Zim: Politics and the failing economy

via Zim: Politics and the failing economy – New Zimbabwe 02/11/2015

A NUMBER of erudite Zimbabweans spread across the globe and others locally based, have quite often taken time to contribute ideas and solutions through various fora to what has become a perennial economic tragedy besetting our country. However, nothing or little has changed on the economic development front. No special skills are required to realize that it’s no longer a case of lack of advice or solutions but it’s the politicians in government and their brand of politics that are standing in the way of economic progress.

Therefore any contribution in any space that purports to provide solutions to our economic problems has to attempt to deal with the devil of our retrogressive and archaic politics first if it is to serve any useful purpose. Of necessity we have to start poking holes in the armor of our politics for the message of the need for economic advancement to get through. What confronts us is our own political wall of Jericho.

Now, a return to focusing on the succession politics is clearly a step backwards. Succession fights do not provide us with electricity, investment, jobs or better infrastructure. Partakers of this futile exercise are only attempting to divert people’s attention away from the failing economy. The point they are missing is that the economy will be in a far worse condition by the time the succession battle is over. And the victors are likely to face an even more daunting task of trying to bring the economy to life as the populace becomes restless. Mass unrests are not limited to places across our borders or far flung territories. Everything has a beginning.

This jostling and tussling for power in the ruling party Zanu PF and government paints a picture of groups that are more interested in enhancing and securing their vantage positions at the feeding trough than anything else. Despite the rhetoric and familiar headlines, reality is that there is little focus and progress on the economy. And on the other hand there are erstwhile notables with nothing exciting to offer that have regrouped and in alliances of sorts and whose only ambition is to pivot to power.

In all this, nobody seems to be preaching any credible gospel that resonates with aspirations of the populace. And this only gives credence to the belief that perhaps the new leader(s) we shall inevitably have is, as of now, are beneath the radar and not among the familiar crew that’s given to the vampire politics of corruption, greed and worse stuff.

For every minute that is wasted on unproductive politics the country slides further backwards. With more pressing issues of, for example, a manufacturing sector or a functional industry that is threatened with extinction, dwindling power generation capacity and mega-massive unemployment – it is ridiculous to see political rivals being preoccupied with succession cat fights. When for example some leaders of war veterans take pleasure in spitting irrelevant vitriolic verbose at rivals of the same party, then it becomes apparent how messy the affair is.

But what some people fail to realize is that the liberation war record is now, as it will be in future, irrelevant in determining who can competently lead this country to better fortunes. The time when that might have been relevant was all taken up by President Mugabe. Therefore, anyone who touts liberation war credentials as a licence to silence others in a race to lead this country is a poverty-monger whose views should be dismissed or, at best and just like some cheeky old fellow who has had more than his fair share of opaque beer, be ignored.

As a nation, we run the risk of supporting people who want to assume power for the wrong reasons. The only message that resonates with the people is of necessity the implementation of viable solutions to our economic problems. These include, aligning domestic policies with goals of attracting investments that create employment, building power plants (solar, hydro & thermal); and trimming the top heavy government administration by, for example, reducing the number of government ministers. This would make better economic sense since that bloated administration consisting of about sixty-nine cabinet ministers, their deputies and provincial ministers – has not delivered and the deteriorated state of the economy says it all.

Gone are the days of worshipping politicians and con artists and not questioning the opaque acquisitions of their massive personal wealth which typically is often paraded in the form of hotel-like mansions on hill tops and the latest and most expensive luxury cars to roll out of show rooms in the US and Europe. As has been the situation elsewhere, in many cases, it is hard to trace such wealth to legitimate and tax-paying enterprises with capacity to back that wealth. Moreover, this happens at a time when the economy is not performing. A lot of what has transpired in the country under the guise of wealth creating empowerment deals and wheeling and dealing passes for a complete disservice to the nation.

Therefore, in the absence of concrete progress on the economic development front and as long as the usual suspects remain the only main beneficiaries of the current system to the exclusion of the now vending populace, then when senior government officials speak against corruption, to many they begin sound like the devil preaching against sin.

The leader of the largest economy in the world in terms of purchasing power parity, president Xi Jinping of China once warned his fellow citizens not to go into public service with the intention of becoming wealthy. As the anti-corruption campaign to clean up his party rolled into full swing, never has such a high number of senior officials been fired and arrested since Mao’s reign.

This has reportedly pleased the young generation in China and Xi is the country’s most popular leader since Deng Xiaoping. The message from president Xi Jinping is clear; those bent on amassing wealth or with ambitions to appear on the Forbes list of richest people must simply join the private sector and stay clear of public funds. An appointment to a senior government position does not mean an opportunity to milk the state.

That said, what our leadership should be excited about is striving to efficiently implement economic plans and ideas as laid out in current economic blueprints to realize the long known benefits thereof. Our dire need for a fully functional industry with its employment creating opportunities and better infrastructure (roads, rail, power plants, and port) requires leadership with a legacy mindset.

The government’s efforts in efficiently approving Dangote’s investments are commendable. However, the country still needs more investments of ten-fold the size of Dangote, Chinese-funded infrastructure investments and the Russians’ platinum mining deal all put together, annually for a few years, to establish itself as a noteworthy emerging economy.

The fact that there will always be challenges in accessing funds for development projects cannot be wished away. Improved domestic policies will dramatically lessen these challenges. Infrastructure projects are not the preserve of public funds only as private capital also has a significant role to play as long as there is a reasonable return. Properly structured public-private partnerships (PPPs) provide answers to many infrastructure projects which have been on the drawing board for years. The global financial markets are awash with infrastructure finance but, according to McKinsey & Company, the challenge is “finding attractively priced assets (i.e. infrastructure projects) with solid economics”. Therefore skillfully structuring infrastructure deals to achieve a win-win result is critical.

A recent accident involving two goods trains which collided head-on at Melfort near Marondera is a stern reminder of the need for investments of talent, equipment and money in our railway system. To employ the best skills in state-owned enterprises (SOEs), there is need to offer attractive packages as well as drastically curtailing political interference in management of these entities.

Instead of throwing a party for sixty-nine ministerial level individuals – in the form of relatively extravagant perks of for example, a Range Rover and a Mercedes Benz (each minister), Discovery and Ford Ranger (deputy minister), Mercedes Benz and Ford Ranger (provincial minister) and a whole gamut of state largesse – by a broke government, for an economy in perpetual recession and in a poor debt-ridden country; the state should be providing key SOEs (e.g. NRZ, GMB) with the requisite capital which is a better use of public funds by a distance. Singapore provides some of the best examples of well-run SOEs in the form of a world class airline and a power utility among many. The other viable alternative is privatizing these SOEs.

Commodities are currently in a cyclical downturn and the resources sector is therefore subdued as investors wait on the sidelines for an upturn in commodity prices. However the long term view suggests that this is the time to restructure key resource assets in order to fully reap the benefits of an upside. Chiadzwa diamond mining companies should be shaping up for a meaningful and transparent contribution to treasury.

This should include exploring for better quality diamonds that may be harbored in the deeper kimberlite pipes. Significant investments are required for the extraction of diamonds from these kimberlites. Therefore, the proposed merger of the diamond mining companies should be speeded up and restructuring completed to better position the merged company to attract investments for a more serious and beneficial mining business to take place.

A lot has been said about the importance of innovation to an economy but little has been said of the kind of innovation that may have success at given the prevailing economic factors. With research and development (R&D) budgets being only a minuscule or even unheard of in many of our public and private entities, how we can then create new things becomes an unfathomable mission for now. This lack of R&D funding therefore negatively affects our chances of success at science-and engineering-based innovation. Perhaps our best hope lies in efficiency-driven and customer-focused innovation. Applying world class technology in process improvements to increase productivity as well as crafting new business models that offer better customer experiences to local and regional markets are critical.

Since the dawn of time every major breakthrough and success in human development has been achieved through positive disruptive thinking and action, and not business as usual. Metaphorically, time is now ripe to discard the analogue type of old politics and go for the digital one which entails:

1: Fostering a legacy mindset, good governance and strong institutions,

2: Uplifting livelihoods through relentless economic advancement that raises standards of living for all, and

3: Respect for the rule of law, peaceful co-existence and fear of God.

We seek a leadership that believes and acts in creating a strong foundation for a better Zimbabwe which will benefit future generations. We say no to any leadership predisposed to devouring anything of value in sight for selfish and myopic reasons.

Noel T Ngangira writes in his personal capacity and can be contacted at ntngangira@gmail.com