Paradigm shift is now necessary to create a new economy

Source: Paradigm shift is now necessary to create a new economy – NewsDay Zimbabwe

Vince Musewe

DEAR President Emmerson Mnangagwa.

Your Excellency, if you look at the economic challenges which our country has faced for the last 20 years, you will realise that the nature of the problem has not fundamentally changed. What has changed has been how those problems have been framed or interpreted in order to create new narratives which serve particular interests.

Your role, as our leader, is to seek to objectively understand fundamental problems and transform the socio-economic architecture so that it can meet growing needs and aspirations of a changing society.

When a society stays in one economic or social stage longer than necessary and running on an old paradigm which can no longer provide answers to life problems, that society struggles with life necessity problems.

Your Excellency, the living conditions in any society are determined by the thinking of the leadership, which develops into a set of beliefs called mindset.

The mindset and systems that are created to help that society to sustain itself economically is called a paradigm. The mindset is also called psychology.

A new paradigm must, therefore, emanate from a renewed mindset of leadership and that new mindset must emanate from acknowledging the facts that old systems which no longer work must be changed.

The facts from which a new mind-set must emanate are as follows:

The Zimbabwe economic architecture of a dual enclave economy no longer serves the needs of our society.

Your Excellency, the devolution of economic power is critical to create inclusive growth. This devolution must be accompanied by building the necessary capacities both in the public and private sectors in each province, so that each province not only has the necessary financial resources, but the abilities and competences to manage funds and chart their own economic trajectory based on their factor endowments.

Devolution needs, therefore, to be taken seriously as a means to dismantle the enclave economy and skewed economic growth and opportunities and create inclusive broad-based economic development where every citizen has a stake.

Zimbabwe’s economy is locked into the production of primary goods which cannot generate the necessary income needed to sustain our needs.

Value addition and beneficiation are not just popular mantras but key triggers to creating local wealth, income, jobs and development. We cannot expect to create sustainable growth as long as we are subject to international commodity prices, which are volatile.

Each time we export raw products, we are missing the opportunity to retain value for our citizens and create local growth and development. No country has ever created sustainable growth through primary product exports.

Almost 80% of our exports are primary products. We need to reduce that and export finished products as much as possible. The benefits of this to our economy are non-debatable. Value addition, beneficiation and import substitution are the Holy Grail to prosperity.

Zimbabwe’s economy is too dependent on foreign capital and that foreign capital only generates wealth for those investors outside Zimbabwe, thus prejudicing the development of the country.

Your Excellency, there is nothing wrong with foreign investment, it creates confidence in the local economy, develops important international business linkages and also creates value and jobs for our citizens.

However, local investment is best as it allows us to build our own capacity to create value and develop new local skills through technology transfer.

It creates opportunities for long-term wealth creation and results in citizens benefiting from our resource endowments. Indigenisation as a policy position is necessary, the question is always how it is implemented and who ultimately benefits.

The fact is that we have the skills in agriculture and we have the skills in mining, all we need is the technology and access to long-term capital and markets for beneficiated products. The ball is in our court.

Zimbabwe’s public institutions are not appropriately structured to meet the social needs of our people.

Your Excellency, the responsibility of public service is to make life easy, administer and provide essential services to improve safety and quality of life of all citizens.

The structure of our public service institutions was inherited from a colonial system which served the needs of a minority.

We must create new and devolved structures which serve the majority and it requires new thinking, new behaviour, new skills, new technology, new processes and above all unquestionable ethics and integrity.

The public service must never be a political playing field but inclusive and non-partisan in its approach to improve the quality of life for all.

Your Excellency, our human capital development is lagging behind and thus limits the potential of the country.

Human capital refers to processes that relate to training, education and other human capacity-building initiatives in order to increase the levels of knowledge, skills, abilities, values, and social assets of the citizens of any country. It also includes the preservation of that human capital.

Human capital is at the centre of everything and not at the periphery. Our investment in and focus on human capital development issues must, therefore, increase significantly. This includes health and education.

Developed countries have become developed through continuous investment in research and skills development, while Africa continues to underinvest in its future.

Differences in economic growth across countries have become closely related to investment in the development of human cognitive skills and capacity. Unless we focus on developing these, we will remain underdeveloped — operating much below our potential as a continent.

Your Excellency, our political architecture is divisive and creates a winner and loser mentality which divides and short-changes any collective effort to develop the country.

There is nothing wrong with having different opinions on how things must work. In fact, there is strength in diversity.

The question is how we can harness that diversity in perspective, skills and thinking so that we can create a great country.

If we accommodate each other, we will soon realise that our differences can create better solutions for all of us. That is all I have to say.

If we accept the above as true, it, therefore, requires a fundamental shift of mind and focus on what matters and what needs to be done to create good socio-economic conditions and ultimately a good quality of life for all.

Nothing is impossible!

Vince Musewe is an independent economist. You can contact him on vtmusewe@gmail.com