New Zimbabwe.com

Housekeeping issues in the quest for economic advancement

THE era we are in demands the collective efforts of Zimbabweans to ameliorate the economic plight at hand. While it is easy to point out the general problems besetting our economy, a closer look at roles being played by different parties within the economy can be revealing.  Application of sound macro-economic policies including fiscal discipline has evidently not been the forte of our government. However, that is now slowly changing and it is important for government to embrace solutions that work.
Some admissions made by government over the past few weeks, while positive and encouraging, also create an expectation for swift remedial action from the authorities. First it was Finance Minister Patrick Chinamasa who concurred publicly with the long-held view that government’s bloated expenditure is unsustainable and an impediment to economic progress; and then came the acknowledgement by parliamentarians that the provisions of the constitution for an unnecessarily large number of constituencies and therefore members of parliament is also a significant contributor to the “bloat”; and finally, the assessment that this season’s poor rainfall has led to crop failure in many parts of the country and there will be need for food aid.
On bloated expenditure, it is surprising that the same officials were silent on the unnecessarily large number of cabinet ministers and their deputies whose attendant salaries and perks have a significant toll on the budget. If results on the ground were to be frankly considered over the years, that bloated cabinet has collectively yielded poor to mediocre results. This needs no further clarification given the state of the economy, never mind the fact that the personal wealth of some cabinet ministers took a stratospheric upturn while the fortunes of the country which they superintend over diametrically plunged. Could this be a classic case of hyenas shepherding goats?
There are two issues that are important to interrogate. Firstly, whoever planted the seed of lust for luxury and riches in the minds of some of our politicians and business people including the so-called affirmative action champions ahead of first consistently performing the hard work and seeking to improve productivity which should then yield the means to afford those desires; created a dangerous precedent for posterity. That unrestrained desire for quick riches is the chief motive of all the major cases of corruption and greed we are witnessing.Advertisement

What is unfortunate is the tendency to celebrate certain figures in society who have corrupted the definition of success to mean an accumulation, by any means possible, notwithstanding the illegality or shadiness of such lavish assets as a collection of top-of-the-range cars and other non-productive assets. This presents a rather poisonous influence on the young and naïve who are then more likely to prematurely abort or shun, for example, pursuing studies or careers in science, technology, engineering and mathematics (STEM) and other fields such as healthcare management, finance and business. While all fields of study are important, research has shown that STEM fields are pivotal for a nation’s economic advancement. And nothing better prepares a nation for success than exposing its youths to good education and training, work experience, innovation and hard work.
Now, with the ailing economy presenting a bleak future for job creation, these young turks are lured into crime in a bid to fast track their way to the unsustainable utopian riches. The downside is always that resources are not allocated to productive sectors and no industry or meaningful employment is ever created. The idea that we should substantially invest in our own industries is often eschewed by our content free flamboyant and bling champions who have no qualms in jostling to fill the order books of German and American car manufacturers for the latest and most expensive models, when the local industry is in dire need of investment to, at least, be able to competitively make canned baked beans.
Mindsets have to shift from the now to the long–term and from the unsustainable cutting of corners to going through the mill, experiencing the sweat and tears of hard work; and being relentlessly innovative and to invest in productive sectors that create more value. We should think of the future, embrace technology, innovate constantly and work hard. That is what pioneers of some of the world’s most profitable companies like Apple sowed in their businesses.
Apple, the maker of iPhones, has perfected the art and science of innovation and efficiency in supply chain management. It has broken all records of company profitability. The company is sitting on a US$178 billion cash pile and is projected to reach a market capitalization (market value) of US$1 trillion in a year’s time. This is not farfetched stuff. If South Korea’s Samsung is hot on the heels of Apple, and a Chinese recent entry Alibaba has made a tremendous head start and is leading the pack in e-commerce, why shouldn’t the same success be imaginable for our own Econet, Net One or Varichem, at least at a regional level?
Secondly, challenges should bring the best out of us and again stimulate innovation in order to improve our circumstances. We should smile at challenges and tackle them head on, there is a divine gift hidden in them. No amount of crying about the challenges we face can somehow improve our circumstances. Challenges may take the form of sanctions, drought, economic hardship and even disease outbreaks.
Now, putting aside the political and ideological preferences and focusing on how other countries that are or were faced with challenges have fared may open some minds. Russia’s moves to mitigate the effects of sanctions imposed on it by the West over its dealings with/in Crimea and Ukraine provides some lessons on how to fight sanctions. Despite having invested in an impressive gas pipeline infrastructure that spans Western Europe, when faced with sanctions, Russia shifted its focus to the Eastern and Southern parts of the globe. It began executing an aggressive trade and investment campaign, sealing deals not only to mitigate the potential damage of sanctions, but also to grow its economy and try to help rebalance the global economy.
Those forays yielded impressive results which included the circa US$684 billion long term deals to supply natural gas to China; supply of oil to Asia through the recently completed 4,857 kilometres long East Siberia-Pacific Ocean (ESPO) crude oil export pipeline; various mega trade deals with India; and of course the US$3 billion platinum mining project in Zimbabwe among others. However, an important lesson to be learnt here is that it is critical to have a well-diversified economy as the predominantly resource-driven Russian economy has to some extent been dented by the combination of falling oil prices and sanctions.
Another example is that of the nation of Israel which, despite having mostly arid conditions, has a relatively impressive record of agricultural and industrial production. It achieved this largely through innovation. Through its concerted efforts on research and development programmes, it has made massive strides in improving productivity in agriculture and many other fields. For example, in 2011 Israel deployed 4.4% of its total GDP to both public and private sector research and development, which proportion was the highest of any country.
It incessantly boggles the mind why we face such chronic and crippling liquidity challenges when we have Chiadzwa/Marange diamond fields in which the state is a major shareholder but there appears to be little or no progress towards serious exploration and production that benefits the country. Meanwhile Debswana (equally owned by government of Botswana and DeBeers), Alrosa (Russia) and Rio Tinto (Anglo-Australian) continue to make truck loads of money while we are still trying to figure how best to exploit Chiadzwa. Is our best mining talent and, or, well-capitalized and organized mining companies operating these fields?
What is apparent in our situation is that, truly committed and pro-economic advancement political leaders who fully understand what needs to be done practically in order to transform our economy, are as rare as chicken teeth. Disheartening as it is, as citizens and patriots we should never step away from efforts to sway the tide and achieve a radical shift of mindsets on the economic advancement front. The desired basic vision is simply to achieve a radical economic transformation with an accountable political leadership. Political success counts for very little without economic success.
That the nation is planning to beg for food aid after experiencing some floods followed by an extended dry spell, buttresses the need for a radical shift of mindsets and better organization.  Zimbabwe is endowed with excellent agricultural conditions in terms of both soils and climate. By extensively investing in robust rain harvesting and irrigation infrastructure as well as mechanization, especially in farming regions I to III, and employing advanced farming techniques to enhance productivity, the country can perennially produce surplus food (grain/corn) and can expand and fill its strategic grain reserves to the brim.
It should also be able to export surplus grain and processed agricultural products with ease. Regions IV and V can collectively be the hub of small grains and livestock production as well as wildlife sanctuaries. This is all common knowledge, but to achieve that in practice requires some rejuvenation, impetus and a visionary leadership that walks the talk.
Our economic progress remains impeded by misplaced priorities and the retrogressive politics of patronage. This explains the inability to trim or right-size a bloated cabinet or failure to dismiss incompetent officials or embezzlers in high political offices. While acknowledging the contributions made by our elder statesmen and others before us, mindsets should now swiftly shift. We must now move forward! It is radical economic transformation now or kushuzha forever. Charira!
Noel T Ngangira writes in his personal capacity and can be contacted at ntngangira@gmail.com