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MDC-T's Juice offers little

by Tafadzwa Musarara
11 February 2013 | 3126 Views
After spending three years in government without its own party economic blue print but only deploying its energy towards demonising Zanu-PF's indigenisation policy, MDC-T has exposed its policy dysfunction with the launch of a vacuous economic policy.

The economic blueprint, Jobs, Upliftment, Investment, Capital and the Environment (Juice), authored by Eddie Cross and UK-based consultant Lance Mambondiani, is a poor attempt to duplicate current government economic policies under the guise of new terminology.

The entire document is replete with inaccuracies and outright plagiarism of other current economic blueprints, especially the government's Medium Term Plan (MTP).
 
First and foremost, it is difficult to believe MDC-T's commitment to deliver on its economic policy which is based on investment devoid of government intervention. In a recent piece titled "My Crystal Ball", Cross, said: "The MD-TC would announce a small government – a Cabinet of 20 ministers with 18 ministries.

The President and Cabinet would be sworn in and would immediately begin a complete overhaul of the State administration. Marange diamond fields would be nationalised and all existing operators expelled."

Did I hear nationalisation here?

The entire premise of the blueprint is that of jobs. Tsvangirai makes this very clear in the foreword to the document. It is the be-all and end-all. He argues that what Zimbabweans need are jobs, hence his economic plan is to avail jobs to all Zimbabweans.

It is through jobs that Zimbabweans will be empowered, he argues.

This argument is fundamentally flawed.

The blueprint is anti-indigenisation and empowerment, referring to this programme as looting and asset stripping. It asserts that current empowerment policies are meant to enrich the elite and politically-connected without proffering any evidence to that end.

Current empowerment transactions expose this fallacy and contradict this assertion as there is no evidence that a few elite have benefited for these deals.

It has mainly been management, employee share ownership schemes, community share ownership trusts as well as the National Indigenisation and Economic Empowerment Board (Nieeb) that have been the beneficiaries of these schemes.

There is little or no evidence of capital flight in response to indigenisation of those firms already invested in Zimbabwe.

Indigenisation transactions such as promulgated by ZIMPLATS have been by way of vendor financing, thus offering value to prior investments.

Strangely, one of the objectives of Juice is "restructuring the ownership and control of the economy through a broad-based economic empowerment programme" which is an acknowledgement of the need for indigenous participation in the economy through ownership of the means of production.

But Juice then goes on to claim that this will be achieved through training, supporting SME's, formalisation of the informal sector, job placements and so on.

This is totally absurd as ownership and control can only be achieved through the vehicle of capital.

The MDC-T must realise that local ownership of capital is a global phenomenon irrespective of which country one is in.

One can argue about thresholds but not the principle. Any other careless option will leave countries at the mercy of foreign capital and ultimately foreign political influence.

In the USA, Dubai Ports had won the right to manage huge American ports, but this attracted the ire of locals who felt that they were giving up their sovereignty and security to foreigners. The indigenous people won.

Juice is content on having local Zimbabweans as employees of foreign multinationals with limited participation in ownership.

Juice acknowledges that one of the key drivers of economic growth is increased and sustainable agricultural production.

However, the conduct of the MDC-T in government and the minister of Finance in particular displays a scant regard to this notion.

In 2012, Tendai Biti promised that he would provide for $20 million towards winter wheat farming. To date, no dime has come out of Treasury.

Funding for inputs have been low and erratic and at times reaching the beneficiaries late to be effective.

The policy is very suspect on the land reform beneficiaries and the fate of former white commercial farmers. It does not address the irreversibility of the land reform and future ownership patterns.

Any future agricultural policy in Zimbabwe must focus on how to underpin and consolidate the agrarian reform through land tenure and creating a sustainable agricultural sector through access to funding and extension services.

According to the MDC-T's own research, formal employment peaked at 1,35 million in 1998 from about one million in 1980 under a Zanu-PF government then dropping to just under one million in 2010, close to the 1980 levels.

It acknowledges the massive growth of the informal sector in the last 20 years which accounts for absorption of jobs lost in the formal sector and population differentials between 1980 and 2010.

There hasn't been major movement in formal employment numbers in the 30 years since independence on a net basis. The informal sector has absorbed additional entrants in the employment market.

Juice contains serious inaccuracies in the employment numbers especially in the agricultural sector claiming only 20 000 people were employed in the agricultural sector in 2008 but also asserts that 150 000 were employed in this sector in 2010.

There is no explanation of this sudden leap in numbers.

Any future economic policy by any political party must pay close attention to sustainable job creation through growing the economy and encouraging capital formation by way of cultivating local savings and foreign direct investiment (FDI).

Jobs allow new entrants into the money economy and help to expand the local market.

The party claims that it will create one million jobs between 2013 and 2018 based on an annual economic growth rate of eight percent. The figure is unreal, as it cannot be achieved in such a short space of time whilst the leading Western economies' employment figures are heading south.

This is fuzzy mathematics considering our current GDP numbers.

The numbers become even fuzzier when one considers its projection of targeted FDI of 30 percent of annual GDP. It is difficult to see how these jobs will be created on such a low base and single digit GDP growth numbers unless they are extremely low-paying jobs in agriculture.

This assertion is not backed by the numbers. The numbers don't add up especially considering the high targeted FDI which is not reflected in GDP and the GDP growth rate.

On road infrastructure, it claims that focus will be on the modernisation and dualisation of Beitbridge-Chirundu, Plumtree-Mutare and Harare-Nyamapanda highways.

These projects are already in motion with construction work already at an advanced stage on the Plumtree-Mutare Highway and feasibility studies being finalised on the Beitbridge-Harare Highway as part of the Chirundu corridor.

There is very little in terms of empirical evidence to bolster the policy conclusions.




The Juice document is juicy-dry and cannot give the indigenes the economic syrup required.

------------------------
*Tafadzwa Musarara is the chairperson of Resources Exploitation Watch 


Juice MDC-T


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Source: dailynews

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