5 December 2012

Zimbabwe: Juice Too Ambitious - Analysts

PRIME Minister (PM) Morgan Tsvangirai's economic blueprint - the Jobs, Upliftment, Investment, Capital and the Environment (JUICE) - is an ambitious election project whose implementation could prove difficult for the Movement for Democratic Change (MDC-T) given the poor calibre of some of its administrators.

PM Tsvangirai, who is battling an implosion in his faction riddled MDC-T, launched his economic blueprin at High Glen Shopping Centre last Thursday as he eyes elections President Robert Mugabe wants held in March next year.

The MDC-T is promising to create a million jobs in the next five years in a country where unemployment is estimated at over 94 percent. The blueprint rivals the indigenisation and black economic empowerment programme which ZANU-PF is using as its election strategy.

A number of foreign-owned firms, particularly in the mining sector, have already embraced the Indigenisation Act which compels foreign investors to surrender 51 percent of their shareholding to black Zimbabweans.

Critics say the indigenisation drive is scaring away potential foreign investors and that the policy is being implemented in a partisan manner.

In launching his economic policy, PM Tsvangirai said JUICE was meant to bring about a holistic transformation of society and growing the national cake for the benefit of all the people.

"The MDC believes that in order to spur sustainable economic growth, it is imperative to grow the national cake," he said in his foreword to the JUICE document.

"Concentrating on sharing the existing small and diminishing cake is a recipe for disaster. The current version of indigenisation is tantamount to nationalisation and expropriation and is clearly a political gimmick by ZANU-PF," he added.

Psychology Maziwisa, a fiery MDC-T critic and political analyst, disagrees. This week, Maziwisa lashed out at the economic blueprint, saying it was much ado about nothing.

"It's an empty policy by an insubstantial party desperate to gain support from the people ahead of crucial elections next year. It's absurd that a party that has failed to create a single job in four years can talk of creating one million jobs in five years. They are obviously taking Zimbabweans for fools," said Maziwisa.

Some of the benchmarks in JUICE include achieving an average growth rate of eight percent in five years, normalisation of Zimbabwe's international relations, domestic savings mobilisation, macro-economic stability anchored on a single digit inflation and attracting Foreign Direct Investment (FDI) constituting at least 30 percent of the Gross Domestic Product (GDP).

An MDC-T led government will also envisage running a green economy, deepening and strengthening the role of Small-to-medium Enterprises (SMEs), implementing a Natural Resources Charter, reaching a US$100 billion first world economy by 2040, an increase in power generation capacity to 6 000 megawatts by 2018, reconstruction of the country's infrastructure, building a social contract and ensuring sustainable and decent wages.

Bulawayo-based economic commentator, Eric Bloch said although he was yet to see the complete JUICE document, it sounded like a "very good" programme in that it sought not only to create jobs but to grow skills while also making citizens economically active.

"The creation of a million jobs is subject to the restoration of monetary liquidity," said Bloch.

He said average GDP of eight percent was possible and could even be exceeded.

"That also is subject to major policy changes in the banking sector and agriculture," he said, adding that good agricultural seasons normally translate into improved economic growth.

Bloch said the restoration of Zimbabwe's international relations remained key to attracting FDIs, adding that the country could not continue to operate in isolation.

He said the country's economy would grow significantly after next year's elections regardless of which political party wins the polls.

Economist, Stevenson Dlamini, who teaches at the National University of Science and Technology's Department of Banking said although jobs could be created in the next five years, targeting a million in five years was rather "too ambitious" on the part of the MDC-T.

"FDI into the country has not been fast flowing enough to justify the creation of a million jobs. The policy (JUICE) goes in the positive direction but it is a bit ambitious," he said.

Dlamini said jobs could be created in the SME and the small scale mining sectors, but not to the magnitude envisaged by the premier.

"Looking at the rate at which the economy has been growing since 2009, an average GDP of eight percent is achievable by 2018," he added.

Solusi University dean of Faculty of Business, Bongani Ngwenya, who described JUICE as a positive initiative, said its success rested on implementation.

He, however, said the US$3,8 billion 2013 national budget, which does not adequately address infrastructural development, key to economic recovery, does not tally with the MDC-T's economic blueprint.

ZANU-PF's Indigenisation Minister, Saviour Kasukuwere has dismissed JUICE as being a "stale plan".

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