HomeOpinionEric Bloch: Looming Zim economic tsunami

Eric Bloch: Looming Zim economic tsunami

LAST week a spokesman of the South African government, Themba Maseko, advised that their cabinet had decided that the special dispensation accorded Zimbabweans, enabling residence and employment in South Africa without compliance to normal immigration processes would cease with effect from the end of December 2010. 

He said that any Zimbabwean without a valid temporary or permanent residence permit or work permit will be deported back to Zimbabwe.
The International Organisation of Migration estimates that there could be as many as 3,5 million Zimbabweans in South Africa.  If this estimate is substantially correct, it is probable that from year-end between 1,5 and two million Zimbabweans are likely to be deported back to Zimbabwe.  The consequences upon an already  strained economy will be immense and  extremely negative.
Some of those who return to Zimbabwe will be highly skilled and greatly needed. This will be good for the economy.  However, the number of skilled people who will be deported from South Africa will undoubtedly be relatively few, for most skilled Zimbabweans  are presently  in formal employment in South Africa. South African employers will have demanded sight of requisite South African residence permits before granting that employment.  Therefore, the boost to the Zimbabwean skills’ resource will be limited.
In  contrast tothat one  advantage,the prejudices to the economy will be extremely great.  An overwhelming majority of the Zimbabweans who fled to South Africa did so to earn incomes to support their impoverished families.   That support was partially by remittance of funds, and partially by provision of essential commodities.
If, on average, each gave only US$50 per-month of support, in cash or in kind, then the two million likely to be returned to Zimbabwe will have represented  US$100 million of inflows of cash and goods each month, albeit  much of that will have been received via informal channels.  As a result, a very great number of the intensely impoverished in Zimbabwe, estimated to exceed eight million, will be  destitute, struggling to survive at levels far below the poverty datum line and confronted with intensified hardships.
Moreover, whilst a significant portion of the cash inflows from abroad have been expended across the border, thereby being re-externalised from Zimbabwe, substantial amounts were utilised within the country, and as the monetary inflows diminish, there will be pronounced negative repercussions upon both formal and informal sector trade volumes, with knock-on diminution of demand upon the outputs of the manufacturing sector. 
Not only will that further impair the viability of many Zimbabwean enterprises, but it may also become a stimulus for further unemployment in Zimbabwe.  Concurrently, the decrease in trade will have adverse repercussion upon revenue inflows to the fiscus.
The negative impact upon the fiscus will also be intensified by a loss of customs duties and other import imposts on the goods sent by those abroad to their families at home.  Whilst it must be assumed that considerable volumes of such goods enter Zimbabwe unlawfully, without being subjected to those imposts, and some of them benefit from duty free allowances, others have attracted the diverse importation charges, and hence a sharp diminution in inflows of goods from Zimbabwe abroad will result in a fall in fiscal revenues.
Yet another negative consequence of the forthcoming South African deportations must be a surge in the already relatively high rate of crime in Zimbabwe.  Most Zimbabweans are inherently honest, but when children are crying from hunger, even the most honest turn in desperation to crime.  To a very great extent, those forced to return from South Africa will be unable to obtain employment.
Whilst there has been economic upturn in the Zimbabwean economy since the horrendous days of 2008, nevertheless the economy remains a very weakened one, and especially so when government foolhardily undermines the slowly-progressing economic recovery with catastrophically abysmal policies in 2010. 
These included the disastrously destructive and counterproductive Indigenisation and Economic Empowerment Regulations, and the ill-considered new legislation governing the mining sector. 
These policies, concurrently with failure to implement fully the global political agreement, and recurrent inflammatory statements of hatred for Western countries have disastrously alienated potential investors, decimated business confidence, and precluded access to international lines of credit and to developmental aid. 
The ever-deteriorating service delivery of parastatals has further precluded continuance of economic recovery, and has triggered the reversal of the 2009 economic gains.As a result, the returning Zimbabweans from South Africa, together with those who are having to return from the United Kingdom will find life difficult in Zimbabwe.
As they then become increasingly poverty-stricken, and their needs and those of their dependants intensify, many will either seek to return to South Africa or the United Kingdom, or to enter other countries, notwithstanding that they will have to do so unlawfully.
But very great numbers will not be able to do so, and therefore will, in desperation, turn to crime.  In so doing, it must be presumed that many will seek to emulate the crime methodologies and tactics which have become very pronounced in South Africa, inclusive of armed robberies, car hijackings, and the like. 
The consequences   of such crimes  will be  adverse.  They will include decline in tourist arrivals, decline on the part of potential investors  in Zimbabwe, losses for those business enterprises falling prey to the criminals, and yet further emigration of the skilled  people that Zimbabwe desperately needs.
One cannot blame South Africa for its intended actions against the Zimbabweans, for it must first and foremost protect its nationals, its economy, and the wellbeing of all South Africa’s interests. 
However, the adverse economic repercussions on Zimbabwe will be of such magnitude that the only possible perception of last week’s announcement by the South African government is that Zimbabwe is facing a looming economic tsunami.

 

By Eric Bloch

Recent Posts

Stories you will enjoy

Recommended reading