via It’s all down to leadership | The Zimbabwean 6 August 2014 by Eddie Cross
A week ago one of the Professors from the Chicago School of Economics was brought out to Zimbabwe to give a series of lectures on what makes a country or a company successful. This was no ordinary economist – he was a Nobel Laureate in economics. I attended one of his talks and the content is still running through my mind.
Botswana now provides a third of world diamond supplies and does so in a transparent, open manner.
He started out by saying that he was really a mathematician, not an economist, and that he had to admit that in his view sociology was much more important in economics than science or mathematics. The point he was making was that all economic activity was driven by human action and management.
The successful country or firm was a direct result of human leadership. He also made the important point that the most successful models all had the same characteristics: they were highly devolved – with authority and decision-making dispersed down to the lowest units in the society or company.
At the end of his talk, he listed the characteristics of those countries or companies that had failed to deliver a better standard of life to their people or employees. This list was not long but the people at my table, all senior executives from major companies, groaned aloud – we could tick every box for our country. Some of them may have been thinking about their own corporate experiences!
Here in Zimbabwe we have had some experience of the failure of leadership in our national affairs. President Robert Mugabe has been in absolute control of the state for the past 34 years – that is twice as long as Ian Smith and a third longer than Cecil John Rhodes lived in Africa. The country has had two short bursts of growth and stability – the 10 years from 1980 to 1990 when he was forced to share power with the remnants of the Rhodesian settler regime by the Lancaster House Constitution and then the four years up to 2013 when he was forced to share power with the MDC.
But even in these periods he was the main actor on this stage and in all of these years his leadership has been dismal. He has taken what was a small, middle income country with a diversified economy, a well-developed infrastructure and a good nucleolus of both national health and education institutions and reduced it to a near failed state.
Tribute to values
All social and economic indicators are negative and as a result Zimbabwe has slumped to becoming a very poor, marginalised state that cannot feed itself or meet the needs of our people for the basic essentials of life. Our only redeeming feature is that we are not shooting each other and that is a tribute to our values and character as a country, not our national leadership.
Compare his leadership with that of Rhodes. He arrived in South Africa with $10,000 in his pocket – start-up money from a maiden Aunt in Britain, he had poor health and was advised to live in a drier climate. In the next 23 years he established 70 companies – two of which are today in the top 500 global corporate’s. He became Prime Minister of the Cape and established the boundaries of Botswana, Swaziland, Zambia, Zimbabwe and Malawi. He built thousands of kilometres of railways and roads and opened up the Mining industries in South Africa, Zimbabwe and Zambia.
When he died at the age of 49 years, his death was marked throughout the world, but most significantly, the people of Southern Africa gave him a royal funeral that started in Cape Town and ended with his burial in the Matopo Hills outside Bulawayo where the Ndebele people gave him the royal salute – used for the last time in this country. When Mugabe eventually leaves the stage, his legacy will have been totally destroyed by his leadership of his country and among the Ndebele, there will be celebrations, joy and certainly no royal salute.
Compare Zimbabwe with Botswana next door. Having none of the advantages of Zimbabwe – it’s an arid country with few resources and a small population, yet under the leadership of the Khama family, Botswana has grown its economy rapidly in the past 35 years and is now well into the status of a middle income country.
Where the discovery of diamonds in large numbers in Zimbabwe has been associated with corrupt maladministration and human rights abuse, Botswana now provides a third of world diamond supplies and does so in a transparent, open manner with the great majority of the financial returns going back to the people through a clean, honest government.
Our economics professor from Chicago described the Chinese model of leadership and management and argued that the secret of their success had been the devolution of power, from the centre to the lowest levels of Chinese society.
He did not mention the dramatic change from the over-arching leadership of Mau, accompanied by poverty, marginalization and tens of millions dying from starvation, to Deng in 1979. But when that small shift in leadership took place, China simply took off and just 35 years later, China now has an economy that is second only to the United States although it remains a relatively poor country in per capita terms – certainly poorer than the average citizen of Botswana. It is all about leadership and the advances made by China in the same period as Zimbabwe has had Independence, is simply stunning.
Although I live and work in Zimbabwe, I have been astonished by the severe reaction of the people of this country to the resumption of total control of the state by Mugabe in August 2013. The reaction of the markets was immediate and devastating; funds amounting to billions of dollars fled the stock market and the banks. Investment inflows have all but stopped.
VAT receipts are down seven per cent year on year, a clear indication that people are not spending. Sales of beer are down 15 per cent, fuel sales have declined sharply and there is no sign of any recovery. Revenues to the State, after rising rapidly from 2009 to 2012, have slowed and are now declining just as rapidly. A pall of despondency lies over the entire country and every aspect of life are affected.
What is the reason for this sudden downturn in our affairs? The only thing that has changed is that Mugabe and his gang have achieved what they set out to do four years ago – retake control of the country. That is it, just one change – we have had a very good season, global commodity prices have remained stable and even risen slightly, we remain using the US dollar as our main means of exchange. The conclusion is inevitable, our leadership has been judged and found wanting and until there is change, there can be no progress; that is the harsh reality that confronts us as a nation.