Pondering a post-election Zim

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After months of arduous campaigning by incumbent Barack Obama and aspirant Mitt Romney, Americans this week went to the polls to elect their next president.

Report by Collins Rudzuna

Most observers contend that unlike the last presidential election, this one will probably be won by a very small margin. Traditionally, Democrats, to which Obama belongs, and Romney’s Republicans are considered to be driven by different ideologies, with the former being liberal and the latter conservative.

Colloquially, they are referred to as left or right wing, respectively. Pundits have already begun contemplating what the election of either candidate will mean for the politics and economy of the country.

Apparently, even investors are factoring the election outcome into their scenario analyses and making investment decisions based on that. Outside America, people are considering what relations with that country will be like under either one of the candidates.

The general feeling is that a Mitt Romney win will result in an administration which is more business-friendly. On the other hand, a Barack Obama win is expected to result in more support and funding for social programmes.

Whatever the case, we will soon know who will captain the American ship. Whether the winner will steer the country in the direction expected is anyone’s guess. Politicians are known for making a lot of unmet promises.

Closer to home it is a bit more difficult to try figuring out how politics will play out. For one thing, it is not even certain whether we will have elections and if so, when exactly they will be held. The constitution-making process is yet to be finalised, money for the election is yet to be availed and no clear official statement has been issued.

Yet talk of harmonised elections in March 2013 is heating up and, like the Americans, we cannot help but contemplate a post-election scenario for Zimbabwe.

Clearly, the government of national unity (GNU) cannot be a permanent solution. It was always an arrangement borne of compromise, an uneasy co-existence of politicians with polarised views. On this basis it is likely the GNU will soon be a thing of the past, one way or the other.

So, say an elections are held and the GNU is indeed dissolved, what are the key economic issues to watch out for?

One immediate concern would be the issue of outstanding debt owed by government to international financiers. Zimbabwe owes in excess of US$10,7 billion, approximately 109% of the forecast GDP for 2012.

Any potential growth is overshadowed by this huge debt overhang and whoever will lead the country must have a workable solution for resolving this debt position.

One probable solution would be to seek assistance under the International Monetary Fund’s (IMFs)’s debt relief programme for Heavily Indebted Poor Countries (HIPC).

Already, different opinions have been expressed across the political divide on whether this is the right route for Zimbabwe or not. Whatever position is taken on this issue in a post GNU Zimbabwe will go a long way towards determining the future of the economy.

Another key policy issue that an elected leader would need to address is indigenisation. There is pressure from different lobby groups for government to correct historical imbalances through indigenisation of the economy. No agreement has been reached on how to address this issue.

Currently, government has a policy where companies are supposed to cede 51% of their equity to indigenous people. Points open to contention include the principle of indigenisation itself; the definition of who is indigenous; and the way the programme is implemented. So far, the mining sector has been targeted more aggressively than other economic sectors.

Most recently, Anglo American Platinum’s Unki Platinum Mine completed a deal in which 51% will go to locals. As with other indigenisation deals in the mining sector, concerns have been raised as to how the acquisitions will be paid for and whether the new shareholders have capacity to put in fresh capital should it be needed.

More importantly, questions have been raised about the effect indigenisation has on potential investors.

As a capital-hungry nation, Zimbabwe is supposed to be going full throttle to attract foreign investment. We expect the approach to indigenisation to differ greatly depending on which candidate wins the elections.

The issues discussed above are but two examples of policy issues that a newly elected leader would have to deal with among a plethora of other matters that need urgent attention. Before one even gets to dealing with policy there are issues around the election itself that we have to get right.

In Zimbabwe, perhaps the process of the elections per se is just as important as the outcome. Ensuring that voting is peaceful is vital in gaining acceptance among local and international observers.

Also, ensuring a peaceful post-election period is of paramount importance.

If elections do take place next year, they will hopefully be peaceful and immediately widely accepted as free and fair, for the sake of the country.

After that we will then wait to see if politicians can deliver on election promises and put into place progressive policies.

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