as to resort to one catastrophic economic policy after another to the extent that the Zimbabwean Government has done over the last 11 years, unless it is with the deliberate intent to achieve a total implosion of the entirety of the economy.

With actions ranging from extreme profligacy, governmental spending being continuously at astronomic levels beyond the nation’s means, to the destruction of agriculture which was the foundation of a resilient and growing economy, or the constantly intensifying regulation of the economic, stifling not only growth, but continuance of business, Government has steadfastly and progressively emaciated the economy.

Growth

Whether it was the alienation of a once friendly and highly supportive international community, to the demolition of an investment conducive and welcoming environment, Government has constructed every conceivable obstacle and hurdle to economic development and growth.

Whether it was not only the total failure to contain corruption, but instead impliedly to condone it (save if an opportunity to oppress political opponents), or a pronounced disregard for human and property rights and the fundamental precepts of law and order, Government has unhesitatingly done so to its own ends and to the prejudice of the populace, and of the economy in particular.

*Constantly the population as a whole, other than the favoured few, and the world at large, has anticipated that eventually government would be healed of its economic myopia, and would see the error of its ways, working vigorously to repair the damage it has done, and to develop the economy that Zimbabwe could have, and that it deserves. But that hope has proven to be devoid of any foundation or substance.

Instead, the foolhardy, implosive actions not only continue unabated, but at an exponentially intensifying pace.

*Last Week government demonstrated yet again that either it is oblivious to realities, or that it is so drunk with its belief in its unbounded omnipotence, that it inserted yet further nails into Zimbabwe’s economic coffin (There may be scarcities of maize meal, bread, flour, sugar, salt, cooking oil, soap and detergents, candles and matches, electricity, petroleum, medications, and much, much more, but government never seems to run out of nails to drive into that coffin!).

It announced yet another extension of the term of the National Incomes and Pricing Commission (NIPC), completely ignoring the irrefutable proof of the absolute failure of price controls to curb inflation.

After more than a year, inflation has soared to a world record 9,2 million per cent!

All that price controls have achieved were to create scarcities, for businesses cannot survive without profits.

Unemployment

Instead, virtually the only source of essential commodities has been in the black market, at prices very markedly greater than would have been the case if available in the formal sector at market-force driven prices.

Concurrently, many businesses were forced to cease operations, whilst others had to downsize considerably.

The resultant was further massive unemployment, and severe contraction of the economy.

But Government is unwilling to recognise the facts, and instead constantly accuses the business sector of profiteering and exploiting the embattled populace, and threatens dire actions against alleged profiteers. (If the price escalations are machiavellian profiteering actions, presumably the first of government’s dire actions of retribution will be against its own Ministry of Home Affairs, which has raised the charge for passports to $1 trillion, and then against the State-controlled media, newspaper prices having risen over 10 weeks from $2 billion to $80 billion!

Thereafter government will undoubtedly focus upon its telecommunication services for their imposing equally great price increases, upon its health services for their increases in charges, and upon many other parastatals and other government departments.

Shame on them for profiteering and for so grievously afflicting the already sufferingpopulation)!

*Concurrently, last week, government announced that it had completed a “preliminary audit” which had identified that there were more than 400 companies in Zimbabwe with British shareholders, and over 300 other companies with shareholders in other European Union countries, and that in the event that threatened sanctions against Zimbabwe include mandatory disinvestment from those companies, government will immediately take over those shareholdings, either for facilitation of its Indigenisation and Economic Empowerment policies, or to sell to investors from “friendly countries”.

Immediate freeze

Not only is the statement devoid of any comment as to the basis, terms and conditions on which government will “take-over” the investments, but in addition it has undoubtedly motivated each and every one of those companies to put an immediate freeze on any further investment, development or expansion, and deterred the foreign shareholders from providing any lines of credit or other foreign currency support to their Zimbabwean companies.

Moreover, coming in succession after the mass and, in many instances, most unjust expropriation of farms, and the threatened expropriation under the Indigenisation and Economic Empowerment Act of other companies, this action sends yet another message to potential investors the world over that Zimbabwe cannot be trusted to respect
property rights and that, therefore,
Zimbabwe is not an acceptable investment destination.

The harm that government causes the economy through its dogmatic and obdurate contempt for the fundamental principles of economics, and its increasingly great disregard for justice and for international norms of integrity in business, and by its petulant and juvenile reactions to the statements and actions of those that it perceives to be Zimbabwe’s enemies, is achieving naught but ever-greater stress, suffering, malnutrition, homelessness and distress to the very people that government is supposed to care for and serve.

It is also triggering an ever-greater exodus of Zimbabweans to other countries, depriving the country of the very skills needed to achieve recovery and wellbeing.

 

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