He says Biti faces two types of problems — those that lie outside budget instruments like limitations associated with political reforms and low implementation capacities in government and those that the budget can address — reducing opportunities for arbitrage in the economy, tackling unemployment through economic growth, supporting the recovery of human capacity and improving budget management.
Apart from problems, Lenneiye said Biti needs to negotiate carefully and conjure some magic trick to make everyone happy.
But like his first fiscal policy last year, his second is fraught with the same problems as his first. Biti has budgeted about US$2 billion for 2011. Last year, Biti had hoped the international community would chip in with US$800 million. But as the year progressed, it became clear the international community would not loosen its purse strings.
Also problems in the unity government could have contributed to the unavailability of budget support.
And nothing has changed on the ground to change the international financiers’ position. If anything, disagreements have intensified among the three principals — President Robert Mugabe, Prime Minister Morgan Tsvangirai and Deputy Prime minister Arthur Mutambara. Except for health, international donors and financiers are not keen to part with their money when it comes to Zimbabwe and understandably so.
Although government’s revenue collections have improved slightly, it is still not enough to bring smiles at most of the ministries.
But Biti has taken all sorts of ridiculous demands within his stride. A consultative meeting in Bindura all but confirmed detachment from reality and general lack of appreciation of the problems facing the economy.
After quantifying demands of various groups in that town alone, Biti says the figure came to US$8 billion. Now, that is just Bindura.
Such a demand to a treasury that struggles to make a billion in revenue annually is just plain ridiculous. It would seem all and sundry, are cognisant of the problems bedevilling the economy and making such demands is unreasonable. This demonstrates that there is a high level of both arrogance and ignorance
Against such a background, where capacity utilisation and revenue collection are low, there is little Biti can do this year that is different from last year. And it is expecting too much to hope that government ministers will cut back on travel expenditure when even President Mugabe himself takes 100 people on an international trip. Unless government cuts back on unnecessary expenditure, the little resources available will be put to waste.
Indeed it’s mission impossible for Biti.