Opinion / Columnist
Five lessons from Rhodesia
13 Feb 2014 at 09:11hrs | Views
Leadership integrity and accountability were at the centre of the success of Rhodesia's import substitution.
The name Rhodesia remains offensive to most of us blacks. It hangs like a nightmare in our brains because of what it stood for and what it did to our fore fathers and those who perished fighting for our freedom. Racism remains an obnoxious and indefensible evil whether it is practiced by whites or blacks.
However, we must move on, and is to our advantage to learn from our past, regardless of the context and objectives of the actors that created it. After all, as Karl Max once noted, men make their own history but they do not make it as they wish, it remains educated by and predisposed to the past; that is one thing we cannot change.
Rhodesia faced serious sanctions but the country rapidly developed notwithstanding. We must learn from that.
I want here to force our minds to appreciate how Ian Smith reacted to those circumstances and why he was successful in developing the productive capacity of a country isolated by the international community, but continued to have a strong currency and was a net exporter of food.
It is an open secret that Zimbabwe has all it needs to develop and yet we continue to complain about how sanctions are preventing that. In my opinion, it is not the issue of sanctions that is our problem (real or imagined); it's our response to our problems that continues to hold us back and disempower us in coming up with our own solutions.
I think that the main reason why Rhodesia's self-sufficiency developed rapidly during its import substitution programme was the discipline and integrity of its leadership; racist they were, but here I want us to learn from the enemy.
Ian Smith was not in it for the money or personal wealth. He truly believed in the national cause. Although misguided, he was dedicated to it to the bone. He was not greedy nor did he pursue personal wealth accumulation as is the case with our current political leadership. The preservation and development of Rhodesia came first and all state enterprises and institutions were established and competently managed only to meet that end.
Our first lesson is that; leadership integrity and accountability were at the centre of the success of Rhodesia's import substitution project. The unfolding revelations of the rot in our state enterprises are shocking, and reflect the value system of our current leadership. Unless we brutally address this, any of our contemplated economic recovery blue prints are a waste of time.
Second, he ensured that no raw material left the country as a matter of policy. Vertical integration of industry was primary at all costs. If no raw materials were to leave the country, it required that the country had to develop the capacity to process them first. This was achieved by investing heavily in infrastructure, especially in the railway network, power and water.
Our lesson here is that we need an informed and holistic strategy on vertical integration of industry that is not implemented ad hoc, but takes into account what needs to be in place first.
In many instances, this government announces good projects without first ensuring that we have the capacity to implement them. It also does not do enough home work to make sure that implementation does not create negative unintended consequences that derail or immunise the intended results. We need to think clearly and anticipate before we act. Inconsistent government policy clouded by hidden vested interests remains our core problem.
The third thing that Smith did was to implement selective subsidies, but these were price subsidies and not input subsidies. In other words, the finished product would be subsidised through its sell price only. This avoided a parallel market for inputs developing. It also avoided profiteering at input level as is the case now, where chefs buy fertiliser in bulk to make profits thereby creating artificial shortages and increasing production costs unnecessarily.
An example was the subsidising of wheat production. Farmers would produce wheat without input subsidies but the price of wheat offered, would compensate the farmer for his full cost of production thus making it viable to produce wheat.
Fourth, Rhodesia had very strict import control measures with strong accountability and fairness. Companies had to have import licences which were managed fairly and with minimum corruption. They had to first prove that they could not source inputs locally and this further encouraged local supply companies to grow. The middleman had no place in that process.
The important thing here was that this policy was only guided by the national priority of producing goods locally. Government officials did not drive imported German or British cars as is the case now. They used locally assembled Peugeot 504's if you remember, thus creating local demand and jobs.
From this we can learn that we must control the import bill strictly but fairly, we must all live within our means and we must walk our talk.
Fifth, Rhodesia had incentives in place for industry to build local production capacity. For example building a manufacturing plant had huge tax incentives and farmers could write off costs for building dams and thus we could irrigate throughout the year ensuring food security and exports. Incentives and not penalties work more effectively.
Of course Smith had his own currency which remained strong because it was managed prudently. Discipline and national interests were not negotiable; something which we have dismally failed to do.
My contention here is that we can certainly do these things if we wish. Our problem is not the lack of ideas or sanctions; it is because of lack of leadership and self-centred politicians who want the privileges of power without the responsibility that comes with it.
Yes we can rebuild our country, but this requires that we all put our heads together in the national interest. Our leaders must also lead by example.
Zimbabwe comes first!
----------------
Vince Musewe is an economist and author based in Harare. You can contact him on vtmusewe@gmail.com
The name Rhodesia remains offensive to most of us blacks. It hangs like a nightmare in our brains because of what it stood for and what it did to our fore fathers and those who perished fighting for our freedom. Racism remains an obnoxious and indefensible evil whether it is practiced by whites or blacks.
However, we must move on, and is to our advantage to learn from our past, regardless of the context and objectives of the actors that created it. After all, as Karl Max once noted, men make their own history but they do not make it as they wish, it remains educated by and predisposed to the past; that is one thing we cannot change.
Rhodesia faced serious sanctions but the country rapidly developed notwithstanding. We must learn from that.
I want here to force our minds to appreciate how Ian Smith reacted to those circumstances and why he was successful in developing the productive capacity of a country isolated by the international community, but continued to have a strong currency and was a net exporter of food.
It is an open secret that Zimbabwe has all it needs to develop and yet we continue to complain about how sanctions are preventing that. In my opinion, it is not the issue of sanctions that is our problem (real or imagined); it's our response to our problems that continues to hold us back and disempower us in coming up with our own solutions.
I think that the main reason why Rhodesia's self-sufficiency developed rapidly during its import substitution programme was the discipline and integrity of its leadership; racist they were, but here I want us to learn from the enemy.
Ian Smith was not in it for the money or personal wealth. He truly believed in the national cause. Although misguided, he was dedicated to it to the bone. He was not greedy nor did he pursue personal wealth accumulation as is the case with our current political leadership. The preservation and development of Rhodesia came first and all state enterprises and institutions were established and competently managed only to meet that end.
Our first lesson is that; leadership integrity and accountability were at the centre of the success of Rhodesia's import substitution project. The unfolding revelations of the rot in our state enterprises are shocking, and reflect the value system of our current leadership. Unless we brutally address this, any of our contemplated economic recovery blue prints are a waste of time.
Second, he ensured that no raw material left the country as a matter of policy. Vertical integration of industry was primary at all costs. If no raw materials were to leave the country, it required that the country had to develop the capacity to process them first. This was achieved by investing heavily in infrastructure, especially in the railway network, power and water.
Our lesson here is that we need an informed and holistic strategy on vertical integration of industry that is not implemented ad hoc, but takes into account what needs to be in place first.
In many instances, this government announces good projects without first ensuring that we have the capacity to implement them. It also does not do enough home work to make sure that implementation does not create negative unintended consequences that derail or immunise the intended results. We need to think clearly and anticipate before we act. Inconsistent government policy clouded by hidden vested interests remains our core problem.
The third thing that Smith did was to implement selective subsidies, but these were price subsidies and not input subsidies. In other words, the finished product would be subsidised through its sell price only. This avoided a parallel market for inputs developing. It also avoided profiteering at input level as is the case now, where chefs buy fertiliser in bulk to make profits thereby creating artificial shortages and increasing production costs unnecessarily.
An example was the subsidising of wheat production. Farmers would produce wheat without input subsidies but the price of wheat offered, would compensate the farmer for his full cost of production thus making it viable to produce wheat.
Fourth, Rhodesia had very strict import control measures with strong accountability and fairness. Companies had to have import licences which were managed fairly and with minimum corruption. They had to first prove that they could not source inputs locally and this further encouraged local supply companies to grow. The middleman had no place in that process.
The important thing here was that this policy was only guided by the national priority of producing goods locally. Government officials did not drive imported German or British cars as is the case now. They used locally assembled Peugeot 504's if you remember, thus creating local demand and jobs.
From this we can learn that we must control the import bill strictly but fairly, we must all live within our means and we must walk our talk.
Fifth, Rhodesia had incentives in place for industry to build local production capacity. For example building a manufacturing plant had huge tax incentives and farmers could write off costs for building dams and thus we could irrigate throughout the year ensuring food security and exports. Incentives and not penalties work more effectively.
Of course Smith had his own currency which remained strong because it was managed prudently. Discipline and national interests were not negotiable; something which we have dismally failed to do.
My contention here is that we can certainly do these things if we wish. Our problem is not the lack of ideas or sanctions; it is because of lack of leadership and self-centred politicians who want the privileges of power without the responsibility that comes with it.
Yes we can rebuild our country, but this requires that we all put our heads together in the national interest. Our leaders must also lead by example.
Zimbabwe comes first!
----------------
Vince Musewe is an economist and author based in Harare. You can contact him on vtmusewe@gmail.com
Source - Vince Musewe
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