18 November 2013

Zimbabwe: Re-Engagement Key for Success of Zim Asset


Last week, Government took a significant step towards its re-engagement with the global political and economic system by hosting Western ambassadors in a meeting about the revival of the economy.

It was not by any means a big event in terms of its publicity, but it managed to show the Government's political will in fixing the economy through its blueprint Zimbabwe Agenda for Sustainable Socio-Economic Transformation (Zim Asset).

It is worth noting that through the meeting Government represented by Finance Minister Patrick Chinamasa, Foreign Affairs Minister Simbarashe Mumbengegwi and Information, Media and Broadcasting Services Minister Jonathan Moyo, acknowledges that re-engagement with the Western community will be key to unlocking funding and winding down the tight liquidity currently being experienced in the country.

And it was about time too! We need to get over personal issues. It's not about race and sanctions -- injustices that we hold dear to the heart -- but rather it should be centred on economics, otherwise we remain closed to global investors and head back to the disasters of that forgettable decade.

Zimbabwe has been closed to international trade and foreign investment. Whereas other regional economies have experienced rapid economic growth; Zimbabwe has experienced remarkably slow growth. Both theory and reality tell us it is difficult for a country to achieve rapid growth without being integrated in the global economy.

There has been over the years, a global shift toward greater investment around the developing world and this has grown tremendously, but unfortunately it happened in the past 10 or more years when Zimbabwe was in crisis. So sadly, this country is not yet globalised and needs to do further homework to ensure it catches up.

This catching up can be done through two ways; creating flexible investment policies and adopting export-oriented growth strategies, which not only focus on mineral or tobacco exports, but also on the manufacturing sector to a point where there is an almost even split to the export trade contribution figures.

As it stands now translating the development agenda enshrined in Zim Asset into a series of implementable programmes is a challenging, but immediate task for the Government. At nine months to the year we were below US$500 million on Foreign Direct Investment according to the Zimbabwe Investment Authority figures, an amount which is a tiny drop to the current economic position.

It is fundamental that a country gets the right type of investors who are in it for the long term and who also have a social benefit. Who create jobs, build infrastructure in the process truly unlock value. FDI brings capital, technology and skills. In addition, new investment projects also create employment.

It is commendable that Finance Minister Chinamasa highlighted the flexibility of the indigenisation programme, which has at often times been wrongly misinterpreted, not only by the Western world, but also by some local sections. The Western ambassadors on their part have to use this meeting to convey positive messages to their principals of partnerships rather than of people who are at war.

Minister Chinamasa summed it all up when he told the diplomats: "By addressing you we are basically inviting you to be partners in that journey and you must look at indigenisation as a journey and not an event."

It is also worth noting that in the same spirit, the new Government has not concentrated its re-engagement efforts on the international community, but that across several Ministries, stakeholders are being invited to dialogue with greater use of the private sector a common theme. There is also a constant reference to meeting peoples' development expectations.

Overall, for successful re-engagement across all sectors, Zimbabwe needs to implement comprehensive economic reforms based on a shared vision for long-term economic development characterised by human-centred, high, sustainable, pro-poor, inclusive and balanced economic growth.

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