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Eric Bloch column

Destruction by doom and gloom

By Eric Bloch

IF it had actually been government’s intent to bring the economy to its knees it could not conceivably have done so as successfully as it has. In fact, government has suc

h a spectacular record of doing the wrong things to negate whatsoever it is trying to achieve, that one almost wishes that it had decided upon a policy of economic destruction because, if it had done so, the economy would undoubtedly be one of the world’s most resounding successes, with an economic strength that would be the envy of the US, China, the European Union, and others.

After the economy had commenced a dramatic, positive turnaround during the three and a half years from early 1994, when the Economic Structural Adjustment Programme (Esap) was belatedly embarked upon with some conviction, after a prior three years of lip-service to the programme, without action, the government’s destruction of the economy commenced. Many have blamed Esap for Zimbabwe’s economic ills and still do so, but the facts (that those who scathingly castigate Esap steadfastly deny), were that inflation fell to about a quarter of prior levels, numbers in employment increased, there was considerable new investment, both domestic and foreign exchange rates stabilised and balance of payments improved, and much else.

Since the latter part of 1997 the economy has been in never-ending decline. Government has unhesitatingly attributed the economic regression to adverse climatic conditions, to evil machinations of the western world, to the diabolical acts of government’s opponents, and to many others. At no time has it admitted to any culpability for the ruination of an economy which had previously been undergoing significant upturn. Wholly irrelevant, in the view of government, was the payout of compensation to war veterans (including thousands of impostors), which largesse was far beyond the means of the state. That irresponsible act triggered an immense devaluation (since which time the president has been a vigorous opponent of currency devaluation, even when economically necessary). In turn, that devaluation initiated a pronounced return to untenably high inflation.

Then government, in order to appease a populace oppressed by the downward slide of the economy, belatedly embarked upon the land reform programme, but did so in a catastrophically disastrous manner which destroyed agriculture as the very foundation of the economy, rendered 300 000 unemployed, nearly two million homeless and without income, and undermined all confidence within the investment community.

Concurrently, government has been endlessly spending that which it does not have, in a horrendously profligate manner, causing a gargantuan, unsustainable, national debt. Moreover, it allowed corruption to prevail unabated, demonstrated an intensifying contempt for the fundamental principles of law and order, with a matching disregard for human rights, and whilst pretending otherwise, abandoned the precepts of democracy (evident in many ways, including the oppressive Aippa and Posa legislation).

The consequence was that Zimbabwe fell into gross disfavour with much of the international community, retaining uninhibited friendship and support of only those who were of like autocratic and lawless mind.

Over a period of nearly nine years the economy has continuously deteriorated, reducing to little more than half of its previous size. With its usual misrepresentative skills, government continuously suggests that the decline is not of the massive magnitude that is in fact the case. A prime example of such governmental deception was a recent announcement that unemployment was 9% of the employable population, whereas it is indisputable that the reality is very different. Reliable data is not available, but authoritative sources place unemployment at over 80% of the employable population. (In order to arrive at its spurious, derisory statistic, government has presumably excluded from the number of the employable population all those who, being unemployed, are now actively engaged within the informal sector.)

At the same time government keeps promising an economic turnaround. It has demonstrated great productivity in creating one economic recovery programme after another, the latest being the National Economic Development Priority Programme (NEDPP) which, like most of its predecessor programmes is a skilled generation by government of a tautologous blueprint for economic change virtually devoid of substance. Essentially, it contains no stratagems which are to bring about the targeted economic revival, other than the creation of a bevy of committees, euphemistically called “task forces”.

The composition of those committees is by government’s selection and invitation, with only superficial consideration to comprehensive representation from all relevant components of the respective economic sectors. And government’s real colours were clearly shown when the deputy Minister of Finance, David Chapfika addressed the business conference at the 2006 Zimbabwe International Trade Fair. He said that the success of NEDPP was dependent upon the private sector “buying into it” and ensuring its success. Clearly, he was establishing government’s escape route if NEDPP has the same fate as did the First Five Year Transitional Development Programme, the Five Year National Development Programme, the Programme for Social and Economic Transformation, the Millennium Economic Recovery Programme, the New Economic Recovery Programme and numerous other failures.

What the deputy minister did not suggest, with conviction, is that government would be “buying in” to NEDPP with determination. Even worse is that the first weeks of NEDPP have demonstrated that it is not doing so. Farm invasions continue unabated, devastating what little is left of agriculture, and the Minister of Agriculture Joseph Made continues to enunciate mythical projections of harvest sizes. Government continues to resist and hinder the greatly overdue devaluation of the Zimbabwean dollar, resulting in almost all exporters losing all operational viability and reduced to the brink of closure. State expenditure on unaffordable, and unnecessary aircraft and other weaponry for the defence forces continues “willy-nilly”, and the military are assuming ever-greater economic controls. Government continues to threaten investment expropriation, the current target being the mining sector.

And yet there are also signs of some moderated policy changes on the part of government, wheresoever those changes can be effected without being seen as an acknowledgement that past policies were wrong. As yet, the changes are few and far between, including invitations to white commercial farmers to apply for 99-year land leases, and discreet overtures to the international community for reconciliation.

However, the populace has been so economically whipped, for so long, that it is unable to give recognition to any changes, no matter how great or small, as could be precursors of greater change and, therefore, of a very long overdue economic recovery actually eventually materialising. Instead, it views all with cynicism and scepticism in the extreme, is filled with emotions of doom and gloom, and conviction
that the economy has been irretrievably destroyed and can never recover.

This is especially tragic in that such sentiments and beliefs can bring about self-fulfilling prophecies, when otherwise change can occur, even if only very slowly.

As essential an element as are constructive governmental economic policies is that there be business confidence, for that is a prerequisite of any economic recovery and of an ongoing virile economy thereafter. Without business confidence, that cannot occur.

Thus, by blinding itself to any positive developments, no matter how small they may be, and therefore by not encouraging and motivating further such developments, the private sector’s mood of doom and gloom is aiding and abetting government’s destruction of the economy, even if that mood is the lesser contributant to that destruction.

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