4 January 2013

Zimbabwe: Key Requirements for Economic Recovery

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TRADITIONALLY, New Year is the time for making resolutions, with a real intent to achieve their fulfilment.

Undoubtedly the key resolution of most of Zimbabwe's politicians is to do everything they can to be re-elected when Zimbabwe goes to the polls this year, including resorting to unlawful or immoral means to conjure up the votes they need.

However, if they really love Zimbabwe, have genuine caring and concern for its people, and wish to serve those people positively and constructively, their re-election is of less importance to taking the necessary steps that will assure substantive and rapid economic recovery and meaningful growth, assuring the well-being of the majority of the presently economically-oppressed population.

Admittedly, since 2009, Zimbabwe has enjoyed some economic recovery, but the extent thereof has in real terms been marginal.

The necessary actions required for a comprehensive economic recovery and, thereafter, continuance of a thriving economy, are many.

However, first and foremost is to motivate and facilitate substantial Foreign Direct Investment (FDI); for that assures creation of employment opportunities, and addresses the negative Balance of Trade that is one of Zimbabwe's economic afflictions, where monetary outflows greatly exceed inflows.

FDI also accords Zimbabwe access to international markets and state-of-the-art technologies. In addition, it will be a motivator for many in the diaspora to return to their homeland and families, hence rebuild and strengthen the national pool of skills.

After struggling over the years, government's task of attaining significant FDI, to revitalise the economy is not an easy one.

For so many years Government has pursued policies and measures which were major deterrents to FDI such that a reversal of those policies and measures with new and constructive ones will undoubtedly be initially perceived by potential investors as a façade and a scam to attract and then expropriate investors' resources.

Government will not only have to strive to convince such investors of its genuiness and credibility, as well as its intention to continue with the FDI-related policies, but will also have to be seen to honour those policies. This should be backed by international protective measures for the investors, including unreserved honouring of Bilateral Investment Promotion and Protection Agreements (Bippas).

Among key requirements for achieving substantial and ongoing economic recovery is restoration of assured investment security by numerous measures and actions, including:

Evidence of genuine and real political stability, which has been almost absent throughout Zimbabwe's 32 years of Independence, save for the first four years, and again briefly after the 1987 Unity Accord. The first step towards meaningfully demonstrating such political stability to the outside world must be that this year's Presidential and Parliamentary elections be conducted in a transparent manner which is incontrovertibly free and fair, devoid of harassment, intimidation, and vote-rigging, and of any militaristic interventions.

Restoration of a pronounced regime of unequivocal adherence to internationally-recognised principles of law and order, including of the absolute containment of unauthorised land and other property acquisitions, and of any violence associated therewith.

A very substantive, realistic, and constructive modification of Zimbabwe's indigenisation and economic empowerement legislation, and a total cessation of confrontational, provocative public statements relating to that legislation and to policies of Indigenisation and Economic empowerment. Concurrently, positive and economically non-destructive measures must be introduced which will progressively assure real, widespread, economic empowerment of Zimbabwe's indigenous population, operating side-by-side and co-operatively with non-indigenous and foreign investment economic entities.

According collateral value to rural lands, either by reinstatement of title deeds, or enabling transferability of leases, thereby enabling "new farmers" access to the working capital resources critically necessary to achieve reinstatement of viability and productivity of the agricultural sector (which, until the millennium was the foundation and mainstay of the economy, comprising more than 300 000 farm workers, their families and other dependants).

Modification of import duties to eliminate unfair competition of imported products against those manufactured in Zimbabwe, and eliminating inflation costs of essential imported inputs for Zimbabwe's manufacturing sector. Although Zimbabwe's industries should not be overly-protected against import competition, they should be enabled to compete on a "level playing field", instead of being confronted with immense competition of imported products which have been heavily subsidised by the governments of the countries of origin.

Reintroduction of export incentives, although such incentives should be wholly within the parameters presecribed by the World Trade Organisation (WTO), thus enabling Zimbabwean products to be fairly competitive in export markets, and evenly balanced against products of other countries in competing for custom.

A meaningful and rapid privatisation and recapitalisation of major parastatals, including the Zimbabwe Electricity Supply Authority (Zesa), National Railways of Zimbabwe (NRZ), Air Zimbabwe and TelOne, among others, in a manner which will accord those parastatals access to technological skills, enabling them to provide consistent, reliable and regular supplies and services to the economy.

Very determined containment of unproductive governmental expenditure, which has been the primary contributor to Government's recurrent, massive deficits.

These have led to the State's virtual bankruptcy, and its inability to fund essential services, infrastructural maintenance and development, and other essential expenditures. It is incomprehensible that a country with a resident population of only 11,6 million (per the 2012 Census) should have a Parliament and Senate of mote than 200 politicians, and in excess of 40 ministers and deputy ministers.

This has resulted in a grossly excessive number of employees in the Public Service, endless and excessive travel expenses, innumerable houses, motor vehicles and other resources, all far beyond Zimbabwe's financial means.

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