eBusiness Weekly
Clifford Shambare
Part Three.
In this part of the article, let us continue to look into Zimbabwe’s indigenisation policy, that the then black government launched through the Indigenisation and Economic Empowerment Act of 2008.
This is a policy that encountered challenges that present us with important lessons regarding the nature of the Zimbabwean economy in terms of how such a policy should have been implemented and/ or what to do when implementing such a policy in the current or future periods if this is still deemed necessary and/or appropriate.
In order to maintain clarity in our analysis, we need to briefly go back to the end of Part Two. In doing so, we find that there were, and still are, deep seated divisions within the country’s population. As already elucidated, on the one hand were the black government and those who supported them on both the political and economic fronts. On the other hand, were the colonists and those who supported them on the other side.
So clearly, here we had, and still have, two systems confronting each other, in the process each trying hard to meet its own objectives.
If we look critically into this case from a neutral perspective, we can deduce that, right at the beginning of this confrontation — one that is quite subtle and complex in nature — each side should have been aware of the hurdles they would face in the process. This assertion is borne out by the conditions the British set in the Lancaster House Agreement on behalf of the colonists — that stipulated the inclusion of white ministers in the key ministries of finance, justice and agriculture for example.
Fortunately for us, we do not have to do much guessing here. So let us delve into the case to see what subsequently took place in the process. If and when we do this, we can see that each side had its own strengths and weaknesses. On the one hand, the government and its supporters had political power and very little else.
On the other hand, the colonists had the capital, the knowhow and the experience to run an economy with its industries and all. Furthermore, they had successfully bust sanctions that had been imposed on them by the British and so logically, they had become hardened and as a result, they were thrifty and hawkish in character.
In addition, their system had operated in a rather complex environment. This complexity originated from their relationships with the super powers —Britain and America. On the one hand, the latter seemed to be against the regime while on the other, furtively cooperating with it. This is a condition that inflated the colonists’ egos — hence the often expressed arrogant attitude of their leader Ian Smith.
Then there was the support — in its basic and rather crude, sometimes even psychological form — they got from a sizeable proportion of the indigenous population. So here we can easily see that the headwinds against the black government were quite strong — much stronger than they had anticipated.
So here it becomes obvious that the latter had a much stronger adversary than themselves. So logically, they needed a leadership with positive attributes all round.
And apart from being supported by a system with the necessary technological skills as the Rhodesians had. In sum such attributes comprise integrity, scrupulousness, fortitude, selflessness, thrift and foresightedness among the main ones. Sadly, the black leadership seems to now lack the majority of such attributes since, as the years have gone by, they have lost some of the individuals with same.
Such individuals were Robert Mugabe who subsequently became president of this country, Joshua Nkomo, the founder of African nationalism in the country and later, the Vice President of the country. Then there was Samuel Parirenyatwa, one of, if not, the first black medical doctors in the country; Herbert Chitepo, the first African barrister and Bernard Chidzero and Ariston Chambati — both excellent finance ministers with impeccable characters and expertise in their fields.
Regarding thrift, I well remember Ian Smith on one occasion quipping smugly that; “This government spends money like water from a tap”, in reference to the new black government’s handling of public finances. This lack of thrift is a negative attribute that is unfortunately, playing out in a poignant way today.
Our government is virtually broke today. And interestingly, this has morphed into today’s condition in which a few connected individuals continue to furtively extract considerable amounts of wealth from the country’s economic system.
Paradoxically, even though they were virtually a part of the Western system, the Rhodesians’ attitude in this respect, was exactly the opposite of the current black leadership. This explains why they were able to build an economy that was only second to the South African one; another economy that is owned by fellow Caucasians. Such a scenario throws us straight into that position where we are compelled to consider development of any kind along racial lines.
Because of the said weaknesses, during the implementation of the indigenisation policy, some unscrupulous black individuals — taking advantage of their association with the ruling party Zanu (PF) — went on to seize some private and public companies. Such an outcome further made a nonsense of the policy of indigenisation— a policy that those who were opposed to it ended up ridiculing publicly.
On continuing to scrutinise this matter, we come to realise that indigenisation or nationalisation, as it were — is a policy that those politicians who have tried to wrestle a nation’s economy from the colonists elsewhere, have tried to employ to achieve this goal.
Zimbabwe has not been alone in this predicament. Here we have such countries as Venezuela, Bolivia and Cuba in Latin America and Vietnam in East Asia.
Interestingly — even though Vietnam is a somewhat peculiar case — all the political leaders of these countries — Zimbabwe included — have been vilified by the West for adopting such a stance.
On the other hand, however, the West cannot deny that they are the ones that have caused this disenfranchised state of the said indigenes to come about. But so far, they have tried to cleverly muffle their guilt for same. But interestingly, in the said book; Why Nations Fail, the authors give themselves away by admitting these attitude and actions that border on being evil.
On-going back to our categories of Zimbabweans we find that, juxtaposed to the said categories of Zimbabweans, is a third one that is made up of those who were born from the 1970s onwards. The oldest of this lot would be approximately 50 years old now, while the youngest would be anything from zero to fifteen years, or thereabouts, today.
In between are tertiary college students — those expecting to be employed sooner or later, but are not. Together with the first lot—that is, those in their 50s — the latter makes up a frustrated lot — what with the unemployment rate hovering around 90 percent.
This is the situation that has brought about a state of polarisation in the economy and country. When viewed from a neutral perspective, this is a situation in which each side can be justified in taking its stance. As can be expected, such a situation is ripe for a stalemate. And where stalemates rule, no positive action can be expected. Again, under such conditions, very little or no creativity and/or innovation can be expected from the generality of the citizenry.
What worsens this case is the polarity between the authorities and the majority of the populace, as led by the business fraternity.
Again, under such conditions, the tendency for extractive government and economic institutions to flourish rises. Today Zimbabwe is one country in which these conditions have led to a dysfunctional — almost failed — state.
Such a state cannot prosper because of a lack of a cooperative culture. In such a state, everybody just does what is in their best interest. Selfishness is rife; so are corruption and opportunism. So in such circumstances, no national goals — if any — can be set and /or achieved. Today in this country, there are a number of conditions and happenings that have led to such a state.
Here they are: Even though the actual situation may need a thorough survey to establish, it is not amiss to posit that the biggest proportion of the country’s money— most of it in foreign currency — specifically, the US dollar — is in the hands of a few individuals. Such individuals tend not to have a developmental mentality and/ or ethos but an extractive one.
As a result, they either hoard the money or externalise it. This is exactly what is happening now in this country. The many robberies in which large sums of money — most of it in US dollars — attests to this assertion.
Here there are two scenarios that have worsened the situation. Most of this money is used to buy fuel to run a non-productive fleet and to import those products, some of which can and should, be produced locally.
Here huge amounts of foreign currency — most of it in US dollars — are spent every year.
The result is an economy that is either not growing or is shrinking. Under the same conditions, no new entrepreneurs can spring up from the populace. In the same vein there is no innovation, no economic empowerment no prospects for youth development.
Finally, no incentives for industrialisation. So here we are back to square one. Logically, therefore, the next question here is: What should be done to move forward?
On going on to scrutinising this matter further, we come to realise that such processes take a very long time to implement and to become established. Here we can cite many cases in the history of the world economy. Here are some prominent ones… such a state of affairs implies that for Africans — Zimbabweans included—to speed up such a process, they have to adopt extra-ordinary measures on all fronts.
Not only that; they have to experience among them, a complete metamorphosis of psyche. This needs both internal and external forces.
To undergo such a change they will need external forces—that is, some sort of shock therapy, to act on them. They may also have to go through what Acemoglu Robinson refer to their book Why Nations Fail’ as critical junctures.
But is all this possible? Yes and no. The yes part comes from the experiences of Japan and China. Japan underwent change through the Iwakura Mission in 1800; and China through the Communist Party revolution. Both these phenomena were spearheaded by the rulers working with a few families of industrialists. So can we have the same phenomena here? Yes and no. The ‘no’ part is unfortunately, brought about by the current discord between government and industrialists.
To my mind, while government has its own weaknesses here — the major ones being its failure to control corruption — the private sector tends to be the major culprit in this case because of its compromised position. On the one hand, this sector is still indirectly controlled by the nation’s foes in the form of monopolistic FDI while on the other hand, it wants to be regarded as patriotic’, witness its involvement in the buy Zimbabwe campaign and strategy.
This sector’s rather confused status often comes through in a number of situations.
The import substitution strategy — or lack of one — is one major area where this discord often manifests itself in an exasperating way. The other one concerns government policy — particularly the monetary policy.
This is a policy that is currently presenting the government with a continual headache — not because of its fault but because of two weaknesses embedded in the economy. One of these weaknesses concerns the rudimentary nature of this economy while the other has been deliberately designed by the former owners of this economy in order to weaken it.
This is another fascinating aspect of the Zimbabwean scenario. Here it appears that the colonists are manipulating the economy so as to prevent the blacks from assuming a semblance of control of same.
The subtle tools they are using here are as follows: Economic sanctions interspaced with tantalisingly small amounts of capital injection into the economy through the Breton Woods institutions. Economic reviews that make it difficult to pin down the direction of the performance of the economy.
This scenario is further complicated by the vacillation being expressed by some of the members of the EU over the matter of sanctions.
The approval seeking mentality of the black Zimbabweans themselves is compounding these challenges. For how can you expect the one who is sanctioning you on one hand, to apprise you positively on the other?
(To be continued)
Clifford Shambare is an economist who has qualifications in agriculture. He is a practising farmer and a business consultant and contacted at [email protected]
