Recipe for failure
ZIMBABWE’S economic malaise can only get worse as long as our government continues to employ irrational policies in the forlorn hope of saving the economy from further decay.
Three announcements th
is week aptly illustrate the depths of hopelessness our rulers have plumbed and it is apparent that they are not finished yet in their quest to ensure no recovery takes place soon.
Firstly, the chairman of the National Incomes and Pricing Commission Godwills Masimirembwa early in the week announced that government was going to embark on another price blitz to compel retailers to comply with controlled prices and to kill off the black market. He also wants to ensure that imported basket goods are priced in tandem with the official exchange rate. The looting gangs are limbering for action. Remember Makro and Letombo Spar!
Secondly, on Tuesday it was reported that the Tripartite Negotiating Forum was convening to extend the protocols signed in June between government, labour and business who at the time committed themselves to a social contract. The protocols were rendered ineffectual by the price blitz that immediately followed the signing of the deal. This week government announced it wants to “operationalise” the dead protocols.
Lastly, the Economic Development ministry was upbeat about a new alphabet economic plan — the Zimbabwe Economic Development Strategy (Zeds) — to guide the economy in the new year. Does the government believe that these three activities can be blended in the cauldron of bureaucracy to create economic recovery? This is a recipe for unmitigated failure.
Masimirembwa and his commission believe salvation will come from the irrationality of controls, heavy-handedness and placing spooks to watch over business round the clock. The commission portrays the intimidating face of the regime — the sort that believes menace is a substitute for leadership. Here we have a government which in September admitted through its supposed handyman, central bank governor Gideon Gono, that price controls were not working. Gono then announced a fund to revitalise the manufacturing and retail sectors which had been ravaged by the July price blitz.
Two months later, there are plans to put the same industry on the torture rack again. We have Masimirembwa wielding a hammer and Gono a spoon of a poor diet. They both want the ailing industry to recover quickly. It is clear that the hammer will do more damage on the patient compared to the expected positive impact of Gono’s feeding scheme. Any form of blitz is a big threat to the efficaciousness of the concessionary funding to industry. Does Gono have a view on this? Is his advice to government still of any use when horses and chariot are driven through his project?
Amid this glaring policy inconsistency and confusion, there is an attempt to demonstrate a modicum of common sense by calling social partners in the TNF to gather and keep the protocols alive. The purpose of the TNF is to foster dialogue and build bridges between the three parties. This has nothing to do with the destructive prescriptions coming from the pricing commission. In fact, who expects the TNF to be taken seriously when its predecessor, the National Economic Consultative Forum failed to rise above a mere talkshop?
The TNF in June signed protocols on prices and incomes stabilisation; restoration of production viability and pricing; and management of foreign currency. These were expected to be implemented immediately but government then came up with parallel processes which rendered the agreements redundant. What is the plan now with the TNF? It will meet and the partners will reaffirm their commitment to the social contract. After that the protocols will be mothballed to make way for the pricing commission and its cohorts.
Also most likely to join the protocols in the recess of dormant plans is the Zimbabwe Economic Development Strategy. Chaos thrives where there is no planning. At the moment our rulers have decided to trash planning which requires commitment, discipline and foresight. This is a country run by taskforces and commissions, all with temporary mandates and very limited scope. No economic blueprint works here.
All the feverish activity by the government has failed to address the fundamental issues of a bloated budget deficit and depressed capacity utilisation in industry which are responsible for our hyperinflation and shortages. It is instructive that in South American economies which came out of hyperinflation, they had to legislate against central banks funding the budget deficit. No amount of sabrerattling will rescue this economy until we get the fundamentals right. Let’s stop the printing press and get rid of the pricing commission for starters.