CAUSES OF ZIMBABWE'S ECONOMIC PROBLEMS
Mugabe,'s own history and actions attest to a
schizophrenic personality, posturing as a Marxist revolutionary, sometimes by
only wearing Communist attire during elections and emitting searing populist
rhetoric, some just know him as an educated man recognized for his Western
suits, love for English cricket, tea and admiration for British royalty. Mugabe
was for long content and not inclined to upset the applecart when it came to
Western interests. Most importantly, after Independence in 1980, apart from
command economic and social services delivery approach, Mugabe did not seek to
reform the settler colonial state structure in line with his party’s socialist
and one-party state manifesto. He happily inherited colonial institutions, laws
and even top individual officials and bureaucrats to run the state while he
learned the ropes.
Laws
need to be upheld, and access to justice provided, by competent, independent,
and ethical judges, law enforcement officials, and attorneys or
representatives, with adequate resources to perform their roles. All truly
democratic nations aspire to respect the rule of law. Even in countries where
freedom of association, freedom of speech, and other human rights are routinely
ignored, there is growing hope. Increasingly, across the world, justice under
the law is possible. But this justice must be built. Institutions must be
created or reformed to guarantee progress toward fairness and equality and to
protect human rights.
Also
necessary are investor-conducive taxation legislation and incentives. Most
essential of all is that government be completely transparent in honouring and
complying with any and all agreements it enters into, and that such agreements
be justifiable internationally in world-recognised, courts of law. In addition,
government needs to facilitate, enable and motivate ready transition of
enterprises from the informal to formal sector by removing many barriers to
formal sector operations.
Human
rights must be demanded, created, maintained, and preserved. As the main
proponents of worker rights and social protections worldwide, unions play an
important role in building and defending rule of law. Whether fighting against
slavery or for the right to a pension, labor unions must act as a balance
against private, corporate, and governmental abuse of workers. Even workers who
are not members of unions benefit from a vibrant, democratic labor movement. Unions
have the capacity to advocate for protections against child labor and human
trafficking, enforcement of occupational health and safety codes, wage and hour
laws, and many other vital rights.
No one is
opposed to the principle of indigenisation and its aims to eradicate poverty
and suffering afflicting of most Zimbabweans. Not only do these laws and
policies discourage and alienate much-needed foreign direct investment (FDI)
and investment by non-indigenous Zimbabwean residents, but have heretofore only
been geared towards enriching the favoured, politically well-connected few.
The
manner in which indigenisation was carried out has intensified business
closures and downsizing, fuelled unemployment within the formal sector,
worsened widespread poverty, hardships and suffering that afflict most
Zimbabweans. Moreover, those policies have effectively been a very major
contributor to the withholding of critically-needed international lines of
credit, and especially so because they run counter to many Bilateral Investment
Promotion and Protection Agreements entered into between Zimbabwe and other
countries.
Tragically,
despite the extensive and authoritative advice given to government by many as
to both the devastating effects and consequences of the existing legislation
and the application thereof, and as to how constructive and beneficial
indigenisation and economic empowerment could be achieved, the political
hierarchy consistently and intentionally and obtusely disregards that advice
and persist with their destructive policies. Moreover, they exacerbate and
compound the damage done by those endlessly making inflammatory statements and
demands, including frequent threats of reneging upon agreements that entered
into with business parties which, despite the negatives of the policies, seek
to be compliant therewith.
Zimbabwe requires as one of the key
components of recovery, very extensive investment. Such inflows are greatly
needed to ensure a net favourable international trade balance, instead of
imports vastly exceeding exports, with consequential negative effects upon diminishing
Zimbabwe’s magnitude of international debt. Most of all, without investment,
and without comprehensive business confidence in the future,
if
Zimbabwe wishes its banks to have access to adequate international lines of
credit for, and loans to, its banks, it has to ensure complete investor and
lender confidence, and hence the mandatory indigenisation threshhold in the
financial sector should not be greater than 25%. Nevertheless, it must be hoped
that practical, realistic and effective policy regime for indigenisation and
economic empowerment, and will lead to further policy changes, including
withdrawal of any intents to nullify or breach agreements that government has
entered into. Failing a major transformation in the legislation, policies, and
implementation and enforcement thereof, the Zimbabwean economy will continue
struggling, and the circumstances of most of the populace, already horrendous,
will decline from bad to worse!
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