Comment: Pro-poor Budget Step in the Right Direction

FINANCE minister Tendai Biti on Wednesday tabled in parliament the 2010 National Budget which can be broadly described as regenerative.

The Budget was announced a year after the signing of the global political agreement between Zanu PF and the two MDC formations and the subsequent formation of the inclusive government in February which gave a much-needed boost to confidence in the country.

 

The official introduction in January of multi-currencies in the country’s payments system saw the economy slowly and painfully emerging from a vegetative state.

The economic “little green shoots”, to use Biti’s language, must be nurtured and the momentum for growth and stability must continue to rise next year.

This can only be achieved by a stimulative budget like the one Biti announced on Wednesday.

By definition a National Budget is a plan of revenue and expenditure that provides the development priorities of a country.

Given the global economic crisis and that Zimbabwe had just emerged from a bruising internal political conflict, Biti crafted a growth-oriented Budget framework which should be implemented to the letter if the country is to sustain the recovery momentum.

Biti told the House that his US$2,2 billion Budget was meant to “save the drowning vulnerable and poor groups” by developing and creating a functional economy capable of consolidating the Short Term Emergency Recovery Programme objectives, generating adequate investment in the country’s productive sectors as well as infrastructure and guaranteeing improved delivery of public services.

The 2010 National Budget, the minister said, would deal with the challenges through a vehicle he termed Reconstruction with Equitable Growth and Stability. In short, he said, “a pro-poor broad-based and inclusive development framework”. The budget puts strong emphasis on education, health, and social services and the continuation of “a strict and disciplined macro-economic stabilisation” programme.

The harsh macro-economic environment, which was the order of the day in the past decade, compounded the vulnerability of the poor. This was worsened by the scourge of HIV and Aids that has claimed many breadwinners leaving children wallowing in abject poverty under the custody of grandparents.

Speaking on social protection programmes in the budget, Biti said the HIV and Aids pandemic has seen an increase in child-headed households where elder children are forced out of school to look for jobs so that they can look after the needs of their siblings. School dropouts up to grade five are at 38% detrimental to the country’s developmental goals and objectives.

In response to this, Biti allocated US$23 million towards social protection programmes run by the Ministry of Labour and Social Welfare.

The vote would go towards supporting 160 000 secondary school students under the Basic Education Assistance Module (Beam) basing on US$30 a term.

Cooperating partners of Beam have committed US$25 million earmarked to support 625 000 primary school-going children.

“This level of support bears testimony to the goodwill our cooperating partners have towards the people of this country. The rest of the allocation is targeted towards supporting the disabled, the elderly, and the chronically ill and other vulnerable groups under various programmes.

Biti should be commended for coming up with broad-based policies that mitigate or minimise the effects of the global financial crisis on the vulnerable and marginalised sections of society.

The parliamentary portfolio committee on the budget, finance and investment promotion had proposed to Biti that he adopt a pro-poor and gender-sensitive National Budget framework placing emphasis on labour intensive strategies to absorb the large reserve pool of labour, while at the same time promoting macroeconomic stability to protect incomes.

Robust growth must be translated into employment growth which is the key nexus between growth and poverty reduction. The key pillars of this growth are infrastructure development, export promotion, investment social investment.

Economic growth on its own does not necessarily ensure poverty reduction. It only leads to poverty reduction when accompanied by rapid growth of productive and remunerative employment. Most countries that have succeeded in reducing poverty have followed strong employment- creation policies.

“Heavy investment in the human capital of the poor will yield two benefits on poverty reduction,” the portfolio committee said. “It will increase economic growth and it will make growth more pro-poor. In the High Performing Asian economies, high human capital accumulation spurred economic growth and poverty reduction”. So did family savings which there is no sign of here. Zimbabwe clearly has a lot of work to do to catch up with its Sadc neighbours. Biti’s Budget at least provides a start.

 

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