Regime change no panacea to Zim’s economic problems

via Regime change no panacea to Zim’s economic problems – The Zimbabwe Independent January 17, 2014 by Fay Chung

MDC-T legislator Eddie Cross published an article on The Need for a New Road Map before Christmas last year.

In it he made a brilliant comparison between the economic changes over the past three decades between China and Zimbabwe, during which China has increased its Gross Domestic Produce (GDP) and per capita income and become the workshop of the world while Zimbabwe’s GDP and per capita incomes have shrunk. This is true.

He ended his article with a short paragraph where he appears to place responsibility for these developments on leadership, specifically the leadership of President Robert Mugabe whom he excoriates for being “cold and distant” and requiring “loyalty” from his followers.

I find Cross’ analysis very superficial. Yes, China has done very well. Yes, leadership is very important. But once again, we have the MDC-T take that if Mugabe and Zanu PF are removed, all would be well in Zimbabwe.

This focus on a leader and a personality as the main problem in Zimbabwe is seriously misleading. The changes in China did not only depend on a personality.

Of course, we should judge cats on how well they catch mice. That phrase by Deng Xiaoping is true, too.

But how can we simplistically say that “regime change” will change everything? One personality and one political party cannot change everything.

What led to China’s success is a little more complex than just a change in leadership. Note, of course, that the political party in power did not change in China: Mao Zedong and Deng Xiaoping both belonged to the same party, and in many ways, their key policies remained the same.

What Deng managed to do is to apply those policies to the world economy, while Mao concentrated essentially on internal policies. Both were correct for their times.

China’s success was due to the following:
The Chinese modernised their industries. Their economy was one of the most backward in terms of industrial technology and management in 1979 when Deng took power. I can say they were more backward than Zimbabwe’s technologies in 1980.

Deng managed to begin the process of modernisation, sending 10 000 students to the United States to bring back the best industrial technologies and introducing China to modern management systems. These 10 000 students did well, and they are the core of today’s industrial system. He applied the Singapore and Japanese model to China.

Zimbabwe’s problem is that our industries are still stuck in the technologies and management systems of the 1940s and 1950s. Zimbabwe is certainly not technologically or managerially competitive compared to South Africa and China, our key industrial competitors.

China’s agricultural policy was based on food sovereignty and self-sufficiency from the 1970s onwards. Zimbabwe was self-sufficient in food in the 1980s, but this changed as a result of the Economic Structural Adjustment Programme in the 1990s.

Food production got worse under hyper-inflation when fertiliser, seeds and the guaranteed Grain Marketing Board failed. While the MDC and its supporters blame this on the land reform programme after 2002, actually the problems began a decade earlier. It should be noted that China had one of the most drastic land reforms.

So did Japan and all the other East Asian countries that have done so well over the past three to four decades. Availability of cheap food for all has been a characteristic of all the East Asian economies which succeeded in industrialisation.

The US opened its markets to Chinese products. Today if you go to the US, almost everything in every shop is made in China.

This was equally true for Japan and other East Asian countries when they industrialised some decades before China: they benefited from the US market which is the largest globally. Africa, and especially Zimbabwe, does not enjoy such open access to the US market. Sanctions, comprising closing of the US and European Union markets, and curtailing Western banking facilities, have affected Zimbabwe seriously.

Almost all African countries, including Zimbabwe, concentrate on exporting minerals and agricultural products.

In Zimbabwe’s case, we are exporting raw ore and tobacco, both unprocessed. If Zimbabwe can persuade other mineral producing countries, especially our neighbours, to insist on beneficiation of mineral products, we can succeed. On our own, this is unlikely.

China managed to get almost the whole population educated up to Grade 9 under Mao. The large population of China (1,3 billion) compared to the very small population of Zimbabwe (less than 13 million today) gives a very different labour market. China has a rich labour resource.

It also means that China has a huge domestic market. Zimbabwe is seriously short of labour, exacerbated by the exit of more than two million to South Africa and Britain. The minimum wage in the capital Beijing in 2012 was US$150 a month, and it is much lower in rural areas.

Better qualified Zimbabweans are demanding a salary of US$500 per month. At almost every level from farm workers to top technocrats and managers, Zimbabwe is short of suitably qualified and experienced labour. Someone with a Master’s degree or PhD can be paid US$150 a month in China, and US$300 in India. Africa, including Zimbabwe, cannot compete internationally.

China benefited from its huge diaspora, which began leaving China in the 1850s. This diaspora was responsible for the initial modernisation of industry and the economy beginning in 1979.

Zimbabwe has treated its diaspora badly, and has not benefited adequately from diasporan technical, managerial, industrial and financial inputs.

Yet the diaspora can be praised for supporting families during the sanctions period from 2002: nearly every family in Zimbabwe benefited from diaspora support in terms of food and other necessities. But the Zimbabwean diaspora has not invested in the economy or in industrialisation. Not even in farming.

The Chinese government gave very favourable loans to productive enterprises, especially into helping build infrastructure. Zimbabwe has failed to support infrastructure adequately, yet the infrastructure is absolutely critical to development.

Last but not least it is not only Zanu PF which must adopt economic growth policies, the MDC-T and MDC and all politically-minded people need to come up with policies and not only look at personalities and political rhetoric. We also need to look at these policies in a practical, pragmatic and implementable ways.

Zimbabweans are great on rhetorical policies, but most of these great policies have not been implemented. Government has been waiting for others to implement, for example, foreign investors and donors. It should look inwards too.

Fay was a cabinet minister from 1988 to 1993.