What do Zimbabweans want?

via What do Zimbabweans want? – The Zimbabwe Independent December 11, 2015

The question is: what do Zimbabweans want? Any attempt to find the answer soon generates a long list of other questions. As these questions all give rise to other questions, we can all become so tangled in the undergrowth of pointless discussion that we lose sight of the question. But for most people, whatever it is that they want, they seem not to be getting it.

John Robertson

Most people might argue that our genuine needs have to start with meeting our immediate requirements for food and shelter, but that is not enough. We also have to accommodate our longer-term needs to provide for a growing family. So we need money. But most of us won’t get that for nothing, so we need a job.

Now we have to back up a bit. To be eligible for a job, we need to have had some schooling, display an eagerness to learn and we need to have learned our manners, plus a few social graces. But even if we had acquired all these, the process of acquiring them would not have created jobs. Investors are the people who create jobs. And they make up a group that has its own needs and wants. Many of these needs are no different from the things of the rest of us want — they too want a steady income and the ability to lead respectable lives — but investors tend to take the initiatives that lead to the creation of new productive enterprises. And to take such initiatives and accept all the risks, other needs and wants have to be met.

It is these additional needs and wants of investors that set such people apart from the rest of us. This is because they look to themselves to deliver their most important requirements: expertise, self-confidence, courage, determination and a willingness to dedicate themselves and all their resources to the success of their business.

But the business environment has to deliver a few of their other pre-requisites — security, the rule of law, acceptable registration and taxation requirements, acceptable labour laws and, for the best of them, assurances that business success will never depend upon their first having to qualify for political patronage.

If these necessities can be met, businesses will be started, jobs will be created, incomes will be earned and increasing numbers of people will be able to meet the costs of bringing up their families properly. Thus, two distinct streams of needs and wants bring employers and employees together to create two different streams of incomes. The investors make money and the employees earn money. And between them, they contribute to a third income stream called taxation that funds the government.

While earning money is likely to be each employee’s major objective, to the employers, the jobs are a by-product. They need employees to help them achieve the main purpose of their business, which is to produce goods or services. These must be produced well enough to capture customers on competitive markets in which the buyers have the option to support other producers.

Attracting enough support from fussy customers to make and keep a business viable and, better still, profitable, is very hard work. Governments in most parts of the world have chosen to be as supportive as possible to their investing communities because they are keenly aware that the greater the success of the businesses, the bigger will be that third income stream of taxes to the government. So, governments make starting and operating businesses as easy as possible.

A useful multiplier effect comes into play as success builds upon success. More investors create more products, more jobs, more exportable goods and more savings through import substitutions. More people earning good wages pay more employment taxes; they also generate bigger sales and higher collections of indirect taxes, while the exportable goods earn foreign reserves that permit the country to meet its international obligations. Displays of dependability help countries to qualify for the large long-term loans needed to pay for power stations, buy modern passenger aircraft and run efficient health, education and railway services.

That description brings into focus the reason why a new perspective is needed in Zimbabwe. Somehow, the Zimbabwean government has decided that its income stream is the only one that matters. To build up the flow, it has decided that operating a business in Zimbabwe should be regarded as a privilege that has to be bought; no matter how much expertise and finance has to be supplied by the investors, they are required to seek permission from government before being allowed do anything.

In this way, all the business sector’s skills, abilities and influence are made subordinate to government’s authority. As a result, the income stream to investors has almost dried up and our income stream to employees has mostly disappeared underground. Government appears to be more annoyed than surprised that its own income stream has become little more than a trickle. But even as it was falling, government was adding to the lists of fees, permits, licences, levies, charges and taxes to further subjugate the investors. If we remember that investors create jobs, we will realise why it is that all those hoping to find a good job have to leave the country.

The perspective we need is one that will recognise and repair the damage done by injecting overheated emotional arguments into cold, hard investment logic. Claims that Zimbabwe’s government has every right to be in total control of every business enterprise operating on Zimbabwean soil can be expressed with passion, but not with very much hope of attracting investors.

We should rather be saying to the world’s productive investors, “Whatever you can make, come and make it here.

Bring your ideas, your money and create jobs for our people. Our investment environment will encourage you to make long-term commitments to Zimbabwe’s future.”

If we turn those lines into an honest statement, what Zimbabweans want will soon be brought within our reach.

Robertson is an independent economist based in Harare. These New Perspectives articles are co-ordinated by Lovemore Kadenge, president of the Zimbabwe Economics Society. E-mail: kadenge.zes@gmail.com, cell +263 772 382 852