HomeOpinionJoining together selected features of capitalism and socialism (II)

Joining together selected features of capitalism and socialism (II)

Retain technologies, systems

It is important to make use of and retain some of the old technologies, whilst at the same time introducing more advanced modern technologies.

The inherited old-fashioned technologies used by peasant farmers and by middle level industrial workers after the Second World War are an advantage, as they can produce durable and easily-maintained machines and equipment.

The old technologies are easily understood and handled by both peasant and informal producers. They are widely utilised and repaired.  The challenge is when these old-fashioned technologies are more expensive than machinery and equipment from China and India, but this can be controlled by the State imposing suitable customs duties and establishing comparable wage systems to those of their competitors. Blindly opening all its industries to competition from better developed and cheaper economies is unwise, and has led to the destruction of much of the manufacturing industries of the past.

Zimbabwe decided to conserve the dual salary system of the pre-Independence era, that is, a high wage system for Europeans and a low wage system for Africans, although this division is no longer racial. Besides the contradictions and comparisons of these two opposed systems, Zimbabwe’s relatively high salaries make it uncompetitive compared to its neighbours, as well as to its Asian competitors.

It is important for Zimbabwe to align its salaries to those of other Sadc countries as well as the salaries of India, China and other industrialising Asian countries. Tying workers’ wages to those of the former privileged Europeans has made Zimbabwe’s manufactures uncompetitive worldwide. The high cost of electricity and water contribute further to Zimbabwean goods being more expensive than those of its competitors.

Establishing more modernised systems of agriculture and Diaspora industrialisation requires a partnership, ideally between government, domestic private enterprise, the Diaspora, and local communities.

Judicious subsidies including for labour costs and importation of new machinery can be provided. The initial market should be the national market, in particular equipment, machinery and transport for the large agricultural sector. Two million small scale-farmers need to mechanise ploughing and other functions, and such a major transformation of the industry requires consistent State policy, administration and funding support over several decades.

Develop economic priorities

In order to succeed Zimbabwe needs to select its economic priorities, and ensure that they are adequately funded through   available State and national funding. It is also essential to ensure that they have suitable technologies, whether these are the old ones from before Independence or recently imported more up-to-date ones.

Dependence only on donor and investment funding is highly unreliable because these fluctuate due to their short term political interests and prejudices which may not coincide with what is needed in the country.

The early generosity of donors in the first two decades of Independence made Zimbabwe highly dependent on donor funds. When  these were suddenly cut off and banking sanctions were imposed,  Zimbabwe’s development was seriously handicapped. If 20%-25% of the gross domestic product (GDP) was devoted to economic expansion and improvement, it would be good enough to bring about a sizeable improvement of the economy. Zimbabwe’s GDP was estimated at US$17 billion by the end of 2020 (www.tradingeconomics.com). Twenty percent of this would come to US$3.4 billion.

Very obviously the only investment Zimbabwe can depend on is its own, after more than 20 years with very little foreign investment.

This is particularly so at the present times. What is needed is to inspire the whole population and coordinate their efforts to achieve a few clear priorities. The State itself must participate and contribute a substantial amount for economic development through its budget.

The Diaspora, as well as citizens at home will welcome such a stand, and will join in to enable Zimbabwe to reach a minimum of US$3,4 billion investment into the economy, particularly into agricultural development and into manufacturing.

One serious mistake of the past 20 years has been the state trying to do everything and spreading its limited resources thinly over too many programs. Having over twenty, sometimes forty ministries, competing for funds, means that most programs cannot be adequately staffed or funded.

Funding government salaries, but not funding the economy makes it difficult for the economy to make major strides.  It is essential for the State to prioritise what it is aiming to achieve in specific terms and provide adequate budgets, technical expertise and supervision in order to achieve these objectives. Economic Structural Adjustment Programme (Esap) advises that it is generally impossible for the government to run commercial and industrial enterprises, because bureaucrats do not have the skills and systems to run private companies.

There is some truth in this, where civil servants have never owned or worked in the private sector, but it is certainly not true in countries like Japan where civil servants are required to have several years’ experience in the private sector.

In general, the bureaucracy expands the number of bureaucrats without increasing its efficiency and outreach.  Too often they are too centralized to deal with day-to-day issues at local levels.  Local companies and groups should be able to make their own decisions, with the State providing the development framework and some resources through the banking system, and avoiding bureaucratic patronage as much as possible.

Priorities for economic growth

Priorities for economic growth can include:

l A clean water supply to ensure the health of the population; sufficient irrigation water as Zimbabwe suffers three years of drought out of every five – without irrigation farmers cannot have a dependable crop every year; good road, rail, air, and communications infrastructure which can link Zimbabwe to export markets; etc;

l Physical infrastructure needs to be well-built, as well as well maintained.  Zimbabwe has suffered tragic deterioration of its infrastructure investments through a combination of corruption and incompetence. These foundations and their maintenance should be technically and professionally constructed and managed. This provides the State with a supervisory role over the companies and local authorities that can provide and maintain these infrastructure;

l Human resource development plays a key role in ensuring that economic development can take place. A sound and cost effective health system for all;  good quality primary and secondary education for all to provide the quality human resources to develop the country; agricultural and technical-vocational education; job training for everyone; and good quality of university and tertiary education.

What is evident is that Zimbabwe’s education system is academically good, but is very weak in terms of practical application of knowledge and skills.  There is also a need for Zimbabwe’s educational institutions to partner closely with colleges and universities overseas and in Africa which work closely with certain industries worldwide.

This will enable Zimbabwe to domesticate the technologies which are commonly utilised globally. Colleges and universities will play a key role in bringing such technologies, management systems and market to the country.  The State can play a key role in incentivising such entrepreneurial innovation in educational institutions; and

l Since Zimbabwe embraced Esap, it has not devoted much funding for economic growth, such as employment creation, supporting the development of the manufacturing industries, ensuring that fertilizer factories have the wherewithal to produce fertilizer, etc. Yet economic health and growth are the key responsibilities of the State. Esap advice is that investment funds should come from the private sector and from investors:  this is a good idea, but excluding the most important and powerful participant, the State, is counterproductive.

To achieve the above would entail a serious revamping and restructuring of the State’s finances, in the immediate term, including the 2021–2022 budget.  The budget is the most crucial and decisive document for planning and implementing economic growth.

Chung was a secondary school teacher in the townships (1963-1968); lecturer in polytechnics and university (1968-1975); teacher trainer in the liberation struggle (1976-1979); civil servant (1988-1993); an UN civil servant (1994-2003). These weekly New Horizon articles are coordinated by Lovemore Kadenge, an independent consultant, past president of the Zimbabwe Economics Society  and past president of the Institute of Chartered Secretaries and Administrators in Zimbabwe. Email: kadenge.zes@gmail.com/ cell: +263 772 382 852

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