Zimbabwe economics 101

We are the local government-pay up!

Economics studies the allocation of 'scarce resources'. Modern economics, unlike classical economics, totally ignores the causes of scarcity. In modern economics, resources are allocated by the forces of supply and demand.

Zimbabwe has an economic crisis. In economics, and Zimbabwe, the central economic problem is  resource scarcity. Resource scarcity in Zimbabwe is worsened by corruption.Corruption has become the sole  resource allocation mechanism.

Zimbabwe has the worst wage system in the world. Employees go months on end without pay, whilst executives and directors reportedly live on millionaire salaries and benefits. Employees live in absolute poverty, working without pay, when they are paid they pay contributions to state organisations that fail to fulfill their obligations. These same state organisations pay large amounts to executives who are non-performing.

Sanctions are being blamed for Zimbabwe's economic problems. With the plundering of national resources, it is becoming clear the real problem is local in nature. Zimbabwe will remain in absolute poverty as long as individuals keep stealing wealth, through non-performing state organisations. Given the poor performance of parastatals and exorbitant payments to some individuals, it seems the sole purpose of these parastatals is to take from hard working underpaid Zimbabweans.

Currently, over 80 quasi-government state sponsored organisations exist with layers upon layer of bureaucracy. The majority of these institutions do not deliver services at all. Nearly all, 80 plus, parastatals are loss making. These institutions are extractive and have been since their initial inception in the 1980s. The whole thing looks like a mafia conspiracy set up to bleed Zimbabweans dry. Zimbabwe's political mafia puts the Sopranos and The Godfather himself to shame.

Zimbabwe has become a feudal economy. An institutionalised patronage system has been created to serve the interests of a few 'Lords'. The main cause of Zimbabwe's worsening scarcity is wealth extraction by these 'lords who run the show', totally mismanaging enterprise (supply and demand) to the point of national bankruptcy.

Any low level employee, who has served in a parastatal, will know they are powerless to deliver any credible change. Political interference and corruption have become the forces of demand and supply in Zimbabwe's economy. With no change in sight, a scarcity of cash and capital will continue to haunt Zimbabwe.

Serving Leaders

Jesus teaches leaders should serve. In The Gospel Of John, Jesus washes his disciple's or student's feet. Christ Jesus advised the disciples, as leaders of the people they show love to the people by providing a service.

This issue has been raised in Zimbabwe's election. Welshman Ncube has asked Zimbabweans to demand a leadership that serves the people. This demand should be carried forth even after the election.

Over three decades the country is collapsing. The cause is a corrupt, self-serving,  mis-leadership. Every policy tried in the last 3 decades has been to the benefit of a small elite. After elections the masses need to demand accountability from the new leadership.

New Zimbabwe Leadership

Even Naaman was purified. The Old Testament is an intense leadership guide. Namaan, in his pride, initially refused to heed the advice of the wise.

Zimbabwe's leadership suffers a type of leprosy. The leadership team is tainted by greed and corruption. Corruption started economic failure in the 80's. Things fell apart, as corruption increased and hyperinflation set in.

Zimbabwe's economy is avoided by investors. The economy has been damaged by corrupt leadership. Only a purification of the leadership can wash the economy anew. All parties in leadership need to attack corruption. MDC heads are focused on the corruption issue, while ZANU is not ready to deal with corruption. Like the servants who encouraged Naaman, all citizens need to raise the issue of corruption. Only when the leadership washes anew, and is baptized by a desire for honesty, can true development start being realized. Namaan was cleansed, Zimbabwe can be purified.

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.

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.