HomeOpinionMDC-T’s Juice: Old wine in new bottles

MDC-T’s Juice: Old wine in new bottles

AFTER spending three years in government without its own party economic blueprint but deploying unprecedented energy towards vilifying Zanu PF’s indigenisation programme, the MDC-T has exposed its policy dysfunction with the recent launch of a much-trumpeted, but vacuous document.

Opinion by Tafadzwa Musarara

The economic blueprint Jobs, Upliftment, Investment, Capital and the Environment (Juice), lead-authored by High Court-declared insolvent businessman, Eddie Cross, and UK-based consultant, Lance Mambondiani, is a poor attempt to duplicate current government economic policies under the guise of new terminology.

The entire document is replete with inaccuracies and outright plagiarism of other current economic blueprints, especially the government’s Medium Term Plan (MTP). It is a case of old wine in new bottles.

First, it is difficult to believe MDC-T’s commitment to deliver on its economic policy which is based on investment devoid of government intervention. In his recent usual rhetoric entitled “My Crystal Ball”, Cross said: “The MDC would announce a small government — a cabinet of 20 ministers with 18 ministries. The president and the cabinet would be sworn in and would immediately begin a complete overhaul of the state administration. Marange diamond fields would be nationalised and all existing operators expelled.”

Did I hear nationalisation here? Let me now interrogate the document further. The entire premise of the blueprint is that of jobs. Prime Minister Morgan Tsvangirai makes this very clear in the foreword to the document. It is the be-all and end-all. He argues that what Zimbabweans need are jobs, hence his economic plan is to deliver jobs to all Zimbabweans.

It is through jobs that Zimbabweans will be empowered, he argues. This argument is fundamentally flawed. It takes the Zimbabwean away from the job creation process, which is the ownership of the means of production through which jobs are created. The Zimbabwean becomes part of the means of production and not the ownership, a position consistent with settler-colonial capital.

The blueprint is anti-indigenisation and empowerment, referring to this programme as looting and asset stripping. It asserts that current empowerment policies are meant to enrich the elite and politically connected without proffering any evidence to this end.

Current empowerment transactions expose this fallacy and contradict this assertion as there is no evidence that a few elite have benefited from these deals. It has mainly been management, employee share ownership schemes, community share ownership trusts as well as the National Indigenisation and Economic Empowerment Board (NIEEB) that have been the beneficiaries of these schemes. NIEEB is warehousing these shares until the creation of an indigenous stock exchange to allow participation by ordinary citizens.

There is little or no evidence of capital flight in response to indigenisation for those firms that have already invested in Zimbabwe. If anything, there is commitment to increase investment especially in the resource extraction sector as well as new entrants.

Indigenisation transactions such as at Zimplats have been by way of vendor financing, thus offering value to prior investments.

Strangely, one of the objectives of Juice is “restructuring the ownership and control of the economy through a broad-based economic empowerment programme”, which is an acknowledgement of the need for indigenous participation in the economy through ownership of the means of production.

But Juice then goes on to claim that this will be achieved through training, supporting SMEs, formalisation of the informal sector, job placements, etc. This is totally absurd as ownership and control can only be achieved through the vehicle of capital.

The MDC-T must realise that local ownership of capital is a global phenomenon irrespective of which country one is in. Nearly every country has restrictive ownership thresholds in most sectors. This is meant to allow local capital formation and retention. One can argue about thresholds, but not the principle. Any other careless option will leave countries at the mercy of foreign capital and ultimately foreign political influence.

In the United States, Dubai Ports had won the right to manage huge American ports, but this attracted the ire of locals who felt that they were giving up their sovereignty and security to foreigners. The indigenous people won.

Juice is content on having local Zimbabweans as employees of foreign multinationals with limited participation in ownership. Although it purports to advocate local ownership through developing local enterprises, it negates the ownership resident in local resources, thus granting local indigenous people access to capital.

Juice acknowledges that one of the key drivers of economic growth is increased and sustainable agricultural production. However, the conduct of the MDC-T in government and the Finance minister in particular display a scant regard to this notion.

Last year, Biti promised that he would provide for US$20 million towards winter wheat farming. To date, no dime has come out of Treasury. The party has not been vocal and enthusiastic in championing funding to this critical sector. Funding for inputs have been low and erratic and at times reaching the beneficiaries late to be effective.

The policy is very suspect on the land reform beneficiaries and the fate of former white commercial farmers. It does not address the irreversibility of the land reform and future ownership patterns. Any future agricultural policy in Zimbabwe must focus on how to underpin and consolidate the agrarian reform through land tenure and creating a sustainable agricultural sector through access to funding and extension services.

According to the MDC-T’s own research, formal employment peaked at 1,35 million in 1998 from about one million in 1980 under a Zanu PF government then dropping to just under one million in 2010, close to the 1980 levels.

It acknowledges the massive growth of the informal sector in the last 20 years which accounts for the absorption of jobs lost in the formal sector and population differentials between 1980 and 2010. There hasn’t been major movement in formal employment numbers in the 30 years since Independence on a net basis. The informal sector has absorbed additional entrants in the employment market.

Juice contains serious inaccuracies in the employment figures, especially in the agricultural sector claiming only 20 000 people were employed in the agricultural sector in 2008, but also asserts that 150 000 were employed in this sector in 2010! There is no explanation of this sudden leap in numbers.

Any future economic policy by any political party must pay close attention to sustainable job creation through growing the economy and encouraging capital formation by way of cultivating local savings and FDI. Jobs allow new entrants into the money economy and help to expand the local market.

The party claims that it will create one million jobs between 2013 and 2018 based on an annual economic growth rate of 8%. Given the industrial automation, the figure is unreal, as it cannot be achieved in such a short space of time while the leading Western economies’ employment figures are heading south. This is fuzzy mathematics considering our current GDP numbers.

It is clear that Juice is an attempt to repackage current government programmes and cannibalise policies from all over the world. The policy is highly repetitious and contradictory on a number of points. The blueprint is very economic on numbers and makes sweeping claims of what is to be achieved without answering how this will be achieved. It is more of a political statement on the perceived shortcomings of Zanu PF than a cohesive and lucid economic blueprint. There is very little in it in terms of empirical evidence to bolster the policy conclusions.

Musarara is the chairperson of Resources Exploitation Watch.

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