New perspectives: Zim govt has to find balance between economy and politics

 Employers were able to rent on behalf of their workers in hostels where half a dozen workers shared a room, and several rooms shared a bathroom and toilet. 

BY FAY CHUNG There is a consensus that the Zimbabwe government is good at politics, but a failure in economics.

Political success is recognised because Zimbabwe has more or less had one political party in power since Independence.

Economic success, on the other hand, has been slow, growth at 2% to  3% a year in the 1980s, then deteriorating to stagnation after 2001.

Are these two views wholly accurate, or only partially true in each case?

It is useful to begin by comparing family and national policies and economies.

A family is said to be successful when it can feed itself, find work and employment, provide itself with housing, and provide education and training to its children.

Traditionally the majority were able to feed themselves, mainly by growing their own food in their little gardens and plots.

Before independence many communal farmers had an average of two hectares of land or less.

The significant number without land were looked after by their relatives.

Under colonialism the very few Africans working in urban areas were paid minimal wages, the lowest being about US$10 a month, plus enough food to feed the worker, but not his family.

Instead the family  had to feed itself and supplement the worker’s diet through peasant agriculture.

Rural housing was constructed of mud and grass in most rural areas, very adequate if well built.

Urban workers’ housing was built by the city council, but could not be rented or owned by workers.

Employers were able to rent on behalf of their workers in hostels where half a dozen workers shared a room, and several rooms shared a bathroom and toilet.

Comparing national criteria to family criteria, it is obvious that Zimbabwe has failed most of its population.

More than 70% of the population are identified as poor by the government itself, half of them not able to feed themselves and dependent on food aid.

Hundreds of thousands are not in primary or secondary school, compared to the 1980s and 1990s.

Work and employment are not available to millions. Housing is seriously lacking.

Property ownership, including land ownership, is seriously hampered.

Since 2001, Zimbabwe has exhibited a bigger difference between political and economic policies.

The millennium saw Zanu PF moving away from the capitalist economic policies which had been followed by the Rhodesian government, and replacing it with a new capitalist form of political and economic policies  known as Economic Structural Adjustment Programme (ESAP), imposed all over Africa by the 1980s.

The old Rhodesian capitalist policies had been straightforward, aimed at enriching those settlers who were enterprising and successful.

It worked well, with the government providing training, supervision, research, development and low cost loans to settlers to purchase and run farms, and to establish new industries. Loans were provided through banks.

This was highly successful for more than 20 years from the 1950s onwards. After independence the Rhodesian form of capitalism, was expanded to Africans but only for a decade.

But most employment was through the civil service or starting small businesses such as bus transportation.

The first land resettlement policy was well funded by Britain, and well supported administratively and in training, but less than three million hectares of land was successfully resettled, mainly to the landless.  Highly  successful but inadequate.

Independence brought about voting rights for all adults, an important and hugely popular process.

“One person one vote” resulted in remarkable social welfare improvements, such as a clean water, primary education and basic Medical services  for all. These were enthusiastically welcomed.

However, there was little change in the ownership of land and of other properties, meaning that the economy rested almost entirely in the hands of the Europeans.

Africans remained with very limited economic opportunities.

Purchasing businesses was not affordable for most Africans.

Under Esap it was assumed that the private sector would become the dominant development factor.

This was very hopeful, but the Rhodesian economy had been a very small one, engineered to benefit the Europeans who comprised only 4% of the population.

The question was how would such a small, albeit very successful economy, be expanded to cater for the total population?

This question remains a vital one.

One of the main Rhodesian precepts was that the state would support and finance the economy.

This was exactly the capitalist system that Britain and the United States had followed for two centuries.

This included state construction, maintenance and support of the national infrastructure.

This ceased almost entirely for two decades:  infrastructure such as electricity, water, railways, airways, roads, bridges, etc, were no longer catered for. This drastically affected the economy.

The Rhodesian state had faithfully supported the provision of low cost ownership and business loans:  this was discontinued.

State support was and is absolutely essential both for infrastructure and for low cost loans for national economic development.

This is lesson number one, an important lesson.

The state has begun to invest in infrastructure, but only in the last two years.

And it is widely believed that this is so because the disastrously poor infrastructure is destroying popular political support.

It is widely believed that this investment is extravagant and highly expensive, given to favoured politically supported companies. Not much is done for poorer and rural areas.

In order to achieve both political and economic balance it is absolutely essential to invest in all sections of the population, not only to the already privileged minority.

This would mean, first of all, divesting most of the infrastructure investment to provinces and local authorities, who are in a better position to decide how to build such needed infrastructure.

Improvement of the rural infrastructure is very urgent indeed, and should commence immediately.

This will benefit the smaller and  poorer sections of the farming, commercial and industrial sectors.

These are the ones which need the most investment.

Provinces and local authorities, especially responsible authorities, should be given back their responsibility for employing more people.

Instead it is the state which keeps enlarging its civil service:  we understand this is important for political control by the leading political party, not to the schools, clinics or hospital and their students and patients for example.

Clearly the civil service is much too large, and responsible only to the politicians who appoint them, and they are now even becoming disobedient to their appointing authorities.

In the 1980s and 1990s, provinces, local authorities, missionaries and responsible authorities were provided with modest grants by the State, usually about 5% of their budgets.   These were discontinued after 2001.

However these small grants, for example about US$8500 per classroom, a third of actual cost, made a great difference to local authorities, as they were able to raise the rest themselves, through physically making bricks and constructing theirs schools and clinics, and by getting funds from their churches, their diaspora and their funders.

The removal of State grants meant that they have not basis to start. Loans should be decentralised to banks, who are in a far better position to decide on the viability of the intended contracts than those which have been given to politically powerful new companies.

Banks will be able to play the much needed role of development institutions.

Finally, government’s key role is to control inflation, not to keep printing more and more money to please civil servants, the largest number of employees within the formal economic system.

Government is failing in this crucial responsibility, whilst blaming the rampant inflation on the illegal foreign exchange system.

This illegal system actually exploits state practice: when the exchange rate changes from say 1:300 to 1:700 naturally the illegal exchange institutions gleefully exploit it, but they are not the initiators of inflation.

  • Fay Chung was a secondary school teacher in the townships,  lecturer in polytechnics and universities, teacher trainer in the liberation struggle.  civil servant and UN civil servant and Primary and Secondary Education  minister.
  • *These weekly articles published are coordinated by Lovemore Kadenge, an independent consultant, past president of the Zimbabwe Economics Society  and past president of the Chartered Governance & Accountancy Institute in Zimbabwe.
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