Govt’s economic confusion

via Govt’s economic confusion – DailyNews Live 23 July 2014

HARARE – Nothing illustrates more starkly the Zanu PF government’s ruinous policy confusion, and how bereft it is of workable economic ideas, than this week’s contradictory, Alice-in-Wonderland statements by President Robert Mugabe and Finance minister Patrick Chinamasa.

In comments that left most Zimbabweans in shock, Mugabe said on Sunday the economy was on a recovery path, this despite his government struggling to foot the civil service wage bill, among others, as well as the worsening suffering of the general populace.

But just a day later, Mugabe’s Finance minister, Patrick Chinamasa, was singing a different tune on the same economy.

He said the economy was in deep doo-doo and that the introduction of the multi-currency regime in 2009 was to blame for the economic challenges Zimbabwe faces, as this not only caused an increase in the cost of goods, but also raised salaries to unsustainable levels, while reducing demand.

Interestingly, it was  Chinamasa, then Legal and Parliamentary Affairs minister and acting Finance minister, who introduced the multi-currency regime on January 29, 2009, in the wake of the calamitous collapse of the Zimbabwe dollar and the concomitant disembowelling of the economy then.

All of this raises the questions: What is happening and which is which comrades?

Let’s quickly dispense with Gushungo’s shocking “Mugabenomics.”

Without meaning to sound a tad rude, it is quite clear that the president lives on cloud cuckoo land, as his views on the battered economy are so out of touch with reality, and so upsetting in many quarters to a point of inducing trauma. Let us leave it at that.

What Chinamasa said on Monday pointedly contradicts the contrived positive spin by the president. But to his credit, he at least acknowledged both the dire state of the economy and the suffering of the Zimbabweans. But that is as far as the positives go, even here.

Firstly, and as pointed out above, it was Chinamasa himself who introduced the same multi-currency regime that he now criticises. What has changed since then?

Secondly, Chinamasa is part of the same government that routinely raises administered prices such as tollgate fees — by 100 percent. How can he then complain of economic cost pressures and price inflation?

Thirdly, did Zanu PF not take credit for improving the economy during the unity government days, ascribing this to the multi-currency regime? Again, what has changed?

And how come indeed, that during the GNU, the economy improved visibly but is now in intensive care?

The nation waits for cogent answers to this riddle, not the usual scapegoating of non-existent sanctions — as the remaining targeted restrictions were in place even during the GNU.

Fourthly, has Chinamasa really forgotten that dollarisation, which he introduced two weeks before the formation of the inclusive government, ended the terrible era of hyperinflation, and stopped the economy from imploding altogether? What indeed is the alternative to the multi-currency regime?

Fifthly, why is it that Zanu PF can never take responsibility, and always blames everyone else except itself for our dire plight? Did you guys not cause the implosion of the Zimbabwe dollar because of your reckless policies?

And did you not usher in the era of the greenback, which you are now blaming again? And we can go on and on.

Our advice to Mugabe and Chinamasa is that the enemies of our economy and people are not external, but found in cabinet,
government and in Zanu PF.

And as unpalatable as this may sound to you, it is true.

All that is needed from our rulers to foster stability and development in Zimbabwe are sensible, clear and consistent political and economic policies. Surely, that is not too much to ask from them? Indeed, our leaders should not sabotage the economy the way they are doing. It has become the stock-in-trade of life under Zanu PF that one day those in authority say the Zimbabwe dollar won’t come back in the next five years — and then the very next day we are told it’s a possibility.

This erodes both investor and consumer confidence, thereby destroying the country. Zimbabweans will be hoping, and praying, that the government, following Chinamasa’s polemic, is not thinking of re-introducing the much derided Zimbabwe dollar.

That would be folly, as ordinary Zimbabweans long discarded that useless currency well before Chinamasa took credit for its fêted death.

Indeed, if the Zimbabwe dollar is re-introduced anytime soon, the country will be doomed to implode spectacularly.