Pay crisis: The tragedy of populism

Source: Pay crisis: The tragedy of populism – NewsDay Zimbabwe June 28, 2016

EARLY this year, around January, the issue of civil servants’ bonuses dominated news headlines. In fact, the previous November had begun with echoes of the raging question of whether there would be a 13th cheque for the over 500 000-strong government workforce. As the year 2015 drew to a close, Finance Minister Patrick Chinamasa pulled a shocker when he made the announcement that bonuses for the civil service had been suspended for two years in line with measures aimed at creating fiscal space to fund ZimAsset. This was quite a bold statement under the circumstances. It was going to be a first, an unpopular first though for a government that had dutifully paid bonuses since independence.

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Even when the darkest clouds hung above the nation in 2007 and 2008, bonuses were still availed. However, faced with a crippling liquidity crunch and an underperforming economy, the minister stood between a rock and a hard place. With the Government of National Unity (GNU) gone in 2013 and the operation of the multi-currency system dominated by the elusive United States dollar making business difficult, the prospect of giving bonuses was manifestly out of question.

Chinamasa, in his knowledge of Treasury then, made the following announcement: “In order to create fiscal space, the Government has decided to suspend bonus payments to civil servants in 2015 and 2016 and the situation will be reviewed in 2017 in the event that we are able to build enough capacity.” His decision divided opinion. Some strongly felt that he had done the logical thing given the topsy-turvy state of the economy, while others argued that the bonuses had to be awarded anyway. In the past few years government has awarded bonuses albeit with difficulty. It is not rocket science why the government has struggled with civil servants salaries: it is financially hamstrung.

Logically, it was something next to impossible for the debt-ridden government to manage a wage bill twice the normal bill. For the record, the government had grappled with the enormous wage bill since the end of the GNU; the paying of civil servants, since then, had become a matter requiring “mobilisation of resources.”

Candidly, given the state of affairs, all reason would have dictated that the awarding of bonuses be shelved until such a time that the economy improves. It was a statement of the obvious by the Finance minister; surely, if the government had struggled with a normal wage-bill, wasn’t it common sense that it would choke under an extra weight.

If the government had mooted retrenching at one point owing to the bloated number of workers, wasn’t it a given that the awarding of bonuses would be suicidal? Sound judgment then, clearly pointed to one inescapable thing: the definite suspension of bonuses. But what happened? How did the government end up in this unenviable position? How did the government come to an arrangement where it spends more than six tough months paying bonuses? This, evidently, is the ultimate consequence of pursuing populist ideas. This is exactly where populism leads to; it breeds more trouble.

Chinamasa, who had earlier spoken an accurate position started singing a different hymn after the Presidency overturned his decision at an Independence commemoration. ‘Analysts’ had also berated the minister for suspending bonuses to the end that logic was ultimately supplanted by populism. Now that populism rode roughshod over sense, the country finds itself in a worse quandary. What does the world make of a government that fails to pay its teachers, doctors and police force? How is that for an image of a country?

All this could have been easily averted by embracing the brutal truth that there simply wasn’t enough for Treasury to present bonuses. Suspension of bonuses was an unfortunate, but necessary thing to do. Look now what populism has wrought? The government has got itself in a vicious web from which it can’t untangle itself. There is simply no way the government can finish paying June salaries for the rest of civil service on July 14 and thereafter go on to pay them timeously a week later. By the time the government finishes paying June salaries on July 14, the due date for the pay of the army would be upon them. It’s really catastrophic.

Today the government is saddled with huge debts and after insisting on paying bonuses, the stubborn reality is slowly setting in. The decision to persist with bonuses has come to haunt the government like homing pigeons. Strikes and demonstrations will now reign supreme. Unions have already given warnings.

It promises to get ugly. The situation promises to go right to the wire in view of the fact that civil servants representatives were not involved in the whole process. They were only consulted after the announcement and this defeated the whole purpose of the salary crisis meeting.

This indeed is the tragedy of populism.

 Learnmore Zuze writes in his own capacity. E-mail: