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Zimbabwe has potential to become economic giant

04 Jan 2019 at 09:19hrs | Views
When I listened to the remarks to the Press by Finance and Economic Development Minister Dr Mthuli Ncube after he was sworn in last September, I shared the same sentiments and fully supported him, like most other Zimbabweans.

I believed, and still believe the ideas will impact our economy in a very positive way if fully implemented. He also promised, as President Mnangagwa also did, to be a listening leader. In 2002 I wrote a paper to Cabinet titled "Positioning Zimbabwe for Rapid Economic Growth in the 21st Century".

While I was the primary author, the ideas therein had been developed in consultation with highly experienced Zimbabweans, including investment bankers, who had overseen billions of US dollar deals for US banking institutions, and a consultant to the world's top technology companies.

While the paper was read in Cabinet, the response was that the Government needed to study the writers of the paper, not its contents. We assume that since nothing in the paper was ever implemented, the investigators were never satisfied about who we were. A few years later, the same Cabinet believed the mystic Rotina Mavhunga, who claimed to have discovered refined fuel from a rock.

In an article published by The Herald on March 12, 2015, I wrote that "We Need Each Other to Build Zimbabwe." The article had been prompted by a question posed by Bill Gates in his review of Joe Studwell's book about the incredible economic development success of "The Asian Tigers" (Japan, Taiwan, South Korea, and China.)

In the review, Gates asks if "The Asian Miracle" (which had "clear policy origins" with growth and development being ignited by market-oriented to state-led policies, and have been "sustained by good macroeconomic management and timely and effective responses to macroeconomic shocks") can happen in Africa. I have always believed that our problem is not that we don't know what to do technically to right our economy.

Our problem lies elsewhere. At Independence, manpower development was, along with land reform and raising the standard of living of the population, one of three economic objectives in the first National Development Plan announced by a Government led by what many said was the second most educated Cabinet in the world. Included in that Cabinet where internationally regarded technocrats like the late Dr Bernard Chidzero and many others.

Education and manpower development had been a critical part of the liberation war. That resulted in the Zimbabwe Manpower Development Survey of 1982 and the manpower development strategy, which produced the thousands of Zimbabweans, who today provide their best thinking to other nations and Fortune 500 companies, but have little opportunity to do so for their own nation.

Zimbabwe can become a high-performing economic tiger if we decide to need each other, and engage every Zimbabwean at home and abroad (beyond appointing a few to Cabinet) in the urgent business of building our nation. We are a nation of exceptional entrepreneurial talent with significant human capital in and outside our borders, all of which can, along with our abundant natural resources, be leveraged for rapid economic growth should we choose to. I am not one of those, who believes that there are no external forces that work against our success.

At the same time, I believe we owe it to ourselves to succeed in spite of them. The cost of not leveraging everything we have to advance the common good is unacceptably high. Many who ended up joining the struggle for political change did so precisely because of the mischaracterisation as "regime change efforts" of any attempt to give objective counsel to government.

The reality is that some critical ideas that will enable us to tackle the country's immense problems may come from outside the ruling party; from many citizens, who love their country. I believe that it is the civic duty of those of us who do not belong to the ruling party not to withhold from those in the office the ideas we may have that may help put our country on a different trajectory. Allow me to share an abridged version of the submission we made to Cabinet 16 years ago:

Positioning Zimbabwe for rapid economic growth in the 21st century It is our firm belief that:

- Economic development frameworks that compromise neither the Government's commitment to its people, nor political control, are possible: We must rise to the challenge of constructing an economic development framework that enables the Government to fulfill its political commitments to the people if political commitments have as their ultimate goal benefiting the economic needs and realising the potential of the Zimbabwean people as opposed to the commitments as goals in themselves.

- Government-private partnerships along the Singaporean, Indian, South Korean models, but adapted to Zimbabwe's situation provide the best option for rapid economic development: We must learn and apply some important lessons from successful models in defining roles and coexistence of Government and the private sector in driving economic growth; and from "inside the boardroom" perspectives of large corporations (e.g. Global 500) and serious entrepreneurs around the world (e.g. Asian entrepreneurs) around motivations and real experiences in developing economies.

- The timely implementation of the right confidence building measures would facilitate positive trade and investment flows into Zimbabwe: There is currently little to no confidence in Zimbabwe by serious entrepreneurs investors (particularly those with a medium-long term orientation) largely because of the property rights issues created by the land redistribution exercise.

Confidence-building measures should include

(a) Bringing the land redistribution exercise to a quick close;

(b) Changing the message to make it clear to the new farmers that Government will expect them to pass the market test;

(c) Restating the Government's commitment to a partnership for development that includes the Government, private and social sectors and to creating and enforcing an enabling legal and public policy environment

- Untapped human capital, relationships and access can be leveraged for rapid economic growth: Zimbabwe has a large number of highly educated and experienced citizens, who have always wanted to contribute to the development of their country, but who feel unwanted by a system that does not always seem to reward educational achievement and real economy and business experience.

Further, we collectively have a disproportionately large untapped access in the global economy that could be leveraged. Framework for repositioning Zimbabwe in the global economy and accelerating economic development

- Work within the globally integrated economy of the 21st century: Inevitability and integrated nature of the global economy of the 21st century requires that Zimbabwe find a way to work within and benefit from the global economic structure through:

(a) An enabling monetary policy and participation in global funds flows, such that Zimbabwe benefits and taps into the tremendous global flow of capital, much of it private enterprise driven;

(b) Creating an economic environment that passes muster with critical global players, whose verdicts place Zimbabwe inside or outside the global economy of the 21st century;

(c) Participation in globally strategic business activities, flows and processes, e.g., infrastructure services and outsourcing activities;

(d) Technology infrastructure and policy that is competitive and enables entrepreneurial innovation and provides Zimbabwean businesses access to global technology-enabled markets and business opportunities;

(e) Capital markets infrastructure and processes that maintain consistency with global and regional markets, while directing (through incentives) investment to Zimbabwe.

2. Government role is critical, but must be focused on enabling: Experiences and analysis of different economies have shown governments to be most effective at driving economic growth when they focus on an enabling role, one that does not interrupt the proper functioning of market mechanisms at the micro-level, other than around a few basic critical commodities. Overall focus should be on: (a) Distributing wealth created by private enterprises (eg taxation) rather than creating wealth (eg running commercial enterprises).

(b) Enforcing property rights and contract laws without which the necessary private enterprise investment and risk-taking is limited. (c) Enabling broad participation of local entrepreneurs in market-driven economic development through entry-oriented support mechanisms (eg subsidised loans, set-asides) openly competed for, and allowing them to be market tested for optimum economic performance.

(d) Setting monetary policy and competitive policies, and other confidence building measures strongly biased towards encouraging private enterprise to invest, and reinvest profits locally.

(e) Providing core infrastructure and services that otherwise would not get investments (e.g. broadband infrastructure)

3. Vibrant private enterprise critical to economic growth: Managerial innovation in highly competitive markets is a proven driver of economic growth and performance.

(a) Private owners of land, production, and other assets must be exposed to market and competitive pressures and be allowed to win, profit and even fail to encourage optimum economic performance.

(b) Allow a virtuous cycle of local, external private enterprise innovation and local-external private partnerships to grow with little interference except through taxation, and reinvestment policies.

(c) create an environment in which private enterprise finds a favourable balance of risks, returns and time-horizons that encourage entry and initiatives of a large-enough scale to drive rapid sustainable economic growth.

(d) Unencumber private enterprise of political patronage to encourage market-business credible innovators to emerge and succeed.

4. Social entrepreneurship, to leverage government initiatives: Building an effective social net in an economy in transition would require significant non-governmental investment and motivated social entrepreneurship, even without the considerable challenges posed by the AIDS pandemic, the drought, the international recession etc.

The similarity of the country-risk considerations of the private sector and key players in global philanthropy in the 21st century (both of which are major sources for investment in the social sector) makes it imperative for government to create an enabling environment for social entrepreneurs.

5. Globally savvy, locally-oriented leadership corps: In the global economy of the 21st century, where Zimbabwe is pursuing a Government-private partnership for rapid economic development, it will be critical to

(a) better leverage those citizens in strategic positions in the global economy to build credibility, relationships and provide "inside the board-room" perspectives and access for Zimbabwe's benefit

(b) pursue a multi-pronged human resources development strategy that rapidly expands the number of globally savvy and well placed leaders in the economic sectors and any economics-oriented policy units.

I believe that what we wrote 16 years ago still applies today along with the kinds of specific policy prescriptions the Finance Minister has started to articulate. Let me add that I also believe there should be a very specific and simple measure of Government performance, i.e., its ability to significantly reduce the levels of poverty which are at unacceptable levels.

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Dr Noah Manyika is the president of Build Zimbabwe Alliance and founder of the War On Poverty Trust.

Source - Noah Manyika
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