Think tank ponders on in- and post-COVID-19 Economic ‘Stimulus Packages’

The unfolding tragedy that Zimbabwe, the region and our continent face due to a second but more vicious Coronavirus assault is comparable only to a nuclear war. It is impossible, if not naïve, to calculate the damage that this pandemic inflicts on our lives. Zimbabwe and Africa particularly suffer a higher, if not intractable risk due to fragile economy and tentative democracy.  Our countries expect permanent damage caused by pandemic lockdowns and restrictions in the absence of an effective vaccine – sooner rather than later.

Zimbabwe case aggravated by our population consisting mainly of women and youths, the lifeblood of our country’s eco-social system. These innocent citizens endure the most of 40 years of national misgovernance. Millions of otherwise productive women and youths turned into cross border traders, vendors, subsistence farmers and the unemployed. SMEs have potential to create safe jobs and income, but informal sector has little or no capacity to sustain demands of a young, vibrant population. We need a well-managed eco-political system with functional industry, a sophisticated infrastructure, healthy competitive democracy and proficient local governance to mitigate the negative impact of Coronavirus.

COMALISO is convinced that our government’s tendency to mimic solutions trumpeted by South Africa is not only dishonest, but also suicidal. That country has better political and economic governance. They suffer from income disparities but have a functional economy. However, per capita, Zimbabwe boasts a stronger human and natural resource base. Merely arguing for ‘better treatment of cross border traders’ is deceptive, myopic, mischievous and a disservice to the starving millions of Zimbabwean women and young people.

National governance

Zimbabweans are not fully enjoying their freedoms because of needless political tension. The Constitution boasts provisions allowing free expression, free assembly, free movement, citizen participation and full enjoyment of human rights. Yet our government is not just militant but highly antagonistic, quick on heavy handedness. COMALISO believes as long as citizens are fearfully constrained, they will not deal effectively with the negative fallout of Coronavirus. At local government level, tension between Councils and citizens is palpable largely due to collapsed service delivery. A nation perverted with mistrust cannot innovate. Separation of powers enhances accountability while non-interference by the Executive in independent institutions of democracy inculcates confidence, participation and justice.

The economy

Our economy lacks ideology. Fiscal and monetary policies seem administered on trial and error basis resulting in low production, high inflation, weak domestic demand and a dearth in foreign currency. COMALISO proposes a free market economy to stimulate competition and optimal use of resources. Huge government subsidies on dysfunctional state owned companies divert crucial resources from the financial system, thus weakening the country’s ability to enhance its infrastructure, job creation. The government should merely inspire conditions conducive to innovation, productivity, free movement of capital, respect of property rights whilst giving business member organisations like Confederation of Zimbabwe Industry, Zimbabwe National Chamber of Commerce, Bankers Association, Institute of Chartered Accountants and Chamber of Mines space to input Fiscal and Monetary policy. Expenditure on large bloated government weakens our economy. Anti-corruption institutions and enforcement are politicised and weak. Billions of US$ syphoned out must be recovered while tenders are made transparent. Economic enablers like railways, roads, electricity and water must either be commercialised or completely privatised for efficiency. No need for ‘state sponsored stimuli’ if our economy is freed from needless control. Moreover, it is still difficult to comprehend why our rich endowment in gold, platinum, coal, diamonds and chrome fails to jumpstart our economy. Our government must focus on good governance, managing the national debt and leave the economy to ‘economists’.

Manufacturing

Despite many policy blueprints on manufacturing, we are heavily dependent on imports even for basic consumer goods – the reason for women and youths risking their lives stampeding to South Africa. There is need for more incentives in product sophistication however, dependant on ideal policies that allow re-tooling and new methods of production. Zimbabwe is signatory to AfCFTA thus can only benefit by value addition and value chain development to reduce the import bill. There is also need to embrace toll manufacturing as part of the global supply chain for the world’s leading sport, clothing and consumer goods brands.

Agriculture

COMALISO believes the ‘Zimbabwe is an agricultural economy’ narrative is self-defeating, old school mantra. In this age of global finance and industrialisation, it is hard to perceive subsistence farming anchoring development. Micro and macro level commercial farming yes, subsistence farming supported by a weak tenure system no! It is true 60% of Zimbabwe’s population scraps sustenance in rural areas. It is fact the country should start exporting maize; grow our own sugar, beans, potatoes, onions, groundnuts, tomatoes and a host of other horticulture products. We must produce more tobacco and export more beef to strengthen our agro-industry. However, if we are to emerge victorious post Coronavirus, certain fundamentals have to apply. First, politicised land reform and subsidies do not enhance confidence because this breeds acrimony and complacency. Agricultural funding is best handled by relevant institutions that appreciate due diligence. Second, relying on rain fed agriculture is delusional. We need a new phase of rejuvenating water harvesting through dams and irrigation systems. Moreover, revive agriculture extension services at the lowest level for profitable knowledge exchange where possible, exploiting smart phones. Set a new paradigm in urban land use to protect wetlands and streambanks. Finally, revert agricultural land to free markets with full title deeds at all levels. This will boost investment and insurance finance, supported by a vibrant, independent commodity market.

Health

It is good that Zimbabwe boasts a vibrant private health delivery system. This should be encouraged with barriers to entry completely removed. Government controls of drug and other pharmaceutical manufacture eliminated to encourage domestic and foreign investment in the sector for more, price competitive medical products. However, apart from stemming brain drain, there is still need for incentive for R&D especially in local herbs. Institutions that monitor public procurement of drugs, investment in public hospitals at local and national level must be immunised against corruption with private players allowed to invest in those hospitals and clinics. Local authorities must court private partnerships as well as adopt sustainable green culture to minimise exposure to pollution. Citizen participation or investment in service delivery reduces the burden on municipalities while improving service delivery quality. Whilst it is important to set aside national reserves for vaccines and other Covid-19 equipment, there must be massive investment in behavioural change – the kind we experienced in the war against HIV/Aids in the 1990s. Militarisation of lockdowns, mask wearing, social distancing and social abstinence only serves to heighten dislike of authorities. Citizens can be made to feel responsible enough to exercise their freedoms without coercion. More health insurance companies are necessary in order to break monopolies in the medical aid sector – this possible only through less barriers to entry.

Education

As a think tank, COMALISO believes human capital thrives where basic, secondary and tertiary education is accessible, but such education tailored towards economic productivity. Silicon Valley-type specialisation in science, technology and performance arts begun at early education level. Zimbabwe boasts a very sophisticated private education system and competition in this sector must continue to be encouraged. Where government decides to invest in the sector, its professionals – teachers and lecturers – held in high esteem with work conditions to match global standards. Intimidating and prosecuting unions violates their constitutional rights while driving out professionals from the sector.  Competition in producing textbooks or providing online tuition must be encouraged as means to affordability. Parents, guardians and private sector given an opportunity to play a role in decongesting crowded classrooms – a super spreader of Coronavirus.

Tourism 

One thing that this global pandemic has effectively done is decimating domestic and international tourism. No amount of virtual reality can substitute physical visits to the Victoria Falls. Assuming the whole episode ends, tough immigration laws still paralyse our country fuelled with a bad international brand, poor transport infrastructure, expensive accommodation and food. Devolution helps reap full benefits from our unique sunny climate and enlightened human capital. Our rich tradition and cultural tapestry is yet to be fully exploited. Opening the currency market and allowing global players to invest in local tourism, exorcizing toxic politics and desisting from antagonistic propaganda is the perfect post Coronavirus panacea for our ailing tourism sector.

Conclusion  

As a think tank grounded in deep liberal values, COMALISO is a protagonist and proponent of non-intrusive governance. A government is not there to run our lives but uphold the constitution, protecting our liberties. It exists to proffer regulatory advice without burdening the citizens with militant laws and predatory taxation. Those that argue for state subsidies, public expenditure and of late, ‘stimulus support’ quite rightly point that government collects (our) money so they should spend it (on us). True, yet there is rampant abuse of this authority as public funds find their way into pockets of the few. We thus insist post Covid-19 survival not premised on government doling out freebies to hapless citizens. Our propensity to create wealth depends on us doing things for ourselves and working with financial partners. Public funds channelled to professional institutions or structures that support good democratic governance, the economy, agriculture, health, education and tourism yield better results to mitigate the negative impact of Covid-19. After all, the constitutional role of government is good governance that creates suitable conditions for citizens to create own wealth. 40 years on, we really should not be a charity case.

COMALISO is a registered independent, non-partisan, non-profit, and non-political think-tank based in Ruwa, Zimbabwe. Its mission is to have a Zimbabwe that respects, adopts and implements innovative ideas that strengthen the free market economy, respect for private property rights and constitutionalism – ultimately entrenching responsible capitalism.

Email: epolitrix@gmail.com  WhatsApp: (+263)772 256 326. Ruwa. Zimbabwe.