PDP Weekly Economic Policy Brief

This week under our HOPE series of articles, we look at the 5th economic enabler which is Industrialisation and Private Sector Development.

At the outset, it is important that Zimbabweans in general appreciate that unless we fundamentally change our economic structure as a country, we will create similar results as in the past where we have a dual economy characterised by unequal distribution of income and opportunity. We need to re-invent Zimbabwe if we are to create wealth and sustainable incomes for our people. This requires that we not only think differently about the potential of the country, but we re-imagine what we can become as a country which has all the resources and the skills it requires to lift itself out this disaster created by ZANU(PF).

Our first contention is that if Zimbabwe is going to be wealthy in the future, this can only be achieved through industrialisation, technological change and access to large markets for its products. This is the same formula which has created leading world economies and we can certainly emulate it. Second, is the fact that the private sector and not the state sector is the engine of economic growth, job creation, increased incomes and more tax revenues that will allow the government to meet its responsibilities.

In short, the production of primary products for export is a colonial and regressive approach which will not lead to sustainable development, better incomes and wealth creation. Instead it leads to continued poverty through the transfer of jobs, incomes and wealth to the West or East.

Unfortunately, ZANU (PF) has demonstrated its incompetence at transforming our economic architecture from that which we inherited from Ian Smith. Instead they have deindustrialised, politicised and in-formalised our economy claiming it to be a "new economy" and yet effectively tacking us backwards.

We must transform Zimbabwe into a developmental industrialised state where the government creates a conducive environment for private enterprise and entrepreneurship and only participate or intervene to accelerate this process and not to stifle it.

It is a fact that sustainable economic growth and development can never be sustained under an extractive political system as that which has been created by ZANU (PF). The main reason being that sustained economic innovation, which is a critical catalyst for economic growth, cannot be decoupled from creative destruction which replaces the old with the new in the economic realm and also destabilises entrenched power relations in politics. We have to destroy the old and replace it with the new and that includes our political leadership.

The failure of Zimbabwe to attract private capital and create new industries is certainly linked to historical tensions in the business sector that arise from wide spread protectionist sentiment against investors and a state centric and interventionist response to development demands. As a result, we have  a private sector which is over regulated and subject to over bureaucratic practices, crowded out by the state-linked actors through patronage, and a target for an elite rent seeking predatory cabal that does not have a developmental agenda.

That must change under a PDP government. We will promote private enterprise and protect private assets, repeal indigenisation, open up the economy to new investors and implement tax incentives to promote rapid industrialisation.

At PDP we therefore believe that an industrial revolution in Zimbabwe is possible sometime in our future, but this can only happen when we radically change the institutions and the culture which we inherited from colonialism and also reverse ZANU (PF) policies and culture which continue to arrest our development.

Our policies, among others, will therefore include;
1. A comprehensive infrastructure rehabilitation and development program in order for the country to attract new investments and make it easy to operate a business in Zimbabwe.

2. Attract the necessary skills-base back to Zimbabwe in order to narrow the skills deficit that has occurred over the last decade with special emphasis on attracting back those Zimbabweans in the diaspora who now have world class experience and skills.

3. The promotion of innovative long term funding mechanisms for industrial development spearhead by a well regulated and stable financial services sector.

4. Regional trade integration to create new markets for new products and services. We must create value chains across borders and upgrade existing and develop new infrastructures while creating significant jobs and trade opportunities within the region.

5. The promotion of entrepreneurship and innovation underpinned by the protection of private property rights, the rule of law and access to capital especially for small to medium enterprises.

6. Incentivise value addition and beneficiation as much as possible in key sectors while limiting imported finished products to create local production capacity of specific high end products and services. We also have to increase manufactured exports to the SADC and COMESA regions and the rest of the world.

7. Implement flexible labour laws and regulation without exploitation in order to attract the establishment of manufacturing going concerns which create employment and make it easy to engage our labour-force.

8. Promote technology transfers and research and development if we are to catch up with the rest of the world. We will need to attain global competitiveness and to re-equip our industries with capital equipment to match global technology. Greater financial support for innovation and technology will therefore be necessary catalyst.

To achieve these, the fundamentals of policy consistency and certainty must be in place, but more important, must be our ability to imagine more, plan effectively, implement competently and lead wisely. That is exactly what PDP intends to do.

Another Zimbabwe is possible!