7 December 2012

Zimbabwe: MDC-T, Zanu-PF Economic Blueprints - Big On Style, Weak On Form and Substance

PRIME Minister Morgan Tsvangirai's MDC-T party last week launched its new economic blueprint, Jobs, Upliftment, Investment, Capital and the Environment (Juice) to succeed the Reconstruction Stabilisation Recovery and Transformation (Restart): Our Path to Social Justice plan which was part of its manifesto and campaign strategy in the last elections.

Restart was concerned with the country's immediate stabilisation and reconstruction, as well the party's industrialisation strategy, through which jobs and economic growth would be sustained in the long-term.

The main objectives of Restart were to reconstruct the social fabric and economic infrastructure, to stabilise the macro-economic fundamentals, recover levels of savings, investment and growth, and to transform the economy and society to achieve equitable, inclusive national development.

It was set to increase real incomes and employment, empowering previously disadvantaged groups by providing them with access to resources and opportunities to increase their incomes in a meaningful way.

The programme also sought to ensure Zimbabweans had equitable access to high-quality, affordable health, education and social services, which are essential for economic development.

Prior to Juice and Restart, the MDC-T launched Bold, Revitalising & Innovative approach to the economy based on Development, Growth & Employment strategies (Bridge).

Its key elements were job creation, driven initially by increased public spending on health, education and housing, exchange rate stability, cutting inflation, alleviating poverty, privatisation and, crucially important, agrarian reform.

While nothing much about Bridge and Restart has been achieved during the MDC-T's foray in the inclusive government, except macro-economic stabilisation after the introduction of the multicurrency regime in 2009, the party has now come up with Juice, promising a million jobs under it.

In what appeared to have been a response to the Ministry of Youth Development, Indigenisation and Economic Empowerment's framework, underpinned by the current economic empowerment thrust, Zimbabwe Broad-Based Economic Empowerment Policy 2013-42 (ZBBEEP), the MDC-T launched a new plan for economic recovery and job creation.

Whilst these policy documents are not quite two sides of the same coin, they have one thing in common: they make big promises but don't elucidate on the how part of it.

The MDC-T's Juice is an initiative for the next five years but has a long-term outlook of 30 years.

It aims to initially deliver one million new jobs by 2018 and a US$100 billion GDP by 2040. However, it does not address the key issue: how will all this be achieved?

The ZBBEEP, driven by the Indigenisation ministry and guided by the Indigenisation and Economic Empowerment Act (Chapter 14:33) of March 2008 and the Indigenisation and Economic Empowerment (General) Regulations issued in February 2010, also suffers from the same problem: it does not address how company seizures will translate into economic growth, job creation and employment, and empowerment of the people.

The essence of the widely-criticised empowerment laws is "to endeavour to secure that at least 51% of the shares of every public company and any other business shall be owned by indigenous Zimbabweans".

The regulations provide that all businesses in Zimbabwe with a net asset value equal to or above US$500 000 should formulate plans that will lead to 5% of its shares being transferred to "indigenous" Zimbabwean shareholders within five years from the date of operation of the regulations.

While the MDC-T and Zanu PF policy documents agree unemployment is a huge problem in the country, they both fail to detail credible job creation initiatives beyond wishful thinking.

Juice says it will deliver one million jobs by 2018, whilst ZBBEEP claims it will create five million jobs by 2042. But they propose no viable job creation strategies and implementation mechanisms, leaving them open to criticism that they are just unrealistic and empty election manifestos.

According to Juice, the wheels came off Zimbabwe's economy in 1997 when the controversial land redistribution exercise began, resulting in the fallout with the international community and a toxic local business climate.

These issues combined to drive the loss of jobs and livelihood for a large number of people across various sectors of the economy as new investment dwindled and companies' output shrank.

In an apparent reference to Zanu PF's economic empowerment programme, Juice argues the creation of new jobs is more empowering than opaque share-ownership schemes via obscure community share-trusts, which may ultimately not benefit the intended marginalised people.

"As a direct result of Juice we expect to achieve the creation of one million new jobs between 2013-2018 within the framework of a projected average GDP growth rate of 8% per annum during that period, macro-economic stability anchored by single digit inflation, the deepening and strengthening of the role of SMEs, widening domestic savings mobilisation and the normalisation of Zimbabwe's international relations," the MDC-T says.

The MDC-T blueprint, just like the Zanu PF one, is good in describing the problems not offering a solution. The party says it will implement a Natural Resources Charter and promote a green economy, increase power generation capacity to 6 000 megawatts by 2018.

It hopes in that timeframe to drive reconstruction of the country's infrastructure and attract FDI that is at least 30% of GDP. The aim is to lay the foundation for a US$100 billion economy by 2040.

Juice also promises creating decent employment opportunities for all Zimbabweans, whilst providing opportunities to every citizen to pursue happiness, achieving social justice and nurturing their natural environment in a democratic society without state bureaucratic hindrance.

Its other key elements include creating an investor friendly environment to attract domestic and Foreign Direct Investment.

This would help increase the productive sector's capacity utilisation to ensure job creation through capital investment.

The blueprint also proposes policies that promote capital formation through efficient financial markets and greater integration with regional and global markets to facilitate sustainable growth.

Juice also aims at a comprehensive programme that provides for the delivery of good-quality social services such as education and healthcare in a way that is affordable to all.

In addition to managing the country's foreign debt, Juice also promises restructuring the ownership and control of the economy through a broad-based economic empowerment programme.

ZBBEEP says it is underpinned by the desire to expand the economic base through promoting, encouraging, forming and growing existing and new industries of all sizes, across all sectors of the economy, particularly the creation of a vibrant micro, small and medium enterprise sector dominated by previously disadvantaged Zimbabwean entrepreneurs.

However, judging by experience, these programmes are likely to suffer the same fate as the plethora of other plans such as the Transitional National Development Plan in 1980, Five-year Development Plans in the 1980s, Economic Structural Adjustment Programme (Esap) and Zimbabwe Programme for Economic and Social Transformation (Zimprest) in the 1990s, Vision 2020, Economic Revival Plan, Short Term Emergency Recovery Programme (Sterp) and now the Medium Term Plan after 2000, among others.

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