The economy is in a mess; for argument’s sake, let’s say it’s because of the sanctions.
From the Editor’s Desk with Nevanji Madanhire
The mess is first and foremost defined by the lack of our own national currency. That means we have no control of money supply, we can’t print (call it quantitative easing, as the Americans say) or withdraw money from the market when it becomes necessary.
The situation is such that it’s almost impossible to re-launch the Zimbabwe dollar without making the situation worse. So we are stuck with the multicurrency regime, which, although it stabilised our economy when introduced in February 2009, has now become a millstone around the country’s neck.
The peasants in the countryside have become poorer; for them it is almost impossible to lay their hands on the United States dollar or the South African rand.
Subsistence agriculture is failing to sustain livelihoods in the majority of provinces chiefly because the rains have become more and more unreliable due to a range of issues including climate change. To survive they have to barter their livestock for food at sickeningly low rates.
This has created a large pool of poor peasants looking up to government for sustenance.
The situation isn’t any better in the urban areas; poverty is on the increase due to lack of jobs. Factories are closing at unprecedented rates; it’s said 700 workers lose their jobs every week. The urbanites are becoming poorer at a time prices of basic necessities are rising. It’s amazing how people are making do in our towns.
Outside every home in the low-income suburbs is a small stall selling anything from tomatoes to boxes of matches. The trend is spreading to middle-income suburbs.
The profits from these “ventures” cannot be much; it means families are struggling to buy their next loaf of bread for, that is all they can get from the stalls’ proceeds.
No sector of the economy has been spared; banks are closing down due to the lack of depositors.
Little manufacturing is happening in the factories, meaning there is very little to export. The haulage sector which should symbolise the vibrancy of the manufacturing and productive sectors is grinding to a halt. The rails system is dead; from employing upward of 25 000 people, the National Railways of Zimbabwe now barely employs 6 000 and is in the process of retrenching.
The country is importing much more than it is exporting, meaning the country is bleeding itself to death by externalising the little money it makes. This explains partly the liquidity crunch gripping the economy. The lack of money in circulation has hit hard the social services sector. Hospitals are failing to operate efficiently and are becoming places of death instead of places of healing.
In major referral hospitals people are left to die because they cannot afford the fees.
The education system has been hit too. Parents can no longer afford to pay their children’s schools fees and to buy them basic instruments of learning such as books and pens. The schools are collapsing due to disrepair. Teachers are underpaid; meaning their dedication to duty has been undermined. The same applies to civil servants across the body.
Government business itself has been badly impacted by the lack of money. The closure of parliament last week is a result of this. Clerk of Parliament, Austin Zvoma has confirmed the House has been shut down because government cannot afford the costs of keeping it open. Parliamentary sessions cost US$200 000 in allowances per seating, according to reports. Government simply does not have that amount of money. Parliamentarians claim they are owed millions. It is said ministries have to struggle without the basic needs for running efficiently, such as stationery and fuel.
It is not possible to over-describe the bleak situation the country finds itself in.
The question on everyone’s lips is: How do we get out of this mess?
It’s a vision thing!
Before running for office in the US 1988 presidential elections, George Herbert Walker Bush, considered a wimp by most Americans, was advised to go on a retreat and come up with a well-defined strategy for moving America forward after the Ronald Reagan years. He said he was not interested in “the vision thing”. He later lost the elections to Bill Clinton in 1992 because America saw him as lacking “the vision thing”, defined in America as clarity of ideas and principles that could shape public opinion and influence Congress. It is now used as a description for any politician’s failure to incorporate a greater vision in a campaign.
History has shown that very complicated situations can only be solved by the simplest of visions. In the 1992 Presidential elections, Clinton prevailed over the senior Bush because of his simple vision; “It’s the economy, stupid”!
Zanu PF has crafted a blueprint to turn round the economy. It is called the Zimbabwe Agenda for Socio-Economic Transformation (Zim Asset). The new economic policy is described as a results-based new thrust in pursuit of a new trajectory of accelerated economic growth and wealth creation. Its vision reads: “Towards an Empowered Society and a Growing Economy”.
Zim Asset will fail for one reason; its vision is too complicated! The phrases “an empowered society”, and “a growing economy” are abstractions; they don’t refer to any concrete things or particular processes!
Zimbabwe’s crisis can be described in one word: money, or, to be precise, the lack of it! Any turnaround strategy therefore has to address the lack of money. The simple vision of Zim Asset should be: “To attract the money!”
Zimbabwe needs to attract the money first before it can come up with such sublime and mystifying nonsense as economic empowerment and wealth creation which themselves depend on the availability of money.
The policies spelt out in Zim Asset do not come anywhere near strategies to attract money in the form of foreign direct investment.
Finance and Economic Development minister Patrick Chinamasa failed to present the national budget in time because there was no money.
Soon after the July 31 elections he said that Zimbabwe needed to clearly articulate its policies so that investors were in no doubt about the safety of their money. His call has not been heeded yet. At the Zanu PF conference in Chinhoyi this weekend, the definition of indigenisation, for example, became even murkier, thrust as it was back to the combative Savior Kasukuwere days.
Sanctions or no sanctions, Zimbabwe’s economic malaise is a vision thing?