via Zim on downward spiral – DailyNews Live by Tendai Biti 18 NOVEMBER 2013
Wananchi, the prospects of enduring the next six months under the current economic status quo breaks all spirits.
The truth is that for some reason, sudden inertia, hopelessness, indifference and lack of energy have become the reigning order of the day.
A permanent grey gloom pregnant with despair and abandonment.
The massive shrinkage of revenue being collected by the State more than anything else epitomises the downward spiral.
Revenues being collected are no longer enough to meet the monthly wage bill and therefore wage arrears are accumulating every month.
In the immediate short term, gymnastics can be performed to cover the arrears.
There is no substitute for sustainable macro-economic policies.
But the consequences of the absence of a sustainable roadmap for economic management are being felt.
This lack of energy can be seen in every sector of the economy.
Demand has shrunk, volumes are not moving and debts are not being paid. Many companies are going for months without paying wages.
If the wage bill is now 110 percent of total expenditure, self evidently there is no fiscal leg room to finance social services and public sector infrastructural programmes.
The truth of the matter is that the economy is on auto cruise to a melt down.
What has altered is confidence and trust. A trust deficit has emerged and with it all the things that happen in a low trust, high cost economy.
At this present moment in time, it is key that the leadership of this government at the very top must make the bold statements and decisions that can bring back confidence.
Speeches alone will not be sufficient but bold actions that will deal with the issues of transparency, bilateral aid, foreign direct investment and the issue of the disproportionate wage bill.
Over the years the existence of a generation that is so steeped in its old ways and does not understand the mechanics of money never mind the intricacies of micro and macro economics and the interrelationship between demand side and supply side economics.
That credit has a correlation with the debit, that is the golden rule of accounting.
As every accountancy student or teacher knows out there, you give to the right what you take from the left.
If leadership is not shown, what are the prospects?
First, it is wrong economics to assume that there is a Santa Claus out there who will fork out the billions of dollars that are required for a budget.
One must work with what is available, which in fact is a lot of money were it to be well managed.
So budget presentation can not be delayed because of a hope or ambition. The bad signals being sent by the delayed budget are just not worth it.
Hard decisions need to be made on the revenue side.
The fact that diamond revenue continues to be a myth, even on their own is shocking.
Why is diamond revenue such a sacred taboo? We know that there are very powerful people in control.
Even more powerful than the chief executive officer, that is why a certain Mr Masimirembwa, is still smiling all the way to the bank.
Not just diamonds, but all other government parallel funds must surely be accounted.
The existence of these many parallel outlets of leakages is reflective of weakness and a centre that is not holding.
If diamonds are being stolen, why is there no action?
In the subject of thermodynamics, there is a scientific measure called entropy.
It refers to the units of energy unavailable for productive use.
Where there is entropy, there is chaos and lack of direction.
There is too much entropy in this government and the party that gave birth to it.
The current economic problems are reflective of something deeper, something we have all known since the 90s.
The crises of legitimacy, of governance and expectation are humongous problems that will be with us for some time with all the attendant problems.
Unless there is a return to legitimacy, the wananchi must prepare for another roller coaster of anarchy and economic hemorrhage.
The truth of the matter is that this thing is rotten.
Chaora chinhu ichi. Zikomo.