Source: Politics, economics: Bane of Zim’s socio-economic prospects (Part 1) – DailyNews Live
hama saburi 3 September 2017
HARARE – A recent report on Zimbabwe authored by the International
Monetary Fund (IMF) creates the impression that efforts of the economic
team driving the country’s revival agenda are being undermined by
political circumstances.
It notes that this economic team was forced to pay the 13th cheque in 2016
by government mandarins, which bonus payment had not been budgeted for.
Lately, there have been reports about President Robert Mugabe also
reversing the decision to retrench 2 000 civil servants who were employed
under the ministry of Youth.
What is coming out from all this is that there is conflict between
economics and politics. It is also being implied that our economic
think-tanks are not the cause of the rise in the fiscal deficit and the
implications thereof.
A strong relationship exists between economics and politics. In fact, the
performance of the economy has always been one of the key political
battlegrounds in Zimbabwe and elsewhere.
Economic policy involves combining economics with a broader understanding
of how to make policy work, whether politically, administratively, or
otherwise.
Economists need political support to push through their policies and due
to the fact that many economic issues are inherently political.
Resultantly, economists need to be aware of this interplay to ensure that
economics does not lose its appeal.
The next question then is; who should manage the economy – unelected
professional economists or politicians who get elected but might not know
about economics?
There’s no easy answer.
Naturally, it should be both. In a democracy, this should be the
responsibility of elected politicians whose decisions should be based on
advice from impartial economists and the electorate.
Their decisions should be based on evidence rather than looking for
something to justify their political ideologies.
The IMF’s reports on Zimbabwe seem to suggest that Zimbabwe’s sound
economic policies are frustrated by politics, given that some “good”
policy recommendations do not see the light of the day while other “good”
policies are reversed or some “bad” policies are imposed on technocrats.
Our challenges are largely fiscal and structural. Those that remain
unresolved are political in nature. We have, therefore, seen failure by
both the economists and politicians to understand and accommodate each
other.
There also seems to be differences in ideology or schools of thought
between these parties.
Our technocrats are more on the neo liberal side while the political side
is shaped more by the Marxists or socialist background.
Resultantly, our technocrats, to some extent, view politicians as people
with limited understanding of economics. As such, they want them to
implement policies that may even push the politicians “out of power”.
The attendant resistance to some of the neo liberal policy options by
politicians has now resulted in the country having a “good economic team”
versus “bad politicians”.
The technocrats are happy with the pat on the back they get from
international institutions for the recommendations they make even though
some are not implemented or a fraught with delays.
Isn’t it time economists also seek to understand the other view and see
how they can be blended together in a manner that reduces tension and
moves the country forward?
Our economists believe that our salvation is in the IMF and hence they try
by all means to please them and force government into arrangements, which
principals have doubts in terms of their materialisation.
In the past, Zimbabwe paid $100 million to the fund, with the hope that we
would get funding from the IMF. Lately, the country was working on the
Lima debt arrears clearance programme, which has not yet materialised.
According to the IMF, the Lima process is said to be “facing severe
headwinds” because of the need for a strong reform agenda on “political
and governance reforms, including human and property rights” to facilitate
debt treatment and the unlocking of financial support. This is despite the
fact that the multilateral institutions were all engaged at the same time
and had agreed to the proposal.
Politicians see through these things that economists fail to see and at
the end of the day feel vindicated on the need to go it alone.
At the same time, it signals a marked shift in goal posts by the
multilateral institutions and the tone of the language now mimics that of
the major shareholders.
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