The architect of de-industrialisation

via The architect of de-industrialisation – The Zimbabwe Independent May 1, 2015

SADC leaders met in Harare this week to discuss a regional industrialisation strategy and roadmap at a time when Zimbabwe is undergoing massive de-industrialisation, amid company closures and job losses due to economic failure.

The economy, decimated by poor leadership, bad policies and extractive institutions, is going through structural regression, with rapid de-industrialisation, unemployment and poverty.

Between 2011 and 2015, more than 4 610 companies closed, throwing over 55 000 workers into the streets. By now and in reality the figures should be much higher than that.

Ironically, President Robert Mugabe, who presided over the damage of the country’s relatively strong industrial base and in the process devastation of the economy, chaired the meeting. An architect of alarming de-industrialisation not just chairing such a meeting but also pontificating and championing industrialisation!

Besides that, this is a 91-year-old and frail president showing signs of dotage and health complications, who despite having studied for seven university degrees — including economics — has inexplicably proved over the past 35 years to be economically illiterate as shown by the current state of an economy shattered by extractive politics as well as associated policies and institutions.

According to the Confederation of Zimbabwe Industries 2014 manufacturing survey report — which provides compelling analysis of the business operating environment focusing on manufacturing — the sector is undergoing serious de-industrialisation which has reached “catastrophic levels, with dire consequences to the state of the economy”.

The survey warned arresting the problem will not be an easy task. Both private and public sectors must take action to tackle the spectre of economic decline, it said, indicating in 2014 average capacity utilisation continued to plunge, shedding 3,3% points to 36,3%. Quite telling were the prolonged effects of power cuts, heavy cost structures, liquidity crunch, low aggregate demand and many other problems buffeting the economy.

Mugabe in 1980 inherited the most industrialised country in sub-Saharan African outside South Africa, the regional economic giant. Zimbabwe had the most developed industrial sector in Africa south of the Sahara apart from South Africa because of the modest development of mining and agriculture. It also had a diversified economy.

By contrast, countries like Zambia and Ghana, for instance, depended on one primary product, copper and cocoa respectively.

That was the situation in most countries in Africa at independence. Botswana did not even have an economy to talk about, yet it’s now an African success story together with Mauritius.

Instead of coming up with a coherent economic and industrialisation strategy after taking over the siege economy in 1980, Mugabe embraced command and populist policies which would eventually prove disastrous.

By the end of the first decade of independence, mismanagement and corruption had set in. The advent of the liberalisation era after 1991 brought its own challenges. When the IMF/World Bank-inspired reforms did not yield desired results due to a combination of factors, the situation could only get worse.

A succession of poor policy choices and decisions, including huge unbudgeted for war veterans’ payouts, the DRC war and heightened campaign for land reform during the late 1990s, triggered a precipitous economic decline.

This was accelerated by chaotic land invasions after 2000, which dismantled the economic base, agriculture and downstream industries. Persistent threats of company seizures worsened the crisis.

Since that time de-industrialisation took root as companies relocated, downsized and closed down. The suicidal indigenisation policy exacerbated the situation.
In short, Mugabe presided over Zimbabwe’s de-industrialisation.

So how can he seriously be a champion of industrialisation or re-industrialisation with that sort of record?

Industrialisation is a political project with an economic strategy. It is about making correct policy choices, creating the necessary institutions and incentives, as well as summoning the political will to seriously provide leadership and direction.

Mugabe is simply unable or unwilling to provide that.

COMMENTS

WORDPRESS: 4
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    Well recently I’ve noticed a trend, mostly used by young men who are finishing washing your car or giving you your dry cleaning. They finish the transaction with, “There you go, boss.” And I hate it ever so much. Why you should never call anyone “Boss”.ou see the whole, “there you go, boss” is a phrase that I think you’d hear the black train porter saying in a 1930’s movie and it always just seemed wrong to me even in that context (frankly all of the above seemed wrong – blacks only being allowed to be porters, etc. you hopefully get the idea).I just think that phrases that put one race, person or whatever down or makes them subservient to you seems a bit demeaning and demoralizing. Today’s racism is often subtle, unlike the strain that infected the nation during the civil rights era. It’s carefully veiled. Daily situations are more shades of grey than simply black or white. Like any form of oppression, the people on the receiving end are left with the impotence to say something. But sometimes, our learned defensiveness jumps the gun and what appears to be classic racism may actually be a case of mistaken identity.I’m sure you and many other blacks don’t analyze every statement to decide whether there is a racist element to it. However, many blacks do. And many blacks thrive on racism/victimhoodIf I said, “I stay away from all white people because most of them are prejudiced against me,” I would sound pretty prejudiced myself, wouldn’t I? I think it’s best to avoid racial typecasting because it closes you off. I have many white friends and engage in many activities that some may think should only be done by white people, but limiting your viewpoints only limit your own experiences in life.. And then there are things like the nonsense as to whether the term “black hole” is racist (google black hole racist term). My God, if we have to have a debate as to whether “black hole” is racist, then what hope is there? I prefer not to have to walk on eggshells when dealing with other people and to have every statement parsed to see if it passes the racist test is ridiculous. View people as individuals, and I am sure that you will discover that you actually interact with quite a large number of black people who treat you fairly (or even kindly) every day. That is all.Our people are suffering still from institutionalized racism meant to keep us in the lower class. THIS. IS. REAL. But nah…it’s just like the oppressor to demean the victim’s claim. If you go to Manhattan for instance people are a lot more diversified(mixed) and more educated so they don’t base people on skin.By putting another culture/country before the name just adds to the fact that you do not feel you are an equal human living in.We are all one species. We are of multiple races.I don’t care if you’re black, white or blue (Sudan actually has a wide colour range of descriptors for people from white, yellow, red, brown, green and blue depending on your skin colour and heritage). Treat people as you would hope to be treated in return.Almost EVERYBODY describes people by the color of their skin and thus, perceived race. I can almost not talk to anyone The black hole is a defense mechanism. It’s what’s left over for a time when black students in nice schools were a minority and afraid of abuse. Now it’s a defense mechanism, and the reality of it is that anyone can go in the black hole these days. All you need is to have a friend in there. The only reason it still exists is that racial issues will always be slightly tense because people are afraid of crossing lines and black people are still being persecuted in many real ways.Have you noticed that the turnover rate for blacks is significantly higher than it is for our white counterparts? Have you stopped to consider why? For now, I’d like to describe to you the miasma that surrounds black managers in our everyday work lives and help you understand how it can erode my productivity and our relationship in insidious ways. I’m going to give you some examples, although I’m wary of doing so because each story, taken in isolation, may seem trivial. But please understand that I could go on and on. I could give you hundreds of examples—things that happen to me and my black colleagues and friends every single day. It’s the cumulative effect that wears us down.We must all share the blame for our ‘useless’ politicians.Most people are angry, not apathetic, and what makes them angriest is politicians who break their promises, which should be no surprise. In living memory there has been no greater deception than in the rift between this government’s pre-election words and post-election deeds.Some accepted deficit reduction as an excuse – but it has corroded trust. Why should anyone believe a word any party says next time? Intense mistrust of parties is growing dangerously with each generation: with fewer than 1% of the population members of a political party, people understand less about the necessary compromises. Our poll’s “angry” voters say they want politicians to say what they believe, not mouth the party line-to-take.But don’t forget that politicians speak robotically for a reason – and voters share the blame. Voters say they dislike party discipline, wanting MPs to speak their consciences, yet as every original thought becomes a newsworthy “gaffe” and “split”, voters also punish parties severely for any sign of disunity.Our democracy is in crisis. Politicians are doing lots of trivial, silly stuff these days; they are, to a man, non-entities, totally unable to capture the imagination of the public. The voters are turned off by all this, their opinion of the political class is nosediving, and fewer and fewer are bothering to vote at all. What is needed, if our democracy is not to fall apart, is a new breed of politician – closely resembling a much older breed of politician – who can inspire the masses with displays of vigor; good sportsmanship; success in battle; raw sexual magnetism; athleticism; tales of derring-do, etc.The common criticisms make this clear: our politicians aren’t smart enough to do this; they aren’t brave enough to do that; they don’t care enough to do the other. Which is to say, we need a better class of politicians – cleverer, braver, more compassionate. Our problems, whatever they may be, can and will be solved by politics as long as the “right men” are in charge. Or, at least, “better men” are in charge. And it’s always possible to find “better men”. That’s why we have elections, isn’t it?

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    C Merson 7 years ago

    Look, it was never about economics, it was always about esteem

    Mugabe may have espoused different things but 35 years of unhindered experience shows this to be true. He was only ever interested in being President and never in its purpose.

    Sadly the amiable nature of Zimbabweans has facilitated the realisation of his whim,,, anywhere else in the world would have dealt with the position differently, very differently and much sooner. So maybe, to some degree, Zimbabweans are themselves somewhat to blame.

    One day, the army whose members are drawn from the people, will recognise whose interests they are really responsible fot and to whom their oath of loyalty was sworn.

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    What it was always about was racism, theft and envy

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      PRESIDENT Robert Mugabe and his ruling Zanu PF party have reduced Zimbabwe’s working class “to beggars and vendors while millions of others have been forced to seek economic refuge in other countries”.nstead, hundreds of companies continue to close and lay off workers as the country’s economy dramatically nears collapse.“Thousands of workers still fortunate to be employed are going for months without salaries while others are getting half of their monthly salaries as the companies fail to cope with the harsh economic conditions”.“It is a sad period for the hard working people of Zimbabwe that the Zanu PF government has failed to show leadership at such a critical moment.”“Zanu PF should stop spending time on petty factional and infighting fights that do not benefit the people. It is criminal and heartless for Zanu PF to let the people of Zimbabwe suffer because of its greed and corruption.“President Robert Mugabe and his wife should stop immediately their endless and irrelevant foreign trips that benefit no-one but gobble the country’s Treasury millions of dollars of the much need foreign currency.
      “We have suffered for a long period under an uncaring and anti-labour dictatorship and the end of that era is imminent.”