HomeOpinionEric Bloch: Stating Fact, First Step Toward Cure

Eric Bloch: Stating Fact, First Step Toward Cure

SHORTLY after the Zimbabwean “inclusive government” came into being 92 days ago, the newly appointed Minister of Finance, Tendai Biti, announced that Zimbabwe’s most critical financial needs amounted to US$8,3 billion.

Such funds would not meet all Zimbabwe’s great economic recovery requirements, but would significantly address some of the most urgent of them.

He did not conceal the intensely impoverished state of the Zimbabwean government, and that whilst every endeavour would be made to generate revenues for the fiscus internally, whatsoever could be raised would, in the short-term, be insignificant in extent, as compared to that required.

Government’s gross lack  of funds was (and is) of such magnitude  that it cannot  pay barely  reasonable salaries and wages to the public service, inclusive of teachers, police, army, healthcare service workers,  and innumerable others.

When such a basic  ongoing funding  commitment cannot  be serviced, then even more  so government  cannot  fund the humanitarian  aid and social welfare needs of more than seven  million  of Zimbabwe’s distressed population, let alone  meet the  immense costs that must be sustained  in reasonably restoring   the intensely debilitated infrastructure.

Monies are needed for rehabilitation of healthcare facilities, schools, water procurement, purification and distribution, electricity generation and supply, telecommunications, roads, rail and air services, and much, much else. Government simply does not have the money to do even the very slightest element of this long overdue, vitally essential expenditure.

Recently Prime Minister Morgan Tsvangirai corroborated Minister Biti’s statements of Zimbabwe’s chronic fiscal needs.  He publicly admitted that government is “bankrupt”. Although that state of affairs has prevailed for some considerable time, it is the first time that any in Zimbabwean political authority has been prepared to admit to, and acknowledge, this deplorable circumstance.

Ultimately, neither acknowledging its grievous fiscal mismanagement, nor doing anything substantive to contain it, it resorted to imposing endless quasi-fiscal operations upon the Reserve Bank, knowing that the central bank could generate the funding by promiscuous printing of money.

That the consequences of doing so would be exacerbation of pronounced hyperinflation, concurrently with further destruction of Zimbabwe’s then already very tarnished international image was of no concern to those in power. They just had to spend, spend, and spend some more!!

But chickens always come home to roost, and  ultimately, albeit with extreme  reluctance,  and with bravado  misrepresentation  that  it was prescribing  central bank discontinuance of operations allegedly  usurped by it,  but which it had never wished to engage in, government had no choice but to resume the responsibility for quasi-fiscal activities. 

The hyperinflation  triggered  “dollarisation”  of the economy precluded continuing recourse  to unsupported money printing, and there were no longer enriched foreign  currency accounts to  “borrow”  from  (although  without concurrence  of the victimised “lenders”).

So  the state had to assume responsibility  for  the quasi-operations, and yet doing so  is in practice  an impossibility, for it does not even have the funds for its basic  fiscal outflows, let alone for quasi-fiscal ones. Hence, the new government  has had no alternative but to admit publicly to that which has long been known to, but denied by, its predecessor, and in the full knowledge of the international  community, the financial sector,  economists, and  many others.

Acknowledging an ailment is the first step towards curing it, even if only a very small step, and Prime Minister Tsvangirai and Finance minister Biti must be commended for courageously doing so.  That commendation is especially deserved in that they have done so very factually, without seeking to gain political advantage by resorting to recriminatory and castigatory denigration of those whose indisputable culpability caused Zimbabwean fiscal bankruptcy. Instead, they have confined themselves to stating facts, and by focusing upon ways of healing the nationally disastrous fiscal ills.

To a material, but not total, extent, government has to curb expenditure, including reducing the vast outflows attributable to fiscal abuse, intemperate expenditures, and widespread corruption.

But both of those actions cannot suffice, for the gap between essential needs and available resources is so great as to be unbreachable by those measures alone, and will remain so until there is a very marked improvement in the economy. In consequence, government is presently not even able to pay anything above token salaries, be it to the public service in general, or even to its ministers.

Civil service morale is at an all time low, worsening yet further the renowned lack of productivity of the public service, and stimulating an endless exodus of skilled personnel to the private sector in general, and beyond Zimbabwe’s borders in particular.

Understandably, the international community is confronted with a major dilemma. On the one hand, despite its own constraints, due to the prevailing global economic recession, it’s anxious and willing to assist Zimbabwe’s economy recovery. On the  other hand,  it is very  understandably  concerned  that any  funding  provided  will only be used  for agreed  purposes,  as distinct  from diversion  and abuse,  which was  a very frequent  occurrence  in  the past.

It is also deeply concerned that the slow but positive developments since the conclusion of the Global Political Agreement (GPA) will continue, and accelerate. The past has been so greatly characterised by governmental duplicity, self-protection and beneficiation, that fears of recurrence thereof are inevitable.

This is especially so because  of the many instances  of Zanu PF in general, and it’s  hierarchy in particular, have as yet  given only  lip-service to the GPA,  complying  superficially only with  many of its provisions.

Until the disputes over appointments of Permanent Secretaries, Provincial Governors, and others are resolved, until Roy Bennett is belatedly sworn-in, as Deputy Minister of Agriculture, until farm invasions are wholly discontinued, until human and property rights are fully respected and the principles of justice, law and order fully complied with, and much else, international cynicism, scepticism and caution and wariness is inevitable.

However, for the sake of the desperately suffering Zimbabwean people, and to maximise prospects of success for the inclusive government, followed by transition to a genuinely free and fairly elected, democratic government, it is vital that the international community very urgently accelerate and intensify financial support for Zimbabwe.

Over recent weeks there has been a slow escalation of that support, including last week’s grant of a US$250 million line of credit by the African Export and Import Bank and an amount recently of US$400 million from Sadc and Comesa (and a derisory, near insulting US$10 million from China). But the total of funds received and pledged   to date is not yet even 10% of the most essential needed.

The International Monetary Fund resumption of technical assistance  is very positive, but its funding,  as that from the Word Bank,  European Investment Bank and many others,  are prerequisites  if Zimbabwean recovery, and progressive restoration of basic essentials  for survival of the Zimbabwean  people,  are extremely urgent essentials.

Tribute is due to many donors of humanitarian aid, but rapid and meaningful governmental funding and developmental aid are as necessary if Zimbabwean humanity is to be saved. Otherwise malnutrition, ill-health and deprivation will see the continuing decimation of the Zimbabwean people.


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