The Economics of Transition

Zimbabwe is in crisis. The elections keep throwing up false hope for Zimbabweans.
After every soap-opera election citizens realize ' they is no such thing as a national economy. Neo-colonialism is real'. African greats, from Nkrumah to Nyerere, learnt foreign financial markets hold sway over local development. Zimbabwe's history demonstrates a  legacy of dependence on foreign  debt markets.
Inspired economic historians, like Ibbo Mandaza, dissected the Zimbabwe economy,  post independence. Some honest politicians lived in accord with the Leadership Code(1985); which was an attempt, by ZANU PF,  to build morality and non-corruption among its ranks. All the good presented by scholars, and honest thinkers, was not accepted by greedy government leaders. Instead, foreign influences corrupted decision makers. Policy was built upon preserving old colonial wealth, so as to extract it one day. No creative decisions were implemented, so as  to build for tomorrow.
To realize transition, Zimbabwe needs to move away from its historical aid dependence.

Escaping the pharoahs

Nations need direction. When the Egyptians crossed the Red Sea they had the inspired leadership of Moses.

Debt is a national burden. It enslaves a society and strangles productivity. Zimbabwe owes more than it produces, it is beholden to foreign lenders. Unbridled consumerism keeps the country importing more than it produces. This imbalance worsens the country's burdened  financial position.

No national debt exit strategy has been defined. National leaders are not providing a sustainable economic development platform. No plan has been developed to escape the pharaohs and cross the Red Sea. Worse, politicians are not moral, or inspired enough, to bring about the systemic change the country needs. Instead of developing a  growth plan, the country is driven further into bondage by the misleadership elite.

Defining economics

Economics is broadly defined as being the study of scarce resource allocation by society. Various theorists have various definitions. Practically economics involves choice in the use of resources, and all these choices have consequences.

Everybody is an economist. We all make choices with regards to how we use time, consume, expend mental energy and transact with our fellow man plus environment. Economics has a problem in that it involves everything. Researchers therefore pick and choose what to study.

These 'schooled' economists follow different schools. No school can explain everything-all schools have limitation- schools related to finance make the most money as they serve financial services. This leaves other schools, with valuable lessons to teach, out in the cold.

The Zimbabwe economy suffered hyperinflation as a sequence of following various schools. The Zimbabwe dollar was removed to reduce inflationary pressures that had worsened the availability of resources. Zimbabwe needs to find more applicable schools of economics to suit its unique institutional setting.

As economics involves institutions, cultural beliefs, complex human behavior, historical influences, political forces, human desires and fears, its scope of study is unlimited. What works in one place, like a Structural Adjustment or Austerity Program, will not work in a different socio political setting. Resources might be limited, but ideas are not. Economic schools need to unlimit economic thought in accord with the laws of nature. They is no limit on thought and creativity which fuel human progress and enterprise.

Read widely-they is no limit to understanding the economy. We are all economists.

Development Potential

Zimbabwe's economy has developmental potential. To realize its capacity the state has to encourage manufacture, rebuild the infrastructure and facilitate Zimbabwean enterprise.

  Zimbabwe has resources. Zimbabweans, at home and abroad, have developed a diversity of core skills. Land, minerals, water and other natural resources are in  sustainable viability. They is spare capacity to build markets, industry and essential manufacturing.

Immense challenges confound Zimbabwe. Debt dependency is the biggest impediment to progress. According to the IMF and other commentators if aid or grant flows stopped, Zimbabwe would virtually collapse.

Having no financial resources creates creates a developmental cul-de-sac. Government has failed to deliver sustainable development, as it has become forced into continual short-term budget balancing. To realize manufacturing and real economic growth, debt has to be overcome. Debt addiction and dependency have halted real economic progress.

33 hard years

Something was achieved. 33 years of sheer survival drive is being demonstrated by Zimbabwe's economically repressed masses.
Without a comprehensive Zimbabwean developed policy agenda, the Zimbabwean will continue to achieve less economically.
Corruption, which is linked to poor policy, also needs to be dealt with.
Corruption worsens the economy. As the Zimbabwe economy declines, the corruption grows and festers.
Corruption and poor economy are the result of economic repression.
Zanu PF has run this 33 year house of Zimbabwe hunger.
Without firm action on corruption, the next ten years will be as bleak as the last 33 corrupted years.

Zimbabwe Economics-Missing Link

Industrialization is evolutionary. Economic models will not help the Zimbabwe economy transition from its current supermarket subsistence state. As shown by the USA, UK, Japan, Germany China and Brazil, heavy duty state support in technological development, on top of state financing of core industry, is needed to seed the development of a reasonable industrial state.

Zimbabwe needs to manufacture. Growing industrial output will:

• Reduce the 100% dependence on foreign manufactured goods.
• Improve employment chances for millions who are unemployed.
• Relieve poverty for 90% of the population currently living in absolute poverty.
• Help reduce corruption, crime and rampant poverty-induced immorality.

Even Ian Smith protected industrial capacity, in the midst of sanctions. Smith ensured Rhodesia protected its core industry.

Government needs to rebuild industry. Policy, made by government, should support industry. As productive capital graduates through subsistence, cottage industry, infant industry, core industry and finally heavy industry- the invisible hand of government is needed. Government plays its hand at every stage of industrial evolution. So far, government has seen industry devolve from core infant industry to supermarket: sub- subsistence levels.

Lets work smart. The Zimbabwe economy cannot live on piss poor planning. Zimbabwe economics should engender smart strategies that deliver employment for the masses of Zimbabwe. Zim economics should not be hijacked by populist, pseudo-socialist,  mantras that do not deliver industry and employment . No more half-baked models, the Zimbabwe economy should see results.

Maggie's Legacy

Thatcher is gone. Former UK industrial towns are celebrating. Zimbabweans remember cordial relations that established links between Thatcher's regime and the Zimbabwe government.

Appearances are deceptive. Beneath the facade of Commonwealth lies a web of deception, treachery and theft. The Lancaster House Constitution was the first significant contract signed by Zimbabwe, at independence. This constitution, overseen by Thatcher’s government, deliberately sidetracked land redistribution which was Zimbabwe’s reason for going to war. Stolen land could only be purchased from farming elites at exorbitant, ‘willing buyer willing seller',  rates. All this laid the first roots for future fast-track redistribution and consequent hyperinflations.

Thatcher unleashed UK Banks. Her financial deregulation and cheap state asset auctions, masquerading as neo-liberalism, destroyed UK industry plus mines on an industrial scale. As 1980s, UK, oil revenues increased, the IMF claimed its programs were a success. Zimbabwe was coerced into ESAP related privatisations which drove back industrial development by over a century. On the other hand, UK ‘big bang’ ‘financial neo-liberalism’ has driven Cyprus, Greece, Italy, Ireland, Portugal, Latvia, Slovenia and other nations to deindustrialisation. These countries are at the edge of total financial ruin. Thatcher played a part in the near ruin of Zimbabwe and Southern Europe is at the brink.  Industrial towns in England were totally destroyed and England is mired in recession. For Zimbabwe and Africa, the stage is set for the next scramble for Africa. Sir Mark Thatcher, Margaret Thatcher’s son, will be waddling back to arrange more coups in the continent.

Where is that state, Zimbabwe?

Zimbabwe has the potential. IMF, the World Bank, western and eastern investors are aware of this fact. Plentiful labour and resources mean growth potential, plus profit, can be reaped in future. This makes it doubly tragic that The State has consistently failed to harness real economic growth, over the past two decades. Even the colonial government could facilitate growth, during years of war and economic sanction.

70s growth was enigmatic. After 1973, the whole of Africa started losing industry due to neo-imperial policy and the role of IMF. Rhodesia, former colonial Zimbabwe, had seen years of economic sanction. The repressive regime was, however, able to attract agro and mineral processing industrial investment from South Africa.  Today's repressive regime has even failed to attract productive South African industrial capital. On coming into power, today's state, induced rapid de-industrialization worsened by hyperinflation. The opportunity to reap the country's milk and honey has been squandered, as the ruling regime has failed to come up with effective industrial development programs.

Corruption is a major problem. Poor planning and implementation make a terrible situation worse. Botched indigenisations, five year plans and E.S.A.P, all represent progroms of extermination against the suffering masses. To regain the 70s level of industry, state transparency is needed. The market will not invest productively in an environment of opacity, and corruption, even if that place is the rapid return economy of tomorrow. Only clear win-win contracts with foreign capital, South African businesses especially, can bring about firms that process Zimbabwe's  agro and mineral potential. Regaining our 70's capacity is the first step. Heavy industry will only be attracted when investors see the success of primary processing. Bringing back the rule of law is a responsibility of the ruling regime. The state  has to act and express transparency, in its fulfillment of mandated responsibility. Action speaks louder than words, anything less is treasonous, and the children of Zimbabwe shall have their day in judging the misdeeds of today. Zimbabweans will not remain underclass immigrants, poor peasants and precariat proletariat forever-all because of an incompetent state.