The effects of political ineptness

For the past 20 years, the economy has featured well down the political agenda. It seems there has been a view from the top that the economy can absorb any amount of abuse, and any level of borrowings for non-productive purposes, because it "just exists".

Business and investors know otherwise. For example, the mere fact that foreign exchange controls exist is an admission that both Zimbabweans and the outside world do not have confidence in the economic policies of government.

Nevertheless, with a resilient spirit, business has been able to keep alive despite the government's neglect of the economy. Unfortunately, the well documented political blunders of the past two years now threaten to crush even that ability to survive.

The withdrawal of foreign loans and aid for political reasons has forced the government to build an unsustainable mountain of domestic debt. The resulting high inflation and interest rates have battered businesses and destroyed virtually all demand for investment.

The economic crisis that Zimbabwe is facing

I believe that Zimbabwe is facing an economic crisis of unprecedented magnitude.

Under current conditions, the government's insatiable appetite for spending will significantly increase its domestic debt. The costs of these borrowings, which exceed 60% pa, will gobble up a big part of its revenue this year.

When the domestic economy runs out of resources to finance new debt and service old borrowings, the government will have to resort to printing money and this will cause hyperinflation that will cripple our economy and destroy the ability of almost all Zimbabweans to survive.

In my view, the absolute size of the national debt is not by itself a problem. It is a problem mainly because of the purposes for which the money was borrowed as well as in relation to the size of the economy and of government's revenue base. 

If private sector investment had been much greater, government revenue would have been much higher today. If that had happened, government borrowings might have been even larger than they are now. But if they had been used to fund public sector investment, instead of prolificacy, this would also have enhanced the economy and thus the borrowings would have been sensible and manageable.

A once-in-a-generation opportunity

In my view, only far reaching political change, followed immediately by radical economic changes, can possibly save this country from the looming economic crisis that I have described above and turn us all on the path to prosperity.

It is important that any new government avoids the temptation to fine tune only. If it does, the respite will be short-lived, whereafter our problems will re-emerge and doom us all to an ever-deteriorating quality of life.

Perversely, the sheer desperation of our situation will be an invaluable advantage to us if we embrace radical economic reforms immediately after political change. Lenders, investors, foreign governments and the foreign public will all be keen to give Zimbabwe a new chance during a honeymoon period that will follow political change.

But only if we are seen to be trying. If, instead, we opt for fine tuning, such goodwill will have evaporated by the time the economic crisis re-emerges, as it inevitably will.

In that event, we will have missed the opportunity of a generation to improve the lives of everyone in this country, and of those not yet born.

New thinking and behaviour by politicians

Radical changes can only be achieved if the new political leaders grasp the nettle and sweep away all of the inefficiencies and political ineptness, particularly in regard to economic policies, that I have briefly described above.

The foundation for doing so can only be a way of thinking that will be very new to all, except those who have lived in economically successful countries and, possibly, those that remember the economic boom of 1948 to 1963.

The centre of this new thinking has to be the visionary aim to continuously improve the quality of life of all Zimbabweans. This means continuously improving everyone's standard of living.

The only possible way this can be done is to entrench the economy at top of the political and administrative agenda at all times, and to make all other issues subsidiary to the improvement of the economy. No exceptions, no populist mandates, no sacred cows. Without economic success, policy choices in every other area are unavoidably restricted.

If aspiring politicians dream of stepping into the shoes of the corrupt lot we currently have, please stay out of our lives. Filling your pockets with public money, because you started out poor and haven't managed to accumulate much so far and you are worried that you won't have enough to retire on is short sighted.

Not only does such behaviour destroy our standard of living, but it will eventually destroy yours, too. Consider the chefs who profited from the Willowgate scandal. With their illicit gains, they probably could have could have bought a couple of houses at the time. Now they would struggle to buy a small car.

Politicians and public administrators need to realise that prosperity for all will eventually benefit them, too. How else can you explain that a blue collar worker in Zimbabwe puts in the same effort to do the same job as his counterparts in developed countries, yet has a fraction of their prosperity.

In my view, the main reason that Africa and America, each endowed with similar natural resources, have such divergent track records over the last 350 years is that Africa has suffered bad politicians. In Zimbabwe, each successive government has championed the narrow interests of particular sections of the population. Virtually all have failed the country.

The time for a new start, serving the interests of the population as a whole without regard to skin colour, tribe and home area, is now.