via Zim faces crises of legitimacy, governance – DailyNews Live by Tendai Biti 1 OCTOBER 2013
Wananchi, the immediate future of this country’s economy will largely be steeped in commodity resources.
With the decline in agriculture production and the clear inevitability of a challenged 2013-2014 season, more than ever mining will be critical to this economy.
Moreso, in the face of self evident absence of an ability to tap into international finance markets and the very limited nature of other options.
But that resources were increasingly central has been self evident to all in the last few years where the same have overtaken agriculture as the main sectorial contributor to GDP by a long mile.
The one evident self thing that has occurred in the last two decades is the dramatic and serious re-configuration of this economy and the redesigning of the same.
Small and enclave as this economy is, it has not escaped capital’s inherent structural booms and crises which in part are a by product of the crises of over accumulation and the consequences of a massive expansion in credit.
In very simplistic terms, the crises of over accumulation simply refers to capital’s tendency to overproduce (technology, machines, ICTs) in the face of falling demand.
The natural consequences are devaluation of capital through company closures, insolvencies, retrenchments and mergers. At a broad macro level, this simply leads to a crisis.
In post-independent Zimbabwe, the height of accumulation reached its peak in the late 80s whereby by 1990 manufacturing was now the major of the economy contributing 18 percent of GDP, higher than agriculture.
But that same period was a golden era of the financial services sector too.
Mortgages, hire purchase agreements were the order of the day.
The expansion in credit and the shifting of attention to consumer facing projects, retail and trinkets, particularly occurring during Esap led inevitably to a collapse.
The manufacturing sector declined from a peak of 18 percent in 1990 to a miserable -6 percent by 1999.
This massive devaluation of supply was reflected in unimaginable current account position at that stage.
Since then, the country’s current account position has dipped to the level of almost four to one, the ratio of imports to exports.
At a theoretical level and I hope to examine this very soon, the question is the current crises one of over accumulation or under accumulation.
If it is the latter under what circumstances is there recovery in the context of absent demand, and an informalised and peasentised economy.
Theses are big questions which validate my own contention of States in permanent crises.
Back to mining, the extent of Zimbabwe’s crises is that in the last decade, virtually every sector collapsed, with resources then increasingly taking centre stage.
Below are selected figures from the 2013 Budget reflecting in percentage terms sectorial growth
These figures make a frightening story even though there was self evident growth during the GNU era.
They point to the need of what I have called before a fundamental revisit of the State, Development and the Economy.
But of course, the present calibre of our rulers is that this is a dialogue of the deaf and once more five great years will be worsted and wasted.
If the future of the country is on mining, then it means that Walter Chidhakwa is huge.
As if he did not already know.
His apprentice period will be very short and will virtually have no honeymoon.
It is not just the pressing nature of our the status quo.
First is the imperator of addressing the mining model in this country and virtually every other African country.
Mining in Africa has remained stuck in the colonial legacy of being an extractive, high value but low impact activity.
An enclave mineral economy reproducing the colonial accumulation model of extraction and rent not channelled in the local economy.
Second and more worryingly for Zimbabwe is the chaos created in this sector in the GNU period where corruption, opaqueness and purely predatory accumulation became the order of the day.
To add to the mess was the shadow of an ill thought indigenisation drive that lacked legal finesse and clarity.
The consequences of this have been exposed in our media.
The Daily News’ covering of the Nieebgate deserve special and enough respect.
Third is a legal framework, embodied in the Mines and Minerals Act, that is so antiquated sterile and anti national.
It is a standard peace of legislation originally crafted by the Crown as a model for all colonies with resources.
The religion being espoused being one of free mining.
Fourth is the absence of geological exploration in this country.
The last serious exploration having been done in 1968.
Lack of exploration invariably leads to the fifth trap,which is the conspicuous of absence of Mineral Register or data base.
The danger is that thieves have capitalised on this.
Concessions have been sold without the sellers knowing what they were selling.
In this vacuum, a complicated infrastructure of looting was created ,with the chief looter demanding a ransom of $10 million for a concession.
What has been exposed in Masimirembwa’s case and the undenied statements of Lovemore Kurotwi, the former director of Canadile are just a tip and I have to say a tiny tip of the iceberg.
Given this mess what is to be done?
It is self evident that the country must come up with a resource-based strategy that is visionary and most importantly immune from rent and aggrandisement.
At the epicentre of this strategy must be to destroy the enclave state of mining in Zimbabwe and make it a high value and high impact industry .
In the very immediate short term must be the imperator of dealing with diamonds and putting a foot down against the ongoing stampede and the infrastructure of looting that is in place.
I have pointed out what needs to be done on diamonds in a previous post.
Beyond diamonds it will be imperative to bring a brand new Mines and Minerals Act.
The same should address key questions of parcelling out mining concessions, the State’s dominium over all resources, the use-it-or-lose-it principle,the marketing of minerals and the role of Zimra in the entire mining sector.
Once this is done, the next question is that of redefining a new accumulation model in respect of minerals.
In this regard the key question of value addition and beneficiation will be key.
It will be key that the mining sector would be altered in such a manner that exposes the cheap slogan of resource nationalism which is concept that masks rent and elite looting.
The issue of forward-backwards linkages and more importantly spatial linkages provide the answer.
Forward linkage underpin the concept of value addition.
Horizontal linkages speaks to the imperator of local procurement of huge mining demands.
Backward linkages refer to hard-core infrastructure, including roads, communications, power and logistics.
Spatial linkages speak to strategy of mining with cluster developmental strategy.
It would be key to be a member of the World Bank’s Extractive Industry Transparency Initiative and Africa’s own African Mining Vision (AMV) developed by the African Union itself.
More importantly, it would be important to have geological surveys and to establish a Mineral Register and Data Base.
These are extremely difficult things to be done.
No one expects from people interested in their own internal issues and structurally exhausted in the Franz Fanonian manner to act on these.
This is why a return to legitimacy is the only thing that will serve this country form the triple traps of a crises of legitimacy, governance and delivery.
There is no alternative to this. Zikomo.