HomeAnalysisSalvaging Zimbabwe’s economic dividend: Part I

Salvaging Zimbabwe’s economic dividend: Part I

Zimbabwe is months before holding the landmark 2018 general elections. This discussion poses the question: how significant are economic issues in influencing national leadership choices in the coming polls?

By Masimba Manyanya

What are the leading economic arguments in the forthcoming contest? Human development is increasingly perceived and defined in terms of the “power to influence destiny”.

At the levels of the individual, “human development” refers to virtually moral categories that may not perhaps be readily quantified or evaluated; but these include skill and capacity, freedom, creativity, self-discipline, responsibility and material well-being. When the entirety of humanity is equipped with the capacity, or power to fight for survival against natural hazards, hunger and disease, to ensure protection against real or imagined enemies, or to advance the cause of human freedom, the essence of “human development” will have been realised. It is on the foundation of these values, principles and goals that economic development programmes are influenced or shaped.

With the turn of the 21st century, various theories also converge on the view that development is a process that begins with, and ends with humanity.

Different theories define the origin of human development.

According to classical, neo-classical, historical and dependency theories, the economy is a lynchpin of human development, and human societies develop economically as the members of those societies jointly increase their capacity for dealing with the environment.

Historically in Africa, the original home of humankind, human society displayed growing capacity to not only extract a living from nature, but to also dominate it and seek to direct it towards the multiple needs of humankind.
Overall tendencies were towards socialisation, and increased production. Political economist Walter Rodney (1973, 1983) helped establish an important premise, when he stated in How Europe Underdeveloped Africa (1973), that “. . . the capacity for dealing with the environment is dependent on the extent to which (humanity) understands the laws of nature (science), on the extent to which they put that understanding into practice by devising tools (technology), and on the manner in which work is organised.”

The deteriorating economic and social situation mirrors the African state of gross human deprivation, inequalities, conflict and insecurity. The country is trapped in the same salient features and contradictions that have, over the past decades, characterised the rest of the African continent.

Zimbabwe is trapped in one intense struggle for human survival, and a sustainable economic policy solution has become an urgent necessity. It is a human development crisis of immense dimensions, but paradoxical in essence as well.
The country’s crisis is a paradox, firstly, in the context of the country’s fairly abundant land, mineral, forestry and other natural resource endowments.

It is again a paradox in the context of a world registering unprecedented advances in technology, educational development, policy research and knowledge management sciences.

In 2017, humanity is certainly at an advantageous or strategic position with critical information, knowledge and important insights for humanity to prevail in mapping out policy solutions with which to tackle the world’s development challenges.

Otherwise, in the context of such resource endowments, knowledge systems, markets, or advantages, the persistence of economic crises such as Zimbabwe’s will remain a testament to human failure of gross proportions.

The position adopted here is that the world has adequate information readily available, from ongoing research, to address pertinent development policy needs and concerns, including the spectrum of economic policy challenges such as this nation faces.

The difference lies in the political will to implement economic proposals. Over the past three decades since the country’s attainment of political Independence in 1980, countless research studies have been carried out on Zimbabwe’s development prospects by local, regional and international organisations, and various policy proposals have been presented.

Investigations by various entities have resulted in large volumes of economic information and knowledge for policymakers, which leaves them with a fairly simple task: which is to select the most cost effective methods of addressing development challenges their countries face.

Evidently, the entirety of Africa should not be facing the same challenges the continent faced five decades ago, in the 1960s because the cost of accessing, or perhaps developing policy information has been significantly reduced, if not eliminated.

The principal challenge for policy makers in this age, is the assemblage of information, the analysis and selection of development policy options.

Through the 1950s, 60s to the 70s for South Africa, the African experience with colonialism and apartheid was characterised by differential population access to basic goods and services, poverty, inequalities, injustices and other heinous crimes against humanity.

But the much-anticipated economic turnaround failed to materialise in invariably all African countries that became politically independent.

For most cases, economic growth in the post-independence period was inexorably less than in the pre-independence, colonial period.

As population growth surpassed economic growth, poverty and human insecurity worsened over the decades. Thus with the turn of the 21st century, a “millennium divide” now separates an industrialised and rapidly advancing world on the one hand, and a stagnating, regressing and impoverished world on the other.

The irony of present trends is also, however, in the gross reality of paradoxes.

Firstly, in 2017, 70% of the world’s 7 billion people live in deep human poverty and misery, but in regions of the earth that are endowed abundantly with land, mineral, forestry and other natural resources.

Africa is comparatively better endowed with some of the world’s richest natural, land, mineral, forestry and oil resources. Different studies indicate that Africa has in its substrata 10% of the world’s deposits of natural resources.

These studies further confirm that in 2017 one hundred (100) multinational companies control more than US$1,05 trillion worth of African resources in just five commodities: oil, gold, diamonds, coal, and platinum.

The resources include 6,6 billion barrels of oil, (valued at US$276 billion ), 79,5 million ounces of gold (US$134 billion), 699,3 million carats of diamonds ($134 billion), 3,6 billion tonnes of coal (US$216 billion), 287 million ounces of platinum (US$305 billion), as well as vast quantities of gas, copper, cobalt and silver.

Thus, in 2017 more than 500 million people, (in excess of half the total African population), live on less than US$1 per day, average life expectancy at birth is 49 years for African men and 51 years for the women, and less than 30% of Africans across the continent can read and write, the figure among women being less than 15%. This is all in spite of massive investments in education and productive capacity over the past five decades.

For African countries the under-five infant mortality remains stuck at 180 per 1 000; compared with 10-15 in developed countries.

Public, and productive infrastructure remain poorly developed; with only 18 mainline telephones per 1 000 people in Africa, compared with 146 for the world as a whole and 567 for high-income countries.

Research indicates that one in every two people in sub–Saharan Africa lives in absolute poverty. In comparative terms, it is as if Africa is rolling back three decades economically.

The turn of the century coincided with Zimbabwe’s worst performance crisis; which included a 40% contraction in GDP (World Bank 2006), a rate of inflation that has been rising since 2000, to reach the highest of 1500% in 2008 (CSO) 2008), and acute foreign currency shortages.

Industrial, transport, service and other productive infrastructure, mostly built over the decades of colonialism, is in a state of decay. The country’s heavy and light industrial sites have practically shut down, and 80% of Zimbabwe’s labour force is unemployed.

Formal sector urban employment shrank from 3,6million in 2003 to 480 000 in 2008. In 2017 the economy is largely informalised, and economic fundamentals remain skewed. Without a source of formal employment there is no formal source of income.

Thus the country’s 14 million inhabitants live on less than US$1 per day, average life expectancy at birth is 49 years and falling. Poverty threatens Zimbabweans across the board, and three million young employable citizens have fled the country to settle and work in the Diaspora.

However, the country remains rich in terms of natural resource endowments. The land is underutilised, and during drought years the country now imports food from Zambia and Mozambique. The agricultural (financial, transport and technical) support infrastructure will need to be rebuilt all over again.
What needs to be done?

Part 2 of this article next week examines policy options around aforementioned challenges.

Manyanya is a Harare-based economist.These New Perspectives articles are coordinated by Lovemore Kadenge, president of the Zimbabwe Economics Society, e-mail: kadenge.zes@gmail.com and cell +263 772 382 852.

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