What economic rebound Mr President?

via What economic rebound Mr President? | The Zimbabwean 30 July 2014

It is critical that conditions for broad-based inclusive economic development are put in place before the economy can rebound.

We are all rather shocked by President Mugabe’s comments that the economy is on the rebound. Obviously he knows something we don’t. However let us not fool ourselves because, in order for the economy to shift onto a better growth trajectory, there are fundamental things that have to change – particularly on the political front.

If we are to create a modern state in Zimbabwe, characterised by inclusive political and economic institutions, we must first look at history and understand the conditions necessary for sustainable development.

An industrial revolution in Zimbabwe is possible sometime in our future, but this can only happen when we radically change the institutions that we inherited from colonialism and also reverse Zanu (PF) policies that have continued to arrest our development in the last 34 years.

Countries that have extractive political regimes do not develop; they actually regress as we have seen in our own country. Extractive political institutions are those that limit political and economic freedoms in order to prolong the rule by an elite – the liberation struggle elite in the case of Zimbabwe. The priority of this political elite is not shared economic growth or pluralistic political institutions, but concentrated wealth accumulation for a few while using state resources at the expense of social progress for many.

I have argued before that no matter how many billions are poured into Zimbabwe, without institutional reform and a change in political culture and institutions, we will recreate the same dual economy.

The critical factors for industrialisation in Zimbabwe cannot arise as long as we have a de facto one party state, the militarisation of the economy and state capitalism or monopolies. These are the antithesis to the development of an inclusive economy underpinned by free enterprise and competition. In order to create a new dispensation we will need a fundamental reorganisation of our economic institutions in favour of innovators and entrepreneurs in all sectors of the economy. This must be based on the emergence of more secure and efficient property rights and the rule of law. This not only covers productive assets such as land and mines, but also intellectual capital. Innovation can only flourish in an environment where ideas are protected by law. The route we have taken, whereby the state owns land and minerals, will not result in these resources being exploited to the maximum by entrepreneurs for the benefit of our economy. Of course we know that the state – aka Zanu (PF) – fears losing political control in the event that free enterprise creates a new class of owners who in time will demand better political leadership.

Therein lies our biggest challenge. It is not in the interest of Zanu (PF) to make this happen which means that as long as they remain in power we are unlikely to see a highly industrialised economy emerging. They are arresting our development.

History has shown that the development of a strong indigenous industrial base in Zimbabwe is not in the interests of Zanu (PF). In fact the party has deliberately stifled the emergence of a strong bourgeoisie class. This is the pattern globally with dictatorships. As a result, economies with such political culture never escape failure and never become sustainable.

This vicious circle of regression can only be broken through revolutionary action and not through negotiation. Circumstances are forcing us to realise that only a broad-based coalition of progressive revolutionaries can break this vicious cycle. If we do not act we shall soon be under a Mugabe monarchy.

The first thing we must do is to unite. I am quite disappointed but not surprised at the emergence of multiple little groups that are establishing political parties. These groups profess to stand for democratisation and yet they are ego trips of their leaders who seek political power. Why can’t we for once put our country first?

We must all appreciate that the rebirth of an inclusive and democratic dispensation in Zimbabwe that ensures the emergence of an inclusive economy can never be built upon principles of exclusion and domination as pursued by Zanu (PF) over the last 34 years. Nor is that party about to change the way it operates.

Rather, they are bound to entrench their control and misrule at our expense. Political systems of domination by a few never create broad-based economic democracy and development.

Without a radical change in our political structures and institutions, Zimbabwe will never really experience a rebound as prematurely and falsely announced by Mugabe. Much more needs to change before any sign of a sustainable rebound can emerge. – Vince Musewe is an economist and author based in Harare. You may contact him on vtmusewe@gmail.com