Eric Bloch: First Real Steps to Economic Recovery

HAVING for long experienced governance that ignored realities required to assure a viable and growing economy and providing substantive sustenance for the population, almost all Zimbabweans were increasingly convinced that the devastated economy was beyond redemption.

With rare exception, Zimbabweans subjected to intense and increasing poverty and hardships developed a conviction that not only did government have neither the will nor the ability to reverse the gargantuan economic ills, but that government had so grievously destroyed the economy that a virile, vigorous economy could never again come into being.

Instead, almost all had such deep-seated perceptions of perpetual suffering with intense doom and gloom, pessimism and negativity. This developed to such a great extent that all uncorroborated rumours of bad news and further adversity were immediately accepted as fact, whilst if there was any good news, it was immediately dismissed as misplaced optimism without any foundation.

The tragedy was that in so doing, the government-created economic catastrophes were exacerbated and intensified, for the absence of businesses, investor and public confidence is the enemy of economic wellbeing, its maintenance and continuance.

Although inevitably the doubting Thomases are still an overwhelming majority, some are now recognising that, at last, some real steps are being taken towards reversing the eleven-year long economic regression.

Admittedly, with over seven million Zimbabweans struggling to survive on incomes far below the Poverty Datum Line, over 90% of the employable population without formal sector employment, with the educational, health care, energy generation and supply and other essentials of a national infrastructure teetering on the precipices of total collapse, all would wish the real steps to recovery to be rapid and extensive.

But, at least, after more than a decade of blatant disregard for economic necessities, some very important actions are finally, very belatedly, being taken.

The first small but nevertheless important step was the coming into being of the “inclusive government”.

Although that is a compromise, patchwork substitution for that which should be democratically created by the electorate in a genuinely free and fair determination, it is a small, tentative step towards reestablishment of democracy in Zimbabwe (and the president has already acknowledged that elections should be held before the end of 2010).

Of greater importance is that, subsequent to the creation of the inclusive government, there have been some significant policy moves.

Of utmost importance is that Zimbabwe reconciles and interacts constructively with the international community, instead of constantly reviling it. It is therefore significant that the Short Term Economic Recovery Programme (Sterp), launched officially last week by President Robert Mugabe and extensively encompassed in the Budget Review Statement of Minister of Finance Tendai Biti last week “recognises that the foundation for a new Zimbabwe needs to address… the rule of law, crafting of a new, people–driven constitution, restoration of property rights, restoration of political legitimacy, freedom and liberties, opening up of the media, as well as the restoration and reintegration of  Zimbabwe into the community of nations.

“Furthermore, it is trite that without a well functioning economy, democracy and human rights are impossible and equally, without a well functioning democracy, economic development is impossible.”

It is significant that Sterp is promoted by the inclusive government as a whole, as evidenced by the president’s launch thereof, and Minister Biti’s extensive positive motivation of the programme in his Budget Review Statement, for unless there is governmental unity on the pursuit of the programme it has no prospect of success.

Of even greater significance is that President Mugabe, his wife Grace, vice-president Joice Mujuru and others of the Zanu PF hierarchy have suddenly vigorously called for a total cessation of political violence and of unauthorised farm evictions.

Similarly, it is intriguing to note the extent that those that have recurrently vilified the international community have now not only desisted from doing so, but also are publicly pleading with that community for support and assistance in bringing about economic recovery.

In addition to some pronounced changes to, or modifications of, precious racially, tribally and politically–driven policies, government is taking some important actions to enable economic recovery and development to occur. Some of the most important of such actions include:

lReduction of budgeted state expenditure in 2009 by US$900 million, and instead an intended pursuit of a “what we gather is what we eat” policy;

lRemoval of mandatory surrender of foreign currency obligations from exporters and other foreign currency generators, thereby contributing to restoration of export and business viability;

lIntentions of completion of the land audit, followed by constructive restructuring of the land reform programme, inclusive of assurance of land tenure security, so as to achieve real recovery and growth in agricultural production;

lBringing about mining sector revival through various measures, including actions “to ensure that international commodity prices are levied and received by mining houses”, concurrently with enhancement of the framework for the marketing of all minerals, and with a review of mining sector taxation of royalty levels “in line with international practices”;

lRecognition that, for the foreseeable future, the Zimbabwe dollar has become moribund, it being a currency that the public and trader will not accept, and pursuant to that recognition, the revocation of S.I.5 of 2009, which prescribed duality of currencies.

On March 20 the Minister of Energy Elias Mudzuri announced a substantial downward revision of the grossly-excessive tariffs applied by Zimbabwe Electricity Supply Authority, which were potentially of major prejudice to the viability of commerce, industry, mining and other economic sectors, and a source of extreme hardship for the populace in general.

These are just some of many other recent measures which the inclusive government in general, and Minister Biti in particular, must be commended for, albeit that had Zimbabwe previously had good governance, such measures would not have been necessary.

Economic recovery will inevitably be long and slow, but at least it is now, at best, commencing, and it can well be accelerated if international support is speedily forthcoming.

The first step to such support must be the discontinuance of economic sanctions, including the US’s Zimbabwe Democracy and Recovery Act, although it may understandably be considered necessary to continue, at this stage, with sanctions targeted at specific individuals.

BY ERIC BLOCH

Top