Friday, 1 August 2014

Zimbabwe’s Elusive Economic Revival: Our ‘Friends’, ZimAsset and Radical Nationalism are Not Enough Mr. President.



By Takura Zhangazha*

Recent statements by President Mugabe concerning the national economy have had the political effect of both muted confirmation and loud derision.  Both from sympathisers of his party and those in opposition to it respectively. 

The main template used to argue about his statement are largely the forte of economists and/or financial analysts. Tools to measure projected GDP, Foreign Direct Investment, mineral beneficiation, infrastructure development, government expenditure and indigenisation have been drawn out in pursuit of one argument or the other.

The analysis will  however tend to be more politicised than it will be factual. Or the facts will be conveniently used to defend one political opinion or the other. And that is a good thing. After all,  if we were to learn from Marx, the economy informs the political. So, robust debate is good even if it becomes over-politicised.
For ordinary Zimbabweans  however, the state of the national economy is not as sophisticated nor does it have connotations of the directly political. At least not until the eve of an election.

 Its simply about how one is making ends meet. Or to borrow from a common phrase during church prayers, its about keeping body and soul together.  That is why very few Zimbabweans are waiting for handouts from government or expecting formal employment in the private sector.  They are trying to make ends meet in whatever way they can.

Even if they are employed in government or the private sector, they have taken to the informal sector like ducks to water to supplement meager incomes.  It’s a struggle but it helps keep destitution at bay, no matter if it is mostly in the short term. 

What is becoming apparent is that there is no economic revolution that is occurring for Zimbabweans.  Instead, there is the perpetuation of a political economy in which elite circles, especially those linked to political parties, remain far above the poverty threshold line. And with impunity. 

Where one considers what should have been the cornerstone of an economic revival based on the equitable re-distribution of land, question are emerging as to its economic efficacy. Especially where  it relates to issues of tenure for new farmers, evictions of those that were resettled on prime land by elite political players and even environmental questions as to the sustainability of tobacco farming.

Due to the quantitative aspect of the fast track reform programme,  our agricultural economic base has changed. At least on the basis of the historical injustice that was the Land Apportionment Act of 1930.
The structural questions however remain where and when it comes to land use and even land ownership specifically with regards as to how they impact the performance of the national economy.  Hence the continued ministerial changes to leases for new farmers, the scepticism of the banking sector and the contestations over large scale bio-fuel farming by private but politically connected concerns. 

From a political economy perspective the key challenge is probably that our national economy has not structurally changed from that which we inherited at national independence.  The difference between the two largely resided in performance legitimacy. With the pre-independence one largely seeking to serve a minority population, while the post independence one sought serve more effectively a majority population.

The latter was obviously going to perform in increasingly difficult circumstances going forward, especially given the fact that it was premised on the structure of the settler state political economy.

A few examples are necessary to explain this point further.  After independence, our national economy initially pursued what to all intents and purposes was a social democratic direction that had a capitalist base.  The latter caught up with the social democratic intentions of our first government in the late 1980s where we abandoned people-centered economic policies in pursuit of World Bank and IMF sponsored neo-liberal ones.  These entailed that we reduce the role of the state in the economy and allow the free market to determine the distribution of goods and services.

When this was done, we opened our economy’ to global competition and in the long run, we lost that battle. Our industries, most of which were established largely under the aegis of the Rhodesian settler state, crumbled. From textile through to minerals processing, motor car manufacturing and even pharmaceutical industries, we lost our internal self reliance in favour of importing finished goods while exporting raw materials.  As an obvious consequence, unemployment and poverty rose only to be compounded by a series of devastating droughts in the 1990s and early 2000s that debilitated our food security. 

After the fast track land reform programme in 2000 the subsequent imposition of sanctions by the European Union and the United States of America, on not only the government but government related companies and restrictions on Zimbabwe’s ability to trade with the West,  our economy was to reach it weakest. Our response to the sanctions was however more political than it was economic. 

Because we had opened up under ESAP and lost a significant measure of our self reliance, we have been unable to recover from  the damage done not only by economic sanctions and a government that lacked an effective strategy to deal with the latter.

Where we came to the tenure of the inclusive government whose primary mandate became that of stabilising the economy and in the process seek solutions for its revival, we applied methods that hardly suited the national catastrophe we faced.  Our pursuit of public private partnerships (PPPs) while at the same time targeting the private sector for indigenisation did not promote the investment required. Neither were the PPPs suited to revitalising our social services delivery given the fact that our people were too poor to afford either the healthcare or education at the exorbitant costs that returned in 2009. 

It became a question of not a lack of availability of goods and services but the lack of affordability of the same for a majority of the Zimbabwean populace. This remains the case today.
The new government’s economic blueprint, the Zimbabwe Agenda for Sustainable Social and Economic Transformation (ZimAsset) is sadly no great shift from the state of affairs under the inclusive government. The main difference appears to be more political than it is economic. 

What the blueprint appears to be keen on is a return to an economy that is structurally similar to the ESAP years in an elite capitalist pact between the state and capital. Its pursuit of PPPs is least likely to revive our manufacturing sector or support agriculture as our backbone.  It is a programme that is suited more to acquire approval from the IMF and World Bank than it is primed to have a direct impact on the livelihoods of the country’s majority poor. 

The argument of beneficiation of mineral resources when the extraction of the same continues to be not only unaccountable to the fiscus has not built any public confidence in the programme.
Instead it will continue to extract more from the citizen than it will seek to give.  On paper it will make for good speeches and limited little progressive action in reality.  It will essentially bring a new version of state capitalism to our national political economy only in order to retain a political elite as the major beneficiaries of state largesse.

As it is, an economic revival might be just for those who are politically well connected as opposed to the majority poor. 

What is required is a social democratic economic model that takes into account the mistakes of the first decade of independence, discard the neo-liberal approach of the 90s and depart from the emotive nationalism of the 2000s.  Such a social democratic agenda would restructure the political economy from being one that is premised on the skeletal framework of the Rhodesian settler state to one that systematically empowers our citizens beyond the rhetoric of land reform and indigenisation.  Its base would be the provision of heath services, education, transport, land security,  transparent mineral extraction, basic political rights and the reward of innovation not political loyalty.  There would be no doubt a new democratic and self reliant political economic superstructure would emerge.  
 *Takura Zhangazha writes here in his personal capacity