Zimbabwe, the future is in our hands

via Zimbabwe, the future is in our hands | The Herald 18 November 2014

Liberation movements in Zimbabwe were born in the crisis of the illegitimate colonial Rhodesian regime. It became necessary for the liberation struggle in Zimbabwe to move to a military strategy for the overthrow of the repressive regime. From the time of the Unilateral Declaration of Independence (UDI) in 1965 until independence in 1980, Rhodesia, as Zimbabwe was then called, was in crisis, caused by the military incursions by the two liberation movements — Zanu-PF and Zapu.

The crisis led to Independence, with the military playing a decisive role.
Given that history, it is not surprising that Zanu-PF is good at dealing with crisis, and is good at using crises to bring about change. But change from what to what?
Is one faction better than the other?

The most important question is: “What changes should take place to improve the lot of the majority?”
To me the challenge is to move away from foreign aid, donor dependency and dependence on foreigners to develop the country. Everyone has agreed that the present stage of the liberation struggle in Zimbabwe is the economic liberation struggle.

We need to develop the country so that every Zimbabwean has a good education and a good job.
It is also clear that donor aid is going to be very limited in the near future, due to the economic crisis faced by the West.
While sanctions are slowly being withdrawn, there will certainly be no immediate return to pre-sanctions donor aid.

FDI is also likely to be scarce, with an average of $400 million at present.
Of course it is obvious that foreigners are not going to develop Zimbabwe, whether they are from the East or from the West.
The example of China’s economic development path is enlightening.

They made great headway in transforming their economy in the last 35 years and have now become the second largest economy in the world after the USA.
However, they did not get much FDI in the first 10 years after opening up their economy: those years they had to depend solely on careful state investment into the economy, and this was very limited, and on attracting the Chinese Diaspora to come and start manufacturing industries in China.

The state in China facilitated the building of infrastructure such as factories, which had access to electricity, water and good communications, while inviting the diaspora to come in with their modern machinery, modern management systems and already developed overseas markets.

This partnership between the State and the Diaspora gave China a head start for 10 years, after which they could attract billions of dollars of FDI because of their already good infrastructure, skilled and educated workers, and low salary scales.

They became the workshop of the world: whether you are in Europe or the United States, Africa or Asia, you buy goods made in China.
Going back to the post-faction period in Zimbabwe: can we move forward instead of backwards? Can we begin by using our own money to kick start the economy? This money is the State budget and the Diaspora money. Donor aid and FDI will remain small or even negligible, but our own funds can easily surpass outside funding.

We need to remind ourselves that it is the responsibility of the Zimbabwe Government and its people, rich and poor, to develop the country.
We have a great document known as Zim-Asset which sets out ambitious goals, for which there is no money.
Zim-Asset says we need $27 billion to succeed.

FDI last year came to $400 million, less than 1.5 percent of what is required.
If we place our hopes on donor aid and FDI, we must wait about 70 years to accomplish Zim-Asset. Yet we have money of our own that we can use. What the Government has to do is to bring all Zimbabweans together, both the rich and poor, to work in a united way to develop Zimbabwe.

We are not united, with various factions fighting.
We cannot be united with these factional fights.

The first task is for Government to play its role of uniting the people behind a realistic plan. If all Zimbabweans were convinced that we are going to use Zimbabwe’s money to increase our GDP and increase employment, everyone would unite behind such a plan.

Can we use Zim-Asset to make a realistic plan for the remaining four years of Government’s time in power?
First of all, let’s look at the Government’s own money paid by our taxes.

The planned budget for 2015 is $4.34 billion. Can the State make an effort to reserve at least $1 billion for agriculture and industry, while depending on the Chinese to invest in infrastructure? Presently over 75 percent of the budget is spent on salaries of civil servants, as the number of civil servants has more or less doubled since sanctions were imposed. The Government used the civil service as the only available tool for employment creation.

As a result, the civil service increased from 164 475 in 2001 to 285 000 in 2014, an increase of almost 100 percent.
It is not surprising that we cannot pay civil servants well. To use the budget to employ loyal followers works, but it does not increase Zimbabwe’s GDP, because the civil service cannot increase productivity on its own.

If the Government could indeed reserve $1 billion for agriculture and industry, this focus would certainly increase productivity within a year or two.
A simple strategy would be to increase the allocation for the GMB from the present $36 million, about $18 per farmer as we have over 2 million communal and resettlement farmers, to say $250 million (to $125 per farmer). This would allow small scale farmers to become self-sufficient rather than beg for seed and fertiliser.

Free handouts should of course continue to help the indigent, but we have many hard working highly competent farmers who cannot sell their crops whilst Zimbabwe is importing $1 billion of food.

Let’s help our own farmers rather than those of our neighbours. Zimbabwe would become self-sufficient in food again.
It will be important to focus investment in industry, and I would suggest that we should invest in housing.
This is because we have a deficit of 1.25 million houses.

It is also an area that will attract Diaspora dollars: nearly all Diaspora want to come home in the end, and they can invest their money into housing and factories, if Zimbabwe offered attractive and trustworthy investment windows.

This would mean expanding mortgage possibilities say to a dozen or more trustworthy banks, building societies and other institutions and companies specialising in construction.
Our Diaspora is suspicious of putting their hard earned cash into only one State owned institution, having been badly cheated over the last few years.
The $250 million from the State to banks, private and non-governmental institutions would be enough for 25 000 houses at US$10 000 each.

Note that mortgages are repayable over time, so this is a worthy investment that can attract a lot of Diaspora funds.
The UNDP has estimated that the diaspora brings in about $1.3 billion a year, but this is not into economic development. Mainly it is brought as goods for their families. With the impossibility for ordinary people to buy housing or farms, a lot of this money goes into second hand motor cars which are now cluttering Zimbabwe and causing daily traffic jams.
Government has a challenge of attracting these “home owned” dollars to development programmes. If housing were done by more than a dozen institutions this could be immediately successful. How can we make our diaspora trust what we are doing?

Employment creation is absolutely essential. The answer to unemployment in most countries, for example Japan, was to use public works to improve on infrastructure. Japan succeeded very well through public works after the Second World War, rebuilding their totally devastated country in a short period of time.
The 2014 budget allocation for public works under the Ministry of Local Government was $46.9 million, about half of which is utilised by the bureaucracy.
If the amount dedicated to actual public works was increased tenfold to US$250 million, it could increase the number of employed by 100 000 – 200 000 a year.

An agricultural worker today is paid about US$1000 a year, whilst a domestic worker is paid US$1800 a year.
These are valuable amounts for the unemployed, and public works could increase and improve agricultural productivity, infrastructure, and demand for goods. This investment will boost the economy. It will mean a huge investment into rural development.
Can this factional crisis lead to a development programme that unites Zimbabwe, including its Diaspora, and have a developmental budget?