Further actions key to economic recovery

LAST week I mooted the key New Year’s resolution required of President Robert Mugabe, his ministers and all MPs and senators, as well as the public service, was to take urgent and constructive actions to ensure Zimbabwe attains economic recovery. These actions would also assure continuance of the resultant recovered, vibrant economy.

Opinion by Eric Bloch

In amplifying this, the column detailed many of the necessary actions which would bring about the desperately-needed recovery of the decimated economy, and undertook to detail additional actions which are prerequisites to the attainment of a robust economy.

Among the actions key to achieving comprehensive economic recovery, and to assuring continuance of such a revitalised economy, are:

  • Pronounced containment widespread corruption in both the public and the private sectors. Zimbabweans, with very few exceptions, are inherently honest and law-abiding. But when their children are crying from hunger and malnutrition, even the honest become dishonest if they can perceive no other way of funding for their children’s needs. Moreover, when they witness that some in government who clearly led humble lives prior to attaining high office have become very wealthy, the assumption that such wealth accumulation could only have been possible by corrupt practices is inevitable, and perceived as a justification for the impoverished to resort to similar actions.

The intensity of corruption in Zimbabwe has been, and continues to be, a major hindrance to economic wellbeing. On the one hand, it is a major contributant to the considerable ongoing deficits of government, resulting in the fiscus raising direct and indirect taxes. On the other hand, it erodes the state of the funding required for infrastructural development and maintenance, and for the provision of essential services, including education and health. It is also one of the several major deterrents to Foreign Direct Investment (FDI), and corruption intensifies the operating costs of businesses, stimulating losses and recurrent price increases.

  • Yet another essential, and most urgent, requirement for attainment of major economic upturn is a categoric and strongly convincing government reassurance that Zimbabwe will not reinstate its own currency, and that it will continue the presently operational multi-currency system until such time as there is indisputable and entrenched economic stability, recovery and growth. Until such re-assurances are forthcoming, and so delivered as to be convincing, a majority of the populace will, together with many businesses, refrain from the utilisation of banking services, instead hoarding their funds in their homes and their businesses. The result is a very weakened banking sector, with minimal funding available for lending to economic operations, thereby constraining the viability and operational continuance of private sector enterprises, and being yet another deterrent to FDI. At the very earliest, dependant upon the pace and continuance of economic recovery, Zimbabwe cannot justify reversion to an own currency until 2015, and this has to be stated convincingly by government.
  • Also necessary for comprehensive and secure economic recovery is that the government works constructively towards achieving reconciliation with the international community, instead of focusing exclusively on Far East and some Middle Eastern countries. Such a reconciliation is a prerequisite to attracting FDI, obtaining substantive lines of credit, rescheduling of Zimbabwe’s national debt, a degree of debt-forgiveness and enhanced international trade. Endless government castigation of Western countries for allegedly “illegal” sanctions, and other negative criticisms and attacks upon many Western countries not only hampers Zimbabwe’s greatly and desperately needed economic recovery, but strongly hinders such recovery.

Concurrently, those repetitive castigatory attacks by Zimbabwe’s political hierarchy also obstruct the populace from being aware of the real causes of Zimbabwe’s economic ills occasioned by government, and therefore there is little pressure by the electorate upon government to mend its economically-destructive policies and actions. They also detract from achieving the high demand for Zimbabwean exports which would otherwise exist.

  • Another key issue that must be urgently addressed, as part of an array of actions required to ensure economic recovery, is a constructive revision of Zimbabwe’s presently one-sided (in favour of labour) labour laws, and vigorous efforts to restore harmony and good labour relations between employers and workers. Labour legislation is essential, but must be just and fair for both the employers and labourers, instead of being pronouncedly one-sided in favour of the latter.

The negative labour relations that prevail widely in the Zimbabwean economy impact grievously upon productivity and upon product and service quality, and hence cause recurrent price increases and, in many instances, business failures. They also constitute a deterrent for many would-be employers from increasing the numbers that they employ. The low levels of productivity also impair enterprises’ ability to be competitive in export markets.

  • As stated in this column last week, one of the incontrovertible prerequisites of a meaningful economic recovery is an unequivocal demonstration to the populace and world at large, and especially to potential foreign investors, that Zimbabwe has political stability and absolute democracy. To such end, the forthcoming elections must be irrefutably free and fair, and devoid of violence. Not only must that be so, but it must be seen to be so, and therefore there must be major oversight of the conduct of the elections by extensive international observers with undoubted credibility.

Preceding such elections, there needs to be transparent revision of the voters’ roll, including reinstatement of voting entitlement of Zimbabweans in the diaspora, with postal vote facilitation. And, importantly, there should be no involvement in the elections by the army and police, save and except for ensuring voter security.
Inevitably, many other actions and policies are needed to assure continuing and substantial resurrection of the economy, those detailed in last week’s column, and above, being only some of the key ones needed. If government would, albeit belatedly, now implement a New Year’s resolution encompassing all these policies and measures, Zimbabwe will progressively regain a vibrant economy, and will markedly reduce the widespread poverty, hardships and suffering of many Zimbabweans.